SIM 336 Strategic Management Assignment Sample with Tesco (GC0423)

Table of Contents

1.0      Introduction.

2. 0 Findings.

2.1. Overview and critique of PESTLE’s models of external environment analysis.

2.2 Application of PESTLE to Tesco.

Political factors.

Economic Factors.

Social Factors.

Technological Factors.

Environmental Factors.

Legal Factors.

2.3 Does this theory (PESTLE) and practice work?.

Ethical factors.

Demographic and informational factors.

Globalization.

Cultural factors.

3.0 Conclusion.

4.0 Recommendations.

References.

1.0  Introduction

Nowadays, business organizations use different models to analyze the external business environment. According to Vierra (2016), the PESTLE analysis tool is a widely used model to analyze the external factors of the business. PESTEL (including Political, economic, social, technological, legal, and environmental) is a strategic framework for marketers. PESTLE analysis tool supports the business organizations to identify several external factors that might impact a business both positively and negatively (Connor, 2017). The key goal of this model is to discover the external factors that influence the performance of the business. This assignment first describes the overview of the PESTLE analysis tool and its advantages and disadvantages. Second, this assignment applies the PESTLE analysis to a particular company called Tesco. Finally, this assignment describes how the PESTLE framework tool is effective to the practitioners including Tesco.

2. 0 Findings

2.1. Overview and critique of PESTLE’s models of external environment analysis

The PESTLE analysis tool is a widely used model to identify the external factors of the business. PESTEL (including Political, economic, social, technological, legal, and environmental) is a strategic framework for marketers (Capon, 2016). PESTLE analysis tool supports the business organizations to identify several external factors which might impact a business both positively and negatively. Both the existing and new business organizations should apply PESTLE analysis in business to identify their strengths and weaknesses. A study by Connor (2017) said that the PESTLE analysis tool can support a business organization to identify the significant changes in political, economic, social, technological, legal, and environmental factors. On the other hand, these factors will impact business organizations in the future in positive and negative ways.

As Morrison (2017) notes, the PESTLE analysis tool supports business organizations to identify several external factors that could affect the decisions created inside the business organization. By understanding the external factors of the business, it is possible to increase opportunities as well as decrease threats to the organization. Perera (2017) disclosed that the key goal of this model is to discover the external factors that influence the performance of the business. A PESTLE analysis has some benefits.

In terms of the benefits of the PESTLE analysis tool, it is a very simple and easy tool for businesses to understand the external factors. The PESTLE analysis tool helps the organization to minimize its business threats (Campbell, 2015). Then, it helps the business organization to observe several influential factors that could affect the product launches’ success. By applying PESTLE analysis in business, opportunities can be discovered and applied as strengthen in a business. Then, this tool supports the business organization to understand the business in a proper way. After that, this strategic tool motivates the business organization to think the strategic development. A study by Campbell (2015) disclosed that this tool helps business organizations to identify its risks and reduce these risks from the business. Furthermore, this analysis tool helps business organizations to identify opportunities for the future. PESTLE analysis tool also helps the business organizations which fail to do business.

However, the PESTLE analysis tool has some drawbacks. First of all, by using the PESTLE analysis tool in business, users can miss significant data easily. Secondly, it is essential to upgrade the tool on a regular basis to create it more effective. Thirdly, the PESTLE tool has become effective if the users are from several perspectives. As Berry (2016) notes, most of the data applied by this tool are on an assumption basis. As Berry (2016) notes, there is a great risk of mishandling information when using the PESTLE tool. PESTLE analysis tool does not provide enough information regarding the competitive situation and internal factors of business that other models such as Porter’s Five Forces, SWOT can provide. Finally, only the PESTLE tool is not effective to measure the overall picture of the company.

2.2 Application of PESTLE to Tesco

The chosen organization for this assignment is Tesco. Tesco is the largest British and multinational retailer organization. The headquarters of Tesco is located in England. In addition, Tesco has become the third-largest retail company in terms of profit. On the other hand, it has become the ninth-largest retailer in terms of revenue. Tesco first founded in 1919 and it is now operating about 6553 stores in 12 countries (Tesco Plc, 2018). On the other hand, it is doing its business well in the UK where it has a market share of about 28.4%. PESTEL analysis tool will evaluate a changeable environment in that Tesco Plc works by defining its external factors that affect the operation or performance of Tesco.

Political factors

The political factor is an activity that is related to the government policy as well as its governmental practices which can affect the business both positively and negatively. Every business organization will keep eye on any kind of political factor including regulatory shifts, new business legislations, etc. that could have an impact on the business operation. In terms of Tesco, it is now operating about 6553 stores in 12 countries. On the other hand, it is doing its business well in the UK where it has a market share of about 28.4% (Tesco Annual Report, 2017). In addition, it is exposed to several political factors that affect its operation. These political factors are political instability, tax rate, current and future legislation, economic condition, the unemployment rate of the countries wherever it is doing its business. Such as, import of products can impact the business of Tesco as it imports different inventory outside from the UK including East Asia, Europe, and China……………

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