Understanding Retailing Unit 29

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P4 - Identify the competitive factors in the retail environment a selected organisation faces
In this assignment I will identify what competitive factors and changes Tesco faces in the retail sector and how it might respond to these under the following headings; retail environment using PESTEL, and competitive environment based on overcoming barriers to entry, pricing, new markets and mobile population. In this assignment I will be talking about how Porter’s five forces are being used by Tesco.
By using PESTEL we can see the changeable environment in which Tesco functions.
Tesco operates in 14 different countries. Therefore its performance may be influenced by the local legislation and political factors. There are
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Tesco was feeling the pressure because they saw a fall in profit since 2008 and were worried that their customers would not return. However as time moved on the economy started to pick up again in 2009. Customers started to spend more and were more comfortable about their current financial situation. However Tesco realised that their customers were not purchasing goods of high price, meaning that customers were likely to purchase readymade meals and organic products. The demand for a product depends on the economic factors such as interest, inflation and local employment levels. Tesco doesn’t have control on the economic factors; however these do have an effect on the business.
Social factors have on affect on the business. These factors include things such as, demographic changes, change in customer’s behaviours and attitudes of the customer. Tesco’s main product line is based around food. Therefore Tesco have to monitor how their customers feel about the food product range. Tesco recognised that many people wanted different products other than food; therefore Tesco opened up a clothing range and offered quality clothing to their customers. Customers are becoming more aware of health issues, this affects the way eat. One way in which Tesco is adapting to its product mix is by increasing demand for organic products.
Technological factors are important for Tesco because they have helped the business to grow immensely.

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