Business Strategy: Evaluation of Macro Environment and Ansoff Matrix for TESCO

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
TASK 2............................................................................................................................................4
TASK 3............................................................................................................................................6
TASK 4............................................................................................................................................7
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business strategy is defined as the set of tactical decisions which direct the actions to be
taken in order to achieve competitive edge. These set of actions provide a direction in which
organisation must move in order to deal with threats present in market and availing the
opportunities for further growth or success (Bell, Bryman and Harley, 2018). TESCO is a larger
British multinational organisation which is headquartered in London, UK. It is discount retailer
which offer several product categories like grocery items, clothing, electronic, furniture,
software, petrol, toys, financial services and many more. This report contains information
regarding evaluation of macro environment and ansoff matrix for external environment
evaluation along with VIRO to determine internal capability. It also describes porter's five force
model along with porter's generic to formulate effective strategic plan for achieving competitive
edge.
TASK 1
TESCO is a larger multination retail organisation which operates its supermarkets
throughout the world in order to fulfill the below given vision, mission and objectives:
 Vision: Its vision is to serve the customers a little better each day of their shopping.
 Mission: Its mission is to become a leader for consumer by helping them in enjoying a
better life and making their living easier by providing them daily essential products of
high quality.
 Objective: Main goal of TESCO is to retain loyal people and creating value among the
customers for gaining the lifetime loyalty.
Business growth and success depends upon the strategic decision an organisation takes in
order to perform its operations effectively. But for formulating effective strategic decisions, it is
crucial for TESCO to consider forces that are present in external environment which have direct
influence over the operations performed by them (Brewster, 2017). Hence, for performing macro
environmental analysis, a strategical tool is used that is PESTLE which perform evaluation of 6
macro-environmental factor to determine the opportunity or threat present in external
environment that may influence organisational performance. The PESTLE analysis of TESCO is
mentioned below,
1

Political: It evaluate the current state of government and changes in political policies that
affect business operations. The political situation of UK is stable and government of UK
maintains good political relation with US and many other countries along with having permanent
membership in UN (Ocasio and Radoynovska, 2016). This is the greatest opportunity for
TESCO as it can expand its trade practices in these countries and maintain it for longer duration
which ensures higher flow of profit as well as growth.
Economic: It perform evaluation over the factors like Forex rate, inflation-deflation,
taxes etc. UK considered as 5th largest economy in world and it considers as popular destination
for Foreign direct investment which is a biggest opportunity for TESCO as it can get investment
from the foreign investors much easily for the business (Peng, 2017).
Social: It involves analysis of factors like customer taste, preferences, cultural influence
etc. that directly influence the buying behaviour of customers. UK considers as big consumer
market where it holds the population of 66.4 million recorded in 2018. Among them 18% people
were 65-year-old while 2.4% population is 85 or over it (Mittal and Dhar, 2015). Hence it is a
greater opportunity for TESCO as it offers one-stop solution where range of household products
can be access by people at a time which old age people mainly seeks.
Technological: It involves analysis of factors like advancement and up-gradation that
takes place within the technological environment and its influence over business. UK is most
technological advanced country in which London is a big hub of technology (Cavusgil and et. al.,
2014). Though it is a positive factor for TESCO as it gets easy access to advancement but, the
major threat which company hold is that there are majority of big retailers like ALDI, ASDA,
M&S. which provide high competition to TESCO. As these rivals make installation of new
technology in order to improve their productivity or offer high quality services which contribute
toward grabbing the attention of customers. Hence the competition fro TESCO get increased
within the business environment.
Legal: It involves legal aspects present in UK which need to consider by retailers
operating in country such as employment law, consumer law etc. UK government is strict toward
the implementation of laws and standards formulated for retailers (McCahery, Sautner and
Starks, 2016). The legal standards and codes are for food retailers within UK are being
formulated by the Food Retailing Commission. This is biggest threat for TESCO as Food
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