Research Topics: PEST Case Studies

The External Environment of TESCO PLC

THE EXTERNAL ENVIRONMENT OF TESCO PLC Table of Contents I.      Introduction.. 3 II.     Background of the Company.. 3 III.        PEST Analysis.. 4 A.    Political Factors. 4 B.    Economic Factors. 5 C.    Socio-Cultural Factors. 6 D.    Technological Factors. 6 IV.       Analysis.. 6 V.    Conclusion.. 8 VI.       References.. 8         I.       Introduction The direct selling industry is among the most active and prominent industries in the world. Those competing in this industry have by now come and gone on account of this constantly changing quality of this industry. Essentially, the process concerned and the practices seen by both contemporary and conventional retailers are alike. The component that has transformed is the environment which these companies control. More specially, the level of doubt in the external environment of the direct selling industry has transformed immeasurably. Hence, it turned out to be an indispensable element of the course of these companies to continually be watchful and aware with the elements of the environment which could impinge on the functions of the organisation. The companies in the direct selling industry who have been experts in this art of incessantly becoming accustomed to the alterations in the environment have been the ones flourishing in their field. This is seen in the case of the retail industry of UK, where Tesco Plc prevails as the leading retail company in the land. II.    Background of the Company In 1919,  established the company selling surplus products in the East End of London. Nowadays, it is among the global leading retailers and controls hundreds of stores. Its nearest competitors consist of Asta, Sainsbury’s, and Morrison. These players work hard to establish some competitive advantage over the other player. In the case of Tesco, their website has mentioned that their mission is “to create value for customers to earn their lifetime loyalty.” This manifests the company’s high respect on their customers and that they similarly keep them faithful by giving them the best possible of products and services in the market. Essentially, the organisation distinguishes the significance of individuals in their overall operations. These signify individuals in general, those who work internally and those that they deal with externally. The bottom line is that Tesco is known for taking care of its people. In spite of owning branches and stores in key cities around the globe, the centre of its operations is still concentrated in UK. III.  PEST Analysis Tesco’s external environment has a strong effect on the functions of the organisation. In the article of  (2001) they mentioned that specific sectors of the environment has the propensity to acquire certain implications to other spots of the company. Hence, it is imperative that organisations become conscious of such incidences to institute a level of elasticity that will guarantee their firm commercial accomplishment and know how to guarantee the alleviation of further losses. A.   Political Factors It has to be highlighted that the organisation is operating in the public sphere as a public entity. Hence, excluding the buying and selling of its stocks, it is also obligated to comply with the competition regimes of EU and UK. Government posts such as the Office of Fair trading (OFT) monitors their every stirs to guarantee that the other players are cosseted from any unscrupulous actions. (Miller, Harvey, Parry 1998, 151) This means that the company is open to operate in any other member state in EU. The major barrier that they have to prevail over is existing retail monoliths in the respective EU member state.       B.   Economic Factors The direct selling industry in UK is considerably secure. Beginning from the food industry to the non-food trade, the consumers in UK have continually depended significantly on shops like groceries for their daily commodities and other product needs. ( 2005) This might well be the grounds why there are several participants in the direct selling industry of UK. There are those focusing on a specific target market to those that favour a locations-specific stratagem, retailers of all sizes has been gathering in the UK market and Europe for the reason of the potential it tenders. C.   Socio-Cultural Factors Perhaps among the major alterations in the socio-cultural setting of UK is the movement of the people in favour of healthy living. ( 1998) This presents that the retailing industry have to now consider the nutritional substance of the merchandises that they are selling to the public. This similarly points to the purchasing patterns of the buyers in UK may possibly have been predisposed by this movement. A case in point of such signs of this trend is seen in the individual programs of schools to provide clean and healthy nourishment to their students. (1998) Moreover, the state has also commenced programmes that sustain the drive towards the healthy living in UK. D.   