PEST analysis

c) Under the PEST analysis, students are to analyse only Social and Technological factors of the company 

and share your findings.

  A PEST analysis looks at how external environment affect a business’s activities and performance, to determine an organization’s overall outlook for success.  External environment is the factors, forces, situations, and events outside the organization that affect its performance. Therefore, external environment is scanned thoroughly and analyzed for the development and success of Tesco’s strategic decisions.

Social factors

   For Social analysis, it examines the social environment of the market like cultural trends, demographics, and population analytics. Current trends indicates that consumers nowadays usually do shopping in bulk which is due to the social changes occurring in the last decades. Since this has influenced consumers’ shopping behaviour, Tesco has expanded its inventory of non-food items. This will be easy for consumers when do shopping in bulk.

  Besides that, types of products and services demanded by consumers is a function of their social conditioning and their consequent attitudes and beliefs. Due to the credit crunch in order to reduce expenditures and because of healthy eating, people buy health foods at supermarkets as it is more affordable. As a result, Tesco adapting its product mix is to accommodate the increased of demand for organic products with lower prices. This has increased Tesco sales volumes, as they offer lower prices than their rivals.

   Furthermore, demographic factors such as increase of women employees, increasing trend of frozen foods and aging population, make retailers to consider these changing factors to update the organization accordingly (Drejer, 2000). Thus, Tesco comply with these changes by emphasizing operational improvements and supply chain management. This has increased Tesco’s overall organizational performance.

Technological factors

   As for technological analysis, it pertains to the innovations in technology that may affect the operations of the industry and the market favourably or unfavourably.  The technology which brought the largest impact and had become the key driver in the global business arena is the internet technology. Tesco’s online shopping is one example of this, as they account for 66.2% of the online food and grocery shopping in UK. 

Furthermore, Tesco is technologically efficient by providing electronic scanners such as electronic Point of Sale (EPS) and Electronic Funds Transfer Systems (EFTS) and barcode reader, to improve the efficiency of distribution services and other inventory related activities.