MARKETING

Tesco

Tesco

Introduction

Tesco came into existence in 1919. It was Jack Cohen's idea that gave rise to such a huge and gigantic organization. Tesco is involved in grocery and general merchandising retailing. Tesco is considered on number three largest retailer in the world if we gauge its position in terms of revenue. First store of Tesco started its operation in 1929. Tesco is one of the companies that are listed in London Stock Exchange. Tesco has diversified both geographically and into areas such as retailing of books, clothing, electronics, furniture, finance, telecom and music download. Tesco is operating over 3,700 stores globally and employing over 440,000 people. Tesco operates in 13 countries outside the UK - Republic of Ireland, Hungary, Czech Republic, Slovakia, Turkey and Poland in Europe; China, Japan, Malaysia, South Korea, Thailand and India in Asia, and the U.S.

Analysis of the Internal and external environment

Internal and external analyses are major part of analyzing an organization and the environment in which the company is operating. SWOT analysis is a great to tool to analyze the internal and external environment affecting the business of a company. Strength and Weaknesses highlight internal condition of a firm and Opportunity and threats highlight the condition of outer business environment. PEST analysis is an abbreviation for political, Economic, Social and Technological Analysis. It is a framework for analyzing macro environment, which affects the industry and an individual country (Levy & Weitz 2004, pp.61).

PEST

Political Condition

The UK is one of the most influential and prosperous country in the world. The British companies play a vital role in international business. The country is a member of UN Security Council and NATO. The country is also a member of EU and G8. Prime Minister, David Cameron took many actions to control the fiscal deficit of the country. These actions included reduction in the central governments contribution to local councils to 24 percent by 2015 and another cut of 24% to department for sport, media and culture. The participation of the UK in various international boundaries is quite helpful for British companies to expand internationally and Tesco has taken full benefit of country's political stability (Datamonitor.com 2011, pp.20).



Economic Situation

In 2007, the country attained high growth rate of 2.7%; however, the economic turmoil of 2008 resulted in contraction of GDP to 0.1%. The economy further contracted in 2009, by around 5% as demand was sluggish due to poor economic situation. Year 2010 saw economic recovery at a slow rate of 1.6%. The recovery continued till 2011. The economic recovery presents new growth potential for food and grocery industry and Tesco is in good financial condition to take advantage of economic expansion. The economic slowdown also affected employment in the country. Around 2.5 million people were without job in 2010. This slowdown also affected the financials of the company during previous 3 years, which will be highlighted in the financial analysis section.



Social Landscape

One major challenge in social landscape is the efficient provision of public ...