Tesco PLC SWOT Anlysis

SWOT Analysis is a strategic analysis tool used to assess a company’s internal and external environment with the aim of developing business strategy. It is an acronym that stands for Strength, Weaknesses, Opportunities and threats. This article explains the SWOT analysis of Tesco PLC, a retail company based in the UK.

    • Strengths

One of the most important strengths of the company is Customer focus and customized brand build-up. The company pursues strategies which are meant to meet the needs of customers. This is important because customer satisfaction enables the company to increase its market share through increased customers and customer loyalty. The second strength of Tesco is competitive pricing and cost strategy. This ensures that existing customers are retained and new ones are attracted to the company. Tesco is also adaptable to changing technologies and is good at standardization of products.

  • Weaknesses

Tesco has poor cultural management yet cultural management is a necessary aspect of any international business. The company also has a large workforce which requires large remuneration expenses. This influences negatively on the profitability of the company.

  • Opportunities

One opportunity of Tesco is its economies of scale which allows for large quantity customization, reduced prices and expansion. This is specifically important in international expansion. The company also has a potential of growth in new cities in UK. This is due to its market share and customer loyalty. The UK also has a large number of retail customers. Increased retail customers and high demand enables the company to operate profitably through increased sales..

  • Threats

The main threat of Tesco Retail Company is stiff competition from companies such as J Sainsbury and Morrisons. This competition drives prices down and reduces profitability of the company. There is also an emergence of new competitor strategies which influences the profitability of the company negatively. Taxation by UK Government is also another threat to business in UK. Financing taxes in UK may drive down profitability and reduce the company’s competitiveness in the UK retail market.

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