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Tesco Pest Analysis

Autor:   •  May 8, 2012  •  Case Study  •  823 Words (4 Pages)  •  2,081 Views

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The PEST or PESTLE analysis tool has been widely used since it helps firms understand the different angles in the environment where they are operating; could be for market growth or decline, business position, potential and direction for operations. This has become a starting point for the analysis of an organization’s external environment and the forces at work here. It has been used by leaders and managers globally to build their vision of the future. This tool seems to be an essential element for firms to succeed with their objectives. This helps them direct the path towards their goals. However, the real value and the effectiveness of this analysis depends on the way it is used.

The effective use of this tool ensures that the activities of the firm are still positively aligned with the powerful forces of change that are affecting the surrounding environment and even the world. It has made firms realized that taking advantage with the changes is more likely to contribute success than opposing to the changes. Likewise, the proper use of this tool also helps the firm avoids taking actions that are destined to fail for reasons beyond the firm’s control. Thus, firms become cautious of the situations that may contribute to the failure of their business. More importantly, this type of analysis is most preferably used when firms enter a new market or country. Firms can already avoid hasty and insensible assumptions which may just ruin the goal especially when assumptions become illusory.

With the presence of these diverse changes in the world, firms can take advantage of the opportunities and minimize threats that lie within the environment they are operating. The can fully utilize this advantage in order for the company to obtain a context which will help them with gain a more detailed planning.

The meaning that each letters in the PEST or PESTLE bears differs on its meaning and the subject of its analysis. Despite of these differences, their subjects however, has roles for each one of them. Like, Political Analysis affects the Economic analysis. All of them are significant in the organizations success. However, the inclusion of the legal and ecological factors received doubts from literatures. The importance of these two factors certainly just differs from industry to industry. If such factors have high relevance on the industry, then must be analyzed separately. Otherwise, the firm can just allocate them to other categories in the analysis.

PEST and PESTLE analysis’ main aspects focuses mainly on how the organization cope up with their changing environment. Economic conditions affect how easy or how difficult it

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