Tesco Marketing Fundamentals: Internal & External Analysis Report

This report provides a detailed analysis and evaluation of Tesco's marketing fundamentals, focusing on both internal and external factors that impact the organization. It employs frameworks such as SWOT, STP, and PESTLE to assess Tesco's strengths, weaknesses, opportunities, and threats, along with the influence of political, economic, social, technological, legal, and environmental elements. The analysis also considers the significant impact of the COVID-19 pandemic on Tesco's operations, consumer behavior, and strategic adaptations, highlighting changes in online sales, supply chain dynamics, and customer preferences. The report concludes by underscoring the importance of understanding these fundamentals for maintaining stability and growth in the retail sector.

Marketing
Fundamentals analysis
and Evaluation

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
Conduct the internal and external analysis which can impact the business organisation......1
You should use appropriate academic theory and industry examples in order to support your
answer.....................................................................................................................................1
Analyse the external environment using the various models for the chosen business
organisation............................................................................................................................4
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Fundamental analysis is defined as the method used to measuring and examining economic
and financial factors. It includes the microeconomic analysis, company analysis and industry
analysis. Whereas market fundamentals analysis are the factors that needs to be consider to a
company before starting their business or maintaining steady growth in the business. It comprises
various shifts in the company marketing strategy, tools used be company in marketing and the
project planning. These marketing fundamentals includes finding and understanding needs of the
market, create communication process with the potential customers and the process of marketing
by the specific organisation. Marketing fundamentals is a framework that companies acquire in
order to maintain stability in the organisations as per the current trends in the market and
customer expectations. The report is being conducted on the Tesco which is a United Kingdom
based retail supermarket. Tesco is having its headquarter in Welwyn Garden City, UK. (Alanzi,
S., 2018). The aim of this report is to highlight the internal and external analysis of the Tesco
company and also the effect that the COVID 19 pandemic have on Tesco with relevant
academic theory and industry examples.
TASK
Conduct the internal and external analysis which can impact the business organisation
You should use appropriate academic theory and industry examples in order to support your
answer
Due to pandemic most of the organisations gets badly impacted all over the globe. The retail
sector is mostly impacted due to this as this sector includes number of factors. There is huge
change in the demands of the customers with that most non essential retail activities shuts down
because of difficult conditions. The after effects of the pandemic also making impact on the
different organisations as there is major changes in the approaches of work in the context of
employees as well as the organisations. Tesco is the company which deals in day to day activities
of the customers and after pandemic many customers changes their approaches towards and
foods and other essential items.
Internal analysis of Tesco
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The internal analysis focuses on the Tesco competency in dealing with situations, resources and
competitive advantage. SWOT analysis in the context of Tesco are discussed below:
SWOT Analysis- It is the framework which is establish to evaluate the and develop strategic
planning in the organisation. It decides the capabilities of the organisation and the area in
which organisation is lacking. With that it describes the current and future potential of the
organisation. (Bakhat, R. and Marroun, S., 2022)
Strengths Weaknesses
It includes the internal positive elements of the
organisation which contains some factors of
the company such as at what process business
is successful , What are the competitive
advantage that a company having in the
market? and What are the assets that company.
In the context of Tesco, their strength includes
their strong recital during pandemic which
delivers growth in its online sale, their huge
market share as it contains 27% of the grocery
market share and their constant invention in
agreement to customer expectations. In the
pandemic Tesco benefited through a jump in
the demands for the groceries as more meals
are eaten at home by the customers. Tesco
has shown great agility and strength in all over
the time in pandemic.
It is defined as the negative factors that are
opposite from strengths and distract from
company. These are the features of the
company which might need improvement in
order to be more competitive. This comprises
things which business need to improve, assets
company requires and the gap which requires
to be completed. In the context of the Tesco,
they also possess some weaknesses that are
inventory management which requires to be
managed effectively, food safety issues which
are lacking in adhering food safety. For
example, Their instant food recalls detects
safety issues. Amid the pandemic Tesco prices
fell approximately 1.5%. Company have huge
brand image but somewhere in the pandemic
there is lack of loyal customer base and
company have high level of debts on them.
