How Tesco Respond to Internal and External Changes

Today’s current market

Just recently UK has came out of recession, the recession started in 2007 which the result was bad, it caused UKs wealth to go down which meant that not much money was coming to the UK economy which means that people have lost their jobs because companies cant offered to have pay the staff which means that have to get rid of some staff, UK has got of recession 23rd of October 2009 UK.

Political factors

Fraud

This factor has big influences on Tesco because by law they must not sell any personal and credit card details to third party if they are involved in this act then they will be fined by the government for committing this factor has been introduced to protect citizen from fraud that organisations commit. If Tesco where involved in fraud they will lose the reputation as a company which could result them going out of business because a fraud is a serious crime also it is a personal issue to many customers because if customers find out that Tesco has been selling the personal details to 3rd party’s then they will never shop at Tesco again because they wouldn’t want to be in that same situation

Environmental issues

This factor has effect on every organisation, this is because every organisation has the duties to protect the environment, and this has a big influence on Tesco because environmental groups like friends of the earth insist to Tesco to recycle plastics and cardboards. If tesco don’t follow the reules that are bei

Macro environment

Macro environment is the external actions and development over which Tesco don’t have control over, such as changes in customer’s minds if they don’t want to shop at Tesco, then Tesco can’t do anything to make them shop at Tesco.

New Technology

Technology changes so every time a new gadget Tesco must have it in stock or they are not offering a good customer service for this Tesco needs to speed up the transportation so that the products can be their on time for their customers.

Economic growth

Tesco has no control over the economic growth such as if there not much money coming in within household then people will not spend much as they used to then Tesco would not be selling as much as they used to so they will lose a lot of money and may be bankrupt.

Social changes

This is meant by people living with each other such as 1981 around 7 to 8 people used to live in one house hold but within the 21centry around 2 to 4 people live in one household this means less products are being brought but also it means there are more houses which means that more are people are buying house hold products.

Government policy

The government can affect Tesco in many ways such as in 1994 the government has introduced trading hours which meant that Tesco can be open only for six hours in Sundays and also the government has introduced planning guidance act 1990 which meant that companies building their store need permission from the council and have to follow procedures.

Recession

Just two years ago unemployment was three million which in result was companies closing down such as Woolworths because of recession, the recession can effect Tesco as well trough if theirs not that much money coming within Tesco supermarket then it means that Tesco will have to close some of their supermarkets which will in result people losing their job

The competitive environment

Information management

Many different organisations gather information through different ways, Tesco gather the information over the loyalty cards, (club cards) which give them information about their customers the benefit of this is customers are able to select promotional messages they want to receive the disadvantage is there is a potential for fraud e.g. cloned credit.

Competitors

Tesco has many competitors such as Asda, Sainsbury’s and Morrison’s; Tesco needs to keep an eye on their competitors about the prices, the products they sell and the services they offer by them doing this they bring changes to their business because of their competitors

Market position

Market position is what companies focus on such as different companies have different market positions for example TK Max focus bargains while Primark focus prices also another example is Lidl supermarks focus on price while Tesco focus on quality and price

Barriers to entry

Is meant by how easy it is to entry the market for example it is easier to enter the headdress market while it is difficult to enter the market for the reason there are big organisations that run the supermarkets while headdress are run by sole traders and partnership.

Product development.

This is meant by more products being developed for this Tesco needs to keep up with products that other supermarkets sell for the reason that if Tesco customers cant find a product at Tesco but a Asda then Tesco customers will start to shop at Asda because they will believe that Asda will always have up to date products for this reason Tesco must have up to date products also by Tesco having up to date products their customers don’t have to go other supermarkets to get the product they desire.

New products and service

This is meant by having new products or services such as Tesco has introduced Insurance which is a new a services this is a good idea because Tesco customers will start to sign up for insurance also Tesco needs to keep up with new products and services

New retailing concepts

This is meant by having new section within the supermarket such as Tesco has a new cafeteria for customers that have been shopping at the stores.

Pricing.

This very important within business because many customers all ways look at the price, so Tesco needs to concentrate on the price if they want to keep customers and to gain new customers, price is also important so Tesco needs to look at other supermarkets about the price they sell the products

Pay levels

This factor has a big influence on Tesco because they have to pay the staff at the national wage and also increase the wages of the staff that work for them for a long period of time

National and international law

This is meant by that Tesco must follow rules that are set by the national; and international law such as they have to follow rules that are set by the united nationals which as a major influence on Tesco they also have to follow laws that are set up the local government this can effect Tesco through things like loading things to their stores which there may be no parking’s.

Cost of credit

This has a major effect on Tesco because they have some items which they borrow to run their business so if the interest rate for borrow the item goes up then they will have to pay more money to borrow that item they want to borrow which will in result them spending more money which means they will be losing money.

Energy prices

If the energy price goes up this will be a bad news for Tesco because it will be more expensive to transport goods to their stores and also it will also be very expensive to transport goods from other countries.

Increased access to broadband

This has big influence on Tesco this because Tesco offers Internet connection so this means that more people are buying their service because of the increase in internet connection.