Pestle Analysis Essay

PESTLE analysis stands for "Political, Economic, Social, Technological, Environment and Legal analysis" and as a framework of macro-environmental factors used in the environmental scanning component of strategic management, which is popular in the United Kingdom.(Pestle analysis history)[5]

Political Factors

Operating in a globalized environment with stores around the globe, Tesco's performance is highly influenced by the political conditions of these countries. In the case, we can see that in England, the political factor affect Tesco's business due to the concerns about market dominance. For example, the restriction on land use and conditions of market competition and NGOs campaigns to restrict power.

Here is another example, in china market, one development in the regime indicated the decentralization of the decision making processes with regards to trade and investment. This gives foreign trade companies in China making the economic decision to expand their profit.

Economic Factors

Economic factors also influence Tesco's business, because they are likely to influence supply and demand; costs and profits. In the case, there are three main economic factors that influence Tesco. Firstly, the potential of growing markets for international caused Tesco expanse its business. Second, fast and high rate of growth in emerging markets (East Asia and Central Eastern Europe) motivate Tesco's Asia business. Last is the growth in the world's largest consumer market – USA.

However, in the real world, one of the most influential factors on the economy is high unemployment rates, which decreases the demand for many goods, adversely affecting the demand required to produce such goods. On the contrary, Tesco launched banking arm amid financial crisis. Through Tesco Personal Finance Tesco has offered a range of products from insurance