Business Strategy and Analysis - Tesco

Business Strategy and
Analysis

2. Table of Contents
3. EXECUTIVE SUMMARY ........................................................................................................1
Overview of the Organization......................................................................................................1
4. EXTERNAL ANALYSIS ...........................................................................................................1
4.1 Pestle Analysis.......................................................................................................................1
4.1.1 Pestle Analysis of Tesco Company.....................................................................................2
4.1.2 Three influences which can be main drivers for future industry changes..........................4
4.2 Five Forces Analysis..............................................................................................................5
4.2.1 Five Forces Analysis of the Tesco Company.....................................................................5
4.2.2 Three key forces at work in Tesco's industry environment................................................7
4.3 Strategy Canvas.....................................................................................................................8
4.3.1 Strategy canvas for Tesco and its two rivals.......................................................................8
4.3.2 Five critical success factors in the retail industry.............................................................10
4.4 Blue Ocean...........................................................................................................................10
4.4.1 Identify and described the blue ocean market spaces.......................................................10
5. CONCLUSION..........................................................................................................................11
REFERENCES..............................................................................................................................13

3. EXECUTIVE SUMMARY
Business strategic analysis is the process of doing research on the business internal and
external environment and its impact on the strategy. If there is any strategy which is not good for
the company, firm will formulate the new strategies in order to achieve the organisational
objectives. This report will conduct the Pestle analysis, Porter's 5 forces analysis and strategy
canvas. It will also identify the strategy through which company can enter into blue ocean
canvas.
The report has covered the pestle analysis and five forces analysis of the company. It has
also told about the strategy canvas of the company as well as its blue ocean strategies.
Overview of the Organization
Tesco Public Limited Company is a British Company which is working under the
retailing industry. It is a groceries and general merchandise retailer company. Headquarters of
the company is in Welwyn Garden City, Hertfordshire, England, United Kingdom. It is one of
the best retailing company in the global market. It was founded in year 1919 by Jack Cohen.
Company started doing expansion of their business in the global market since 1990s. It is
currently serving its products and services in United Kingdom, Poland, Ireland, Hungary, India,
Czech Republic, India, Thailand and Malaysia. It has around 6800+ shops. It has 28.4% market
share in the UK retailing industry. Tesco Organisation provide their products and services
through supermarket, superstore, hypermarket and convenience shops. It has given 4,50,000+
employees employment. It has various subsidiaries which are such as – Tesco Stores Ltd., Jack's,
Tesco Bank, Booker Group, Tesco Mobile, Spenhill, Tesco Ireland, Dunnhumby and Tesco
Family Dining Ltd. Its competitive position is strong. It is 3rd largest retail company in the
industry. Retail industry refers to the industry in which company sell their products and services
to the customers by multiple channels in order to gain profitability.
4. EXTERNAL ANALYSIS
4.1 Pestle Analysis
Meaning of Pestle Analysis
Pestle analysis is a strategic analytical framework which is being used by various
companies and industries for the purpose of identify and monitor the external environmental
factors and its impact on the business activities. Pestle analysis is an abbreviation for Political,
Economic, Social, Technological, Legal and Environmental (Marketing Theories – Pestle
1

Analysis, 2017). Pestle analysis is one of the most important analysis done by companies for the
purpose of reducing the negative impact on the company and improve the company's
profitability.
4.1.1 Pestle Analysis of Tesco Company
Pestle analysis of the Tesco Organisation is as follows -
Political Factors – Political factors are those factors which determine the degree to which
government and its intervene affect the company and industry. Example of political factors are
political stability, governmental policy, taxation policy, trade policy, foreign exchange policy
and perceptions of political parties towards business etc. (Aithal, 2016).
In case, government change in their taxation policy, it can affect the Tesco Company
positively and negatively both. If taxation rate increase, it will lead company to pay more tax
2
(Illustration 1: Factors of Pestle Analysis
Source: Marketing Theories – Pestle Analysis, 2017)