FINANCIAL RESOURCE AND PERFORMANCE

Financial Resource and Performance

Financial Resource and Performance

Introduction to company (TESCOS) and assignment

UK's largest retailer Tesco and one of the top supermarket operators in the world plans to open a thousand-strong chain of discount stores in the US. Tesco plans to invest more than $250m (£120m) [$2.5 billion over the next five years] in its US business launch. This expansion plan and strategy places it directly against competitor retail giant Wal-Mart. Many UK retailers have found it difficult to survive or compete in the US retail market. The US retail market is most competitive in the world, a fact well-known to British retailers Sainsbury's and Marks & Spencer which failed to attract US customers.Tesco is a food and grocery retailer (Public Limited). The company operates in Europe, the US and Asia. Tesco is headquartered in Hertfordshire, the UK and employs about 470,000 people. The company operates 4,331 stores in 14 countries worldwide. It operates in the UK, other European countries, the US and Asia. (MacLaurin 2009)

The company operates in a single segment: retail. However, Tesco's operations can be examined by the store formats operated by it: Express, Metro, Superstore, Extra and Homeplus. The company has over 960 Express stores (up to 3,000 sq ft) offering fresh food at convenient locations. These stores sell a range of up to 7,000 products including fresh produce, wines and spirits and bakery products. The company has over 170 Metro stores (approximately 7,000-15,000 sq ft) in town and city centre locations. It offers a tailored range of food products including ready-meals and sandwiches

Audit

Macro (pestle)

A PESTLE analysis for Tesco must consider all the important external factors impacting on the company. These factors may have political, economic, sociological, technological, legal or environmental dimensions. The political analysis must include the impact of local and national government, and the international situation. The Economic analysis needs to investigate the influences of the stock market and tax increases, amongst many other monetary matters. 

Sociological factors are difficult to suss out. We swim in the "water" of our culture without recognising it as an important determining factor. And sociological analysis is all about analysing the background culture. Technological factors are usually easier to spot, because new technologies involve change, and change is always noticed. For instance, online shopping has had a major impact on Tesco's recent success. The change created by technological advances often lead to legal problems, which is why legal analysis is always an important part of a PESTLE analysis. 

Tesco's operations obviously have a significant environmental impact, from fossil fuel use to packaging issues. Reducing the demand on the planet is a challenge for any big company.

A PESTLE Analysis for Tesco must look at all the six factors we have mentioned. Here they are again, with examples of each: 

Political: an increase in unemployment due to a downward turn in the world economy.

Economic: impact on sales of the credit crunch.

Sociological: an increase in immigration from Eastern Europe resulting in a demand for new goods.

Technological: how can Tesco take full advantage of the ...