Most Important Factors of Tesco

Most Important Factors of Tesco Tesco first launched their international expansion in 1994. After 11

years their sales have grown to contributing 20%(£7 billion) of the

total turnover has been from overseas sales. The success of Tesco

expansion overseas has mainly been down to the strategy of seeking out

new markets in an early growth stage. These markets have few and week

competitors and lots of potential. Tesco expansion overseas has mainly

been in Eastern Europe and the Far East. Tesco has set up in thirteen

countries abroad so far, some of these include; Czech Republic,

Malaysia, Poland, Republic of Ireland, Thailand and Turkey. This

assignment will focus on Poland in Eastern Europe, Thailand and

Malaysia of the Far East.

The assignment will undertake a PESTEL analysis of Tesco expansion

overseas. Involving political, economical, social, technological,

environmental and legal issues that effect Tesco.

There are many political factors that effect businesses. The main

factors are legislation, government agencies and incentives put

forward by the governments in order to attract investors. Investment

incentives in Poland are very favourable for large companies such as

Tesco. Polish government offers these incentives mainly to companies

that invest more than £10 million. Some of these incentives that the

Polish government offer Tesco are, employment grants, training grants

and grants for infrastructure development. There may be problems to

businesses t...

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...e on bank holidays. Tesco

were seen to be outside the employee law and therefore were ordered to

pay their workers a total of 35 million baht to a total of 8500

employees. There has also been inquest in the allegations of Tesco

suppliers of forcing suppliers to sell their produce below cost. Tesco

has also been accused of charging suppliers fees in order to sell

their products. The Thai government have stated that these unethical

business strategies are not welcome.

In my view the most important factors are those of the political and

technological. Political problems plague companies looking to expand

aboard as they have a large control of what companies can and cannot

do. Technological factors are also extremely important as

technological advancement can mean efficiency and being able to

sustain any competition.