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Tesco is a very well-known multinational grocery store and retailer of general merchandise. The company has its headquarters in Welwyn Garden City which is located in England. Tesco is extremely famous and it is considered to be the third largest retailer that can be found in the world when measured in terms of gross revenue and ninth position in the world when considered on the basis of the revenues that are collected by the company. the company Tesco has its shops located in five different countries all across Europe and is considered to be the largest and the market leader in terms of groceries in the United Kingdom.

Background

There has been a noticeable global expansion of Tesco since the beginning of the 1990s and the company had operations in 11 countries of the world. The origin of the company Tesco runs in the past. In the year 1919, Jack Cohen who was actually the son of a Jewish merchant originating from Poland, founded the company Tesco in order to sell the groceries that were the war surplus from a stall at the Well Street Market. The name Tesco was first used for the brand in the year 1924. The name was given after Jack Cohen actually bought a shipment of tea from a person named Thomas Edward Stockwell. The new name was a short form of the initial of the name of the supplier that is TES and the first two letters of his own surname CO. Therefore, the famous retail company of TESCO was formed. Throughout the next few decades that is in the 1950s and 1960s, there was phenomenal growth of the company. Tesco expanded its business through several acquisitions that were made by Cohen. Some of the most important acquisitions that were made by the company were Williamson’s Shops in the year of 1957 and Irwin's Shops in the year 1960. There were many other chains of shops that were acquired and Tesco finally acquired around 800 shops.

SWOT Analysis

Strengths

• One of the greatest strengths of Tesco is the huge turnaround that the company has seen under the leadership of Dave Lewis. According to the reports, the company suffered a huge loss of around 6.4 billion in the year 2015. However, due to the efficient leadership, the company could finally make a huge turnaround and make a huge profit by the end of the year 2020.
• The position of Tesco in the grocery market of the United Kingdom is indeed unchallenged. The market share of the company is huge. Tesco approximately has a market share of 27% in the United Kingdom. The closest competitor to Tesco, Sainsbury’s market share is only 14%.
• Tesco had managed to perform well in spite of the deadly pandemic that had impacted businesses all over the world. This can also be attributed to the great leadership of Dave Lewis.
• The innovation of the company is another strength for the company and a primary reason for the success of the company. it is also, due to the innovation that they managed to continue with their profit even in the times of the pandemic.
• The adaptability of the company in hard times like the COVID-19 pandemic is also a crucial strength for the company. You can get case study help.

Weaknesses

• There was a complaint against Tesco, regarding certain quality issues in their products. Though the company apologized for the situation still this can be a very big weakness as it may dissatisfy the consumers.
• During the Covid situation, there was a trend of panic buying. As a result, Tesco rationed some of the products making an impression among the consumers that there is inadequate stock.
• The management of the inventory is poor in Tesco. Therefore, there was a huge fine of 175,000 imposed on Tesco for displaying products that had 15 15-day expiry dates on them.
• There are also, certain issues that are faced by Tesco on the basis of the safety of the food products. This can be a big problem for Tesco.

Opportunities

• The growing trend of online grocery is a very important opportunity that can be seen for a company like Tesco. Due to the pandemic, there are a large number of people who are relying on buying the grocery through the internet. This can be a great option for Tesco to consider.
• The growing rate of unemployment among young people provides a great chance for Tesco to acquire the labor needed for the business.
• There is also a trend that is noticed among the different people to switch to meat alternatives for protein. This can be a very big opportunity for a company like Tesco.
• Investing in the technologies like AI and Machine Learning can be a very important opportunity for the company, Tesco, to grow.

Threats

• One of the biggest threats for Tesco is that of Brexit. Due to Brexit, there are certain impositions that are noticed on the import of goods that were usually sold in the supermarkets. This can impact the supply chain of Tesco.
• Another major threat in the contemporary situation is that of the Covid-19 pandemic. Due to the coronavirus, there was a disruption that was seen in the business all across the world. Tesco was no exception and it has also suffered due to the pandemic. The growth of Ocado as the most valued retailer in the UK is a big threat.
• The severe economic depression that is caused due to the Covid-19 pandemic also has a very severe effect on the company.
• The revival of Asda is also a very big threat to Tesco.

PESTLE Analysis

Political

• Tesco is an international company that is headquartered in the United Kingdom but operates in 13 different countries. Therefore, there are a lot of rules and regulations that are different in different countries. The company must keep a regular and updated notice of the various rules and regulations for trade in the different countries.
• There is also a question of political stability that is usually shown to affect the various business. The recent Brexit and the impact that it may have on business is crucial.
• Another great political factor that may affect Tesco is the trade war between the US and China.
• The changes that are brought in the tax system in the various countries of supply can also be crucial. You should check for plagiarism in your case study assignment.

Economic

• Since Tesco is a multinational company, the various taxation policies that are prevalent in the different countries in which the company deals, may affect the business.
• Though the market for the company is growing, it cannot be denied that the majority of the revenue of the company is still collected from the United Kingdom. Therefore, the changes in the models of the economy in the UK can be very crucial for the company.

Social

• Nowadays, the pace of life of the people is indeed very fast. Therefore, there is a preference amongst them that they can access all the needful groceries in one go. The infrastructure of Tesco is somewhat similar; therefore, the company has the advantage of getting more customers.
• Since, Tesco is a multinational company, and deals in multiple countries; the company must remember that the choices of products in the different countries will be different according to the differences in the culture of the people. This is a factor that must be remembered by Tesco and catered.
• There is also a difference in the mentality of the new generation. There is a preference for the organic materials that are noticed in them. Tesco must look into this and transform a majority of the products to the organic type.

Technological

• There is a growing trend of online shopping and dependence on technology that is seen in customers. Tesco should also work on this trend.
• Also, the promotion of the company on social media and other online methods can prove beneficial for Tesco.

Legal

• The various changes in the policies of the government and the new laws that are implemented are directly responsible for the business of the company.
• Since Tesco is an international brand, and deals in multiple countries. Therefore, the company needs to be updated and follow all the domestic as well as the international laws that are there in the market.
• There were also certain allegations in the company regarding bias and unequal pay between the two genders. This had led the company to legal complications. Therefore, it must be remembered that these legal issues are crucial for the company and must be remembered.

Environmental

• The environment has become a very crucial factor in any business and companies must take care that through their business the harm that is caused to the environment is as minimal as possible.
• Tesco must also look into the matter that they abide by the protocols and save the environment.
• As a result, the company has already adopted the process of Reuse and Recycle plan. Through this plan, the company has changed 800 products and helped in decreasing the residue of plastic.

Conclusion

Therefore, to conclude, Tesco is a very successful retail chain that has its business in multiple countries. In this essay, there is a vivid background of the company from its origins is understood. Also, through the help of the SWOT analysis, the internal environment of the company is understood. Also, the PESTLE analysis helps to understand the external environmental factors that are affecting the business of Tesco.

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