Tesco Globalization in Pestel Framework free essay sample

Framework Political Factors Tesco is currently serving people in 14 countries across the world. The global operationsof the company make it vulnerable to the political and legal frameworks of these countries whichcan impact the market position of the company. There are large numbers of legislations passed by the governments regarding the employment of their own citizens (Balchin, 1994). The government of the countries these days pressurizes the company to offer job opportunitiesranging from flexible to highly paid skilled jobs to their citizens.Tesco has to meet the governmental and demographic requirements of these countries byemploying large numbers of local citizens including students, disabled, women and elderlyworkers to effectively meet the regulations related to employment. Economic Factors The economic factors hold importance for the companies operating in the diverselocations. These factors can have direct influence on the business operations, customer buying,demand, cost of production and services, revenues and prices of the merchandise.Moreover, thehigh rate of unemployment in the country decreases demand for large number of goods and themanufacturing capabilities of the companies. We will write a custom essay sample on Tesco Globalization in Pestel Framework or any similar topic specifically for you Do Not WasteYour Time HIRE WRITER Only 13.90 / page These factors influencing the business capabilities of a company are outside its control but the effects of these factors on a firm ¶s performance can be severe. The international businessof Tesco is still growing and generating revenue but the company is mainly dependent on theeconomy of UK. So if there is any fluctuation in the economy and the markets of UK, Tesco willlikely to be among the suffering companies. Social Factors According to Clarke et al (1994) and Data monitor Report (2003), the current shift in theBritish customer buying trends has impacted the business of various firms. The currentcustomers are usually availing bulk purchase options from one single retailer one stop option? which is mainly due to the social changes in the culture. Tesco is more on nonfood items in itsstores than the food items. There are also demographic shifts in the country including aging people, increased rate of female workers and a declining ratio of home cooked food items.Thissocial change has led the retailers in United Kingdom to focus more on the products and servicesto meet customer requirements. Similarly the retailers are more focusing on their private label products than offering the other brands as well as on the distribution networks and other operational improvements. Likewise, the customers are now more interested of the products andservices that meet the health care requisites. Technological Factors Technology plays an important role in influencing the company ¶s performance and itsmanufacturing capabilities.Tesco employs latest technological advancements for the retail business and other services it offers. The latest technologies facilitate the customers and thecompany both. According to the Data Monitor Report (2003) the customers feel great ease andsatisfaction due to the availability of more personalized and convenient shopping services whichis mainly due to the technological advancements employed at shopping arenas. The latesttechnologies employed by Tesco include wireless equipment, intelligent scale, and electronicsystem of product labeling, as well as Radi o Frequency Identification system (Tesco, 2011). According to Finch (2004) technologies like electronic point of sale has enhanced thequality of services and the operational and business capabilities of the companies by increasingthe efficient distribution and inventory systems. Environmental Factors There is a great deal of pressure on the companies to comply with the environmental laws and to understand their responsibility towards the society (Lindgreen and Hingley, 2003). The corporate social responsibility of the company states that Tesco tries to adopt business practicethat helps the societies in development (Johnson Scholes, 2003).In 2003 the government of United Kingdom has launched a new strategy that is based on the sustainability of consumption and the production procedures by cutting the level of wastes, reducing the amount of resources consumed and minimizing the damage the toxic waste has been causing to the environment. Moreover, a new resolution was passed by the government for the advertisement of processed and fa tty products which has directly impacted the Tesco’s product ranges and led it to adapt its product offerings which has in turn affected its relationship with the suppliers and the end users (Graiser Scott, 2004).