0 SWOT analysis SWOT analysis was invented by Albert Humphrey (Friesner, 2012).

It is one of the most common ways to analyse the internal and external business environment. It also helps the company to focus on the key area and indicates the current positi on of the company. SWOT stands for Strength and Weakness which are internal; Opp ortunity and Threat which are external (Tennessee Tech University, n.d.) Strength Analysing the strengths can help Tesco to cope better in competition. (Tesco, 20 12)b. This highlights that Tesco is one of the outstanding grocery retailers in the world, which operates in 14 countries and employs approximately 490,000. Bas ed on (Bowers, 2012)a, Tesco occupies about 29.7% of shares in the UK supermarke t sales which is the lowest level since 2005. However it still overwhelms other competitors. In addition, Tesco not only is the core in UK, the international re tails business is also very successful. The improvement in sales, profits and re turns in Asian market is most significant (Tesco, 2011)c. Weakness Identifying the weaknesses can help Tesco to understand how to improve business. According to Pinnington, (2012), it was discovered that Tescos decreasing sales is due to a lack of communication with customers; it is vital therefore that Tes co should understand what the customers want. Nevertheless, Tesco still neglects the needs of shoppers. Furthermore, the head of Tesco in UK- Richard Brasher resigned on 15th March in 2012 because of the fall in sales. The conflict between Richard Brasher and Phi lip Clarke, Group Chief Executive will have a negative influence on the progress of Tesco, since Richard Brasher had been working in Tesco for 26 years (Bowers, 2012)b. Externally, Tescos business in USA cannot get a breakeven ever since the y started the business in USA. This will bring a negative effect to their target of getting globalized (Tesco, 2011)d. Opportunity Opportunity is essentially important for the company growth. Tesco intended to focus on the online shopping market instead of opening the lar gest stores; nowadays many customers think that they can save on the cost of pet rol needed to drive to the store, finding it more convenient and economical if a delivery is made directly to the buyers home; therefore it can attract new custo mers and make more profit ( Butler, 2012). In order to expand global business, Tesco has developed stores across Asia, Euro pe and USA as well as India. They has set up an exclusive franchise agreement wi th Trent, retailer of Tata group, which is one of the largest industrial corpora tions of India (Tesco, 2011)a. Indian cabinet will discuss allowing foreign reta ilers to own 51% of Indian operations. This will benefit the investment of Tesco in India. In recent years, China has been welcoming foreign chain stores to sta rt their business in mainland, Tesco has opened more than 100 stores in China (P ratley, 2011). With the experience gained in China, Tesco started the business i n South Korea through a partnership with Samsung and have been awarded the Most Admired Company award in South Korea (Tesco, 2011)e. All these changes have brou ght a great opportunity to Tesco future prospect. Threat Threats come from an external environment that is uncontrollable. There are a va riety of factors that affect a business. Wachman,( 2012) has noticed that Tesco has reduced its market share from the peak of around 31.8% in 2007 to just below 30% in 2012. In contrast, the second largest grocery markets- ASDA - shares soar ed by 0.6% within a year, which gave Tesco a profit warning shock. Furthermore, an economic crisis can have an impact on Tescos sales: due to the decline in inco me, buyers spending will be reduced (The economist,2011) hence, it will affect bu

