TESCO is one of the leading international retailers in the world. It was started in the mid of 1920s with the trading name TESCO. Since then the company has slowly expanded and marked its presence in different markets and sectors (TESCO) . The growth strategy of the company is a long-term strategy based on four key parts: growth in the Core UK business to expand by growing internationally to be as strong in non-food as in food and to follow customers into new retailing services. Knowing this little information about the company, the environmental analysis of the company is done and presented in the forthcoming paragraphs.
PESTLE analysis is a useful tool for understanding the "big picture" of the environment, in which you are operating, and the opportunities and threats that lie within it. By understanding the environment in which you operate (external to your company or department), you can take advantage of the opportunities and minimize the threats. (RAPIDBI)
Specifically the PEST or PESTLE analysis is a useful tool for understanding risks associated with market growth or decline, and as such the position, potential and direction for a business or organization.
Political Environment: Political forces influence the legislations and government rules and regulations under which the firm operates. Every company faces political constraints in the form of antitrust laws, fair trade decisions, and tax programs, minimum usage legislations, pollution and pricing policies, administrative activities and many other actions, aimed at protecting the consumers and the local environment. In 2001, The Department of Trade and Industry (DTI) introduced a Supermarkets' Code of Practice to regulate trading relationships between the four largest UK supermarkets and their suppliers.
Tesco is a signatory to the Code and has met its obligations for implementing the Code. The company is committed to maintaining strong mutually advantageous relationships with its suppliers.
Economic Environment: Economic factors clearly indicate the nature and direction of the economy in which a firm operates. Every market is unique and consumption patterns change along with the wealth of the consumers in various market segments. For strategic planning all the economic trends at national and international levels have to be considered.
Tesco makes a significant contribution to economic activity in all the places in which it operates. Every week over 400,000 staff serves over 30 million customers in 13 countries. The company has to its credit a track record of providing value for customers, creating jobs and training, providing opportunities for suppliers and regenerating deprived areas. The business relationship of Tesco is with nearly 2,000 own-brand primary suppliers in 98 countries.
Social Environment: The social environment is an important factor as changes in the values, beliefs, attitudes, opinions and lifestyles in society create potential opportunities for an organization. For