Opportunities threats
Opportunities includes all the external factors
in the company's business environment which
are likely to make aids in the success of the
Threats are describing as the external factors
that business has no control over. But it
impacts the functioning of the company. These
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company. It contains some emerging trends in
the market that encourages and influence
people to buy more products , upcoming events
or changes in the market that may provide
benefits to the company and changes in the
regulations and code of conduct that may
impact company positively. In the context of
the Tesco, there are multiple set of
opportunities for retail sector such as growth
of online grocery sales in the pandemic, high
unemployment rates which helps in generating
more employees in the company and rise of
alternatives of non-veg as many people are
turning towards veg food. Tesco states that in
the pandemic there are approximately 50,000
workers are working on the temporary basis
and about half of them are joined the retail
company permanently.
factors contains potential competitors who is
entering in the market, change in technology or
in machinery, development in the competitive
market and change in the behaviour or
expectations of the consumer. In respect to the
Tesco, the common threats involves is
increment in the competition in retail sector,
economic rescission in the UK and effects of
the Brexit and supply chain which affects
imported food in supermarket. In creasing
competition after the pandemic and
maintaining good relationships with the large
companies is proving to be big topic of
concern. And the product and services of the
company needed regular innovation as rivals
are adopting different methods of
manufacturing and enhancing their products on
a continuous basis.
The another model which can be applicable to conduct internal analysis of the company is STP
marketing. It is describes as the 3 step marketing model that evaluates and examines the products
and services of the organisation with that it also explores measures of communication that
company uses to connect with their customers. The internal analysis of Tesco through STP is
discussed below:
Segmentation of the market- Segmentation of the company can be divided into different aspects
of the working and the it can also be segmented physically. Tesco is well established
supermarket chain having such as wide network of distribution. They are working in UK and 13
other countries in both the rural and urban areas. The goods and services that Tesco is providing
is suitable for all the age group of people. They have segmented their goods for every age group
of people. Basically Tesco is selling their products in most of the places in the UK and having
stores in both rural and urban areas of the UK. The prices at which they are providing products
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are suitable for all the income group. Tesco is providing products that uses in day to day
operations of general people , so they are attracting their customers by developing innovative
products for them. At the time of pandemic they become more active on enhancing their
network on internet in order to make more sales through online modes. (Deepak, R.K.A. and
Jeyakumar, S., 2019)
Targeting – This stage includes the framework of target best customers of the company. In
consideration to achieve maximum profit for generating potential growth , there is a need to
target the buyers who actually needs the company products. In the context of Tesco, they are
target on the basis of the customers who are more interested in bargains and low cost price. As
they are providing large alternative of many products , they target the customers who likes
variety in the products. In the pandemic , they create an strategy and shift towards more healthy
products as customers potentially shifting towards healthy eating. (Dymov, D., Sheynin, Y. and
Olenev, V., 2020)
 Positioning- This stage includes the establish organisation appropriately in the market
which helps in distribution of the goods and services of the company easily. It is the
capability of the organisation to influence customers in regard to particular product and
brand. In the context of Tesco, they target customers on the basis of health and beauty
products as they are having attractive range of products that make influence on the
buyers. In the pandemic Tesco makes major shift in the healthy alternatives of food
products that provides taste with different health benefits.
