PEST Analysis for Tesco

A PEST analysis for Tesco is a political, economical, sociological and technological 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. 

• A political analysis needs to assess the impact of local, national and international political decisions. 
• Economic analysis needs to consider matters like interest rate fluctuations, tax increases, pension policies, minimum wage stipulations, and union wage demands. 
• Sociological analysis needs to look at the wider society and how matters like immigration and an ageing population might impact on the company.
• Technological anlaysis needs to consider how new technologies might impact the bottom line. For instance, online shopping is a major factor in Tesco's recent growth.  

Any PEST Analysis for Tesco, must consider each external factor in detail. Some drastic changes that have affected Tesco in the recent past, or might 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). A PEST analysis is just a shortened PESTLE analysis. Pest Analysis can also usefully be performed alongside a Porter's five forces analyis or a SWOT analysis. Different analysis techniques provide complementary ways to analyse a company's performance.