Tesco: In-depth SWOT and PESTEL Analysis for Business Strategy

This report provides a detailed analysis of Tesco, a global supermarket chain, using SWOT and PESTEL frameworks. The introduction highlights Tesco's goal of providing high-quality products to meet customer needs and the importance of analyzing micro and macro environmental factors. The SWOT analysis assesses Tesco's strengths (awards, market position, technology), weaknesses (subsidiaries, competition, consumer spending), opportunities (strategic alliances, online shopping, product offerings), and threats (economic recession, food prices, labor costs). The PESTEL analysis examines political, economic, social, technological, environmental, and legal factors impacting Tesco's operations. The report also discusses how external factors influence Tesco's business, including political, economic, social, technological, ecological, and legal variables. The conclusion summarizes the importance of these analyses for business success. References to academic sources are included.

Individual report
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TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
SWOT ANALYSIS................................................................................................................3
PESTEL Analysis...................................................................................................................4
How the company impact its context External Environment.................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................7
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INTRODUCTION
There are different kind of organisation operate their business that are of various size in the
market. The primary purpose of company is to increase financial position at workplace. In
current time, it is assess that there are different kind of company executing its business in
specific factor for accomplishing favourable result. In this assignment, the company is taken is
TESCO. It is determined as the global supermarket chain situated in UK. The main purpose is to
providing superior quality products to its customer for satisfying their need. In this report, there
is a discussion regarding micro and macro environmental elements that enforces direct effect on
organisation. In assistance of this, there are different company that executed business in a
specific field for accomplishing favourable results in future time period (Adem, Çola and
Dağdeviren, 2018).
MAIN BODY
SWOT ANALYSIS
The SWOT analysis is adapted for assessing internal as well as external atmosphere of
company that enforces direct effect on activity of company. The strength, opportunity, weakness
and threat of organisation are given below:
Strengths:
 The primal strength of TESCO is to get ample of awards for offering superior facility to
customer during the period of time.
 TESCO is considered as the largest organisation who conducts their operations in retail
industry that aids assistance in accomplishing competitive edge over rival firm in the
market (Schütz and Schrefl, 2017).
 In assistance of this, they emphasis on enhancing use of latest or advanced technology
for offering cost appropriate goods to its user that is determined as primal strength for
organisation.
Weaknesses
 There are different subsidiary of chosen organisation that do not organise their business
in proper way it enforces direct effect on profitability of company in future time period.
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 Due to enhance level of competition, it decreases profit of Tesco during the period of
time.
 Due to decrease in level of income of individual person, the consumer does not want to
spend its money in buying luxury goods and services that decreases income of Tesco.
Opportunities
 There are different type of opportunities prevailed for Tesco like strategic alliance that
aids assistance in offer more attractive goods to its user in the market.
 There is a possibility to enhance online shopping which assists in offering home delivery
facility to customer.
 They also emphasize on providing western product to customer according to demand of
user that aids assistance in enhancing profit in future time period.
Threats
 Due to economic recession as well as credit crunches that is determined as a primal threat
for company, it reduces or decreases buying power of user during the period of time.
 Due to enhance in price of food around the world, it decreases level of income of Tesco.
 Labour is determined as a primal issue that is confronted by Tesco because due to
enhance in wage rate around the world it add extra cost to company.
On the above given analysis, it is assess that SWOT analysis is adopted for assessing internal
as well as external atmosphere of organisation that enforces direct effect on company. The
strength, weakness, opportunities as well as threats of organisation are important to determine for
smooth operations of company (Ramkumar, Schoenherr and Jenamani, 2016).
PESTEL Analysis
PESTEL Analysis is mainly used for determining factors in the external business
environment which halve direct impact on business functioning of TESCO which is mentioned
underneath as:
Political factor These factors include legislation, tax policy, economic & political
stability which have direct impact on enactment level of Tesco. As there is political stability so
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firm does not amend their plans and policy thus develop positive impact on economy and in turn
growth of overall economy. On the other side if there is alteration in policy of government it is
essential for firm to adopt those changes this can be difficult for Tesco to makes changes in their
policy frequently as it develop negative business environment (Boasson and Wettestad, 2016).
Economic factors: This factor consists of inflation, deflation, and demand & supply
factor in economy. As the income level of person is constantly decreasing thus they are spending
less money on luxurious products these affect sales of firm. On the other side firm is offering
quality products to their client according to their desired need, this helps in enhancing profit of
firm in future time duration.
Social factors This consist of fashion, trend, population factor and many more which
have direct impact on business functioning. The firm offers goods according to the wish of
customers which helps in enhancing growth of business in the future time span. As the taste of
client is constantly changing it is difficult for business to make alteration in order to satisfy need
thus there can be decrease in profit ratio.
