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Analysis of TESCO
(Retail Industry of UK)
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Table of Content
Introduction ------------------------------------------------------------------------------------------------- 03
SWOT Analysis of TESCO ------------------------------------------------------------------------------- 03
PESTLE Analysis of TESCO ----------------------------------------------------------------------------- 04
Michael E Porter’s five force Analysis of TESCO ---------------------------------------------------- 04
References --------------------------------------------------------------------------------------------------- 04
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Introduction:
TESCO super store based in England UK is a multinational retailer. This multinational
retail store is ranked as the third biggest store in the world. As per the revenue calculation, this
store takes the fifth position on world ranking. This particular retail super store is even registered
at the LSE i.e. London stock exchange (Sparks 2006). The detail business environment analysis
of this TESCO store is given in this report.
SWOT Analysis of TESCO:
Strength Weakness
 Online presence  Poor financial performance
 Leader in Retail industry of UK  Commercial Income scandal
 Club Card – CRM tool  Bad employee morale
 Strong Portfolio
Opportunities Threats
 International market expansion  Currency fluctuations
 Increasing non-food retail  Emergence of new ethical problems
 Inability to sustain cost leadership

PESTLE Analysis of TESCO:

TESCO being the part of the biggest industry of UK economy (Food and beverages
industry), is facing severe economic and other challenges. Therefore this industry is more
vulnerable towards any fluctuation in the surrounding economy. The PESTLE analysis of
TESCO is given below
 Political
Tesco is now working in six other countries in Europe notwithstanding the UK; the Republic of
Ireland, Hungary, Czech Republic, Slovakia, Turkey and Poland. South Korea, Thailand,
Malaysia, Japan and Taiwan are also included in the list of the possible markets for TESCO.
Being operating in so many other countries, it is quite evident that political factors are quite
important for TESCO management and thus they make flexible strategies to handle them.

 Economic
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Being a direct affecter on consumer behavior, the economic factors matter a lot for the TESCO
management. Even the fluctuations in the taxations, interest rates, consumer buying powers
affect the demand and supply of the TESCO retailing products (Sparks 2006).
 Social
People’s knowledge and increasing awareness is also affecting the ales and the product cycle at
TESCO store. Therefore the management at TESCO even considers people’s life style changes,
to make alterations in their own operational activities.
 Technological
TESCO is using quite a variety of technological tools and gadgets in its operations, therefore
innovation and changes in technology area even affect the TESCO operations to a great extent.
Tesco stores use the accompanying innovations:
 Remote gadgets
 Smart scale
 Electronic rack naming
 Self registration machine
 Radio Frequency Identification (RFID)
 Legislative
Being a multinational firm, TESCO has to face certain trade barriers and rules and regulations to
enter new markets across the borders. Therefore legal and legislative factors matter a lot for the
operational activities of the company (Sparks 2006).
 Environmental
These days, green marketing is very important and many of the organizations are even putting
emphasis on it. People are also aware of societal ways of marketing and thus they even
considered the marketing and promotional patterns of the company.

Michael E Porter’s five force Analysis of TESCO:

Michael E Porter’s five forces Analysis of the UK based retail store TESCO is given below
(Sparks 2006);
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Open market for High bargaining High bargaining

new entry power of power of buyers
suppliers

TESCO Retail Outlet

High
Substitutes are
competition in
readily available
industry

References:
Sparks. L. (2006). The Changing Structure of Distribution in Retail Companies: An Example
from the Grocery Trade. Transactions of the Institute of British Geographers, 11(2), 145–154.