Tesco PEST analysis Essay Example
PEST ANALYSIS OF TESCO
Tesco was founded in 1919 by Jack Cohen. The supermarket chain now has stores in 14 countries across Asia Europe and North America.
Sir Terry Leahy chief executive since the mid 1990s states. "Our core purpose is, 'To create value for customers to earn their lifetime loyalty'. We deliver this through our values, 'No-one tries harder for customers', and 'Treat people how we like to be treated'". The underlying aim is of course to make higher profits, but there is a clear focus on customer service at the top level employees of the company that also filters down to subordinates.
The company currently holds a 30% market share in the UK supermarket industry. The most recent success of the company has been attributed to the innovative tracking of consumer purchases through the Clubcard scheme. It is pertinent to point out however, in Tesco determination to succeed there will be factors which will determine how the company relates to its customers and even its survival. These factors are analysed through a “PEST ANALYSIS”
Weighting scale: -5 to +5 where + is positive and- negative. PEST ANALYSIS
FACTORS: POLITICAL (Government Stability) - (VAT)
Meaning: Changes can lead to uncertainty to policies of a potential new government which may force an organisation to change the way it operates to accommodate new laws and policies. Tesco would need to analyze and adapt to those changes that may affect the company.
BBC NEWS – 26.SEP.2011- Edd Balls Labour shadow chancellor unveiled a 5 point plan which include temporally lowering VAT to stimulate growth
However the current government in power;
The Conservatives intend to keep VAT at 20%
Weight has a negative effect on Tesco of -2 Negative points
The current VAT rate at 20% affects the turnover in customer interest in their products
This forces Tesco to reduce their profit margin to stimulate customer interest
Tesco have to reduce
Tesco was founded in 1919 by Jack Cohen. The supermarket chain now has stores in 14 countries across Asia Europe and North America.
Sir Terry Leahy chief executive since the mid 1990s states. "Our core purpose is, 'To create value for customers to earn their lifetime loyalty'. We deliver this through our values, 'No-one tries harder for customers', and 'Treat people how we like to be treated'". The underlying aim is of course to make higher profits, but there is a clear focus on customer service at the top level employees of the company that also filters down to subordinates.
The company currently holds a 30% market share in the UK supermarket industry. The most recent success of the company has been attributed to the innovative tracking of consumer purchases through the Clubcard scheme. It is pertinent to point out however, in Tesco determination to succeed there will be factors which will determine how the company relates to its customers and even its survival. These factors are analysed through a “PEST ANALYSIS”
Weighting scale: -5 to +5 where + is positive and- negative. PEST ANALYSIS
FACTORS: POLITICAL (Government Stability) - (VAT)
Meaning: Changes can lead to uncertainty to policies of a potential new government which may force an organisation to change the way it operates to accommodate new laws and policies. Tesco would need to analyze and adapt to those changes that may affect the company.
BBC NEWS – 26.SEP.2011- Edd Balls Labour shadow chancellor unveiled a 5 point plan which include temporally lowering VAT to stimulate growth
However the current government in power;
The Conservatives intend to keep VAT at 20%
Weight has a negative effect on Tesco of -2 Negative points
The current VAT rate at 20% affects the turnover in customer interest in their products
This forces Tesco to reduce their profit margin to stimulate customer interest
Tesco have to reduce