Tesco Plc.

Size, Sector and Type of Business

Tesco is number three on the list of largest food retailers measured by revenue and the second measured by profits, internationally. The corporation commands a significant market share in the United Kingdom, and the world at large. In the UK alone, the company enjoys a 30 per cent grocery market share. Besides it is a market leader in Thailand, Republic of Ireland and Malaysia. The firm has employed at least 440,000 employees to serve millions of customers in the company stores and online (Tesco Plc. 2019, n.d.). As a leading retailer, Tesco owns more than 6,800 shops and records an approximately 80 million trips of shopping per week (Tesco Plc. 2019, n.d.). The public limited company that serves as a grocery and a general merchandise stores has its headquarters in Cheshunt, UK. Tesco is an international organization with presence in 14 countries across North America, Europe and Asia.

Key Internal and External Factors

Internal factors are key in determining how an entity moves forward as a self-contained corporation and in response to external environment changes. Leadership is a crucial internal factor that can influence the success of Tesco Company. An effective leaders should carry the vision and mission of a company and serve as an example to the junior staff in working hard to achieve organizational objectives. Organization culture is of importance to every corporation and may affect the ability of a company to compete or respond to changes in both the internal and external business environment. Another internal factor is communication.Woods (2008, p. 1074) explains that the success of an organization partly depends on robust communication practices that allows critical discussions between teams, team leaders, and the top management. External factors include changes in the economy and competition.

PESTLE Analysis

Political

In 2001, the global economy experienced transformation with China, a country of more than one billion people, entering the World Trade Organisation (WTO) (Wood, Wrigley, and Coe 2016, p. 33). Notably, this created free flow of foreign trade by removing barriers, thus encouraging Western corporations including Tesco to join the second largest economy in the world. Tesco utilised this new opportunity to expand its market share by signing an agreement to set up a series of joint ventures for the development of shopping malls in China. To this end, Tesco launched the Qinhuangdao, Fushan, and Anshan malls in addition to multiple hypermarkets. Furthermore, the joining of 10 states into the EU in 2004 was a boost to trade between Eastern and Western countries. This provided Tesco with yet another platform to expand its market share across the European Union.

Economic

According to Mollah (2014, p. 43), companies need show concern to economic factors since they have a direct effect on consumer buying behaviour. The United Kingdom has been able to defeat the effects of the 2008 recession and currently the economy is on the rise. With that said, however, there is still some financial uncertainty especially with Brexit exit. What this uncertainty means is that consumers may cut down on consumption of premium products, including ready prepared means and organics, and this may have adverse effects on Tesco’s sales value and margin. But there is a positive aspect of the financial uncertainty in that customers may consider eating out less and eating more at home. Arguably, this will provide a market opportunity grocery retailers such as Tesco.

Social

The UK population is more of seniors than children and this ageing population is a big blow to food retailers as older people eat less. Unlike the younger generation, seniors travel less to supermarkets for shopping. Imrie and Dolton (2014, p. 173) say that internal level literacy starts to drop at age 65, but even with this case the ageing population may find online shopping more convenient than brick-and-mortar shopping. Besides this, there is a change in consumer attitude towards food whereby many individual are now watching for their health. Tesco invested in this growing market by introducing organic foods in its stores.

Technological

Technology has a direct influence on the supply chain, processes and operations

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