Analyzing The Micro Business Environment For Tesco Marketing Essay

Analyzing The Micro Business Environment For Tesco Marketing Essay My organisation for this assignment is â€Å"Tesco†. It is leading food and grocery retailers on the planet. The aim of this essay is to analysing the micro business environment, Identify the core resources and competences of the organisation, Evaluate the organisation’s strategic choices and justification of the strategy of the company. I have used Strategic evaluation tools such as PESTEL, SWOT and others. Tesco is among the biggest food retailers in the world with returns in surplus of  £54 billion in 2009 and over 470,000 workers. It has 4,331 stores in 14 countries.   The company’s Head Office is based in Hertfordshire, UK and operates mainly in the USA, Europe and Asia(www.tescoplc.com ). PESTEL Analysis (J. L. Fowle, September ,1993), analyses the vibrant and erratic environment in which company operates by classifying the forces that have the most influence on its performance, Influences Company has, to achieve strategically success. Porter’s Five forces can also be used to analysis competitive environment. However these forces becomes interrelated at some times. And its Tesco’s vision to expand globally, encouraged me to use PESTEL forces analysis rather than any other model. Political decision has always been at watch by companies like Tesco. China is one of the world most profitable market, worth over 1.3 billon, Now it has open it door for world and encouraging Western companies. Tesco has managed to signed agreement in 2009 to set up thought-out series of joint ventures for development of shopping malls in i.e. Anshan, Fushun and Qinhuangdao(http://www.fas.nus.edu.sg/ ).By end of 2010 18 more hypermarkets are expected to open in China(http://www.investis.com/ ).   Such rises of Tesco’s international business segment are predicted to account the company’s profit for one quarter. In 2004 immersion of 10 further countries into the EU took place, encouraging trade between Western and Eastern Europ ean countries(http://www.eu-27watch.org/ ).Helped Company to enter into new market, and increase its market share across Europe. Economic forces are of great concern to any company as they impact directly on the buying behaviour of its customers. The UK economy was officially declared under recession in 2008, the government’s was successful in minimising the rises in unemployment by considerable reduction in interest rates during 2009 (www.euromonitor.com ). This has given rise in spending power of English people,but both sales value and margins are effected as consumers are not or less likely to divert their spending on more of premium or high value goods. According Maslow hierarchy of need consumers would be at top of Basic need. (http://www.ict-learningnow.com). But retailers like Tesco would still be benefited, as their low price strategy would encourage its customers to shop from Stores and cook and dine home rather than spending more on restaurants(www.guardian.co.uk ).   As we all know that food is the last thing that customers will sacrifices .   The percentage of overall consumer spending on food has risen over the years. Social forces are quite obvious as Man is Social Animal. An analysis has proven that the UK has the Baby Boom generation and latest medical facility by NHS Trust has reduced the death rate too(www.statistics.gov.uk ).This means that more retired people eats less and less spending power. It’s not expected of them to travel to supermarket for shopping and at the age of 65 internet literacy level go down, But it is still assumed that online shopping is and would be the only convenient way of shopping for older age people.   The ageing population is discouraging for the food retailers older people tend to eat less. Company still have to bear in mind the ineffective and expensive small deliveries. However taste and preferences of consumers should always bear in mind when strategies are framed. As mentioned on Economica l forces, high value goods would be avoided but the standard of leaving would have great influence.