Tesco's Business Environment Analysis: PEST and Porter's Five Forces

This report provides an analysis of Tesco's business environment, employing PEST and Porter's Five Forces frameworks. The PEST analysis examines political, economic, social, and technological factors influencing Tesco's operations, highlighting the impact of global politics, the COVID-19 pandemic, and shifting consumer preferences towards veganism. Porter's Five Forces model assesses competitive rivalry, the threat of substitutes, and the bargaining power of buyers and suppliers, concluding that competitive rivalry and buyer power are significant factors for Tesco. The report emphasizes the importance of understanding the business environment and competitive forces for companies to operate smoothly and maintain profitability. It is crucial for organizations to assess political stability, economic conditions, cultural influences, and market trends before entering international markets and to evaluate potential risks and opportunities.

Business Environment

Table of Contents
 Introduction
 PEST analysis
 Porter’s Five Forces
 Conclusion
 References

INTRODUTION
 Business environment is also known as market environment which refers to the
factors of forces that could impact the ability of a company to perform their
business. There are various macro environmental factors which could influence the
functioning of a company. Tesco is a multinational British retail industry which
has it headquarter in valve in Garden City England. This company was founded in
1919 and is considered as one of the market leaders in grocery industry of UK.
The following report covers the best analysts of the company in order to examine
its macro environmental factors. Furthermore, the report also contains the
explanation of competitive forces by implementing porters five forces.

PEST ANALYSIS
 PEST analysis helps companies in determining and capitalising various
opportunities that are offered by present conditions in the environment
of business. It is a marketing tool which is used to analyse external
environmental factors.
 Political factors: these factors are associated with the laws executed by
government of various nations. In case of Tesco, since it is operating it
business worldwide the global political components highly impact the
performance company.

CONTINUE..
 Economic factors: these components are
considered to be linked with financial situation of a
country which could influence the stability offer
company. In context to Tesco the business of the
company was highly impacted due to the COVID-
19 pandemic.

CONTINUE..
 Social factors: these components of the
model are linked with the social and
cultural trends which impact the business
of an organization in the market. In
context to the Tesco, the preferences of
people have been highly switching from
meat-based food to vegan food.

Porters Five Forces
 This is a marketing tool which is executed by
companies to evaluate their competitive forces
that could influence their business
 Competitive rivalry in the market: This is a
factor which helps in explaining how the
business of companies could be impacted by the
activities of their competitors.

CONTINUE..
 Threats of substitutes: This vector of the model
describes how the substitutes a secondary goods of
original product could impact the profitability of
company. In case of the selected firm, the threat of
substitutes is very low because there are only free few
alternatives present in the market two retail products.

CONTINUE..
 Bargaining power of buyers: This factor off
the model health and determining how
customers can influence the profitability of a
company. In case of the selected organization,
the bargaining power of customer is high
because there are various other retail
companies who offers various products or
services.

CONCLUSION
 From the above discussion it has been calculated that it is very important for companies to
examine their business environment in order to operate the activities smoothly in the market. It
has also been evaluated that companies must determine the competitive forces which could
impact their profitability and growth. Before entering into the international market organization
must examine their political stability economic conditions, cultural influences and market trends.
It could also be concluded from the above discussion that various number of companies present
in the same sector could decrease the market share of company. In the end it could be said that it
is very vital for organizations to evaluate all the risk and opportunities it could face in the market.

REFRENCES
 Roth, S. and Valentinov, V., 2020. East of nature. Accounting for the environments of
social sciences. Ecological Economics, 176, p.106734.
 Abraham, S., 2018. Emotional Intelligence as a Coping Strategy on Stressful
Organizational Environments. Proceedings of the Northeast Business & Economics
Association.
 Arkesteijn, M. and Heywood, C., 2021. Alignment theory: For CRE and workplace. In A
Handbook of Management Theories and Models for Office Environments and Services (pp.
100-116). Routledge.
 Ataburo, H., Muntaka, A.S. and Quansah, E.K., 2017. Linkages among e-service quality,
satisfaction, and usage of e-services within higher educational environments. International
Journal of Business and Social Research, 7(3), pp.10-26.

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