Technological Factors The buyers of the UK market are literate in terms of handling new technology. (1999) Organisations that intend to operate in UK could effortlessly acquire admission through the World Wide Web. ( 1999) This is decidedly feasible for big companies as they by now own the brand recall from their core customers. Moreover, small retailers could similarly use this means to perform their business but they have to evidently distinguish themselves from the other competitors in the UK market. E.   Legal Factors The consumers of the direct selling industry are similarly covered. In the circumstance surrounding their operations in the internet by means of , it seems that they may too come across particular issues as high online marketing charges proliferate in the UK. On the whole, this is a consequence of the severe policies that the UK government has ratified to control the employment of the internet for marketing and trade. ( 2001) F.    Environment Despite being considered a monolith in the retail industry, Tesco have to correspondingly contend with issues that could place them at odds with the state. Plainly, there include abuses in management programmes prearranged by law could cause them to be legally responsible to the  for enquiry. Moreover, they could similarly be legally responsible to the said authority if they are discovered vend merchandise deemed to be genetically changed and have yet to be permitted by the government for commercial circulation. ( 2004)   IV.Conclusion The success story of Tesco with regards to international business has been one of the more looked upon cases. In any case, the discussions above proved that the ability of the company to take into consideration the implication of the environment to their overall operation. The case of Tesco showed that it is not enough that the products that they are selling the public are top of the line. They have to make sure that the products they are selling do have an actual demand from the customers. They have to guarantee that the products that they are offering will ensure sale. This is done by being acquainted with the market and establishing great relations with their customers through customer relationship management. Hence, the success of Tesco is manifested in the ability of the company to balance both the external and the internal operations of the firm. The demands of the people and the stability of the company to provide for these demands are the key ingredients to the overall success of Tesco.    V.   Recommendation  The mission statement, moreover, signified that the workers are also regarded as among the major contributor their successful operations and treatment of the consumers. It has been pointed out in organisational studies that for CRM to operate appropriately, the company have to set up an environment that will be favourable to the performance of the said model. ( 2006) This is, it seems to be the purpose of the management as it considers both customer and the employees as important factors in the accomplishment of the company. Based on the conclusions and arguments provided above, Tesco should heed the following recommendations regarding their international strategy.   ·        Establish a close relationship with the government institutions in the target country It is advisable that the company rests on the good graces of the government on which they will be penetrating. To do this, all they have to do is accomplish all the prescribed acts and satisfy all the prerequisites for doing business. The company must also be acquainted with the law in order to know what their responsibilities and their possible liabilities.   ·         Before penetrating the market, the company must carry out a well conducted market research using tools like the Pestle Analysis The surroundings of Tesco involve the political, economic, socio-cultural, and even the present technologies in society. In determining these elements, these could be used as tools in determining the possible strategies for the company. (2001) There is also some other studies mentioning that the likelihood for capital build up in a specific market would be sufficient. (2005) The rule in effect in a specific market would similarly form the strategic branding projects of a company. ( 1994) There are active markets akin to that of China and Hong Kong that needs foreign companies to institute joint ventures with local companies so as for their brands to operate in said markets. ( 1995)   ·        Implement the Card Club scheme right away The use of schemes like the Card Club gave Tesco the chance to obtain the relevant information from the target market in addition to the individual customers of the organisation. (2006,) Fundamentally, this is the key condition for executing a suitable customer relationship management system.   ·        Establish a high standard of customer relationship management scheme. It is obvious that the organisation has been imposing several standards of customer relationship Management (CRM). Looking back at its mission statement, the organisation has shown that they are pent towards taking care of their customers the pre-eminent way that they are capable. Credit:ivythesis.typepad.com

