PESTLE analysis

PESTLE analysis indicates the external factors affect the business. PESTLE stands for political, economical, social, technological, legal and environmental. 

First of all, political refers to the attitudes of political parties. It may involve in taxation, policies or any kind of government directives.

Economic factors have significant impacts on the businesses. Economic growth, interest rates or inflation are the macro economic factors can affect businesses. The micro economic factor can be the income that people spend on goods everyday.

Social factors involve in population, trend, cultural beliefs and age distribution. For example, the trend of this year is checked shirt, demand will increase and people will buy more checked shirt.

Technological factors are the things such as new technology development, new intervention or ecommerce. These things can affect the output of businesses. Moreover, businesses can use these opportunities to advertise their products and provide convenience ways for customers to shop like E-commerce.

Legal factors include all the law that can influence the company’s businesses. Every business needs to follow the law so that benefits will be equaled to stakeholder. Factors can be consumer law, employment law and health and safety law.

Last but not least, environmental factors are the impact of surrounding environment such as weather, climate and resources. For example, it is not successful for a skiing shop opens in the summer.

It would be useful if competitors factor should be included because without competitors, a business would not know what are their weaknesses to improve. I have studied this when I was in my previous college but it was SLEPT analysis. In the SLEPT analysis, it doesn’t include the environmental factor; this is one of the most important factors that businesses need to consider. 


Also, there are PEST and STEEPLED analysis. In the STEEPLED analysis, they add extra ethical and demographic factors into PESTLE. Demographic factors are the things that related to personal characteristics such as gender, age or level of education; and ethical factors are things related to reputation and business ethics. I have learnt a little bit about business ethics when I was in high school. 


One of an example of a bad business ethics was about KFC in my country-Vietnam. KFC advertises their food with nice pictures and they said that it's healthy to eat. However, there were many KFC chain stores in Vietnam had to close because they provided food with low quality. This has brought down the image of KFC. 

Tesco in the industry

  When a company wants to open a new business, it needs to consider about the porters 5 forces: rivalry, threat of substitute products, threat of new entrants, bargaining power of suppliers and bargaining power of customers. 

  Tesco is one the largest supermarket company in the UK.

  The intensity of competitive rivalry of Tesco is extremely high. There are big supermarkets compete with Tesco such as Asda, Sainsbury’s and Waitrose. They are competing over the products and prices.

  There are threats of substitute in the market. In order to minimize the problem, Tesco tries to produce the best quality of products with the best prices for people to maintain the brand image.

  The barrier for new entrants in the grocery market is high. As Tesco is a big company, it has the loyalty of customers; new companies need to have huge capital to invest into their companies. It is hard for new companies to enter the market. In order to compete with Tesco or other big supermarkets such as Sainsbury’s, Asda… new companies should differentiate them with lower prices or high quality of products. This is the reason why Tesco has low threat of new entrants in the industry.

  The bargaining power of buyers is high. Customers can switch to other substitute such as Sainsbury’s if the products and prices do not satisfy them.

  Finally, the bargaining power of suppliers is low. Tesco can dictate the price of suppliers. The suppliers will lose their chance with a large supermarket if they disagree with the price as Tesco set out.

  

Specific Management

•      Taylorism or Scientific Management is a theory management that written by Frederick Winslow Taylor. He defined it as the best way to do the task for the workers by select the best person to do the job and give them motivation. Financial incentives give employees motivation to produce efficient productivity.  I am interested on this theory because it is fair for who produce more productivity, they will receive more money than those produce less. In Taylorism, managers the driving force, they have accountability for what their workers do. I think this type of theory is decentralization because everyone in an organization is equaled; they need to cooperate and share ideas to solve problems and issues. An example of a company that bases on this theory is Google. Last week, my friends and me did a presentation on Google and I have found that Google is a decentralize company. It empowers and motivates workers by provide the best environment, give them freedom and also, teamwork and creativity are encouraged.

One of the problems at work at the moment is social interaction. As a result of development in technology, more and more people and companies are using electronic devices. The reason people prefer to use technology because it is quicker and people don’t have to travel long ways to do businesses. Even though technical advancement helps business to succeed, but it damages the social interaction at work. In my opinion, social interaction makes it clearer for people in communication. For example, face-to-face meeting will help to solve the problems easily as you can gain better understanding of other’s opinion and feeling than using video conferencing. The best solution for this is just balance between the use of technology and social interaction so that social interaction will not be damaged. For instance, do not rely too much on email, employees should go and find managers to express their opinions.