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Business Strategy Assignment - Tesco plc

   

Added on  2020-10-05

17 Pages3732 Words167 Views
BUSINESS STRATEGY

Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3P1) Application of Pestle Analysis to derive influence and impact of macro environment onTesco and its strategies...........................................................................................................3TASK 2............................................................................................................................................6P2) Analysis of internal environment and capabilities if Tesco with the help of Swot Analysisand VRIO framework.............................................................................................................6TASK 3............................................................................................................................................9P3) Application of Porter's five forces model to evaluate competitive forces of retail sector onTesco.......................................................................................................................................9TASK 4..........................................................................................................................................11P4) Application of range of concepts, models and theories to devise strategic planning ofTesco.....................................................................................................................................11CONCLUSION..............................................................................................................................14REFERENCES..............................................................................................................................15

INTRODUCTIONBusiness strategy refers to a detail plan that describes course of action that company willadopt for getting competitive advantage over other competitors. It helps the employer inachieving the desired goals and objectives of the business. There are various types of businessstrategy such as business level, corporate, functional level strategies. The Report will explaininternal and external analysis, strategic plan of Tesco.Tesco plc. belongs to retail industry. It was founded in year 1919 by Jack Cohen. Theheadquarter of company is located at Hertfordshire, England, U.K. Tesco is a multinationalcompany that deals in groceries and merchandise items. Company operates in different countriessuch as United Kingdom, Thailand, Poland etc (Bentley-Goode, 2017). The key products ofTesco are hypermarket, supermarket etc. There are various subsidiaries of the company such asTesco Stores Ltd., Tesco Ireland, Tesco Bank etc. Tesco is at third position in the world in termsof revenue. The company has diversified itself in different areas such as financial services,clothing, electronics etc.TASK 1P1) Application of Pestle Analysis to derive influence and impact of macro environment onTesco and its strategiesMacro environment is an important part of external environment of the company. It refersto all those factors and forces that exists in the external environment of the company andindirectly affects the performance of company. Macro environment includes different factors likesocial, political, technological, economic, legal and environmental factors.The impact of variousfactors and forces of external environment on Tesco are as follows:Political: Tesco is having its operations in more than 12 countries due to which, theoperations and strategies of the company is affected by different types of rules,regulations and legislations of the government of different countries. There are differenttypes of political factors that may affects the business decisions as well as strategies ofTesco such as instability in political environment, level of economic development ofdifferent countries such as U.K. etc. Tesco deals in a wide range of goods and tomanufacturer such goods it has to import raw materials from other countries like China,

India etc. and it has to pay import duty on the raw materials. Import duty also affects thelevel of price of various items (Buckley, 2016).Economic- There are various economic factors that affects the operations and variousstrategies of Tesco such as economic development of the country, cost of labour, grossdomestic product etc. Tesco operates many supermarkets in different countries and toprovide services to customers it requires talented employees. Cost of labour in differentcountries also affects the operations, profitability of the company. For example- Theregulations of government regarding minimum wage rate that has come in year 2018, hasrequire that company has to increase the rate of wages by 4.4% (Chiang,2016). This hasincreased the cost for the company. Company can adopt diversification strategy toincrease the revenue and reduce the cost.Social-cultural- There are various social and cultural factors such as beliefs, attitude,behaviour of consumers etc. that might affect the working of Tesco. Trends in shoppingby the customers are changing fast so, company should modify its strategy related withproduction and delivery of goods therefore, company must understand the demands andpreferences of the customers and should provide facility of one stop shopping to theconsumers. Tesco is focussing on the issues related with attitudes and beliefs of thecustomers. Nowadays, consumers are becoming more health conscious. Therefore,company should develop strategy for determine the demand of consumers regardingorganic items.Technological- There are various technological factors that might affects the functioningof Tesco such as, rate of change in technology, advancement in technology etc. Fewyears ago, Tesco has faced issue such as horse-meat scandal etc. These issues hasaffected the reputation of the company. And Tesco has made efforts for makingtechnological advancements so that it can regain the trust of customers (Ghemawat,2016). Tesco has installed advanced technologies so that, company can improve theexperience of customers. Example of technological advancements made by the companyare identification of radio frequency, electronic fund transfer system etc. Thesetechnologies have helped the company to improve production and distribution process.Legal- The factors of legal environment in which Tesco is operating the business isaffecting the performance of the company in different ways. For example- Food Retailing

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