2. Q1 – Analyzes of the external environment2.1. PESTELAnalysisPolitics:According to the University of St. Gallen case study, Tesco began its expansion into international markets in the 1990s by acquiring successful companies in emerging economies. These include Hungary, the Czech Republic and South Korea. Since the expansion strategy was successful, the company was looking for more international expansion opportunities. These opportunities were presented 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 in order to benefit from globalization. The expansion of the European Union has therefore presented many opportunities for Tesco's international projects. A good example would be the acceptance of 10 new countries from Western and Eastern Europe 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, where Tesco signed several joint venture agreements with Chinese companies, creating an attempt to enter a market of 1.4 billion people, making it the largest market in consumption 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 linked to profits, costs, prices and demand. . One of these factors is the unemployment rate. Following the economic downturn, the percentage of unemployed people increased rapidly in the UK also middle of paper......entering the new market is always risky, but Tesco managed to minimize this risk in the past by entering into partnerships and strategic alliances with local businesses. By continuing its expansion in Asia, Tesco could generate more profits in markets that are demographically rich in opportunity. Asian markets, particularly China and India, have seen a dramatic increase in consumer spending. Needless to say, it is one of the largest market economies in the world. -8-Of course, businesses will face many difficulties in adapting to the culture and general consumer behavior on these markets. This is why entering into partnerships and joint ventures can greatly benefit the business. Tesco can achieve economies of scale by in some way exchanging the operational expertise and market knowledge of its partners, for its own supply chain and operational skills.6.Conclusion