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SWOT Analysis and PESTLE Analysis of Tesco

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SWOT Analysis of Tesco
It is essential for a company to conduct SWOT analysis before entering a new market with a new product or a service or an existing product or a service as it allows the company to assess where they stand and what are their strengths, weaknesses, opportunities and threats. Once a company evaluates and determines what their current condition is, only then they can come up with an effective business strategy. The SWOT analysis of Tesco is done below (Soegoto,et al,.2021):
Strengths of Tesco
As Tesco enjoys the title of being the leading supermarket in the UK, it holds a number of strengths that differentiates it from its competitors. The brand name of Tesco is itself a strength for the company. The company dominates its industry and holds a great percentage of the market share (Syafiq,et al,.2021). The company is diversified in the sense that the stores are widespread not only across the country but also in various other countries. The range of products that the company provides are drastic and diversified from hardware items to fruits and vegetables, from clothing to mobile phones. They give priority to technology and have an effective network of efficient supply chain management. The company also enjoys a large customer base and has built a unique level of trust and confidence in its people (Tian,et al,.2021).
Weaknesses of Tesco
With a number of strengths, comes a few weaknesses also. Despite being one of the leading companies in the UK, they failed to operate both in the USA and Japan. The company failed to understand the demand of the customers, it failed to understand what the people actually wanted and therefore they had to take an exit from both the countries. Therefore, the company has a limitation of lack of understanding of some markets and some products as well. Also, the company is criticized for lacking market research and as a result there are certain stores that are not operating as well as they should have operated (Baliyan,et al,.2021).
Opportunities for Tesco
It is important for a company to identify its strengths and once those strengths are identified, they can be used to benefit and attain new opportunities. One of the opportunities for Tesco is to make an alliance with any well reputed company or a brand as this will allow them to provide a wider range of products to an increased customer base. Also, the company can benefit by getting into a joint venture especially in the regions where the stores are not performing up to the mark. The company also has an opportunity to enter new emerging countries where there is a scope of development like Turkey (Soegoto,et al,.2021).
Threats for Tesco
It is mandatory for a company to be aware of its threats so that they can take actions accordingly. There are various threats that the company faces due to the ever changing political and social environment that the company operates in. The recent threat that the company faced was due to Brexit where there was an increased fear of the deals of the company being affected along with its costs. Also, as a result of increased globalisation, the position of the company can be affected due to various giant competitors like Walmart that can cause serious damage to the company (Syafiq,et al,.2021).

Pestle Analysis of Tesco
The environment where the company operates plays a vital role in its success therefore it is essential for the company to track the environment where they are operating as this evaluation will help them comprehend what are the major threats and opportunities that lie for them. This is what Pestle Analysis helps a company achieve (Tian,et al,.2021).
Political Factors
Political factors affect the operation of the company in a number of ways. For a company like Tesco, that operates in various countries, political factors play an important role. Some of the political factors include the stability of the country they operate in, unemployment rates, tax rates and any form of uncertainty in either of these will affect the company. It is essential for a company like Tesco to be aware of the political situation of the countries they operate in so that damage control can be done at the right time. For example, if there is a change in import duties of any of the countries that they operate in, it will affect the company as the company imports various items from various countries (Baliyan,et al,.2021).
Economic Factors
Economic factors include changes in interest rates, taxation, inflation, exchange rate etc. An economic growth will lead to a growth in the retail industry where the company operates and will be beneficial for the company. In the same way, an economic recession will lead to lower disposable income of the people, lower spending, high unemployment which will all lead to failure for the business. Therefore, it is important for Tesco to be aware of the economic condition of the countries they operate in and should keep track of the changes that are made. For example, if there is a change in the tax rates of a particular company, this will cause a direct impact on the earnings of the company (Syafiq,et al,.2021).
Social Factors
These are the factors that will directly have an impact on the spending pattern and buying habits of the customers. It is important for the business to understand the ever-changing society and only when the company will understand the changing society, only then will they be able to comprehend what the customers want from them and why they are acting in a particular way. Nowadays, people have become health conscious and they want food that will have a positive impact on their body. As a result of an increase in this demand, Tesco has increased their focus on the provision of organic food, as this is what many of the customers focus on (Tian,et al,.2021).
Technological Factors
In this era, it is essential for any company to focus on technological advancement as this is what will provide the company with a competitive edge. By focusing and adapting new technological advancements, a company can better avail new opportunities in their environment and can limit their potential threats. Tesco has always been updated with new technology and has ensured that it makes the life of their customers easy. An example can be their self-service check out points which provides their customers an ease rather than standing in long queues and waiting for their turn.Like many companies, Tesco has made various guarantees and one of these includes making all the packaging of their products recyclable by the end of 2020 (Baliyan,et al,.2021).
Legislative Factors
There are various government policies and legal changes that a business should be up to date with as this will help them survive in their environment. There are various changes and amendments that are made in the law that a company is entitled to follow. In the same way, Tesco is very effective in coping up with the legal factors that it faces. It is vital for Tesco to ensure that their operations are in line with the Food Retailing Commission as otherwise it will have severe effects on the company. They should follow their strict codes of practice in order to survive in this industry (Soegoto,ET AL,.2021).

References
Baliyan, R., 2021. A Shift in Paradigm for Apparel Industry Post Covid 19. Turkish Journal of Computer and Mathematics Education (TURCOMAT), 12(13), pp.5203-5211.
Soegoto, F.A., 2021. Product Development using SWOT Analysis. International Journal of Entrepreneurship & Technopreneur (INJETECH), 1(1), pp.1-10.
Syafiq, M.S., Usali, M.F., Ibrahim, M.R. and Wan Mazlan, W.M.H., 2021. John Bundle.
Tian, Q., Analysis on the Business Strategy of Tesco in the Chinese Market.

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