Strategic Analysis of Tesco: A Comprehensive PESTLE Framework Report

This report presents a PESTLE analysis of Tesco, a major British multinational retailer. The analysis systematically examines the political, economic, social, technological, legal, and environmental factors influencing Tesco's operations and strategic decisions. The political factors include government intervention, trade policies, and Brexit uncertainties. Economic factors cover financial stability, inflation, and consumer demand. Social factors address changing consumer preferences, health consciousness, and demographic trends. Technological factors explore Tesco's online shopping and Clubcard innovation. Legal factors discuss competition laws, employment regulations, and consumer protection. Environmental factors analyze pollution, carbon footprint reduction, and the impact of Brexit on the environment. The conclusion emphasizes the importance of PESTLE analysis in helping Tesco navigate challenges and identify opportunities within the macro-economic environment, ensuring customer satisfaction and business expansion.

Pestle Analysis of
Tesco

Contents
INTRODUCTION:..........................................................................................................................1
MAIN BODY:.................................................................................................................................1
CONCLUSION................................................................................................................................3

INTRODUCTION:
Pestle analysis is a technique used to analyse and monitor external environmental factors
that have a direct impact on an organisation's performance. Words in pestle analysis stands for
political, economic, social, technological, legal and environmental factors (Shageeva and et. al.,
2017). Tesco is a British general merchandise retailer and multinational food retailing company
with headquarters in Welwyn Garden City, Hertfordshire, England, United Kingdom.
MAIN BODY:
Below is description of Pestle Analysis of Tesco plc:
 Political factors: These are all about how and to what degree a government intervenes in
the economy. It includes foreign trade policy, tax policy and so on. In context of Tesco,
in UK there is ongoing financial instability in the country, many governments inspire
retailers to create job opportunity for domestic population. Due to pandemic situation as
Brexit it creates many uncertainties in UK it leads to government to make environmental
laws. Tesco has proved that it is capable to respond to current and future legislation and
adjust its marketing policies and business accordingly (Chasdi., 2017). The only
implication is Tesco can face Brexit market where they are not allow to trade in European
countries.
 Economic factors: It includes the factors that influence a country or region's financial
performance. Economic growth rate, exchange rates inflation rates and so on are included
in this. In UK, Tesco is most likely concern in factors like demand, profits, leverage costs
and prices so company is aware of any changes in policies like taxation which affects
accessibility of finance. Due to decline in disposable income, Tesco shifts its focus
towards advertising its brand value rather than on luxurious items. Due to pandemic
situation, Brexit inflation rate in UK leads to economy in pressure.
 Social factors: It includes the factors that makes the social dimensions of the market. It
includes the factors like demographic characteristics, cultural norms, age distribution and
so on. In UK, people are becoming health conscious so Tesco is adapting a change by
offering organic products to consumers. The high demand of meat like halal meat so
Tesco made independent counters in some stores of meat for satisfy customer wants. For
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people of UK, Tesco start providing specific type of chicken/meat, demand of vegan food
or vegetarian food according to age distribution.
 Technological factors: These factors refer to the technological innovation that have
either positive or negative impact on the business operations. Tesco develop and
introduce online shopping with home delivery facility (Aithal, 2017). Tesco introduced
'Clubcard' in 1995 which is been a big force in success of company as this card can be
used in any country where Tesco operates. By introducing self-service checkout points it
provides consumers with convenience an also helpful for company in reducing cost.
 Legal factors: It includes the laws like employment laws, consumer protection laws,
discrimination laws, copyrights and patent laws, labour and safety laws and so on. There
is a direct impact on Tesco of this, in UK competition law prohibit anticompetitive
activities so by this Tesco cannot merge with any supermarket. Tesco cannot pay any
labour less than minimum wages that set by government of UK. Tesco cannot sell many
alcoholic drink to underage customers.
 Environmental factors: These factors have a significant impact on the environment
around us environment around us, including the acquisition of raw materials, carbon
footprint and so on. Pollution and green house gas emissions: to reduce pollution and
global warming Tesco reduces its carbon footprint by 50% by 2020 (Madi, 2017). Brexit
leads to uncertainty to many people who earn their livelihood by selling fishes. In context
of Tesco, government make many environment laws for protection of their customers.
CONCLUSION.
When a business wants to expands its business pestle analysis is very important as it
examines the macro economic factor of the country. Tesco uses pestle analysis to overcome
threats that company faces and analyse opportunities for satisfied their customers.
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REFERNCES
Books and Journals
Shageeva and et. al., 2017, September. Training the achievement-oriented engineers for the
global business environment. In International Conference on Interactive Collaborative
Learning (pp. 343-348). Springer, Cham.
Chasdi, R.J., 2017. Corporate Security Crossroads: Responding To Terrorism, Cyberthreats,
and Other Hazards in the Global Business Environment. ABC-CLIO.
Aithal, P.S., 2017. Impact of Domestic, Foreign, and Global Environments on International
Business Decisions of Multinational Firms: A Systematic Study. International Journal of
Management, Technology, and Social Sciences (IJMTS). 2(2). pp.93-104.
Madi, M.A.C., 2017. Global business models and labor challenges. Cambridge Journal of
Economics. 24(6). pp.771-787.
Online:
PESTEL analysis of the UK, 2018. [Online] Available Through:
Size<https://howandwhat.net/pestel-analysis-uk/>
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