PESTEL Analysis of Tesco

PESTEL Analysis of Tesco Table of Contents PESTEL Analysis Political Economic Social Technology Environmental Legal Review of Tesco PLC References PESTEL Analysis Political The UK government has recently adopted a tax measure that affected Tesco. In 2011 the UK government increased the VAT rate from 17.5% to 20% with the aim to increase government revenue by  £13 billion per year (BBC, 2011, n. p.). Crossley et al. (2009, p. 3) contend that an increase in the VAT rate leads to lower customer spending. Therefore, an increase in the VAT rate negatively affected the sales revenue generated by Tesco. Sales revenue is the key source of income of the organisation and thus it holds a substantial effect on profits (Atrill, 2009, p. 33). The UK government has also proposed to adopt a fat tax with the aim to control obesity and limit the medical problems associated with it (The Guardian, 2011, n. p.). Such measure can adversely affect the sales revenue of certain products retailed by Tesco. Tesco is responding to such a threat. Indeed, in 2014 Tesco launched a brand new healthy food range (Tesco, 2014, n. p.). Economic The UK economy is showing positive signs of recovery from the financial crises. Higher economic growth rate was forecasted and the gross domestic product was estimated to be 2.7% higher than the pre-crises peak (BBC, 2014, n. p.). A growth in economy is a positive sign for Tesco because it results in a growth in the supermarket industry, which is the main industry in which Tesco operates. When there is an economic recession, which is the opposite of economic growth the rate of unemployment increases. This results in lower disposable income in the hands of the British people. Therefore, customers will decrease spending and will shift to products of a lower price (Mankiw, 2012, p. 97).Therefore, recovery from the economic recession stimulates revenue growth for Tesco. Social The number of elderly people is increasing in the UK due to the baby boom generation. In the past years there was a decrease in the birth-rate and an increase in the life expectancy of people (Independent, 2010, n. p.). This led to a shift in the tastes of individuals which should be taken into account by Tesco. For example, the adoption of online shopping by Tesco for grocery products is an approach that takes into consideration the mobility issues that elderly people face. Eastmen and Iyer (2004, p. 208) examined the perception of elderly people to the use of the Internet. These scholars found that elderly people view the Internet favourably and are willing to use it. This research also suggested that elderly people with a high income are generally more in favour to the use of the Internet and are interested to acquire products online (Eastmen and Iyer, 2004, p. 208). Therefore, Tesco has positively responded to this social change. The literature says that the customers opinion of an organisation can quickly change due to changes in the quality and price of the companys products, shopping service provided to customers and competitive moves (Kotler and Armstrong, 2010, p. 163-165). This highlights the importance that the corporate strategies should be responsive to the business environment. For example, in 2013 Tesco was accused of the horsemeat scandal. Horse-related puns were identified in Tescos burgers and the organisation was accused of not providing the good quality products claimed in their advertising campaigns (Pratley, 2013, n. p.). This scandal affected negatively the perception of customers on Tesco, which resulted in a decline in sales (Neate and Moulds, 2013, n. p.). Tesco needs to respond to such scandal, which adversely affected its image. Technology Technology is critical for the supply chain management of Tesco. Retailers like Tesco develop supply chain management systems in order to attain competitive advantages and enhance cost efficiency (Tan, 2001, p. 41). Johnson et al. (2005, pp. 132 133) posit that the most effective competitive advantages are those that are difficult to imitate by competitors.These are reflected in the core competencies of the organisation (Johnson et al., 2005, pp. 132 133). Tesco needs to be very attentive to technological advancements because these may be an opportunity for the firm. For example, mobile technology helped to improve Tescos distribution service because customers can selected their preferred wine through their mobile (Tomlinson and Evans, 2005, n. p.). The management of Tesco needs to be attentive for disruptive technologies, which occur frequently in retailing. For example, the introduction of e-grocers led to a disruptive wave in the supermarket industry (Wessel and Christensen, 2012, p. 7). Disruptive technologies result from an innovation in technology that is initially incapable of reaching the performance of the present