Comprehensive Analysis: Internal and External Factors Impacting Tesco

This report provides a comprehensive analysis of Tesco, a leading global grocery retailer, examining the impact of internal and external factors on its operations and strategic decisions. The analysis begins with an introduction defining internal factors (strengths and weaknesses) and external factors (opportunities and threats). It then delves into a detailed SWOT analysis, highlighting Tesco's strengths, such as its extensive retail network and flexible payment methods, and weaknesses, including challenges related to innovation and cost-cutting strategies. The report also incorporates a PESTLE analysis, evaluating the political, economic, social, technological, legal, and environmental factors influencing Tesco's business. Key threats, such as Brexit and competition from discount stores, are also discussed. The report concludes by summarizing Tesco's contributions to the external environment, including its efforts in promoting environmental sustainability, providing employment opportunities, and supporting social initiatives. The report utilizes scholarly references to support its analysis.

INTERNAL AND EXTERNAL FACTORSINTERNAL AND EXTERNAL FACTORS
INTRODUCTION
The internal factors refers to anything within the organization which are under the control of the company without affecting that whether it is tangible or intangible in
nature. These factors include strengths and weaknesses of the organization (Rosen, C., 2020). While on the other hand external factors are those who influences
situation that a business can never control and affect business decisions prepared by business owners as well as stakeholders. This poster will highlight the concept of
internal and external factors impact on Tesco and different ways through which business can impact external environment.
Internal and external analysis of TESCO
Tesco is one of the most successful grocery stores dealing in
retailing food items in the world. Company operating in 2678
stores all around the world and offer employment to various
candidates nearly approximately 327,000 people (Gupta, B.,
2018). The internal analysis describes the detailed evaluation
internal SWOT analysis of the firm which states that the factors
are within the control of the organization while on the other hand
external factors describes with the help of PESTLE analysis
which are out if the control of the establishment. Below are the
detailed evaluations of SWOT as well as PESTLE analysis:
Strengths
•Huge network of retail store makes shopping activity
convenient for consumers: Large number of company stores
helps the Tesco in order to reach out large number of consumers
and which creates good image of the firm within the market
space or among the consumers which also recommends the
establishment to enhance their shopping network. With the
involvement of effective distribution network by the Tesco, the
company is able to create an effective image within the outside
environment.
•Offer flexible methods of payment: In order to moving forward
in the direction of providing cashless facilities to their
consumers Tesco offer various payment options to their
customers in order to satisfy their needs as well as requirements
in highly detailed manner. The company offer digital wallet
facility and a new contactless club card to provide consumers a
quick and convenient way to pay at checkout.
•Private labels brand products give their consumers a cheaper choice: Self produced brand
products has been offered by the Tesco helps them to adopt the strategy which is offering of
goods and services at cheaper cost to the consumers but with good and efficient quality
products. It becomes possible for the firm because if their own produced brand goods and
services. Tesco also have contracted numerous brands to produce their goods but distribute
them under their own named roof. With the help of adopting this strategy, Tesco is able to
increase customer loyalty.
Weaknesses
•Participating in various retail activities: Tesco tries
their maximum to provide various kind of services to
the customers in order to satisfy their needs but those
business only contributed to an increased number of
head offices as well as jobs rather than providing results
in the favour of the firm highly affects the brand image
within the market space (Woodward, R., 2019).
•Lack of innovation leads to cost cutting: It has been
utilized as a main strategy by Tesco but due to
struggling for increase sales and profit margin of the
firm, the culture of the company does not encourage the
establishment and finding new ways to grow the
business. However, cost cutting is not a sustainable
strategy since the company can only cut down so much
until it backfires.

