Swot and Pestel Analysis on Tesco

Tesco is a powerful retail brand. It has a reputation for value for money, convenience and a wide range of products all in one store.

There has been a significant increase of number of Tesco retail stores within the UK, from 692 stores in year 2001 to 1780 stores in year 2005. Also with the introduction of the different stores such as Tesco Metro and express it has made it more convenient and accessible for customers.

Due to the size and the ability of Tesco to buy in bulk they enjoy Economies of scale. Ultimately, this means that they have the competence to lower prices when they want in order to keep their prices attractive and compete with its main competitors such as Sainsburys and Asda.

Ultimately it increased profits.

A company as big as Tesco who sell many products from groceries, books, clothing, and furniture to insurance etc has its weaknesses. It may not have the flexibility as many of its more focused and specialised competitors. For example Tesco would not be able to provide a better service in Books than Waterstones can, as they specialise in this region.

Over the years Tesco has increased its Market share and has increased in size. At present it is the UK’s largest supermarket with over 26% Market share, which almost doubles the closest rivals Asda. Tesco controls its own massive empire. This could leave some weaknesses due to the huge span of control and can suffer from bureaucracy.

Tesco is relatively new to the phone and insurance market therefore may lack experience and expertise. Tesco has recently entered many different Markets, so therefore not specialise and focusing on one particular market like other companies, which can have a negative affect.

There are many opportunities for Tesco. Merging or forming a strategic alliance with another company is a great way to improve their services and overcome some of their weaknesses. It would be a good idea to form alliances with companies in the areas they are not doing so well in and could do with the expertise of a specialised company. In this way Tesco Might be able to get access