Business Analysis Report: Tesco SWOT Analysis and Operational Impact

This report presents a SWOT analysis of Tesco, a major UK-based retail chain. The analysis examines Tesco's internal strengths, such as its simplified business model, low-cost structure, and diversified product range, as well as its weaknesses, including high debt and employee turnover. It also identifies opportunities for strategic partnerships and online shopping growth, while acknowledging threats from competitors, market uncertainties like Brexit, and disruptions like the COVID-19 pandemic. The report concludes that Tesco's strong brand image and low-cost structure are key strengths, despite market dependencies and potential challenges. The appendix provides company information, including its founding, headquarters, and competitors. The analysis is based on the PESTLE analysis conducted earlier.

Portfolio Paper 2:
Operational Impact
Analysis

Contents
Introduction..............................................................................................................................................3
Main Body...............................................................................................................................................3
SWOT Analysis of Tesco....................................................................................................................3
Conclusion...............................................................................................................................................3
References................................................................................................................................................5
Appendix..................................................................................................................................................6
Company Information..........................................................................................................................6

Introduction
This report is aimed at performing SWOT Analysis of Tesco. It will help in
identifying factors present in internal and external environment of company, using the
PESTLE analysis which was conducted earlier.
Main Body
SWOT Analysis of Tesco
Below mentioned SWOT analysis of Tesco will help it identify the impact of internal
and external factors over operations of the company:
Strengths – Biggest strength of Tesco is its simplified business model, low-cost
structure and efficient waste management practises (Ahmadzadegan and et.al., 2020). It
offers services both in its physical stores as well as online store. It also offers diversified
product range which includes grocery, clothing, home-ware, financial services, etc. It has a
reliable and efficient supply chain network. Technologies such as wireless devices,
electronic shelf labelling, self-check-out machine, RFID, etc. have earned it more customers.
Loyalty of customers towards brand is also one of the biggest strengths and competitive
advantage for the company.
Weaknesses – Company has a low-cost structure and therefore, incurs high debts and
credit card liability, which impacts its profits. Tesco employs high number of students at
direct sales counters, who are not there for long time. This increases employee turnover cost
for the company. Tesco has its shares of scandals, frauds and controversies which has
resulted in backlash from customers and loosing trust of investors. Many of them has resulted
in litigation cost for the company as well.
Opportunities – Strategic partnership with other brands and non-competing
companies in same industry and other industries can open new doors of opportunities for the
company. Also, increasing demand for online shopping also presents a good opportunity to
exploit for company with its strong logistics channel. Company can also bring new stores in
the localities where it sees the opportunities of earning good profits. Company can enter into
joint ventures with local brands there which will help it understanding the expectations of
local customers and improving store performance.
Threats – Company operates in a highly competitive and dynamic business
environment which presents as much threats as opportunities (Keiningham and et.al., 2020).
Uncertainties like Brexit referendum had created threats of trade deals with other European
partners which could impact cost structure of the company. Also, Covid-19 pandemic had
disrupted supply chain which lead to obstructions in delivery and delay in procuring and
supplying products, which costed company lots of lost sales opportunities in the times when
groceries and other company products were much in demand. There is also threat of
competitors poaching its efficient employees at better packages which will threaten its
productivity.
Conclusion
From the above SWOT analysis of Tesco, it can be concluded that biggest strength of
company is its strong brand image and low-cost structure, which has helped it maintain

sustainable finances and the position of market leader, even after chances of high employee
turnover cost. Tesco is highly dependent on market factors and any uncertainty in market can
create both opportunities and threats for the company such as Covid-19 lock-down, disrupted
supply chain posed a threat while increase in demand of grocery products improved sales.

References
Books and Journal
Ahmadzadegan, M.H. and et.al., 2020, July. Detailed Study on the Features of Mobile
Applications. In 2020 International Conference on Electronics and Sustainable
Communication Systems (ICESC) (pp. 901-907). IEEE.
Keiningham, T. and et.al., 2020. Customer experience driven business model
innovation. Journal of Business Research. 116. pp.431-440.

Appendix
Company Information
Tesco Plc which trades under the name Tesco, is a retail groceries and general
merchandise supermarket chain of UK. It was founded in 1919 by Jack Cohen and at present,
has its headquarters at Hertfordshire, UK. It offers groceries, clothing, books, electronics,
furniture, toys, financial services, etc. Its primary competitors include, Aldi, Sainsbury, Lidl,
etc. It is a listed London Stock Exchange company and is a constituent of FTSE 100 Index.