technology. Therefore, customers value the present technology more than this new technology. However, a niche in the market arises where the disruptive technology is more convenient to customers. Therefore, such technology will appear unattractive to large well established organisations, like Tesco. On the contrary small firms will regard a disruptive technology as an opportunity to enhance the market share (CIMA, 2009, pp. 1 2). These small firms will utilise the technology in order to meet the standards of performance expected by the bulk of the market (CIMA, 2009, p. 2). Therefore, over time the disruptive technology will increase in popularity and will be more valuable to customers than the present technology (CIMA, 2009, p. 2). This will thus negatively affect organisations that have not used this technological opportunity. Environmental In the press substantial emphasis is made on global warming and the consequences associated with it. For example, the increase in average temperature is leading to a melting of the Arctic ice and it is envisaged that by 2040 there will be an ice-free summer (National Geographic, 2007, n. p.). Such facts are leading to higher emphasis on environmental sustainability. Tesco is adopting a number of measures that are aimed to protect the environment. For example, Tesco is committed to diminish the consumption of energy and utilisation of greenhouse gases (Tesco, 2014c). Management claimed that when they are doing store adjustments they are taking into account such environmental factors. For example, in Thailand the organisation has invested  £3.1 million on 49 stores in order to provide energy savings of approximately  £2 million (Tesco, 2014, c, pp. 44 45). Legal There are a number of laws that affect Tesco because the organisation markets a wide number of products and services. For example, as regards the agricultural products the UK government is reforming the common agricultural policy. The government is revising the way direct subsidies will be allocated to farmers (Gov.uk, 2014, n. p.). Such measures can lead to lower subsidies, which affect the ability of farmers to meet the agricultural standards set by Tesco and the prices agreed with organisations engaged in the supermarket industry. Winnett (2012, n. p.) contends that significant fines can be imposed on firms like Tesco if such organisations force agricultural suppliers to sell at a price which is lower than costs. Tesco is also engaged in financial services products like credit cards, savings, loans and mortgages (Tesco, 2014a, n. p.). The Financial Services Act (2012) was recently implemented in the UK (Noked, 2013, n. p.). Three new governing bodies resulted from this act, which consist of the Financial Policy Committee, the Prudential Regulatory Authority and the Financial Conduct Authority (Noked, 2013, n. p.). The Prudential Regulatory Authority adopts a micro-perspective and is responsible that organisations engaged in financial services products operate in adherence to relevant regulations (Noked, 2013, n. p.). The Prudential Regulatory Authority seeks to decrease the negative effects arising from disruption to the continuity of financial services, which may be influenced by the way financial services organisations operate or their failure (Noked, 2013, n. p.). Review of Tesco PLC Tesco is facing serious threats that are weakening the leadership in the supermarket industry that the organisation holds in the UK. Furthermore, the financial health of competitive firms is better than that of Tesco. Tesco needs to respond to these threats and utilise its main strength, which consists of a strong brand name in order to sustain its competitive advantages. References ACCA F7 (2009) Financial Reporting: The Complete Text. Berkshire: Kaplan Publishing. Atrill, P. (2009) Financial Management for Decision Makers. Fifth Edition. London: Financial Times Prentice Hall. BBC (2014a) Tesco Turns Stale as Competitors Freshen up Ideas [online]. Available from: http://www.bbc.com/news/business-29310445 [Accessed 2 October 2014]. BBC (2014) UK Economy Grew 0.9% in Second Quarter, says ONS [online]. Available from: http://www.bbc.com/news/business-29422267 [Accessed 1 October 2014]. BBC (2011) VAT Rate Rises from 17.5% to 20% (online). Available from: http://www.bbc.com/news/business-12099638 [Accessed 1 October 2014]. Bokaie, J. (2008) Tesco Finest Hits  £1.2bn Sales to Become Top Grocery Brand, Marketing Magazine [online]. Available from: http://www.marketingmagazine.co.uk/article/803672/tesco-finest-hits-12bn-sales-become-top-grocery-brand [Accessed 2 October 2014]. Brealey, A. R., Myers, C. S. and Allen, F. (2011) Principles of Corporate Finance. Tenth Edition. New York: McGraw-Hill Irwin. CIMA (2009) A Strategic Approach to Disruptive Technologies [online]. Available from: