PESTLE Analysis of Tesco PLC

A PESTLE analysis of Tesco, or any large organisation, involves examining all of the external factors impacting on the company.

What is Pestle Analysis?

Pestle Analysis looks at the external factors affecting a company. Although there are an endless number of possible external factors, PESTLE analysis focuses on the factors most likely to determine the success or failure of the company. These factors are: political, economic, sociological, technological, legal and environmental

So a PESTLE analysis of Tesco must consider all the factors affecting this large supermarket company. Though, remember, any industry can be analysed in this way--from bamboo flooring to banking, from publishing companies like reed elsevier to manufacturers of basic foods like Nestle.

• A PESTLE analysis, in general, must create a good overall picture of the external impacts on an organisation by breaking them into useful categories.

In Jamie Oliver's world, a pestle is a bowl in which different ingredients are mixed together to create an overall good result. That's exactly what a PESTLE analysis aims to achieve. It looks at all the "ingredients" that affect a company and tries to mix them together to create a tasty dish.

The external factors affecting a company range from the political to the environmental. The political impacts can be local,  national or international. Many governments can be involved. For instance, Tesco might have to deal with British and Columbian politics in regards to its coffee supply. 

Economic factors have a large impact. Fluctuations in the stock market, or tax increases, can seriously affect the bottom line of a company like Tesco 

Sociological factors are more subtle, but still important.

Less subtle are the obvious impacts new technologies can have on a large corporation. For instance, online shopping has become a major factor in Tesco's recent success. The nexus of change created by all these factors lead to many legal problems, which keep the lawyers busy. 

Last, but not least, any large organisation has a massive environmental impact. For instance, Tesco uses up vast amounts of fossil fuel in its transport network. Reducing this demand on planetary resources is a major challenge for Tesco and similar organisations.

Any PESTLE Analysis for Tesco, must consider each external factor in detail, and how their impact continually changes. Examples of possible drastic changes that could affect Tesco in the next few years or decades:

• political: government bans the sale of alcohol to people over the age of 21.
• economic: the government decides to put a tax on food.
• sociological: Tesco moves into Russia, tries to adapt to the different shopping patterns of the native population..
• technological: - hydrogen powered lorries impact on Tesco's distribution costs.
• legal: mad cow disease has a long term impact. How can Tesco avoid paying large compensation claims?
• environmental: - climate change decimates Tesco's third world suppliers. How can it adapt?

Make your own PESTLE Analysis for Tesco by thinking about all the external factors that might impact on the store's success.

Other Companies

If you want to find info for PESTLE analyses of other companies, or a good example of a Pestle analysis, try using several different search engines.  If you search with the appropriate search terms then you may find that very few, if any, URLS are returned. That's why you should try different engines For instance, if you want info on a PESTLE analysis of Coca Cola try searching for "PESTLE analysis on Coca Cola". This returned no URLs on MSN search, but 3 terms on Yahoo search when I last tried it. You could also try searching for generic industries like insurance, banking or leisure. For example, for information on the banking industry try search terms like pestle analysis of banking industry, or for universities try searching for terms like  pestle analysis on university. Use synonyms, e.g. pestle analysis on college. Don't forget to add any information that might help the search. For instance when searching for data on the UK airline industry enter the term uk pestle analysis airline.

Alternatives

A PESTLE analysis may look rather general for company managers, who are likely to be more concerned with the bottom line than political and environmental matters. They might want to compare a PESTLE analysis with Porter's five forces model, as the latter could be more useful day-to-day. SWOT analysis or Gap analyses could also be useful supplements to PESTLE analysis