Business Environment: Tesco PLC Structure, PESTLE Analysis Report

This report provides an executive summary of Tesco PLC, a leading retail organization, focusing on its structure, governance, and the impact of the external business environment. The report begins with an introduction to the company and its operations, followed by an analysis of Tesco's organizational structure, including its hierarchical management levels and the roles of key board members. The importance of PESTLE analysis as a framework for understanding external factors, such as political, economic, social, technological, legal, and environmental influences, is then discussed. The report applies the PESTLE framework to Tesco PLC, examining how each factor affects the company's operations and strategic decision-making. Key findings include the impact of Brexit and political relations, economic conditions, changing consumer behavior, technological advancements, and legal regulations on Tesco's performance. The report concludes with an overview of the main highlights and implications of the analysis.

Tesco Plc

Executive Summary
Tesco Plc is leading organisation in retail industry and this report discussed about how the
organisation is governed and what the structure of the company is. This report also discussed
about environmental factors affecting the company and all the elements of the environment in
which business is operating and how they affect success and functioning of the organisation.

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Task 1...............................................................................................................................................3
Structure and Management Structure of Company.....................................................................3
Task 2...............................................................................................................................................3
Importance of the PESTLE analysis............................................................................................3
Task 3...............................................................................................................................................4
Pestle analysis of Tesco PLC.......................................................................................................4
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The environmental analysis plays an essentials role in the business management in way
of providing the level of outcomes returning with identifying the possible level of opportunities
and threat outside supporting the external environments (Perera, 2017). In this report, there will
be on the Tesco plc have the governing the management structures and the governances in order
to develop the strategic plans to gains the competitive advantage over the different competitors.
In addition to that’s, the report will have the analysis of the Tesco company by the implication of
PESTLE model and its impact on the company.
MAIN BODY
Task 1
Structure and Management Structure of Company
There are many stores that are owned by Tesco in UK and there is a reason behind the strong
consumer base of the company in UK it is because they commenced their operations here and
with time they were able to gain recognition in the market. With the help of their success in one
market they were able to take their base of operations in other countries across the border. One of
the reasons of their success is considered to be the culture of the company which is diversified.
Through this they have hired employees of different culture and assess the requirements of other
markets with the help of them so that they can take the help of those tactics that can be effective
in different countries and through that the company has proved themselves to be successful and
obtain the most share in the market. The countries in which the company maintains their
operations has a total of more than 5,00,000 employees through which they are successful in
establishing their markets. Tesco has set their base in more than 10 countries and this has been
possible because of the goodwill they have in the market and the time they have served for in the
market which is long (Holotiuk and Beimborn, 2017).
Just like the employees of the company the members of board are also diverse. This is
why the state of mind and way of perceiving things is different and this is the reason why they
are able to take the benefit of different approaches and achieve more. The members of the board
involve many designation such as Chairman, Group Chief Executive, Chief Financial Officer,
Senior Independent Director and many others that are non executive. One of the non executive
member and chairman is John Allan, the Chief Financial Officer of the company is Alan Stewart,
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The position of CEO is hold by Dave Lewis since 2014. Overall there are nine people in the
committee of board.
These are the directors who govern the company and this makes the structure of the
company hierarchical and tall. The structure of the company involves three levels and they are
top, middle and lower level. All the decisions that are of major level are taken by the CEO of the
company and that is the top level management. it also includes the role of members of board and
their decision helps the company to maintain the flow of work smoothly and effectively. Many of
their employees represent the company in international markets. On the middle level of
management people such as managers, assistant and vice president serve. The last stage is the
management of lower level which involves the role of manager on a regional level and they have
to look after the whole region which is assigned to them. They analyze the market and check that
the decisions taken will achieve success or not (Michael, Reisinger and Hayes, 2019).
Structure of the company can be defined as the order in which all the functions of the
organisation are carried out and decisions are made. This is very important for the organisation
and this is because structure ensures that all the activities are organised and everyone in the
organisation is aware about their role in the organisation. Tesco also has its structure and
structure plays important role in governance of the company. The structure of management and
its effect on governance of Tesco is
Task 2
Importance of the PESTLE analysis
The analysis is consisting of the clear highlights regarding the different extrinsic scenarios
which have the major level of impacts on the business and respective brands. There PESTLE
analysis is the frameworks which is the imperative tool for Tesco as it will helps in
understanding their different market dynamics in order to have the improvement in the business
at continuous level (Policy, 2018). The analysis will help the Tesco to have the interpretation
regarding the different factors in order to have the proper utilization of the resources and access
the long-term societal trends to be fold there dynamic and the unpredictable business
environments in which will have the significant impacts to the company performance and
profitability.
