Pestel and Porters Tesco

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PESTEL provides an analysis into the external business factors which may effect the company performances. It can be used on a daily, weekly, monthly and yearly basis to analysis the macro environmental effects on a company. POLITICAL-EU Free trading laws promoting trade between western and eastern European resulting in expansion of tesco retail outlets ECONOMIC-Economic recession has affected consumers buying behaviors. Consumers buy essential commodities however the demand for luxury has decreased. Consumers spend less time eating out and spend more time eating in, in order to cut down on cost. SOCIAL-The majority of the uk population is made up of retired people who spend less on food and eat less. Consumer attitude changing to become more healthy. Increase in demand for organic foods. Increase in UK ethnicity population has lead to a wide range of food items available in store TECHNOLOGICAL-Increase in population access to internet has caused an increase in Online grocery shopping. Loyaty programs has enabled tesco to analyze consumers spending habits. Mobile technology allowing convenient shopping on mobile devices. Self service tills makes buying quicker for customers ENVIRONMENTAL-Incentives to re-use bags and be more environmentally friendly. Recycling center’s available at tescos. Carbon foot print data available on some products.Greener living scheme which advices customers on environmental issues such as how to reduce food waste and carbon foot print when preparing meals LEGAL-Increase in VAT rate will affect the non-food sector of tescos. Increase of minimum wage of over 21s (from 6.08 to 6.19) impacts operating costs.

PORTERS 5 forces allows the analysis of the competitive environment. SUBSTITUTE of PRODUCTS and services-Low threat of substitute for food products as tescos provides quality goods at low prices Substitutes- indirect- pubs offering food, local marketss or shops, on line suppliers New COMPETITORS - Low rate of competition from new...
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