http://www.cimaglobal.com/Documents/Thought_leadership_docs/cid_dispap_strategic_approach_disruptive_technologies_nov09.pdf [Accessed 1 October 2014]. Crossley, T. F., Low, H. and Wakefield, M. (2009) The Economics of a Temporary VAT Cut. Fiscal Studies, 30(1), 3-16. Eastmen, K. J. and Iyer, R. (2004) The Elderlys Uses and Attitudes towards the Internet. Journal of Consumer Marketing, 21(3), 208-220. Eiteman, K. D., Stonehill, I. A. and Moffett, H. M. (1999) Multinational Business Finance. Eighth Edition. New York: Addison-Wesley Publishing Company. Gov.uk (2014) Reforming the Common Agricultural Policy to Ensure a Fair Deal for Farmers, Consumers and Taxpayers [online]. Available from: https://www.gov.uk/government/policies/reforming-the-common-agricultural-policy-to-ensure-a-fair-deal-for-farmers-consumers-and-taxpayers [Accessed 2 October 2014]. Huang, Y. and Huddleston, P. (2009) Retailer Premium Own-Brands: Creating Customer Loyalty through Own-Brand Products Advantage. International Journal of Retail and Distribution Management, 37(11), 975-992. Hunger, J. D. and Wheelen, L. T. (2000) Strategic Management. Seventh Edition. London: Prentice Hall. Independent (2010) Will the Baby-Boomers Bankrupt Britain? [online]. Available from: http://www.independent.co.uk/news/uk/politics/will-the-babyboomers-bankrupt-britain-1936027.html [Accessed 1 October 2014]. Johnson, G., Scholes, K. and Whittington, R. (2005) Exploring Corporate Strategy: Text and Cases. Seventh Edition. London: Financial Times Prentice Hall. Kaplan, S. R. and Norton, P. D. (1996) The Balanced Scorecard: Translating Strategy into Action. Watertown: Harvard Business Press. Kotler, P. and Armstrong, G. (2010) Principles of Marketing. Thirteenth Edition. London: Prentice Hall. Mankiw, N. G. (2012) Principles of Economics. Sixth Edition. Mason: South-Western Cengage Learning. Matsa, A. D. (2011) Competition and Product Quality in the Supermarket Industry. The Quarterly Journal of Economics, 26(9), 2375-2410. McKenzie, W. (2003) Using and Interpreting Company Accounts. Third Edition. London: Financial Times Prentice Hall. Meyer-Waarden, L. and Benavent, C. (2009) Grocery Retail Loyalty Program Effects: Self-Selection or Purchase Behaviour Change? Journal of the Academy of Marketing Science, 37(3), 345-358. National Geographic (2007) Global Warming Fast Facts [online]. Available from: http://news.nationalgeographic.com/news/2004/12/1206_041206_global_warming.html [Accessed 7 October 2014]. Neate, R. and Moulds, J. (2013) Tesco Sales Stumble on Horsemeat Scandal, The Guardian [online]. Available from: http://www.theguardian.com/business/2013/jun/05/tesco-sales-fall-horsemeat-scandal [Accessed 1 October 2014]. Neville, S. (2013) Tesco is still UKs Top Retail Brand despite Horsemeat Scandal, says Report, The Guardian [online]. Available from: http://www.theguardian.com/business/2013/mar/19/tesco-retail-brand-horsemeat-scandal [Accessed 2 October 2014]. Noked, N. (2013) Financial Services Act 2012: A New UK Financial Regulatory Framework, The Harvard Law School [online]. Available from: http://blogs.law.harvard.edu/corpgov/2013/03/24/financial-services-act-2012-a-new-uk-financial-regulatory-framework/ [Accessed 2 October 2014]. Pike, R. and Neale, B. (2003) Corporate Finance and Investment: Decisions and Strategies. Fourth Edition. London: Financial Times Prentice Hall. Poulter, S. (2014) Price War at the Checkout: Rival Supermarkets Forced to Fight Back after Morrisons Slash  £1 Billion off the Cost of Basic Food, Daily Mail [online]. Available from: http://www.dailymail.co.uk/news/article-2579920/Morrisons-vows-Lidl-Aldi-slashing-prices.html [Accessed 3 October 2014]. Pratley, N. (2013) Tesco and the Horsemeat Scandal: Answers Needed Quickly, The Guardian [online]. Available from: http://www.theguardian.com/business/nils-pratley-on-finance/2013/jan/16/tesco-horsemeat-scandal-reaction?guni=Article:in%20body%20link [Accessed 1 October 2014]. Reuters (2014) Financials: Tesco PLC (TSCO.L) [online]. Available from: http://www.reuters.com/finance/stocks/financialHighlights?symbol=TSCO.L [Accessed 2 October 2014]. Tan, C. K. (2001) A Framework of Supply Chain Management Literature. European Journal of Purchasing and Supply Management, 7, 39-48. Tesco (2014b) Annual Report and Financial Statements 2014 [online]. Available from: http://www.tescoplc.com/files/pdf/reports/ar14/download_annual_report.pdf [Accessed 3 October 2014]. Tesco (2014 c) Environment [online]. Available from: http://www.tesco.com/csr/downloads/pdf6.pdf [Accessed 7 October 2014]. Tesco (2014a) Tesco Bank [online]. Available from: http://www.tescobank.com/home/home.html [Accessed 2 October 2014]. Tesco (2014) Tesco Launches Brand New Healthy Food Range for People on the go [online]. Available from: http://www.tescoplc.com/index.asp?pageid=17newsid=1005 [Accessed 1 October 2014]. Tomlinson, H. and Evans, R. (2005) Tesco Stocks up on