Analysis of Competitive Environment

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Impact & influence of macro environment factors on the organisation......................................3
TASK 2............................................................................................................................................6
Analysis of internal environment & capabilities of organisation................................................6
TASK 3..........................................................................................................................................10
Analysis of competitive environment of the organisation........................................................10
TASK 4..........................................................................................................................................13
Theories, models, concepts that can help in strategic planning................................................13
CONCLUSION..............................................................................................................................20
REFERENCES..............................................................................................................................21
Tesco Porter’s Five Forces Analysis, 2016. [Online]. Available through: <.................................22

INTRODUCTION
Strategies can be regarded as the various plans that are used by organisations in
achievement of long run goals. It is also very helpful in improvement of overall
performance of various business organisations (Marx, 2015). In present report there has
been different frameworks been applied to a retail organisation of UK for developing an
understanding of how can they form strategies to achieve their overall objectives. There is
application of models such as PESTLE, SWOT, VRIO, Porters five force, porter’s generic
strategy, bowman’s strategic clock all these are said for development of a business plan to
be used in course of achievement of their laid down objectives
TASK 1
Impact & influence of macro environment factors on the organisation
PESTLE Analyses is a framework which is adopted to assess the micro environment factor
that imposes direct impact on the productivity and profitability of business organisation. In
context of TESCO, the manager focuses on grab the opportunities as well as eliminate the risk
in order to boost the success and growth of the company (Murthy, 2012). There are various
external factors in relation to TESCO which is going to be mentioned below:
Political Factor: It includes various factor such as government policy, taxation structure and
many more which directly affect the performance of business. The positive and negative
impact in relation to TESCO which is going to be given below:
 Positive impact: The political condition of UK is stable thus it imposes positive impact on
the productivity of the company. Due to political stability, government does not make any
inference in the activities and functions of business organisation.
 Negative Impact: Due to increase in tax rate it adds cost to the product of the company
thus it affect the company in negative manner.
Economic Factor: Economic factor includes unemployment rate, interest rate, exchange rate,
inflation and deflation rate and so on which imposes positive and negative impact on the
operations of the TESCO which is discussed below:

Figure 1: Interest rates in UK
 Positive impact: Due to decrease in inflation rate, it reduces the cost of product which
imposes the positive impact on the productivity of the company. It helps in increasing the
future sales and growth of TESCO.
 Negative Impact: Due to stable economy, it imposes negative impact on the financial
performance of TESCO because it increases the rate of interest for the business
organisation.
Social Factor: Social factor includes population, lifestyle, preferences as well as trend and so
on thus it imposes both positive and negative impact on the future sales and growth of the
TESCO which is going to be mentioned below:
 Positive impact: In context of TESCO, the manager focuses on providing superior quality
products and services to its customer in order to satisfy them. It helps the company in
retaining the customer for a longer period of time. Tesco organic sales rise by 15 percent
in the year 2017 (Tesco “Organic food sales strongest for over a decade,
2017).
 Negative impact: Due to frequently changes in taste and preferences of customer; it is not
possible for TESCO to cope up with dynamic situation in appropriate manner.
Technological Factor: Technology plays an essential role for the success and growth of
business organisation. It is important for the manager of TESCO to execute the latest
technology in order to offer innovative products and services to its customer (Nurlansa, and
Jati, 2016.). There is some positive and negative impact in context of TESCO which is given
below:

 Positive impact: Due to implementation of latest technology, the manager of TESCO
offers innovative and unique products and services to its buyer in order to satisfy them.
 Negative impact: The cost of implementation of advanced technology increases the cost
for the TESCO can affect the productivity of the business firm in negative manner.
Environmental Factor: Environmental factor involves climate as well as weather condition
and so on (Oldmanand Tomkins, 2018). The favourable and adverse impact of this factor in
reference of TESCO which is going to be discussed below:
 Positive impact: The manager of TESCO provides the eco-friendly products and services
to its customer in order to increase their living standard. And also they offer goods and
services which do not harm the environment.
 Negative impact: Due to frequently change in the weather condition it imposes negative
impact on the future sales and growth of TESCO.
Legal Factor: Legal factor includes rules, laws, regulations as well as regulations and many
more thus it imposes both positive and negative impact on the productivity of TESCO which
is given below:
 Positive impact: The manager of TESCO comply the laws which imposes positive impact
on the performance of the company. TESCO has reduced its carbon emissions by
26% (Our Tesco “How We Communicate Together”, 2018)
 Negative impact: Due to change in rules, laws and regulation results in change in the
policies of the business organisation.
Critical analysis of various macro factors to determination of some of the management
decisions.
The manager of the company makes effective strategy, policies and procedures in order
to grab the opportunities and reduces threat which is prevailing in the environment of the
business. From the above mentioned topics, it has been analysed that political condition of
UK is stable thus it imposes the positive impact on the productivity and profitability of
TESCO. In addition to this, they provide eco-friendly products and services to its customer in
order to satisfy them. It helps in increasing sales and growth of business organisation.
From the above analysis there are some opportunities and threats that have been identified in
respect of Tesco:

Opportunities:
Tesco has opportunity to form strategic alliances with other organisations and existing plants
by diversifying their product range. They can launch for the discount change in different parts
of the world where they are presently not having any present surcharge in countries like India.
Threats:
There is a very high threats from various German discount brands and high growth of
competitors. Whether there is any validity to adjust the supply chain because of the brexit
environment and after effects of this referendum.
TASK 2
Analysis of internal environment & capabilities of organisation
Internal environment of every organisation is related to the culture, management and can
impact the overall decision making in the organisation. There is a requirement to study all
such factors in detail that are having an impact on the internal functioning of a organisational
and are also a part of internal business environment. Tesco has to integrate the strength &
opportunities that they have identified and then convert them into strategies for achievement
of their laid d own business objectives. Below discussed is the swot analysis and VRIO
analysis. These two models are basically used for purpose of achievement of certain business
objectives in Tesco. For achievement of certain objectives SWOT analysis.
Strengths Weaknesses
 Tesco has a established brand image as
no other retail store is having a high
trust worthy image that is possessed by
TESCO.
 The capacities only compatible with
their present business model that is
leading to limitation for expansion of
their more product segments.
 Tesco is having a low profitability ratio
& their overall contribution is also low
in their industry average
 The overall investment made in the