Business Strategy for Tesco: Analysis of Macro Environment, VRIO Model, and Porter's Five Forces

Business strategy

Table of Contents
INTRODUCTION...............................................................................................................................3
TASK 1.................................................................................................................................................3
P1 Application of proper framework to analyse the effect of macro environment on strategies of
organisation.......................................................................................................................................3
TASK 2....................................................................................................................................................6
VRIO of Tesco....................................................................................................................................6
TASK 3....................................................................................................................................................7
You will produce appropriate strategies to improve competitive edge and market position based on
your evaluation of the competitive market using the Porter’s Five Forces model..............................7
TASK 4..................................................................................................................................................11
Strategic planning............................................................................................................................11
CONCLUSION..................................................................................................................................12
REFERENCES....................................................................................................................................13

INTRODUCTION
Business strategies refers to the strategic management which in walls formulation as a
implementation of various goes and initiatives taken by any organisations top management in
order to make sure that all the goals and objectives of an organisation are fulfilled in the
given time period. This involves objective is, developing of policies plants as well as
procedures including various frameworks which will help organisation in decision making
process. Tesco is the biggest supermarket group in United Kingdom with a number of
competitors such as Sainsbury, Morrisons and so on. They started their business as a
vegetable stall in 1924 in London. Tesco is mostly engaged in selling of clothing, groceries,
retail banking, electronics and a number of household products. The following report consist
of the business strategy used by Tesco in order to run their business effectively. It includes
analysis of internal as well as external environment of business with the help of a number of
strategies and frameworks. Apart from this in order to devise the competitor strategy used by
Tesco to stand in competition at the market place is also mentioned in this report. Various
theories and concepts as well as models are also used which will help to produce a proper
strategic management plan for Tesco including its tangible and tactical strategies for the
objectives it needs to achieve.
TASK 1
P1 Application of proper framework to analyse the effect of macro environment on strategies
of organisation
Macro environment usually includes all the conditions which are existing in the economy as a
whole. This includes wider extent rather than just the region or a sector. There are various
concepts included in macro environment such as trends, domestic product, inflation,
employment, governmental interference is, so on (Sulich and Grudziński, 2019). It is
important for businesses to study their macro environment correctly in order to formulate a
proper strategy which will help them in attaining all the opportunity present in external
environment. PESTLE analysis is a framework through which macro environment of Tesco
can be analysed.
PESTLE ANALYSIS
Pestle analysis is it tool which is used by business in order to analyse the macro
environment and the factors include it in macro environment which have an impact on
performance of any organisation. It is necessary for businesses to analyse and use this tool in

order to formulate a proper strategy. This stands for political, economic, social, technological,
legal and environmental factors present in macro environment in a business which have a
great impact on functioning of a business. Pestle analysis of Tesco and effects of Brexit in
various external factors is mentioned below:
Political factor: Political factors are regarded to all those factors which are affecting
the business due to the governmental implications. Briggs it has brought a number of changes
for supermarkets in United Kingdom including Tesco. The prices of food have arrived
steadily. Also, the devaluation in pounds sterling have affected supermarket growth due to
which the food which is imported by these retailers such as Tesco are more costly now. Tesco
is now forced to buy the imported food products at a higher prices. Also the European Union
suppliers specially the ones who provided core grocery items to Tesco are now increasing
their prices due to Brexit. This implication of Brexit have heavily affected Tesco as the profit
margin of company is decreasing due to increase in various products imported by company.