siness revenue 0 PESTLE analysis Political Political decisions can impact on many vital areas of business. Starting from Ap ril 2013 onwards, the Northern Ireland government is going to charge the plastic bags tax .(McDonald, 2012). There is still a huge controversy over this levy. Government policies have different degrees of intervention in the economy. China joined the World Trade Organization and became a free flow of foreign trades; i t encourages Western companies to find trade opportunities in China, as China ha s approximately 1.35 billion people (Central Intelligence Agent, 2012), and many companies including Tesco (Tesco, 2012)d intend to invest money in China. Tesco will have a great opportunity to develop business and increase the profit from China. On the other hand, Miliband, (2012) highlighted that the UK should avoid all imp orted products and to be more patriotic, and suggested the government should sup port all the products made in the UK. This policy might result in higher prime c osts to compete with imported products. Economy The economy includes many influences, such as wage level, employee rate and pens ion. Fletcher,( 2012) states that Tesco will create 20,000 jobs within two years in the UK. It will ameliorate the unemployment rate in Britain and assist econo mic growth. On the contrary, Tesco is proposing to increase the pension age from 65 up to 67 which means that the Tesco workforce - 172,000 members of staff - h ave to work 2 years more before they can receive the full pension fund (BBC, 201 2). Tescos pension scheme will become less generous, but it will save the expense s of the company. Social Social changes can have an impact on the companys products and the loyalty of the customers. Tesco made a confusing advertisement ad caused some demonstrators to protest (Press Association, 2012). It indicates that a small mistake can contri bute a serious problem in society. If this happens again, it will reduce the con fidence of all customers. On the other hand, Tesco has contributed greatly towards social welfare, such as by fund -raising for cancer research. The target amount is over 10 million (Tesc o, 2012)e. It will bring a very positive brand image to the consumers. Technology Internet technology is becoming more and more important nowadays, many companies have created online shopping websites for all consumers. The internet helps bus inesses to save costs, for example, on staff wages and on rent. They can make gr eater profits from online business, Tescos sale growth is around 15% (Tesco, 2011 )b. Generally, online sales will increase in the future. But it is vital to be v ery careful about IT errors: for instance, Tesco put the new iPad original cost of 659 as 50 and announced that this was an IT error (Taylor, 2012). It damages Te scos reputation slightly, so Tesco should take care to avoid similar mistakes hap pening again in the future. A strong technology background could support the imp rovements of a business. Legal All countries have their own regulations, for instance, Health & Safety and pack age labeling. There is a law called low value consignment relief, which means all the goods imported into the UK costing under15 are free of charge. However, from April in 2012, all online retailers will not be allowed to sell non-taxed produc ts, for example, stationary and memory sticks (Bowers, 2012)c. This will diminis h the profit of Tesco. In addition, product labeling is very informative, since customers value the ingredients of the food: Tesco has to monitor the labeling, if it is misleading, it is a criminal offence (Business Link, n.d.), so Tesco ha s to be aware of this to earn the trust of the customers .

Environment As global warming is a serious problem, being environmentally friendly is vital. Tesco has made five Community Promises on its website - one of them is caring f or the environment. Tesco understands the importance of climate change and how i t affects customers and is trying its best to cut its own emissions, so pledging to become a zero-carbon business by 2050 (Tesco, 2012)f. However, Tesco is givi ng out plenty of plastic bags to the consumers to carry the groceries, this prac tice is a scourge to the environment. Tesco should encourage shoppers to bring t heir own recycle bags. The Northern Ireland government is going to charge the plastic bags tax on April 2013 (McDonald, 2012). On the other hand, Tesco has had to stop its plans to build a giant supermarket in the town of Margate because it is being opposed by residents. They worry ther e will no longer be seafront views after this development, the environment of th is area will be totally destroyed. Tesco not only has to keep the promise of bei ng a zero-carbon business, but also has to take care of the environment of the s tores in the residential area (Reid, 2011). 0 Conclusion In the light of this, after After taking into account the above analysis of SWO T and PESTLE, I regard that the business of Tesco will Tesco might only have li mited growth in the near future. They will have significant growth of profit in Asian markets but sales warnings will still be happened in UK. Recently, they have had sales warnings, not only because the economy is still we ak but also because there are a lot of competitors around the world. As one of the leading businesses in the UK,, Tesco must take responsibilities for the comm unities; any minor fault will be exaggerated by the media and so the company wil l become opposed by society.Therefore, Tesco has to be strong in the UK by devel oping a well-regarded image so as to build up the trust and loyalty of the consu mers. After taking into account the above analysis of SWOT and PESTLE, Tesco might onl y have limited growth in the near future. They will have significant growth of p rofit in Asian markets but sales warnings will still be happened in UK. It is no t only because the economy is still weak but also because there are a lot of com petitors around the world. As one of the leading businesses in the UK,, Tesco must take responsibilities f or the communities; any minor fault will be exaggerated by the media and so the company will become opposed by society.Therefore, Tesco has to be strong in the UK by developing a well-regarded image so as to build up the trust and loyalty o f the consumers.

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