PESTEL ANALYSIS

Presentation by:
Milan, Sonu, Rishita, Vivek, Sanjay,
Martin, Sayeed and Deep
 Political Factors
• It takes into account the level of government
intervention in the economy.
• The political factors also taken into account
include government policies, tax laws, labour
regulations and trade policies.
• Businesses need political stability to operate
or they will fail to achieve the desired level of
profitability.
 Economic Factors

• It have a direct impact on their profitability.

• These factors include inflation rate, exchange
rate, interest rate and disposable income
available to end consumers.
• The economic factors can be further
categorized into micro-economic and macro-
economic factors.
 Social Factors
• It has a profound impact on its operation.
• The social factors include the cultural
influences and beliefs of the target audience.
• This will also include age demographics,
education, likes, interests and opinions of the
society.
 Technological Factors
• Explore new ways of communicating,
engaging and interacting with their target
audience.
• Significance in the production of goods and
services and also in their distribution.
• Today, companies allocate considerable
resources towards Research and Development
to stay ahead in the game.
 Environmental Factors
• Relatively new addition to the macro-
economic analytical tools.
• Gained significance owing to the rising
concern regarding the environment among
the masses.
• Consumers prefrence, environment-friendly
products and who are socially responsible.
 Legal Factors
• Focus on issues like product safety, consumer
rights and laws, equal opportunities, and
health and safety.
• Abide by the rules and regulations of the
country they are operating in.
• It helps in business plan and achieve its
strategic objectives in a more informed and
realistic manner.
• Tesco, a multinational food retailing company,
is headquartered in the UK .
• Has stores in 12 countries across the world.
• It is the second largest retailer after Wal-Mart
in terms of profits made and also holds the
title for the second largest retailer considering
revenues.
 PESTEL ANALYSIS OF TESCO
Political Factors
• Since the retailing company operates
worldwide, global political factors greatly
influence the performance of Tesco.
• It plays its part in creating employment
opportunities, it also, in turn, increases the
demand for its products and diversifies its
workforce.
Economic Factors
• The main point of concern for Tesco, are most
likely to leverage costs, demand, profits and
prices.
• Tesco, has shifted most of its focus towards
advertising its value brands rather than the
more luxurious items.
Social Factors
• Tesco has increased the number of non-food
items offered for sale. ( Bulk and Non stop
shopping).
• Tesco is adapting changes by accommodating
the demand for organic products.(Consumer
Concern)
Technological Factors
• Firstly, the development and introduction of
online shopping . Secondly, self-service
checkout points
• Tesco has also invested a significant amount
on energy efficiency projects to fulfill its long-
term objective to reduce its carbon footprint.
Environmental Factors
• Tesco is clearly committed to reducing its
carbon footprint by 50% by 2020.
• Tesco is minimizing the waste produced in
their stores by increasing social conscience in
customers.
Legal Factors
• Government policies and legislations also
directly impact the performance of Tesco.
• Tesco provides its customers price reductions
on the fuel they purchase, in accordance to
the amount spent on their grocery stores.
Also, there are several promotion offers where
prices are lowered.
 CONCLUSION
• PESTEL analysis is the effective way to run the
business organization in systematic manner.
• It helps to analyize the external environment
concerning all factors which affect an
organization.
• As we took the example of Tesco company
which is now the second largest retailer in the
world due to effective use of PESTEL analytical
method.
ANY QUERY
THANK YOU