Opportunities
•Increase sales through online channels:
Currently customers are able to order groceries
on the Tesco website and get them deliver as
soon as on the same day of their order. Apart
from groceries, other non-food items are also
provided by the firm although they are limited in
terms of choice and pricing which sometimes
eliminate Tesco from the one stop shop list of
customers.
•Expand the booker brand with a cash carry
model: Cash and carry is a kind of model
followed by Tesco in which all kind of credit
transactions in which no sales are made on the
account of receivables and all goods and services
required up-front payments. This model is
highly popular among wholesalers, although it is
successful in some countries only. With the
adoption of this model, Tesco is able to enhance
its profit margin and strengthen financial position
from other market sources.
Threats
•The consequences of Brexit: The withdrawal of
Great Britain from EU will leave UK firms
exposed to tariffs and other trade barriers on non-
member countries and vice versa for EU forms
exporting goods and services to the Great Britain.
Tesco sources its inventory from all over the
Europe and imports them to the UK (Nandhini,
M., 2017).
•Discounted stores taking over the Tesco market
share: Various other competitive brands planned
to open various new stores in most of the towns
and cities started from small discounted shops to
huge stores. However, these stores act as
competitors in front of Tesco which are the
biggest threat for their firm growth and
expansion.
PESTLE Analysis
Political
Tesco working in globalized environment and as the company operates in various countries, it needs to keep
their eyes on the changing political circumstances in all the countries in which the organization operates. The
more stable the company is within the environment, the better is the opportunity to carry out their business.
Another is the Brexit effect which drastically affects the company as it changes all the taxes rates, tax policies
among various supply countries which affects the profitability of the firm.
Economic
Tesco keep their eyes open towards the changes reacted to economy that occurs within the country as it affects
various factors such as revenue, sales, profit, etc. The company should have complete knowledge about
taxation policies for its own benefits (Male, L. eds., 2020). As inflation exists within the economy, Tesco have
to keep in their mind that pricing of the products should be set by the firm in a manner which attracts their
customers in similar manner.
Social
With the fast pace of life, people prefer to get all the products under one roof so, in order to fulfil the
requirements of their customers, Tesco offer such kind of premises which includes offering of various kind of
products under one roof. The products has been decided on the basis of attitude of customers, interest of
organic items, benefits the society through their CSR activities and many more in order to satisfy the
consumers.
Technology
Introduction of new and advanced technological changes has been required by the Tesco in order to promote
their products within the market space. For the achievement of this, company offers online shopping facility
and social media promotions in order to attract consumers as well as influence them. With the involvement of
technology, the company has managed to shift the trends of shopping on online platform (Dosmurzaevich,
A.B., 2020). This will help the customers to evade the long queues and help them save their time.

Legal
The change in government policies affects the operations of the company. Tesco have to follow local as well as international market laws in order to smoothen the company
operations. It is highly important for any firm as once company lost its credibility; it is quite expensive for the establishment to get back to same position.
Environmental
Tesco has undertaken various initiatives in order to improve the environment and create more sustainable society for customers to live in. Tesco launched its phase cycle which
includes remove, reduce, reuse and recycle plan. Company also take various practices in order to remove wastage.
Different ways in which Tesco affects the external
environment
Tesco provides various benefits to the external
environment in order to make environment clean
and sustainable in order to make the outer place as
best place to live in for the people living in society.
Tesco promotes recycled packaging in order to
maximize awareness of effective environment.
Company also provides various employment
opportunities within the society in order to promote
employment facilities to needy people who want to
continue their life in effective manner and thus
helps them to improve their lifestyle. Organization
donates emergency supplies through partnership
with British Red Cross charity which holds the
UK’s largest ever food collection or providing huge
amount of meals to feed people who are in need. It
also offers effective goods and services at valuable
cost including organic food products through home
delivery services along with high quality which
helps the people to get products at cheaper cost
which also helps the people living in society in
economic ways as well (Georgiev, M., 2018).
CONCLUSION
From the above report it has been concluded
that there are various kind of internal and
external factors which helps the organization
to become successful in market space along
with providing effective and efficient
services to the customers who are living in
the society. With the help of SWOT as well
as PESTLE analysis, it has been identified
that Tesco contributes a lot for the betterment
of the environment as well as the people
living in the world in order to provide better
employment opportunities, effective products
at cheaper cost as well as providing good
employment opportunities.
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