Situation analysis takes into account five important areas of marketing that are necessary for decision making. These five areas are consumer, company, collaborators, competitors, and climate.In this report, an overall situation analysis of Tesco will be executed with the help of SWOT, PESTLE and Porter’s five forces analysis. Tesco is a U.K. based public company primarily engaged in the retail merchandising. Tesco, the largest retailer (supermarket) in the U.K has been operating since 1919 (Tesco Plc, 2010).Pestle analysis involves the scanning of an industry’s broader environment. Pestle includes six factors. these are political, economic, socio-cultural, technological, legislation, and ecological (Sinclair-Hunt and Partridge, p.77). Tesco is the retail industry operating in the U.K. This particular industry is affected by these Pestle factors.The global credit crunch affected the U.K. very badly and the retail industry was one of the worst victims. The market however is slowly recovering and the government is paying special attention to this sector because of its ability to generate huge employment. As this industry is one of the fastest-growing industries, the influence of the political factors has also been increasing. This industry is one of the major industries that add value to the economy. Economic factors like GDP, purchasing power parity, etc have a huge influence on this type of industry. Per capita income of the nation is very important for this industry to operate, since retail consumers are its major revenue earners. The socio-culture effect on this retail industry is also very important as their local stores function within the society. Factors like age, culture, education etc are instrumental in shaping the trends of the retail industry. The use of the latest technology is imperative in the development of the modern retail industry.

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