Tesco Plc in the Uk and Thailand

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Marketing environment for the UK and Thailand

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PESTEL

PESTEL analysis was created by a Harvard professor, Francis Aquila in 1967.This analysis is for scanning and determining the external environment of business. Political, Economic, Social, Technological, Environment and Legal factors are the external factors (PESTEL).[pic 2][pic 3][pic 4][pic 5][pic 6][pic 7][pic 8][pic 9][pic 10][pic 11][pic 12][pic 13][pic 14][pic 15][pic 16]

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Figure 1 PESTEL (Rapidbi, 2012)[pic 30][pic 31][pic 32][pic 33][pic 34]

Political factors are governmental activities and policies that affect domestic and foreign businesses in a country. For instance, Tesco was affected by UK’s decision to leave the European Union which was accompanied by depreciation of the pound sterling. According to BBC (2016), Tesco UK had to remove marmite and other Unilever brands from its shop due to price row.

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The British government announced an outline legislation for duty on sweetened beverages, which will supposedly begin from April 2018. That could negatively affect Tesco since it produces own-label soft drinks but it says it has revolved 4,200 products during the last four years, and that includes all its own-brand soft drinks, which have 20% less sugar than five years ago, this implies that they might be able to escape the sugar tax (BBC News, 2016).

In Thailand, Tesco is facing issues of corruption, labour laws of the country and taxation methods in the international market.

Economic factors deal with the state of the economy that affect the international market.

The consumer price index in the country has increased from 0.1% to 1.8%. There is likely to affect Tesco customers in the UK since their purchasing power will reduce (UK Office of the National Statistics, 2017).

The BGP fall below the Euro (30% lower its average. Tesco do offshore business and if there is a sudden depreciation of the GBP it affects payments of already sold goods) (Independent, 2017).

In Thailand, Tesco’s economic issues include infrastructure. According to Nikkei Asian Review (2016), Transport Minister Arkhom Termpittayapaisith admitted that ‘Poor infrastructure is a main factor impeding Thailand's economic development’. This poses as a logistical difficulty for Tesco in terms of moving its products from one place to another.

Thailand’s population has grown by 0.32% in 2016. Comparing Tesco lotus to Tesco UK means Thailand has large consumer market (CIA, 2017).

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Social factors consist of the behaviour, Language and attitude of the consumers in the location of the business toward the product and service.

We will use the graph below to explain the social factors:[pic 35]

Figure 2 Thailand in the Comparison with the UK (Geert Hofstede, 2017)

Individualism is a society where people provide for themselves and their direct family. Thailand scored 20 which means it is a collective society where groups provide for themselves in terms of needs and wants. The UK scored 89 which means large number of people provide for themselves and family only (Geert Hofstede, 2017)

Masculinity in the society is when the large members of the society strive to be the best whether through education or hard work. The feminine society is where success stand out from the crowd and they see it as only few can achieve it. Thailand score 34 which means it feminine rather the UK which score 34 making it masculine (Geert Hofstede, 2017).

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Uncertainty avoidance is where people believe that the future cannot be known and therefore they need to put in measures to avoid this treat that may come up. That is good anyway but in doing this it turns to bring about strict regulations, strict policies and strict laws. Also, societies which practise this mostly resist change. Thailand scored higher of 64 as compared to 35 of UK (Geert Hofstede, 2017).

Technological factor has to do with the pace at which production and service methods are changing or improving to make products and service cheaper and easier to be use by consumers.

TESCO has use more technology reforms to be able to maintain it standard in the market. Example is the introduction of Club Card which makes registered customer get discounts. There is also Check out points, self-services etc. which make shopping easy for customers (Tesco Plc website).

More importantly TESCO always try to enter to franchise agreement with quality and popular brands in the market. Example is F&F Clothing. They have quality producer in their supply chain. (The Telegraph, 2013)

In Thailand, Tesco has introduced a mobile App and when costumer download they stand a chance of winning 500 baht. This is because they know when you have the App on your phone you are likely to use it to shop. Again, Tesco Lotus has introduce all day entertainment package for couple in Thailand (Tesco lotus Website).

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Environmental factors are those risk or issue that are caused by the environment. The risk may be natural or manmade. We found that with increasing pressure on Tesco branches across the world on their environmental impact

TESCO are aware their own operations has impacted the climate in several ways. This includes greenhouse gas emissions from energy generation to power their stores and distribution centres, emissions associated with refrigeration, etc.

Following the UK’s 2010 Climate Change Act they made an ambitious commitment to become a zero-carbon business by 2050 and have set medium-term 2020 targets to help achieve this, it reduced CO2e emissions per square foot of our stores and distribution centers against a 2006/7