2. Q1 – Analysis of the external environment2.1. PESTEL AnalysisPolitical:According to the case study from the University of St. Gallen, Tesco began its expansion into international markets in the 1990s by purchasing successful companies in emerging economies. These included: Hungary, the Czech Republic, and South Korea. As the expansion strategy was successful, the company sought more opportunities for international expansion. These opportunities have arisen in light of relatively recent political events. First, the encouragement of free trade blocs. As stated by Lynch (2003), the government is very interested in promoting easier trade to take advantage of globalization. So the expansion of the European Union has provided many opportunities for Tesco's international plans. A good example would be the acceptance of 10 new Western and Eastern European countries in 2004 (BBC,2009). This allowed easier access to new markets with relatively legal competition and high growth potential, which is exactly what the company was looking for in foreign markets. Another opportunity was seized in 2009, when Tesco signed several joint venture agreements with Chinese companies, thus creating a move to enter a market with 1.4 billion people, making it the largest consumer market in the world (BBC,2013). This became possible thanks to China's accession to the WTO in 2001, which opened the market to Western companies by removing trade barriers.-1-Economic: Economic factors are crucial for Tesco as they are directly related to profits, costs, prices and demand. One of these factors is the unemployment rate. Following the economic crisis, the percentage of unemployed has grown rapidly in the UK and... middle of paper... entering a new market is always risky, however Tesco has managed to minimize this risk in the past by forming partnerships and alliances strategic with local companies. With further expansion into Asia, Tesco could generate more profits from markets with demographically high opportunities. Asian markets, particularly China and India, have seen a dramatic increase in consumer spending. It goes without saying that it is one of the largest market economies in the world.-8-Naturally the company will face many difficulties in adapting to the culture and general behavior of consumers in those markets. This is why initiating partnerships and joint ventures can bring great benefits to the company. Tesco can enjoy economies of scale, in a sense exchanging operational expertise and market knowledge from its partners, for its own supply chain and operational capabilities.6.Conclusion