The London Stock Exchange is one of the largest stock exchanges in the world. It comprises of more than three thousand companies coming from fifty different countries. It is used electronically and different types of shares are traded on different types of systems. I will be conducting my Stock Market report using Tesco. This is because Tesco is a ‘british multinational grocery and general merchandise retailer'(1) and is one of the biggest supermarkets in the UK. The reason why I have chosen Tesco over it’s big competitors like Sainsbury’s and Asda is because Tesco ‘is the best performing big supermarket in the latest sales figures’. (2). It has been quoted that Tesco had an increase of 2.2% in sales figures compared to Sainsbury’s of 1.2% and Asda of 0.1% (2). The other type of companies I had considered were Asda, Sainsbury’s and Morrison, however Tesco was the supermarket which had caught my eye as they had completely blown away its competitors. Tesco is a organisation which focuses on customer needs and understands that customers needs ever changing therefore they always adapt to them hence why they are at the top of the supermarket chain. This makes customers want to visit more often and as a result boost’s Tesco’s sales figures. The Porter’s Five Forces model was used to ‘analyse an industry’s attractiveness and likely profitability’. (3). Porter had found out that businesses like to keep a watch on their competitors, and he encouraged business to look at other things like what might impact the business environment. He said that their are five forces which make a competitive environment which are as follows: competitive rivalry, supplier power. buyer power, threat of substitution and threat of new entry. PoliticalTesco’s have their stores in twelve different countries across Asia and Europe. The advantage of branching out makes more people aware of the organisation however political factors such as tax rates and legislation’s could have a huge impact on their performance. In 2011, the government had increased the VAT rate from 17.5% to 20% in order to boost tax revenues to cut its deficit (BBC,2011). The increase in VAT meant that consumer spending drastically decreased. This had an effect on Tesco as it’s a general merchandise retailer, it affected their revenue. As Sales is their main source of income it is very important that they make sure they come up with a way to tackle this.EconomicalEconomical factors are one of the main concerns for Tesco because they are likely to influence things like profits, prices and costs. Hence why it is really important for Tesco to make sure that they are aware of any changes so that they do not get affected. Regardless of Tesco branching out to different countries, they are very dependant on their UK Market and have a ‘market share of 27.9% to the total market’.(3) However branching out to different countries has been one of Tesco’s key strategies and has worked out very well for them. If a recession hits the UK , consumers have a decline in disposable income. This gives them less to spend and have to buy cheap alternative products. Tesco went the step further in advertising its value goods rather than the branded goods in times like this. This is effective as it will still stimulate revenue. SocialIt is said that customer’s opinion of an organisation can change quickly due to changes in price and quality of the company’s product (Kotler and Armstrong, 2010, P. 163-165). This shows how important it is that Tesco make sure their products are of good quality and their prices have to make sense for consumers to pay and not to overprice their products. In 2013, Tesco was accused of using horse meat in their products. This affected the reputation of the business and customers had started to shop elsewhere.This had resulted in the decline of sales and profit. Customers have started to bulk shop more often because of social changes and find it much more convenient. This saves them a lot of money in the future. Because customer’s are becoming much more aware of health issues, their diet is constantly changing. The way Tesco’s is tackling this is by adapting to these constant changes by offering healthier alternatives such as organic products. TechnologicalTechnology is ever evolving and you can never be up to date with it. Technology has bought lots of opportunities for Tesco. One of the main being their online shopping for home delivery. Another opportunity is the self service checkout’s which have reduced the ques and provides ease for customers. Tesco need to make sure that they are aware of the technology used because they can use this opportunity to create something much better in the future. An example of this is the mobile services which improved Tesco’s distribution as customers can select what type of products they would like through their mobile phones. This is a really helpful tool for some consumers as some customers do not like going into a supermarket and would rather their shopping be delivered to them. However Tesco needs to be aware that these type of services are used properly and accordingly to the customers wants and needs.The graph shows the comparison of the Share and FTSE 100 Index of Tesco and FTSE 100. As you can see from the table the share prices are always fluctuating. The reason why these share prices fluctuate all the time is because of the supply and demand level. Tesco is a very big supermarket retailer, therefore their needs are always changing. During Christmas period they will need much more stock compared to other months which are not so busy. On the 13th October the closing share price for Tesco was 186.00 however a week later the share price increased to 188.90. This can be due to a lot of factors such as the demand increasing for stock. When the demand increases for a stock, its share price will also increase. The reason why the stock prices may have increased is because the Halloween period was nearing and Tesco would need to have a lot more stock than they usually do. This would not necessarily mean normal items like food however stocking up on Halloween costumes would be much more suited and because of this, Tesco’s stock levels will increase which may have resulted in their share price increasing. When The following week on 27th October, the share price decreased 185.50. The reason why the share price decreased could be due to a number of reasons. One of the reasons why Tesco’s share price could have dropped on this occasion is because the demand for certain products may have decreased for example Halloween costumes. Certain periods like these will increase the share price significantly however it will drop once the period is over. Because Tesco’s share price fell, it would mean that Tesco will have to sell additional shares of stock in order the raise the same amount of money. This tells us that when the stock price decreases, it gets much more expensive to get back on track. Low share prices would mean that investors would see a fall in wealth.