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Introduction
Environmental analysis always helps to identify the external and internal elements of the company. It will help to understand the positive and negative impacts on the company. Therefore, the company will be able to understand their competitive market. In this report, Tesco has been chosen to conduct an environmental analysis. The main aim of the report is to understand Tesco’s internal and external factors to understand its current position in the market. Based on the threats and weaknesses in the SWOT analysis a recommendation will be added to overcome the situation and Tesco can focus on new plans to grow in the market.
Comment on the statutory and ethical consideration of a penetration tester working in the UK.
Background
Tesco is a big retail company in the UK. The company first launched its products in the year of 1919 making a profit of £1. In the year 2024, the owner gave the Tesco make introduce Tesco tea and gain profit from it. That way the company slowly grows in the UK market.
The company expands its business in many ways like Tesco Bank, grocery shopping, and online delivery services. The company has a loyalty program for its customers. After shopping customers can get rewards and they will be added to loyalty cards. The company’s main purpose is to provide a good service to the community, and customers. This way, they always show responsibility towards the community and can serve it on a Broadway. Their main mission and values are to maintain a strong bond with their customers and employees. Provide employees full support if they require help and try to work as a team (www.tescoplc.com, 2022).
Environmental analysis
Internal factors
Product issues
Tesco mainly provides an affordable range of products. Slowly the company starts expanding its market in the non-food section. The main focus is to offer good financial services to their customers. Therefore, it can be a way for the company to start to focus on diversification and to calculate risk. Based on that, Tesco’s profits also broke down; now the company wants to grow its business again (ukdiss.com, 2022).
Marketing issues
Tesco maintains a low-pricing strategy to attract customers. At times it happens they are unable to provide good services which can affect their business. The company slowly makes some good principles to follow and maintains strong social media strategies to grow in the market. With the help of their online portal, their customers can order products at any time.
Quality issues
The company has to focus on maintaining fresh and good quality products. Tesco has to focus on good technological advancement to make a new opportunity to regain its trust. The company has to maintain good food quality. Therefore, the company has to focus on maintaining good quality to grow its business.
Customers
In the rush hours or during sales hours, sometimes the company does not take care of their customers. Sometimes they forget that their success depends on the people which can be a problem for the company.
Suppliers
Lots of other companies give an affordable price. If the company wants to order demanded products, sometimes it happens suppliers give late delivery or forget about the delivery which can be a problem for the company.
Competitors
There are lots of competitors in the market. Those companies always try to give low-rate products. That can be a big issue for the company to grow in the market.
External factors
Political
Various political factors can stop Tesco’s operations. These are political instability, tax rates, current economic conditions, and unemployment rates. The government keeps on changing its rules and regulations therefore the product’s price range can up and down. The company has to focus on the country’s political circumstances that help to understand the government’s rules and regulations (Adamyk, 2019). That helps to maintain a stable political environment within the country.
Economical
For Tesco mainly increased demand, price, and profit, costs are the main concern. The company can be affected if the demands for goods are effectively decreased. Few consumers slowly move towards cheaper products or they buy fewer products. These factors can affect the company’s environment in the economic market.
Social
Most of the time the company saw their customer wanted to buy bulk essential products. Therefore, the company has to focus on stocking demanded products. It can be based on social influence and cultural change. Tesco slowly trying to stock more organic products as per their customers’ requirements. This way, the company maintains its brand identity among its customers.
Technology
New technologies are coming into the market like improved scanners, heat sensing, and other technologies. Tesco slowly adopted this technology. That can be a problem for them. Tesco expand its business in many ways such as having an online portal and social media presence. That way, Tesco maintains a strong bond with its customers. Having good technical benefits can help to influence to buy from their online portal and get delivery at their home.
Environmental
The company faces a lot of environmental issues like an increase in daily basis pollution rate, non-biodegradable products, and the use of plastic materials. Therefore, Tesco has taken the initiative to reduce all non-recyclable plastics and started using eco-friendly and bio-degradable bags. The process is mainly focused on building new types of plans to reduce and recycle plastics. With the help of social media, the company can showcase its initiative programs to its customers. That will help to grab their customers’ attention.
Legal
Government rules and regulations always change. Tesco has to understand the way Government policies are working procedure. Therefore, the company also needs to follow international market law to manage good operations (Rosnizam et al. 2020). The food retail commission has rules and regulations that the company has to follow. It slowly shows some good positions to manage a strong reputation in the global market.