The External Environment of TESCO PLC

THE EXTERNAL ENVIRONMENT OF TESCO PLC Table of Contents I. Introduction .. 3 II. Background of the Company ...

Levi Strauss: PEST factors

Levi Strauss: PEST factors Some firms are increasingly recognising the benefits of becoming multinationals and expanding internationally. The case study will outline theoretical exegesis of global standardisation and international adaptation. Levi’s the fashion clothing retailer and their jeans’ subdivision is utilised to exemplify PEST factors as outlined. In identifying and analysing the level of globalisation and assessing the feasibility of global marketing strategy and tactics, the case study will focus on jeans as product, specifically Levi jeans. Levi has been chosen as consequence of its widespread penetration of the international jeans market. It is the world’s largest manufacturer of trousers, notably blue denim jeans. Initially aimed at cowboys, blue denim jeans spread to the whole US population and were eventually exported worldwide ( 1999). Just recently, Levi’s closed six US manufacturing plants in a move that redundant 3,600 workers (2003). The jeans maker has been struggling to reverse six-year slide in its sales as consumers began buying trendier or less expensive clothes. PEST factors There gas been diversity of PEST oriented factors determine whether the marketing mix can be standardised for all customers in the jeans market or whether it needs to be adapted to suit specific market conditions. Political/Legal factors Promotional activities are regulated in all countries by legislation. One of Levi Strauss’s most famous television commercials used the music of Martin Gaye as a background to 1950s image of young man stripping to his boxer shorts and washing his 501′s in a laundrette. There has been variety of adaptations were required in local markets. For example, the original commercial had to be re-shot in Australia and Brazil because the local regulations insisted on domestic produced commercials. Furthermore, many South East Asian countries exercised their censorship power and banned the commercial completely (Jeannet et al., 1998). There are relatively few legal restraints upon the choice of distribution channel. However, there are exceptions such as France and China’s prohibition against door to door selling which may not be particularly applicable to jeans. Economic factors The economic factor is increasingly important in enhancing adaptation. Local markets vary enormously by their disposable income per capita. Therefore, standardising prices would mean that poor countries are likely to have reduced market for jeans. Different levels of income and changes in income levels will affect both the price that can be charged and the product quality that is appropriate for each local market. Prices for jeans do vary very substantially between markets and such price discrimination may be partly for reasons of income but may also be because of the severity of competition and the inaccessibility of the territory. For example, standard Levi jeans in the UK sells for approximately £46 whilst in certain US states £20 is the norm. The nature of the promotional campaign will also be affected by the stage of the economic development of the individual country and therefore require a degree of adaptation. Advertisements for jeans in affluent societies are quite sophisticated and rely on the communication of ideas about lifestyle and imagery. By contrast, advertisements in poor countries are more rudimentarily based upon factors such as function and value for money. Distribution channels may require adaptation in relation to the stage of development of each local market. Advanced countries possess multiplicity of different retail outlets while choices are likely to be much more constrained in less developed countries. Therefore the full range of selling patterns employed for advanced markets cannot be deployed in poorer ones. Socio-cultural factors Socio-cultural consists of language, religion, ethnics, values and customer perceptions. It heavily affects the product and promotion elements of the marketing mix because they are the most culture-bound aspects. Differences in culture attitudes lead to enormous variations in product and advertising standards and expectations. Levi wishes to minimise the degree to which culture prevents them from producing standardised promotional campaigns. This is because of the benefits of economies of scale and the higher quality that can be obtained for a single advert than for multiplicity of local adverts. Consequently, Levi Strauss paid 0,000 for one series of TV commercials(1998) to use around the globe. However, it should be mentioned that Levi’s success turns on its ability to create a global strategy that does not stifle local initiative. It is a delicate balancing act, one that often means giving foreign managers the freedom needed to adjust their tactics to meet the changing tastes of their home markets (1990). In addition to the effect on the design of adverts, cultural differences have linguistic implication with regard to the product name. The brand name of product is a key element of its promotion but care has to be exercised to avoid causing offence in translation or using symbols that do not have the same significance worldwide. Moreover, Japanese consumers prefer tighter fitting jeans than the American counterparts (1995). It is therefore evident that fit, design and style of jeans need to be adapted to meet the requirements of the local buyers. Levi Strauss when setting up its own direct sales force, found that the debt collection period was six month period in Japan compared with a one month period in the home country(1994), adaptation to such local trading customs was necessary in order to penetrate the Japanese market. Technological factors Technological considerations concern whether the local market has sufficiently developed technologies to take full advantage of the product. High technologies are required to make full use of the variety of promotional methods using alternative advertising media such as television or Web sites. Similar considerations apply to the distribution of the product. For example, whether consumers can utilise online home shopping facilities. In less developed countries, for example in Africa, where such technologies are in rather inchoate stage, adaptation is required such that a greater extent of use is made of more traditional methods. On the other hand, in developed countries Levi make use of the electronic data interchange system to order and monitor stock levels with their customers such as major department stores in order to avoid costly stock-outs. (1997). Credit:ivythesis.typepad.com