Technological factor If the firm wants to satisfy their customer, then it can be done by
executing innovative technique. Tesco mainly focuses on spending their resources on that project
which are energy efficient so that long term goals can be easily achieved by minimising the
carbon footprints that have positive impact on the functioning of firm. On the other side, as
advance technology is implemented it adds extra cost to business (Heischmidt and Gordon,
2020).
Environmental factor As the environment issues are constantly increasing thus Tesco is
mainly focusing on reducing their carbon footprints by almost 50% in 2020 that helps in
minimising wastage in effective manner. The firm is offering products which are environment
friendly to their potential clients that maximise goodwill of company in the eyes of client at the
market area. Other than this firm also manufactures some products which emit pollution and this
develops negative impact on the activity of business.
Legal factors: This factor consists of rules, legislation and regulation and many more.
Thus the firm mainly focuses on regulation in order to execute all business activity in desired
manner. As there are changes in regulations it is not possible for business to adhere all rules that
are negatively affecting business activity.
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From the above factor, it has been analysed that PESTEL framework helps Tesco in
determining all the internal and external forces which are affecting their operations thus changes
can be made in those areas which are very weak.
On the basis of the above given project it is identified that both SWOT and PESTEL
analysis is vital to be considered by the firm for running their business activity in smooth
manner. Therefore, it is necessary to adopt various business practices in effective manner that
helps in enhancing business growth for future time duration (Hyatt and Berente, 2017).
How the company impact its context External Environment?
There is different type of external factor which are having direct impact on business
activity which is evaluated below as:
Political variable There are different laws related to business in various countries. Every
factor help firm in order to analysis the efficiency level at which government is interfering. It is
vital for governing bodies to analyse both the future and current business situation in relation to
advertisement strategy that have impact on business.
Financial component The economic variable is having direct impact on profitability of
business which consists of trade rate, loan cost etc. It is essential to separate all the variable so
that business goals can be achieved in desired time frame and revenues can be expanded.
Social factor There is different social factor that helps in analysing desire of their potential
client according to their age, analysis perspective etc. so that products can be offered to them
accordingly (Khaba and Bhar, 2017).
Mechanical component It is most vital for business to generate those products which are
much superior for the socialising merchandise in order to expand profit for future time duration.
Ecological variable There is different element of government that helps in enhancing
business efficiency. It is vital for firm to follow all rules that enhances brand image of firm at the
market area.
Lawful components legal element which includes laws, security laws as well as data
related to customer is collected by government in order to put rules within business organisation.
The legal element which consists of security law, empowerment law etc. and data linked with
customers is collected by governing bodies in order to implement rules at the work place.
There are various external business factors which should be taken into consideration by
business for smooth functioning of all business operations. It helps in achievement of set
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business goals in the desired time duration. Apart from this it also results in growth and success
of business in the future time period (Krasinskaya, 2020).
CONCLUSION
From the above report it can be concluded that there is business which are performing their
activity in different field with the aim of achieving good outcomes in the future time frame. The
internal and external factor in the environment have direct implication on business functioning
thus the weak areas are to be identified and efforts made for making changes in order to gain
success. Apart from this there are different business association which are performing their
activity according to size at market place.
REFERENCES
Books and Journals
Adem, A., Çolak, A. and Dağdeviren, M., 2018. An integrated model using SWOT analysis and
Hesitant fuzzy linguistic term set for evaluation occupational safety risks in life cycle of wind
turbine. Safety science, 106, pp.184-190.
Boasson, E.L. and Wettestad, J., 2016. EU climate policy: Industry, policy interaction and
external environment. Routledge.
Heischmidt, K.A. and Gordon, P., 2020. Different Strategic Planning Models: Considerations for
International Study Programs. Journal of Higher Education Theory & Practice, 20(15).
Hyatt, D.G. and Berente, N., 2017. Substantive or symbolic environmental strategies? Effects of
external and internal normative stakeholder pressures. Business Strategy and the
Environment, 26(8), pp.1212-1234.
Khaba, S. and Bhar, C., 2017. Quantifying SWOT analysis for the Indian coal mining industry
using Fuzzy DEMATEL. Benchmarking: An International Journal.
Krasinskaya, L.V., 2020. Development of the business plan of the investment project for the
wedding agency “Vanilla Sky” LLC: thesis annotation/Krasinskaya Lizaveta Vladislavovna;
School of Business of BSU, Department of International Business; Sc. Adv: Sadovskaya JY.
Ramkumar, M., Schoenherr, T. and Jenamani, M., 2016. Risk assessment of outsourcing e-
procurement services: integrating SWOT analysis with a modified ANP-based fuzzy inference
system. Production Planning & Control, 27(14), pp.1171-1190.
Schütz, C.G. and Schrefl, M., 2017, November. Towards formal strategy analysis with goal
models and semantic web technologies. In International Conference on Conceptual
Modeling (pp. 144-153). Springer, Cham.
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