Tesco Pestel Analysis
INTRODUCTION
Corporate strategy dictates the future direction of a company by examining its objectives, available resources and how it connects with the external environment, (Lynch, 2005)
The production of food and drink products is Ireland’s principal domestic industry, providing over 230,000 positions and €26bn in annual turnover, (FDII, 2016). Tesco PLC is the largest retailer of food and drink in the UK and Ireland with over 3000 outlets. The supermarket sector, like all industries, is becoming more competitive due to many factors including globalization and new market entrants. In order for a company to remain competitive, a solid business strategy, cohesive to core values and objectives needs to be formed, implemented and monitored …show more content…
This information is beneficial as it allows us to proceed to use Porters 5 forces and SWOT analysis to gain knowledge on a company operating environments and sources of competitive advantage.
2.1 POLITICAL FACTORS
Before deciding to operate in a new country, a thorough political environment scan is necessary. “Elections and other political events, economic crises, and changing societal attitudes can disrupt the best-laid plans in both emerging and advanced economies” (Henisz and Zelner, 2010)
Tesco has varied operating locations, with stores in places such as UK and Ireland, Eastern Europe and Asia (Malaysia, Thailand, Taiwan and South Korea). Naturally, Political and legislative conditions play a significant role in influencing the performance of the company. These conditions include employment legislation, Tax rates and the political stability of a …show more content…
2.3 SOCIAL/CULTURAL FACTORS
Johnson et al., (2006) state that population demographics, lifestyle changes, consumerism and social mobility are all sociocultural factors influencing the microenvironment of a company.
As a result of the “baby boom”, there are increased number of elderly citizens in Ireland and the UK. This shift impacted consumerism and Tesco has responded by using the Internet as a platform to sell and deliver products. “Elderly people with a high income are generally more in favour to the use of the Internet and are interested to acquire products online”, (Eastmen and Iyer, 2004, p. 208)
Current trends also show that consumers have drifted to “bulk buying” similar to USA. Tesco have therefore presented a diversified range of non-food products such as technology and home ware. With current social trends of healthier eating, Tesco has reacted by introducing a range of affordable, healthy meals and created the “real food” and “healthy living range”. “Tesco Ireland aims to make healthy eating more affordable for customers by developing our Healthy Living range,” (Tesco, 2015).
2.4 TECHNOLOGICAL
Corporate strategy dictates the future direction of a company by examining its objectives, available resources and how it connects with the external environment, (Lynch, 2005)
The production of food and drink products is Ireland’s principal domestic industry, providing over 230,000 positions and €26bn in annual turnover, (FDII, 2016). Tesco PLC is the largest retailer of food and drink in the UK and Ireland with over 3000 outlets. The supermarket sector, like all industries, is becoming more competitive due to many factors including globalization and new market entrants. In order for a company to remain competitive, a solid business strategy, cohesive to core values and objectives needs to be formed, implemented and monitored …show more content…
This information is beneficial as it allows us to proceed to use Porters 5 forces and SWOT analysis to gain knowledge on a company operating environments and sources of competitive advantage.
2.1 POLITICAL FACTORS
Before deciding to operate in a new country, a thorough political environment scan is necessary. “Elections and other political events, economic crises, and changing societal attitudes can disrupt the best-laid plans in both emerging and advanced economies” (Henisz and Zelner, 2010)
Tesco has varied operating locations, with stores in places such as UK and Ireland, Eastern Europe and Asia (Malaysia, Thailand, Taiwan and South Korea). Naturally, Political and legislative conditions play a significant role in influencing the performance of the company. These conditions include employment legislation, Tax rates and the political stability of a …show more content…
2.3 SOCIAL/CULTURAL FACTORS
Johnson et al., (2006) state that population demographics, lifestyle changes, consumerism and social mobility are all sociocultural factors influencing the microenvironment of a company.
As a result of the “baby boom”, there are increased number of elderly citizens in Ireland and the UK. This shift impacted consumerism and Tesco has responded by using the Internet as a platform to sell and deliver products. “Elderly people with a high income are generally more in favour to the use of the Internet and are interested to acquire products online”, (Eastmen and Iyer, 2004, p. 208)
Current trends also show that consumers have drifted to “bulk buying” similar to USA. Tesco have therefore presented a diversified range of non-food products such as technology and home ware. With current social trends of healthier eating, Tesco has reacted by introducing a range of affordable, healthy meals and created the “real food” and “healthy living range”. “Tesco Ireland aims to make healthy eating more affordable for customers by developing our Healthy Living range,” (Tesco, 2015).
2.4 TECHNOLOGICAL