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The model has the consisting of the various external or outside factors which is need ted to be
significantly evaluated by effecting the business. The factors are such as the political, economic,
socials, technology, legal and environment. The political will have the current direction of the
significant political parties which may influences the business development and growth and
economic factors have the exactly the effects of the different interest rates taxes, the stock
market, consumer confidence and other economic metrics at the different marketing and strategic
business planning’s in the country. In addition, for the social and technological factors which
have the proper level of acknowledge their changes in the significant lifestyles m adverting
ethics demographics and cultures in order to have the marketing up opportunities. The
technological factors have the consisting their social media and robotic and innovations by
regarding the width the innovations technologies obsceneness and technological which have the
impact of the products offering. The environmental factors and the legal factories looking out the
global environmental policy’s which can be such as their climate changes, taxes, the stock
market, consumer confidence and other economic metrics. This is the process to have the
decision makers in order to take the better level of awareness and the understanding the changes
which methods significant impact in the business. as this is helpful in providing the significant
structures in order to bring together the various level of departmental skillset with the common
goals in order to have the intensification of the potential threats and reduce the impact by
adopting the strategic mindset (Irawanto, 2017). This will have the evaluation of the various
decision-making s in order to have the nay implementation for the providing the strategic
direction. This model will have the implacability in such as marketing campaigns,
reorganizations, new production methods and introductions of new products.
Task 3
Pestle analysis of Tesco PLC
Pestle Analysis is an framework through which organisations can analyse their external
environment and influence of different factors of macro external environment on the company.
Pestle analysis of Tesco Plc is as follows-
Political Factor
Political factor is one of the most important factor to affect Tesco, the reason behind this is that
Tesco is a multinational company thus it has to deal with political environment of more than one
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country. Tesco is a British multinational company and political factor ad environment of UK
have direct impact on the Tesco. Political condition and Brexit has significant impact on Tesco
as this will impact operation of the company in countries that are part of EU (Prasad, 2018). This
also impact cost of the operations and earlier the resources and material being acquired from
those countries was available at less price and was helpful in keeping the price low. Similarly
this might also impact employment and talent availability for Tesco. Along with this Tesco also
gets affected by the political relations of UK with other countries and political environment and
uncertainties of countries where Tesco operates. While operating in other countries Tesco
requires following norms and conditions of the particular country. This means that many times
governments impose strict regulations on the companies which are of other countries and this
create difficulties for the company to operate in other countries.
Economic Factor
This is another major factor which affects Tesco and its success in financial terms is significantly
dependant on this factor. This is because economic factor and environment includes elements
like GDP, Per capita income, and disposable income of a country people. Economic factor also
affect cost of operations and profit of Tesco by economic condition of a country where they are
operating. This means that in case economic condition of a country is not very good and in this
case Tesco might need to reduce the price of the products for ensuring that customers can buy
the product, however this will affect the profit, this profit can be covered by operating in country
with a good economic condition and where Tesco is able to sell its products at higher price. This
is how Tesco gets affected by economic factor. Tesco also requires to be aware of changes in
policies and taxation and cost of the finance (Nandonde, 2019). Tesco even though is an
international company but still it is mainly dependant on UK market and this is why economic
condition of UK greatly affect Tesco and its success and growth.
Social Factor
This is another important factor which affects Tesco and exists in external environment. This
environment consists of those who are most important for Tesco and these are customers of
Tesco. Social environment consist of customers and this is one of the important environment
affecting Tesco and this has become more important due to unpredictable fast shifts in consumer
behaviour. Tesco requires to keep up with changing trends in consumer and this requires timely
analysis of changes that are going to take place and how they will impact on the business of
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Tesco. This means goods and services demanded by the customers and changes in belief and
attitude of the customers. Increasing value of online platform is also an important changes in
customer behaviour as this requires Tesco to create and deliver effective online services in order
to remain competitive and sustain its development. Sustainable development of organisation
requires that Tesco is able to create products and services which are able to attract attention of
customers. This requires timely analysis of factors through which customers can be positively
influenced to buy products of the company.
