Tesco SWOT Analysis

Tesco SWOT Analysis

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A SWOT analysis of Tesco is an analysis of the strengths, weaknesses, opportunities and threats affecting the company.
SWOT Analysis - Strengths
Begin your SWOT analysis by analysing Tesco's strengths.
• Determine Tesco's main assets. Check out online sources, such as the Tesco Direct website, and offline sources like the company report. Also, try shopping at a Tesco store, and keep your eyes peeled and mind open.
• Investigate Tesco's main competition, in a similar manner.
• Look at other SWOT analysis case studies, for Tesco and other companies. These can be found offline and online. Don't just use Google search. That's lazy. Also enlist the help of your local librarian.
SWOT Analysis - Weaknesses
In performing a SWOT analysis of Tesco's weaknesses, think about the weaknesses that other companies share with Tesco. For instance, comparing Tesco with British Airways might get you thinking about how dependent Tesco is on the UK market (73.8% of 2003 revenues.) Comparing Tesco with Amazon might reveal flaws in its attempts to move into new markets.
SWOT Analysis - Opportunities
Some of Tesco's main opportunities are on the internet. Look at the Tesco Direct website, and compare it to the opposition. Ask yourself: What opportunities is Tesco missing? Which opportunities are Tesco exploiting? For instance, compare tesco.com and amazon.com. How do the prices of books compare? Which site has the best features? What opportunities can Tesco take that Amazon might be missing?
SWOT Analysis - Threats
Having already investigated the strengths, weaknesses and opportunities facing Tesco you should have some good ideas about the threats facing it. Concentrate especially on strategic planning to counter threats from other companies. For instance, investigate how Tesco's financial products compare with those from more established providers. A SWOT analysis of Tesco must consider all the competition in detail.

Swot analysis of Tesco plc

We all know Tesco as a food retailer, and we know that they are in constant competition with other retailers such as Sainsburys and Asda, yet we do not know much about what goes on beyond the shelves and the tills, the marketing plans and the day to day tactics that have to be devised to stay the number one food retailer in the United kingdom today.
I am going to analyse Broughton Parks Tesco and their possible competitors Swot Analysis

Firstly, four main goals, under which these particular four are Strengths:

1. Tesco is about a strong UK core business. Last year the industry saw some very marginal growth as a whole, however Tesco continued to grow beyond the market by offering better value for money and through getting cheaper.

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2. To be as strong in non-food as in food. The market for non foods (such as clothes entertainment cleaning products) is worth seventy five billion pounds in the UK today. You can see through the growth of their......

Hey guys I am dong a Swot Analysis on Tesco, only for UK Base. I am not aloowed to mention Global aspects.

This is what I have done so far: What Can I add to this? and does it look right?

Tesco is a powerful retail brand. It has a reputation for value for money, convenience and a wide range of products all in one store.
There has been a significant increase of number of Tesco retail stores within the UK, from 692 stores in year 2001 to 1780 stores in year 2005. Also with the introduction of the different stores such as Tesco Metro and express it has made it more convenient and accessible for customers.

Due to the size and the ability of Tesco to buy in bulk they enjoy Economies of scale. Ultimately, this means that they have the competence to lower prices when they want in order to keep their prices attractive and compete with its main competitors such as Sainsburys and Asda.

Ultimately it increased profits.
A company as big as Tesco who sell many products from groceries, books, clothing, and furniture to insurance etc has its weaknesses. It may not have the flexibility as many of its more focused and specialised competitors. For example Tesco would not be able to provide a better service in Books than Waterstones can, as they specialise in this region.
Over the years Tesco has increased its Market share and has increased in size. At present it is the UK’s largest supermarket with over 26% Market share, which almost doubles the closest rivals Asda. Tesco controls its own massive empire. This could leave some weaknesses due to the huge span of control and can suffer from bureaucracy.
Tesco is relatively new to the phone and insurance market therefore may lack experience and expertise. Tesco has recently entered many different Markets, so therefore not specialise and focusing on one particular market like other companies, which can have a negative affect.
There are many opportunities for Tesco. Merging or forming a strategic alliance with another company is a great way to improve their services and overcome some of their weaknesses. It would be a good idea to form alliances with companies in the areas they are not doing so well in and could do with the expertise of a specialised company. In this way Tesco Might be able to get access to better locations and reach out to its customers.
New locations and store types offer Tesco opportunities to exploit market development. They diversified from large super centres, to local and mall-based sites.
Opportunities exist for Tesco to continue with its current strategy of small and large, super centres and taking over villages.
Tesco also faces many threats. Being number one means that you are the target of competition. One big threat that Tesco faces is the takeover of Asda by Wal-Mart. The reason this is a threat is because Wal-Mart is the largest Global Competitor and therefore has the necessary skills, resources experience and funds to cause Tesco problems.
A major threat to Tescos current strategies of expansion is the government and the Monopoly and mergers commission. Also there is a Growing public concern and annoyance that Tesco is threatening the smaller retailer. The smaller shops are disappearing due to the growth of supermarkets and this is annoying some people. So there is a social and legal implication as well.

There is a growing concern that Tesco is getting too big and driving out competition. The Government, Monopoly and Mergers Competition could get Tesco in trouble for this.

Increasing market share


Tesco online

Brand value

UK market leadership reinforced


Reliance upon the UK market
Although international business is still growing, and is expected to contribute greater amounts to Tesco's profits over the next few years, the company is still highly dependent on the UK market (73.8% of 2003 revenues). While this isn't a major weakness in the short term, any changes in the UK supermarket industry over the next year - for example, like the Morrison's group successfully purchasing the Safeway chain - could alter the balance of UK supermarket power, and affect share.

Debt reduction
Tesco is not expected to reduce its debt until at least 2006. Tesco has a large capital expenditure program - mainly due to its huge investment in space for new stores. Since its expansion is so aggressive, Tesco has little free cash for any other operations.

Signs point to serial acquisitions
With an enterprise value of £23 billion, Tesco clearly has enormous firepower. Also, its product range is vast and almost any acquisition can be justified, particularly in the UK. While 'fill the gap' strategy would be useful to the company, as has been the case with the UK convenience market, there is the danger of Tesco becoming a serial acquirer, as this tends to reduce earnings visibility and quality.

Non-food retail

Health and beauty

Further international growth

UK structural change could spark a price war
The price followers in the UK market are about to become aggressive investors in price, Safeway because of new ownership and Sainsbury because of new management. Morrison is reducing Safeway's prices by up to 6% and Sainsbury is bound to see lower prices as one of the basic changes necessary to drive its recovery. With both Asda and Tesco committed to price leadership, this could result in a step down in industry profitability.

Overseas returns could fall

Wal-Mart/Asda challenge

International expansion

That is, a PESTLE analysis of Tesco examines the main external factors impacting on the company.
The political factors can be local, national or international. Many governments can be involved. For instance, Tesco might have to deal with British and Columbian politics in regards to its coffee supply.
Economic factors have large impacts. Fluctuations in the stock market, or tax increases, can seriously affect the bottom line of a company like Tesco.
Sociological factors can vary from the impact of immigration, to changes in fashion.
New technologies have had a great impact. For instance, online shopping has become a major factor in Tesco's recent success.
The changes caused by all the external impacts lead to many legal problems.
Finally, any large organisation has an environmental impact. For instance, Tesco uses fossil fuel in its transport network. Reducing this demand is a major challenge.
In summary, any Tesco PESTLE Analysis must consider external factors in detail, and examine how their impacts continually change.
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