Analyse the external environment using the various models for the chosen business organisation
As it is recognised that there is the effect of the external environment over the business
organization. It is very significant for every business enterprises to identify the impact of the
external factors over the business operations. As after the pandemic and the coronavirus the
situation is changed and it is very essential for the organisation to keep safety for its employees
and customers. The coronavirus has impacted the company in numerous ways. The external
environment need to be analysed by the administration in order to develop the strategies by the
organisation. There are use of the various model for the external environment which is discussed
below;
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PESTLE analysis
This is the implement which is utilised by the business enterprise in order to identify the
different external factors which have a influence over the business operations. It is very
important for the organisation to identify the impact of the factors so that the company can use
the various strategies in order to overcome with the impact. There is both positive or negative
impact of the external environment. The various factors are mantioned below in context of
Tesco:
Political- This is the aspect which is related to the extent to which government policies may
impact the organisations and its business operations. Such elements include trade policies, tariffs
etc. it is identified that there is the impact of the government regulations over the Tesco which
has both positive and negative impact over the organisation. So after the coronavirus it has been
analysed that the changes in the government policies have impacted the Tesco company. The
Brexit move has also impacted Tesco as there was the separation from the European Union
which impacted in the important and export of raw material for the business organisation. Also,
Tesco need to be aware of the certain regulation within the United Kingdom after pandemic
which need to be adopted in order to keep the safety measures for the customers and as well as
for the staff members.( Hou, J., Wang, C. and Luo, S., 2020)
Economical- This is the issue which is related to the direct impact of the performance within the
economy has a influence over the business organisations and its business operations. Such
factors nuclide direct taxes, inflation rate etc. it has been identified that there was the impact of
pandemic within the Tesco company in a negative way. It is very imperative for the organisation
to keep the changes in the economy into consideration which has a influence over the
organisation. the pandemic has made rise in the inflation are which has increased the prices of
the products and services. This lead to decline in the demand of the products and has impacted
the Tesco company. The positive impact of this factor over the Tesco was that as there was shut
down in the economy and people were at their homes which has increased the consumption of
the grocery items. This has increased sale for Tesco during the coronavirus.( Japaries, W. and
Nando, A., 2022)
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Social- This is the element which is concerned with the surroundings which can influence the
business organizational and its operations. Such factors include lifestyle, attitude , behaviour.
This is the most important factor for the marketers which need to analysed in order to have an
effective impact over the business enterprise. It has been identified that there is the influence of
the social groups and the people surrounded over the purchase of the products and services for
the customers. In context of Tesco, there was the impact of the pandemic over the organisation
and this impacted in the sales of the company. As consumers were influenced because use of the
packed food products and health issues. This is very vital for the organisation to analyse the
preferences of the consumers. which has a impact over the business organisation. As people now
a days prefer to have healthy food after the coronavirus which has influenced the Tesco in order
to keep the products according to the preferences of consumers. (Kartajaya, H., Setiawan, I. and
Kotler, P., 2021) Technological- This is the factor which is related to the innovations and development
around the world has a impact over the business operations. Such factors include research
and development, digitalisation, automation, artificial intelligence etc. as the change in
the technology it is very important for the Tesco company to adopt to the latest
technology in order to attract customers. Keeping the safety in mind it is very important
that the Tesco develop the strategies so that customers do not have to stand in Queue for
the long hours for billing. It is very essential that the company includes the online
services effectively in order to avoid the crowd. As there is the fear in the minds of the
people because of coronavirus the customers are not willing to visit the store whereas
they are preferring online purchase.
Legal- This is the aspect which is related to the certain laws which need to be tracked by the
business organisation which has a influence over the organizational and its operations. Such
factors include employment law, safety law etc. as the employment safety law is most important
for the Tesco company in order to avoid any legal actions from the government. As after the
pandemic this is the most important law which need to be followed by the company for the
safety of employees. As the heath and safety is the most important aspect because of the spread
of coronavirus. It is very important for the Tesco company to take care of the laws within the
United Kingdom which need to be followed in order to be effective and efficient. (Kinoshita, N.,
Shirahata, T. and Misaki, Y., 2019)
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Environmental- This is the cause which is attendant to the surroundings which can impact the
business organisation and its operations. Such factors include climate changes, weather
conditions, sustainability etc. it is very important for the Tesco to be sustainable while
conducting its business operations. This is most important after the spread of coronavirus. It is
very important that the company focus on the sustainable development and reduce the use of
carbon footprint. In order to keep the environment safe it is the duty of the organisation to
practice certain activities which can help in improving the conditions. (Kreps, D.M., 2019)
Porters five forces
This is model which is considered by the business organisation in order to identify the
various forces which can impact the business organisation. There has five forces which has a
influences over the business enterprise. It is very important for the organisation to analyse the
differences forces in order have a competitive advantage and increase growth of the company.
