Tesco Pestle Analysis

Introduction

This report will present a brief context, recent history, objectives and structure, product/service of TESCO PLC, which is the largest chain of supermarkets of United Kingdom. This report will discuss its business relationships with EU countries. The later part of the report will focus on PESTLE analysis of TESCO, examining how each of these elements of the external business environment has had an impact on TESCO. The final part will examine in detail how Political factors may impact the future of TESCO and its business operations.

TESCO: The Biggest Supermarket Chain of UK by Sales

TESCO is UK’s biggest retailer by sales and also the biggest private employer, with more than 330,000 staff working in 3145 stores. It is also the

• a growing business, full of opportunities

• modern, innovative and full of ideas

• winners locally whilst applying our skills globally

• Inspiring, earning trust and loyalty from customers, our colleagues and communities (Our Tesco, 2015).

This vision has helped Tesco to build its business globally and operate in multicultural and multifaceted environment.

STRUCTURE

Tesco’s employs a ‘decentralized structure’. In a decentralized structure, the decisions are taken at lower level of the management. Tesco’s each geographical location has a regional manager, the store manager is responsible to the regional manager and can make decisions specific to its store. This decision making responsibility empower store manager to own his/her responsibilities and motivate to do better.

Tesco Products and Services

Tesco houses a number of brands under its umbrella, it started with food retail stores and grew organically acquiring different stores. Apart from food and groceries retail stores, it now has its own internet retailing, Clubcard, petrol stations, bank and its own mobile phone

Even though Tesco largely support British jobs and expertise by consistently encouraging UK branded supplies but it has recognized the need for products from abroad and thus have started working with many different suppliers of different region and ethnicity. For example, “Tesco cooperates with 1500 Polish suppliers and a number of shopping mall’s tenants. Tesco promotes polish producers and local economy.”

PESTLE Analysis

To get a better understanding of the external environmental factors, the PESTLE analysis is presented below:

Political Factors

Since Tesco is a global organization, operating in more than 12 countries across Asia and Europe, political factors are the most crucial external force that derives its business operations. Political factors involve legislation, tax rates and the economic stability of the country it is operating in. The ruling political party in any given state in which Tesco is operating can influence major strategic decisions such as employment of domestic population at a certain minimum wage. Further political factors will be discussed widely in later part of the