Inside Knowledge of Shoppers Lives, The Guardian [online]. Available from: http://www.theguardian.com/business/2005/sep/20/freedomofinformation.supermarkets [Accessed 1 October 2014]. The Guardian (2011) UK could Introduce Fat Tax, says David Cameron [online]. Available from: http://www.theguardian.com/politics/2011/oct/04/uk-obesity-tax-david-cameron [Accessed 1 October 2014]. Wessel, M. and Christensen, M. C. (2012) Surviving Disruption. Harvard Business Review, 90(12), 56-64. Winnett, R. (2012) Supermarkets Face Large Fines for Abusing Farmers, The Telegraph [online]. Available from: http://www.telegraph.co.uk/earth/agriculture/supermarkets/9720989/Supermarkets-face-large-fines-for-abusing-farmers.html [Accessed 2 October 2014]. Wood, S. and McCarthy, D. (2014) The UK Food Retail Race for Space and Market Saturation: A Contemporary Review. The International Review of Retail, Distribution and Consumer Research, 24(2), 121-144. Other Essays on Tesco Other essays available on the Tesco organisations are: Tesco SWOT Analysis Tesco Business analysis Tesco is one of the leading supermarkets Tesco Strategy analysis Tesco Changing Business Environment Tesco Fresh Veg Supply Chain Management

Pixar †the Innovative & Creative Animation Company

PIXAR – the innovative & creative animation company PIXAR is a world class animation film studio. The Pixar organization culture is influenced the company to be more creative and innovation. This is helping her to achieve remarkable awards in their industry. The great successful for Pixar is the share values, all employees named â€Å"Pixarians† who are proud of their job and love their job. They are self-motivated and enjoyed to be work in Pixar. By using seven dimension of organization culture, Pixar culture is achieved at least 3 dimension, they are: â€Å"People orientation†, â€Å"Innovation and risk taking† and â€Å"Team orientation†.People orientation Pixar management believes that new talent can blossom creativity and innovation thus using appropriated candidate, no matter whom they are and where they come from being a critical success of the organization. Like John Lasseter hired Andrew Stanton who writes script of Toy Story that he canâ⠂¬â„¢t. Pixar does not like other assembly studios which employed a group of freelance professionals to work on a single project. They hired a permanent staff takes the full responsibility in their role from project to project.Pixar provides on job training to encourage lifelong learning cultural, the in house professional development school – â€Å"Pixar University† where allowed any levels of employees to miss work for classes. Furthermore, Pixar promotes a slogan â€Å"Try, Learn and Try again† for innovation development. It is a company culture that encourages the staff to try something new and think in different. Innovation and risk taking As Pixar is a creative animation factory, their working environment also creative and breakthrough the normal office layout.They are mixing fun with their work place. We can find basketball court, game centre, gym room and even bathrooms in the main office. From the relaxing fun and play area, all employees can take a bre ak and refresh their mind during office hour also meet different department people would interact creative and sparkling ideas. For individual staff, they can design and create their fun & play working spaces at their own preference. Pixar’s management will not disturb their staff freedom which can build another level of respect and trust. [pic] [pic] Fun & relax area pic] Employee can design their own workplace Team orientation Pixar has no organization chart which aims to erase the corporate control and power that forbidding creativity. Paxarians are freedom to communicate with anyone and contribute own creative ideas regardless the level or title, that removes communicating barriers and builds peer driven cultural within Pixar. They are project base team structure, so staff building a good relationship by project succeeds or process failures. To analyze above culture affects the management within Pixar Planning:Base on the business nature, Pixar would like to create a rela xing environment to the staff for encouraging creative thinking, therefore the office layout planning being informal and given enough individualized working area for their staff. Pixar understood that the common social area that can be exchange the working information and idea by a no pressure setting so the leisure facilities is planned for their office. Organizing: Pixar is an organic organization structure company. Their culture is forming a team for specific project. This flexible project based structure can fully utilize the staff talent by their specific strengthen.Also, the project owner can recruit the right person internal for their individual project. On the other hand, staff can meet different