PEST Analysis for Tesco

A PEST analysis for Tesco must examine four key external factors that impact upon it: political, economical, sociological and technological.

A PEST analysis is a shortened PESTLE analysis. 

• A PEST analysis tries to create an overall picture of the main external impacts on an organisation.

The four main factors in the PEST analysis are difficult to ignore in any organisational analysis. The political factor involves the impact of local, national and international political decisions. Economic factors like fluctuations, like tax increases, are equally important. 

Sociological factors include a growing immigrant community and an ageing population. New technologies can have an enormous impact. For instance, online shopping is a major factor in Tesco's recent success.  

Any PEST Analysis for Tesco, must consider each external factor in detail. Some drastic changes that could affect Tesco in the near future are:

• political: the government ban on smoking in pubs.
• economic: increased fuel tax.
• sociological: an influx of cheap Polish labour.
• technological: identity cards..

A PEST analysis is useful for a quick general analysis, which can later be easily extended into a more detailed analysis by adding legal end environmental considerations (making it a PESTLE analysis). It can be compared with a Porter's five forces model and a SWOT analysis to give different approached to company problems.