BUSINESS

ENVIRONMENTAL
ANALYSIS
 INTRODUCTION

Business environment is the overall internal as well as external factors

which influences a business. Management of an organisation must keep
in mind that these factors might influence together towards a business.
For instance, a health and safety regulation can be an external factor for
a business which might impact their business activities. This study will
shed its light on conducting an analysis for internal and external factors
which influence business activities of Tesco.
 SWOT ANALYSIS
Strengths
 Tesco has been serving a wide base of customers which includes oil and gas firms,
equipment brokers and drilling contractors.
 With such a diverse base of customers, the company does not depend on a single
customer segment for generating their revenues.
 Tesco possess a strong product portfolio mainly in top drive segment which
provides services and offers equipment across various customer segments all over
the world.
 A six model system is followed by Tesco and innovate their products on the basis of
changing demands of their customers. This has enabled the company in gaining a
competitive edge over its rival companies.
 SWOT ANALYSIS

Weakness
 Tesco has experienced several controversies while
dealing with companies like Weatherford and Varco for
violating certain patents.
 The company had to pay a significant amount of legal
costs in order to defend infringement claims. If any of
these claims are held correct, it could deteriorate image
and business of the company.
 SWOT ANALYSIS
• wide and diverse base of customers
Strengths • strong product portfolio
Opportunities
 Tesco being a technologically driven
• Controversies while dealing with
company requires to constantly innovate
Weaknesses companies
in order to thrive within the competitive • High amount of legal costs
market.
• Constantly innovate
 The company has made certain strategic
acquisitions for improving their business
Opportunities • Greater technological access

processes for obtaining greater

technological access and obtaining funds • Increased volatility in the prices of
oil and gas
for building technology by themselves. Threats • Risk in production applications and
exploration
 SWOT ANALYSIS

Threats
 The political turmoil all over the world has increased volatility in
the prices of oil and gas which could significantly impact the
demand for Tesco’s top drive units (Lancaster and Massingham,
2017).
 Certain operations carried out by the company could lead to
arising of risks mainly during activities like production
applications and exploration.
 PESTLE ANALYSIS

Political
 Tesco has been carrying their operations all over the world and
hence global political factors like tax rates, legislation and
political stability could influence their performance.
Economic
 Economic factors are one of the major concerns for Tesco, as they
tend to leverage demand, costs, prices and profits.
 Tesco carries out their operations all over the country, they are
mostly dependent on the United Kingdom, where it possesses a
30% of market share.
 PESTLE ANALYSIS
Social Factors
 The customers of the UK have shifted from bulk shopping towards one stop shopping.
 As per the recent reports released by PwC, 65% of overall shoppers in the UK are loyal and Tesco
could exploit these opportunities in closing ties and connecting effectively with its customers.
Technological Factors
 Tesco has developed an RFID Technology which automatically calculates stocks and remove it
prior to sales.

Economic Technological Environmental

• Tax rates • 65% of overall • Code of practice
• 30% of market shoppers in the • Developed an introduced by • Renewable
• Legislation UK are loyal Food Retailing
sources for
share RFID Commission
• leverage Technology generating
demand 100% of its
Political Social Legal electricity
 PESTLE ANALYSIS

Legal Factors
 In 2004 a code of practice was introduced by Food
Retailing Commission which could place bans on various
business practices such as changing prices without
demanding payments or notice from suppliers (Dias et al.
2016)
Environmental Factors
 Tesco has committed them in using renewable sources for
generating 100% of its electricity by 2030
 CONCLUSION

From assessment of this report, it can be concluded that by conducting an

analysis of their internal and external business factors, Tesco is able to
develop certain strategies which could enable them in gaining a
competitive edge within the market. Moreover, they will be able to
understand the changing demands of their market and consumers, they
will be able to innovate their core products for catering their changing
requirements.
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