The various forces are explained below in context of Tesco;
Threat of new entrants- It has been identified that the power of the business organisation is
subject by the power of the new entrants into the new market. As the less time in the money cost
with a competitor in order to enter a complete industry and be an affective competitor the More
stab list company can gain this significantly weakened. It is identified an industry the strong
barrier to entry is IT organisation within that industry since the organisation would be able to
charge higher prices in discuss better terms. In context of the disco the crack of the new interest
as low as the industry is very wide and the disco is a well-established company with new entrants
cannot take the market. There is no threat for the Tesco company for the new entrants within the
retail industry (Musonera, E., 2018) Bargaining power of buyers- The bargaining power of the customers is defined as the
ability of the customers to cause prices lower the level of power is one of the five forces.
It is affected by how many by the customers of the company has a significant as it would
cost the company to find the new customers and market for its output. As a smaller than
the powerful customers describes that the customer has no power to convey with the low
charges and better deals. The organisation has independent customers which have an easy
time chatting a price is to increase more profitability. Customers as high as there are
biggest type of organisation to which the customers can switch and change the
preferences. This is the force which can impact the organisation in a very negative way
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with organisation need to keep its customers happy. It is identified that this is the force
which is most affected for the retail industry.
Bargaining power of suppliers- this is the next factor within the model where it is identified that
how easily suppliers can determination the cost of the imports. It has been declared that the
affected by the number of supplies of the key inputs of a good or service is how you need this
input or in how much it would cost the business to switch to another supplier. As the few
numbers of suppliers to the industry the more compute depends on the supplier. As a result, the
supplier has no power and can actuation up to input the cause and push for the other benefits in
trade. On the other hand, when there are large number of supplies or lose switching cost between
the rival suppliers and keep it in because loan and enhance its profits. So, the bargaining for the
suppliers is low because the company can switch to another supplier is the suppliers against the
company. It is very important for the suppliers to keep the trade and kit for materials best quality
in order to attract the business organisation in an effective way. This is the force which can
impact organisation as the rise in the raw material can lead to the change in this applies for the
business organisation. (Salamat, S., Hadavifar, M. and Rezaei, H., 2019)
Threat of substitutes- This is another five forces which is 3 to the substitute it is defined as the
substitute goods services which can be used in place of the companies put up a service which can
be the threat for the company. The company said that the scooter services for which there are no
close substitute will have low power in order to increase the prices and look in favourable terms.
When a close substitutes are available the customers will have the option for going in buying the
company’s product in the business’s power can be debilitated. As the Tesco it is identified that
there is a hydrate of the substitute is in the grocery items there are various other items which can
be substituted by the other product and service which is a big treat for the company. It is very
important for the business of nutrition to identify this threat in find the various ways in which the
customers can be attracted in an effective and efficient way (Schleimer, S., 2018)
Rivalry against competitors- It is identified that this is the force the weather is number of
Competition in the organisation where there is ability to beat the competitors. The large number
of competitors along with the number of equal and put of the services they offer the list to the
power of the company. This identify the suppliers in my mistake of the company’s competition
and if they are able to offer a better deal at lower prices which can increase the competition
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within the industry. It is identified that the competition rivalry is low as organisation has a high
power to charge higher prices inside the terms in order to deal to a higher sales and profit. In
context of the Tesco there is a high competition within the industry as it is a little industry in
their competition and image can I track customer effectively. (Waller, A.R., 2018)
CONCLUSION
From the above discussion it has been concluded that it is very important for the business
organisation to examine the internal and external environment. It is very important for the Tesco
company to analyse the internet and external factor in order to have the effective marketing
fundamentals strategies for the development of the business organisation. It is identified that
there are various strength and weakness which can help the business organisation to expand in a
effective way. As the opportunity and threat also can help the business organisation in finding
the new ways in order to develop the most strategic framework. The external environment advise
that the organisation need to be aware of the various external forces which can impact the
business operations in the organisation.
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REFERENCES
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