SWOT analysis
SWOT – internal analysis
| Strength | Opportunity |
| ● The company mainly captures the total British market.
● It helps to generate good revenue to maintain a good position in the market. ● Tesco has a high market share in the UK (Tirawatnapong and Fernando, 2018). ● The company has financial strength that can help to maintain a strong bond in the market. ● The company wants to build a sustainable and eco-friendly world that helps to maintain brand loyalty. ● Tesco has a good customer base that will help understand customer requirements. |
● The company starts emerging in the global market. That helps to build some good investments in the market.
● That can be a way to gather potential benefits to grow and make alliances with other brands. ● Slowly their market demand is increasing and the company wants to expand in the international market. ● Tesco has an opportunity to make a partnership with local businesses. ● Having an online store and social media presence can come under opportunity. |
| Weakness | Threats |
| ● Sometimes it happens the company does not show its accounting ledgers to avoid high taxes.
● Tesco’s market share price has fallen around 9 percent. ● It happens other companies use debt to increase their profit and if the company starts lowering their debt then profit is automatically reduced. ● That can be a problem for the company to grow in the market (www.marketingtutor.net). |
● National economic crises like changing government rules, taxation, and credit can come under threat.
● The company has a lot of competitors in the market that can come under threat. ● Daily basis the competitors’ market is growing which can be a threat to the company’s growth in the market. |
Table 1: SWOT analysis
(Source: Self-created)
Recommendations
After conducting a SWOT analysis it can be shown that Tesco has two types of threats and weaknesses in the market. That can provide some limitations to stay in the market. Other companies have used debt to maximize their profits, and when the company begins to reduce its debt; its profits are instantly reduced (Soegoto, 2021). This could be an issue for the company’s market growth. Introducing new types of products will help to grow in the market. Tesco is gradually losing market share to strong competitors. The corporate governance, resources, and corporate culture can come under a weakness for the company. The company always hiring new candidates and does not give proper training to them. Those can be a weakness for the company. The company slowly focuses on the financial process and can identify the internal loopholes. With the help of social media, the company raised concerns about sustainability. It can help them to maintain a good standard in the global market. The company is considering for good delivery services. It will help the company to understand its threats in the market and focus on understanding the competitor’s market for better reach. This way, the company has a chance to grow in the market.
Conclusions
The SWOT analysis of Tesco is always useful in identifying external and internal elements. On the other hand, Tesco’s pricing strategy remains low to attract customers. Sometimes they need to provide good services, which can have an impact on their business. Tesco must focus on good technological advancements to create new opportunities to regain their trust. Their competitors will capitalize on their errors and be able to resupply based on customer demand. It could be based on social involvement and cultural shifts. Tesco is gradually attempting to refill more organic foods in response to customer demand. It will be good for the company to grow.
Reference list
Journals
Adamyk, K., 2019. PESTLE Analysis on Tesco PLC.
Rosnizam, M.R.A.B., Kee, D.M.H., Akhir, M.E.H.B.M., Shahqira, M., Yusoff, M.A.H.B.M., Budiman, R.S. and Alajmi, A.M., 2020. Market opportunities and challenges: A case study of Tesco. Journal of the Community Development in Asia (JCDA), 3(2), pp.18-27.
Soegoto, F.A., 2021. Product Development using SWOT Analysis. International Journal of Entrepreneurship & Technopreneur (INJETECH), 1, pp.1-10.
Tirawatnapong, R. and Fernando, M., 2018. Factors influencing Bangkok people’s purchase intention towards Tesco Lotus house brand products. International Research E-Journal on Business and Economics, 4(2), pp.15-29.
Websites
Analysis of Tesco’s Corporate Governance and Responsibility, [Online] Available at:https://ukdiss.com/examples/increasing-amount-of-importance.php/ [Accessed on 17.06.2022]
Core Purpose and Values, 2022. [Online] Available at:https://www.tescoplc.com/about/how-we-do-business/core-purpose-and-values/[Accessed on 17.06.2022]
Tesco PESTLE Analysis, 2022. [Online] Available at:https://www.mbaskool.com/pestle-analysis/companies/18023-tesco.html[Accessed on 17.06.2022]
TESCO SWOT Analysis, Available at:https://www.marketingtutor.net/tesco-swot-analysis/ [Accessed on 17.06.2022]
