Business Strategy: Analysis, Models, and Strategic Plan

BUSINESS STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
PART A...........................................................................................................................................4
Analysis of Macro environment..................................................................................................4
Pestle analysis..................................................................................................................................4
Porter Five Force model..............................................................................................................6
SWOT analysis............................................................................................................................7
VRIO Analysis model..................................................................................................................8
PART B.........................................................................................................................................10
Strategic Plan.............................................................................................................................10
CONCLUSION..............................................................................................................................14
REFERENCES..............................................................................................................................16

INTRODUCTION
Business strategy refers as a set of competitive actions and moves which organization
uses to attract stakeholders or customers, compete successfully, influence global presence and
meets business objectives. The strategy is crucial for organization because it leads sustainable
business performance in the market.To understand role of business strategy,have an example of
Tesco company. It is a British multinational groceries company which is headquartered in
Welwyn Garden England, UK. The brief study provides understanding about macro
environmental and external environment of business.It includes VRIO chain analysis model that
helps to understand internal environment of business.
PART A
Analysis of Macro environment
Macro environment can be defined as the external environment factors that directly
influences the business success, strategies and decision-making process. The factors
encompasseconomic factors i.e. demographical, governmental regulation, interest rates and
competitors. While external environment includes all outside factors that impacts the operation
of business. External factors are political, environmental, socio-cultural, economical,
technological and legal factors (Düerkop and Huth, 2017). There are several environmental
analysis frameworks such as Pestle analysis, Porter’s five force and SWOT analysis model which
helps to analyse external environment of Tesco.
Pestle analysis
It is strategic tool which analyse external environment of business and influences
decision-making process and performance of organization in the business market. The model if
apply for Tesco to analyse its external environment.
Political factors
Tesco has various political opportunities in different market of UK which can enhance
it’s market establishment and generates high revenue. But Brexit leads various political changes
i.e. political instability that can reducegrowth opportunities in the retail market negatively.

Foreign trade policies also change by Brexit which directly and indirectly impact on
multinational organizationto generate higher profit for achieving core competency in the
business market effectively.
Economicfactors
Recessionand inflation rate are considered economical factors which has impacted the
economical growth of United Kingdom and influenced inflation rates of country. The recession
period has impacted Tesco to sustain in market along with low liquidity of cash flow and
increase interest rates. Foreign exchange rate of currencyenhanced by Brexit as result enhance
unemployment rates of the UK (Ge and Li, 2019). Due to this, purchasing behaviour of
customers reduces that declines sales and profit margin of organization to compete and sustain in
the retail market.
Socio-cultural factors
Due to high unemployment rate in country has declined income level of public. It
automatically decreases the disposable income and affected sales behaviour of Tesco due to
highly shift in the user trends and their lifestyle. In addition, UK also faces several other issues
as decrease in birth rate and increment in life expectancy rates has enhance the population
majority of old age customer instead of young age users. It has impacted productrange that is
specified for youth customer segment.
Technological factors
Emergence technology leads profitable opportunities for Tesco which can help company
to capture large market share by offering high quality products and services to the customer.
UK’s population is highly updated for E-commerce business.So, company can generate high
profit margin if Tesco opens few online stores and offers online service as result buying
behaviour of customer will improve and can develop it’s business in UK (Varelas and
Georgopoulos, 2017).
Legal factors