Introduction Pestle analysis

Pestle analysis is very significant for an organization in terms of business expansion across the country. This report aims to provide the detail PESTLE Analysis of Tesco retail chain in the UK.

 

Pestle Analysis 

PESTEL Analysis is a strategic tool, which is used to analyze various environmental factors that have an impact on an organization’s working to the large extent. It is a technique to analyze various opportunities and threats prevailing in the market.

Political factors:

TESCO is the UK based company, which usually enjoys the benefit of political stability in the UK. The main motive of any organization is to increase its sales revenue which helps to maximize the profit margin of the company. The political stability of UK allows TESCO to enjoy benefits regarding stability in various taxes, tariffs, duties, etc (BBC, 2011). Above this help the company to expand their operations in the country.

Economical factors:

The economic growth rate of UK is usually high. Currently, Tesco has 30% market share in the UK retail industry. High per capita income of the UK people helps the company to maximize its sales.

Social factors:

There are different social factors vary on the company sustainability like values, ethics, behaviour, lifestyle. The high living standard of the UK has a positive impact on the purchasing power of the customers. But in past few years, UK had suffered decreased birth rate and increased the life expectancy of people which led to shifting in the taste of individuals (Independent, 2010). For example, the online shopping of grocery products facilitated by TESCO is an approach that takes into consideration the mobility issues (Eastmen, and Iyer, 2004).

Technological factors:

The UK is a country which is mostly based on digitalization. However, Tesco always updated with new technology thereby, the company has introduced new advanced techniques like RFID Technology for enhancing the customers’ experience in the store. The company also launched PayQwid where customers can make an online payment. This will help to gain the competitive advantage in the market.

Environmental factors:

The UK is facing the pollution problem. Therefore, UK has put emphasis on controlling global warming and diminishing the utilization of greenhouse gases. Pollution and greenhouse gases may affect the Tesco operations. However, TESCO has adopted various measures like to collect unwanted plastic bags from customers to recycle them (TESCO, 2014).

Legal factors:

There are various laws, regulatory bodies that are dealing with the legal aspects of the company. For example, with regards to agriculture products, the UK government have revised the policies through subsidies will be allocated to farmers (Gov.uk, 2014). This affects the farmers’ ability to meet the standards set by TESCO. Therefore government bodies and legislations have a direct impact on the working of the company.

Reference

Brealey, A. R., Myers, C. S. and Allen, F.(2011).Principles of Corporate Finance. Tenth Edition. New York: McGraw-Hill Irwin.

Essays, UK. (November 2013). PESTEL Analysis of Tesco. Retrieved from https://www.ukessays.com/essays/business/swot-and-pestel-analysis-of-tesco-business-essay.php?vref=1

Gov.uk (2014). Reforming the Common Agricultural Policy to Ensure a Fair Deal for Farmers, Consumers and Taxpayers [online]. Available from: https://www.gov.uk/government/policies/reforming-the-common-agricultural-policy-to-ensure-a-fair-deal-for-farmers-consumers-and-taxpayers [Accessed 2 October 2014].

Independent (2010) Will the Baby-Boomers Bankrupt Britain? [online]. Available from: http://www.independent.co.uk/news/uk/politics/will-the-babyboomers-bankrupt-britain-1936027.html [Accessed 1 October 2014].