PEST analysis

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

PEST analysis is a tool used by organization for understanding market growth or decline, to see the potential of future business activities. It is an acronym for political, economic, social and technology factors.

The purpose of PEST analysis is to examine the market, target consumers and other influences on a company.

Political factors 

Political is a factor which determines the extent to which a government may influence the economy or a certain industry. Tesco now operates in 6 countries in Europe i.e UK, Republic of Hungary, Czech Republic, Slovakia, Turket and Poland. Not only that they also operates in Asia: South Korea, Thailand, Malaysia, Japan and Taiwan. This shows that Tesco Hypermarket is operating in globalized environment.

The government encourages retailers to provide a mix of job opportunities from flexible, lower paid and locally. Tesco understand that retailing has a great impact on jobs and people factors. Tesco therefore employs people from different backgrounds i.e students, disabled, elderly workers and often paying them at lower rates. In an industry with a typically high staff turnover, workers offer a higher level of loyalty and therefore represent desirable employees. 

Economical factors

Economic factor is the determinants of an economy's performance that directly impacts company.

Economic factors are a major concern of Tesco because they are the factors that are most likely to affect and influence demand, costs, price and profits of the company. One of the most influential factors on the economy is high unemployment rates which leads to a decrease in effective demands for goods and affecting the demand required to produce such goods. 

These economical factors are the external factors, meaning that they are largely outside the control of the company. It affect the company's performance greatly and the marketing mix can be profound. 

Social factors

Social factor examine the social environment of the market like cultural trends, demographics, population analytic.

Things that may affect the company is a social factors such as increased in birth rate and education.  

Birth rate: Tesco may look upon at selling children's toys as a new market in the company in order to extent the ranges which in the long run will lead them into making more profits because they will have extra market that parents and children will be interested in.

 Education: Tesco also focuses on education. As you can see from their adverts, they provide their consumers by selling school uniform for children that are at a certain age - mostly primary school. They tend to use the theme of "Back to school" on adverts or commercials. This opens a whole new market for Tesco which will be beneficial for them.

Technology factors

Technology factor pertain to innovations in technology that may affect the operations of the industry and the market favorably or unfavorably.  Having an advancement in technology for a company is an important thing. This is because they could provide better services for their consumer and their consumer's needs as well as improving customer satisfaction. Technologies that are used in Tesco stores are:

Electronic shelf labeling

Electronic Point of sale

Self check out machines

Bar code scanner

By providing such technology in the company will allow the customer to feel more convenient as product is readily available to them. The above mentioned has helped Tesco in improving their stocking and distribution process.