Technological Factor
One of the important elements of success and competitiveness in present business environment,
technology in playing key role in success of the organisation (Souiden, Ladhari and Chiadmi,
2019). Regarding technology Tesco has to ensure that its technology is able to perform in
competitive environment. Technology also provides competitive advantage and by developing
technology which is able to outperform Tesco can also ensure its sustainability in competition.
Technology also includes development and introduction of technology which enables it to
provide effective and efficient services to the customers. This also includes providing effective
services through online mediums. For Tesco investment in technology which can reduce cost of
operations and also enhancing efficiency of the products and services which create basis of
higher prices of the products. Tesco has also invested in energy efficiency of the organisation so
that it can achieve long term objectives and so that it can reduce carbon footprint.
Legal Factor
This is another important important factor which guide and govern operations and functioning of
the company. This means government policies and legislation of the country which specifically
govern operations of retail organisation and along with this those who govern all business
organisations. Tesco also requires considering factors of different countries because it is a
multinational company. This includes impact of different legislation in food products and other
code of practices that are included in operations of the Tesco. Legislative practices are extended
to all areas of business operations in which employment law is also important law and legislation
that affect Tesco (Jensen, Sommer and Hansen, 2019). Standards that are developed for all
practices of the organisation that are minimum requirements of the practices by legislation.
Environmental Factor
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In present business environment, this is very important factor because of increasing negative
impact on the environment. This is the reason that government and organisation have become
aware of the organisational impact on the environment. Not just organisations but individual are
also becoming aware of the environmental impact and this required Tesco to take action in order
to reduce their environmental impact. Governments are also imposing regulations on companies
in order to reduce their environmental impact and also to contribute in sustainability of the
environment. Governments are increasing pressure on adopting practices that are beneficial for
society. In order to do this Tesco is also committed to reduce its carbon footprint by 50% by
2020. Tesco is also practicing waste management and this is being done by Tesco by increasing
social conscience in customers.
All the factors are important to be considered because of impact they can make on the
company but in these social environment and environmental factor are very important (Oraman
and et.al., 2018). This is because customers are centre of business organisations and along with
this they are considering environmental factor.
CONCLUSION
On the basis of above discussion it can be concluded that Tesco, a multinational British
corporation is a leading retail company and success of the companies in present business
environment gets affected by their readiness to adopt the changes of external environment. The
changes in external environment start after analysing potential changes in external environment.
this requires organisations to stay agile so that they can identify changes on time. Tesco has
managed to identify and analyse changes in the environment and this also enables company to
make changes before they affect organisational practices and its success and PESTLE analysis is
a way to analyse changes.
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REFERENCES
Books and Journals
Online
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Policy, P., 2018. What is pestle analysis.
Irawanto, D.W., 2017, May. Indonesia Human Resource Management Practices: Cultural
Dimension and PESTLE Analysis. In Conference Proceedings International
Conference on Social Science and Management ICSSAM (pp. 574-590).
Prasad, P.V.V., 2018. Impact of FDI in retailing industry. International Journal of Research in
Social Sciences. 8(5). pp.165-170.
Nandonde, F.A., 2019. A PESTLE analysis of international retailing in the East African
Community. Global Business and Organizational Excellence. 38(4). pp.54-61.
Souiden, N., Ladhari, R. and Chiadmi, N.E., 2019. New trends in retailing and services.
Jensen, J.D., Sommer, I. and Hansen, G.L., 2019. Value for the calorie?—C orporate social
responsibility and benchmarking analysis of calorie efficiency in food
retailing. Corporate Social Responsibility and Environmental Management. 26(3).
pp.567-575.
Oraman, Y and et.al., 2018. WHAT EXTERNAL AND INTERNAL FACTORS AFFECT
ORGANIC FOOD SECTOR?. New knowledge Journal of science. 7(2). pp.33-44.
Michael, N., Reisinger, Y. and Hayes, J.P., 2019. The UAE's tourism competitiveness: A
business perspective. Tourism Management Perspectives, 30, pp.53-64.
Holotiuk, F. and Beimborn, D., 2017. Critical success factors of digital business strategy
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