kind of team member from the company, it sparkle their mind from the new members. Leading: Pixar is will not hire the freelance designer for the specific project, the form of the team base on the staff talent for full time staff therefore, the leadership style is regarding the staff ability for each project. The chance to show the staff performance is not related on the organization structure but the personal ability.This leading culture gives the chance to everyone in the company to show their talent in their own professional. Their culture will not kill any creative and potential staff from the rigid company structure. Controlling: Pixar is a people orientated company therefore the on job training – Pixar University being one of the controls for the employee performance and level up the employee professional to be Pixar standard. From the training program, employee can understand more about the company requirement, as the same time Pixar can be evaluated the employee by the Pixar university classroom.This long time learning culture is covering all level of the employee which is not only for the working needs but also line up the Pixarians mind set to meet their company goals. Conclusion To sum up, as world-class animation company, Pixar did a very wel l company culture to help the innovative and creative happened. Top management understood that people is the most importance asset for the company so the people orientated management style being the key success for Pixar.Employees get the strong identity with Pixar culture and being loyal to the company, who called themselves â€Å"Paixarian† and so proud of being the member of Pixar. The staff and company are getting the shared values, principles and doing the same way to let company going forward. References: Pixar Official Website: http://www. pixar. com/ Pixar office photo : http://thechive. com/2009/12/22/pixar-offices-are-almost-as-cool-as-thechive-offices-27-photos/ Capodadli, B. & Jackson, L. (2010) Innovate The Pixar Way: Business Lessons From The World’s Most Creative Corporate Playground. New York: McGraw Hill. ———————– 4

Online Shopping Essay

It won’t be a wrong thing to say that the present world is a digital world where the world is shrinking day by day on the screen of the Smartphone. People spend a lot more time on internet for fun and work and even now prefer to shop online. But there is a group which prefers to shop from the physical stores. What is your view? Is shopping online a better idea in today’s world? Read more:  Online Shopping Disadvantages Yes:- †¢ It is a boon for working people who hardly find any time from the busy schedule to go out and visit the physical outlets for shopping. †¢ It is just not about buying the luxuries online but now it is a platform where people look to order for groceries and other essential products required in daily life. †¢ There is a great flexibility to compare the prices when you shop online. You can visit the different websites and can then choose the best deal. †¢ There is no time restriction when it comes to shopping online. No matter where you are at the home or in office, you can buy from anywhere and anytime. †¢ When you shop online you can go through the customer reviews to get the idea about the utility and quality of the product. †¢ There is no headache to deal with the sales people who stay after you and pressurize you to buy products in the physical stores. †¢ With the help of online shopping it has becomes easier for the people to buy gifts and flowers and send them to their loved ones on special occasions. No :- †¢ The first problem definitely is of quality. You cannot touch and see the products before you buy them. †¢ Online shopping always comes with the risk of insecure online payment and the fraudulent sites claiming to sell genuine products. †¢ When you buy anything online then there is the compulsion to wait for the products for some days. You cannot get the delivery at the same time. †¢ The greatest headache in online shopping is of return policies. The return policies are not at all buyer’s friendly. Moreover it is a long and complex procedure. †¢ People are getting addicted to internet for their each and every need. If they won’t step out of the home for the simple thing like shopping also then they are at a higher risk of confining themselves to the virtual world. †¢ When you shop online then you have to pay extra as shipping costs. Sometimes the cost of the product is less than the shipping costs. Conclusion:- The coin has two sides head and tail, life has two phases good and bad, everything has its own sets of advantages and disadvantages. The only thing is that be sensible in whatever mode of shopping you use. If you do then online or physical, all are fine.

Literature Review on Organic Farming - 3191 Words

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