Background

The prior aim of the report is to analyze the micro and macro environment of the organization chosen for the report. Here the chosen organization is TESCO Plc. This report will analyze the PESTLE and SWOT of TESCO plc. to get an understanding of the business environment and demographic condition of the country, the United Kingdom. Environment analysis can be considered as the strategic management framework that helps to identify each of the external and internal elements that will affect the performance of the organization. This element analysis will entail a detailed observation of the threat and opportunity for the business.

Here the chosen organization is TESCO Plc. It is one of the biggest multinational food retail organizations and the headquarters of the organization is situated at Welwyn Garden City, England. TESCO is considered the third-largest retail organization from the perception of gross revenue earnings. The CEO of the organization is Ken Murphy and the organization has been founded in the year 1919. According to the data for 2021, the total revenue of TESCO is 5,788.7 crores GBP (Schmit 2016). The organization is having 4,673 shops around the globe (Awadari and Kanwal 2019). The mission of the organization is to assist and become the champion of the customers. The main focus of the organization is to make a better shopping experience for the customers and provide value addition to the customers. The vision of the organization is to provide satisfaction to the stakeholders by attaining their needs and demand and providing them with proper solutions.

This part of the study will briefly discuss the internal and external environmental factors that might affect the operational factors of the organization. Business environment analysis can be of two types micro and macro analysis (Camilleri 2018). The internal environment analysis will cover the 7P’s factor of the marketing mix and the PESTLE analysis will be covered to undertake the external factor analysis of TESCO Plc.

The 7P’s of marketing mix stands for product, price, place, promotion, people, process, and physical evidence. These are the prime factors that can affect the business operation and therefore needs to be controlled and measured.

TESCO Plc. has a wide range of products that extensively comprises food products, clothing, stationery accessories, cosmetics products, financial services, and many more. TESCO Plc. is focusing on the vivid product line extension to satisfy the needs of the customers. TESCO caters to various products of different brands including their brand such as Tesco Lotus, Tesco Value, and F&F Clothing (Basari, Yazid and Shamsudin 2020). By finding out the product issues, TESCO has focused on the extensive program for NPD (New Product Development) for the improvement of product quality to hold a good brand reputation in the existing market.

Environmental Analysis

TESCO Plc. usually follows the cost leadership strategy and for that, they try to produce low-cost products but of good quality. Tesco has the benefits of economies of scale and works simultaneously with the suppliers to improve the supply chain efficiency for reducing the market price of the products. There are other food retail brands such as Aldi and Lidl in the UK food retail market that give fierce competition to marketing issues of the market pricing strategies of TESCO. Other marketing issues can be stated here. Tesco Plc. operates in two types of marketing channels such as offline and online. TESCO is having 7000 offline stores around the globe and their offline stores are of six types such as Tesco Compact, Tesco Homeplus, Tesco Express, Tesco Metro, Tesco Extra, and Tesco Superstore (Moodley et al. 2020). And their online distribution channel is known as Tesco Direct. They have maintained an exclusive distribution channel for resolving the marketing issues. Tesco has high organizational brand value thus it creates additional promotional activities for the brand. Tesco spends the highest amount on the traditional approach of promotion. Tesco generally uses television, newspapers, and various multimedia outlets to reach out to its potential customers. The organization has spent over £80.8m in 2019 which is far higher than the amount spent on advertising in the year 2018.

Tesco has tactfully maintained its management issues. Tesco plc. has almost 420,000 people working in the system (Ren 2021). Tesco has tactfully managed its customer service department to achieve success for the organization. Tesco has spent huge investment for the training and development program for the employees in the organization and this process has made them competent and highly proficient. Tesco provides high rates of reward and appraisal for their employees. However, several researchers had commented that Tesco lacks in motivating their manpower in the organization.

SWOT analysis has been done for Tesco Plc. as it briefs about the internal strength, weaknesses, opportunities, and threats (Benzaghta et al. 2021). This will help to understand the internal conditions of the organization.

There is a certain recommendation that will help them to identify the gaps in the internal and external factors and helps in reducing their impacts.

• Before developing the marketing plan and further business expansion in other countries, they need to understand customer perception and their purchasing behavior.
• Tesco needs to inform their customers about the sudden change in Clubcard as it was there since 1995. And can provide certain extra benefits as compensation and for gaining customer attraction.
• Tesco can adopt a product differentiation strategy to offer customers a varieties range of products that are too sustainable and healthy in quality.

Conclusion

Thus, the assignment has fulfilled the requirement of the task and the recommendation will provide an insight to the organization to operate their business in a different market. The internal and external analysis has provided the existing business outlook of the organization and the current gaps in their organizational system of Tesco Plc.

References

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