Porter's Five Forces Model: Assignment (Doc)
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Added on 2021-02-19
Porter's Five Forces Model: Assignment (Doc)
Added on 2021-02-19
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BUSINESSSTRATEGY
TABLE OF CONTENTSINTRODUCTION ..........................................................................................................................3TASK 1............................................................................................................................................3Analysing the impact and influence of macro environment on Tesco company and its businessstrategies......................................................................................................................................3TASK 2............................................................................................................................................5a) Analysing strategic capabilities of an entity by using VRIO framework ...............................5b) Conducting SWOT analysis of an enterprise .........................................................................7TASK 3............................................................................................................................................8Porter's five forces model............................................................................................................8TASK 4............................................................................................................................................9Strategic direction by using Porter's Generic Strategy................................................................9REFERENCES..............................................................................................................................10
INTRODUCTION Business Strategy consists of competitive actions, planning and moves to stimulate thecustomers, to ensures improvement in the performance of business concern, and to achieve theset of goals and objective of the organization (Walsh, 2015). This study discusses the variousimpact of macro environment in strategic planning of the organization TESCO and effects ofsuch environment in its performance. This study comprises the application of most appropriateframework for the smooth functioning of the business firm. Study analyse the strength andinternal capabilities of TESCO so that company can plan its strategies accordingly. Evaluationand analysis of various outcomes by using compatible model is discussed in this study. Themotive of this study is to recommend the direction to the company TESCO.TASK 1Analysing the impact and influence of macro environment on Tesco company and its businessstrategies.Business strategy: Business strategy is concerned with a course of action or variousdecisions taken by the top-level management in order to achieve the organizational goalseffectively and efficiently. Business strategy acts as a road map that a company has to follow inorder to achieve their objectives. Tesco company follow various business strategies to overcometheir competition, increase market shares and to improve the overall performance of the business.In the view point of Vella, 2015 Tesco's business strategy involves improving the customerloyalty to maximize their profitability and also to reduce the carbon emission in their dailyoperations as it would help them in improving their brand image.PESTLE analysis: PESTLE analysis is concerned with identifying all the external factorsaffecting Tesco's business performance. It includes political, economic, social, technological,environmental and legal factors.Political factors: Political factors include the taxation policy, level of political stabilityand other government rules and regulations. The BREXIT had affected Tesco'sperformance as the food prices have steadily increased after the following announcementwhich has subsequently reduced the profits of the grocery department of the supermarket.According to López, 2017the United Kingdom based supermarket stores like Tesco arebeing forced to purchase the raw materials and other grocery from the local suppliersinstead of EU suppliers which has disrupted the overall performance of the organization.
Economic factors: Economic factors are concerned with the leverage cost, profits andthe overall demand and supply mechanism. There are various economic factors affectingTesco's business strategy like inflation and slow growth in the wage rate mainly due toBREXIT which has further declined the sales as well as increased the labour turnover ratein their company. Also, with the increasing competition from other start-ups and onlinegrocery stores have further reduced the profits of Tesco. Social factors: Social factors are concerned with the overall belief of the people, theirculture, buying habits, lifestyle and attitude. The current trends in the social factorsinclude that the people have become more aware about eating healthy and have startedavoiding eating of junk foods which has also affected company's growth prospects. Also,majority of the people are turning into vegans which has further reduced the demand formeat and eggs in Tesco's grocery store. Therefore, the Tesco must identify the needs andwants of the customers and develop products accordingly in order to maximize theirprofits effectively and efficiently (Sparks, 2019).Technological factors: It is imperative for every organization to use latest and moderntechnology in order to reduce their overall cost and also to overcome their competition. Inaccordance with Vu, 2016 Tesco adopted the RFID (radio frequency identification)technology to enhance the overall customer experience by automatically counting thestock and removing it after it is being sold. The supermarket chain also accepts digitalcash through different wallets and cards which makes it efficient for the customers topay. Moreover, Tesco has also shifted their business online and started delivering groceryand other products which has helped the company in increasing their market share andcustomer base.Environmental factors: Environmental factors are a big concern for every company andare also responsible for building the brand image of the organization. Therefore, as perthe latest business strategy, the company has decided to become zero carbon emissionstore by the year 2050 and also has banned the single use plastic in their stores to protectand preserve the environment (Wang and et.al., 2016). Furthermore, it encourages itscustomers to shop at Tesco.com where the store uses the shortest possible route to deliverthe products and also collect the plastic items in order to recycle them and making them
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