Levi Strauss: PEST factors

Levi Strauss: PEST factors Some firms are increasingly recognising the benefits of becoming multinationals and expanding internationally....

PESTLE ANALYSIS on the UK Housing Sector

Political Many building companies still hold onto large stocks of land for much of which there is not yet planning permission for building. Successive governments in many countries, at national and local levels, have attempted to stimulate house building activity in order to address the housing shortage. They have provided incentives to encourage new builds, especially low cost accommodation, and have eased planning restrictions. Yet new house building has often lagged well behind need. Also, need is not always translated into demand. Economic Levels of economic growth and poor mortgage availability seriously impact the housing market. In the UK and North America, for example, most people aspire to own their own house (as opposed to renting accommodation) and usually achieve this by placing an often small deposit on a house and borrowing the bulk of its cost at competitive interest rates. These substantial loans or mortgages are usually repaid over the long term. Commonly, rates are adjusted by the Central Bank to control general inflation, not normally to influence the housing market. However, a change of interest rate from say 4% to 6% within a year may lead to a 50% increase in the monthly repayment required of mortgage holders. This simply may not be affordable in all cases, particularly in times of economic hardship or national recession. Social/socio-cultural Nevertheless, brown-field development is central to many regeneration ambitions, given the stimulation new sustainable development can make to depressed areas. Others lobby for the development of sustainable communities which provide a balance of housing and other services such as education, and retail and leisure facilities, and which aim to avoid future social problems. Many house owners occasionally ˜top-up their loan when moving to a more expensive property or borrowing further to buy a car or to fund their spending habits, using their home as security. Mortgage interest rates in the medium and long term are broadly aligned to prevailing national interest rates set by central banks, which vary from time to time due to prevailing economic conditions. Technological The house building industry in most world economies is highly cyclical and currently in rapid decline. In the last two years, due in large part to the credit-crunch initially and economic recession latterly, both the number of house sales and house prices have fallen significantly. A number of large and previously highly profitable house builders have gone out of business and many building sites and newly completed houses are left abandoned. In Spain, for example, there is an estimated three-year supply of new holiday or second-homes vacant and unsold. Yet in many countries there is a housing shortage and long waiting lists for social housing. Businesses such as shops, consumer goods manufacturers, importers and personal service companies thrive in such circumstances. However, if you buy a new house for 0,000 on a 95% loan, and within two years the house is only worth 0,000, your attitude towards spending might have radically changed. The scenarios included here are entirely fictional. Any resemblance of the information in the scenarios to real persons or organizations, actual or perceived, is purely coincidental. Legal Higher interest rates mean that mortgages become more expensive, and this deters many would-be purchasers from buying more expensive property. Economic growth is closely related to consumer spending levels. Buoyant house values in many countries are believed to encourage consumer spending as people are less concerned about increasing their borrowing or using their credit cards when sitting on a major asset. Government, which largely controls the planning processes in most societies, is usually concerned to ensure that house builders provide ample low cost housing in addition to larger, more lavish properties (on which the profit margins for builders are usually higher). Environmental Environmental groups are concerned about the detrimental impact of housing development on the countryside. There are government-backed grant incentives, particularly in many European countries, to use brown-field sites rather than destroy open countryside, although such sites are often in run-down, less desirable city areas. Credit:ivythesis.typepad.com

PESTLE ANALYSIS on the UK Housing Sector

Political Many building companies still hold onto large stocks of land for much of which there is not yet planning permission for building. ...

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