Business Strategy and Tesco Case

The assignment focuses on analyzing the business strategy of Tesco, a leading global supermarket chain. It requires students to evaluate Tesco's strategic management accounting techniques, relationship with business strategy, and impact on operational effectiveness. Specific aspects covered include Tesco's marketing mix, leadership style, and commitment to sustainability. The analysis draws upon various sources, including academic journals, industry reports, and company websites.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Covered in PPT...........................................................................................................................3
TASK 2............................................................................................................................................3
2.1 Strategic positioning of given organisation...........................................................................3
2.2 Environment audit.................................................................................................................5
2.3 Significance of stakeholder analysis when formulating new strategy..................................6
2.4 Present a new strategy...........................................................................................................7
TASK 3............................................................................................................................................9
3.1 Appropriateness of alternative strategies to market entry, substantive growth,
retrenchment................................................................................................................................9
3.2 Strategy Justification...........................................................................................................10
TASK 4..........................................................................................................................................11
4.1 Roles and responsibilities of personnel...............................................................................11
4.2 Resource requirements for implementing a new strategy ..................................................11
4.3 Contribution of SMART targets to achievement of strategy implementation....................13
CONCLUSION .............................................................................................................................14
REFERENCES..............................................................................................................................16

INTRODUCTION
Business strategy is significant component of an organisation which aid company in
accomplishing goals and objectives. This help in development in performance of operations and
enhance productivity of services which is being served. It also assist in identifying the path and
plans that can lead organisation to success and make it more convenient. Management focus over
business strategy planning which is main element of a company. This is a very complex process,
where, there is no guarantee of achievement through implementation of strategy 1. Performances
and practices of a company entirely depend upon external and internal factors. Business strategy
is essential in order to keep maintain the reputation of brand in industry. This assist in increasing
benefits in market and portray unique identity organisation in industry.
Tesco is one of most leading UK retail company which provide wide variety of products
and services in all over the world. It has diversified range of commodities such as books,
grocery, networking services many other. Volkswagen is a German auto-maker organisation
which is one of largest and one of oldest enterprise. Company has deployed its market in UK,
Europe ad Asia mostly. This report will go through the procedure of strategic planning through
identifying objective, vision and aims and defining the factors of a company in order to prepare a
plan for business.
TASK 1
Covered in PPT
TASK 2
2.1 Strategic positioning of given organisation
Value Chain Analysis –
Volkswagen have adopted value chain which consist of evaluation of operations, inbound
and outbound logistics, sales and marketing. For raw materiel and cost of inventory, overviewing
is essential2. As it undertakes output and input process, such operation should be analysed. The
1 Acquaah, Moses. "Management control systems, business strategy and performance: A
comparative analysis of family and non-family businesses in a transition economy in
sub-Saharan Africa." Journal of Family Business Strategy 4. no. 2 (2013): 131-146.
2 Auzair, Sofiah. "The effect of business strategy and external environment on
management control systems: a study of Malaysian hotels." International Journal of

process of outbound is concerned when some product or services is required to be transfer from
one to other place. For undertaking market sales and revenues, Dept. of marketing and sales is
required to be examined.
SWOT Analysis -
SWOT assist company in recognising major threats, opportunities of future and strengths
and weakness of company which helps in developing organisation in market through reducing
upcoming danger and total utilization of possibilities in regard of company development. Here is
Volkswagen's SWOT analysis mentioned below:
Strengths Weakness
1. Most popular auto-mobile brand among
others.
2. Diversified portfolio. The company render
13 automotive brand such as Bentley, Audi etc.
3. Constantly developing company and one of
the oldest company of auto-mobile 3.
4. Fresh strategy including “ Together- 2015.”
5. Wide employee group hiring more than
3,50,000 employee within company.
1. In competitive market, The company have
less presences in new auto-mobile industry.
2. Company products of Volkswagen are not
nature friendly. Most popular cars of this
including Bugatti, Lamborghini ad Porsche
emit high level of CO2 and use inefficient
fuels.
3. Company is still struggling to make brand
recognition such as Toyota and GM.
4. Negative publicity Volkswagen is ruining
the image of company is society which can
decrease the consumer.
Opportunities Threats
1. New demands for advanced technologies.
2. Decrease in exchange rate of Euro.
3. Innovative strategies company is
implementing for new and advanced cars for
1. Strong competition.
2. Non-friendly products which can cause of
fines and damages.
3. Amendments of gov. policies.
Business and Social Science 2. no. 13 (2011).
3 Chang, Kuo-Pin, and Gary Graham. "E-business strategy in supply chain collaboration:
An empirical study of B2B e-commerce project in Taiwan." International Journal of
Electronic Business Management 10. no. 2 (2012): 101.

the future.
4. Volkswagen can work on eco-friendly cars
for future development.
4. Increase in the prices of raw material.
2.2 Environment audit
Volkswagen can examine external environment through performing PESTEL analysis in
order to identify needs and expectations which is explained below:
Political Factors –
Political changes in nation can affect the economic and other element of a company 4.
This can be occur after change in political party. Organisation must keep maintain the
relationship with gov., to smooth functioning of operation.
Economical Factors –
There are various people whose taste is changing toward the luxuries more in UK. But in
case of changing the taxation policies, there may vary occur in the system of Volkswagen Which
can cause of failure and success of the company.
Environmental Factors –
Volkswagen need to improve and develop their manufacture procedure and system
because company products are more fuel burning and dangerous in respect of nature accordion to
the analysis.
Social Factors –
This is related with economic factors. According to the population and interest of the
country, sales of are affected by people. Factors such as customers service, technical
maintenance and products delivery affect by social components.
Technological Factors –
The company can face loss in the economy because of technology that harm nature which
they are are using 5. Volkswagen is producing and modifying its production system in order to
manufacture more eco-friendly services.
4 Chu, Mei-Tai, PremKumar KrishnaKumar, and Rajiv Khosla. "Mapping knowledge
sharing traits to business strategy in knowledge based organisation." Journal of
Intelligent Manufacturing 25. no. 1 (2014): 55-65.
5 Strategic Management and Leadership at Tesco. 2015. [Online]. Available
through:<https://www.ukessays.com/essays/management/strategic-management-and-
leadership-at-tesco-management-essay.php>. [Accessed on 6th September 2017]

Legal Factors –
Company keep follow laws and rights of nations. But in more nature friendly era, there
are chances of creating new acts related to it which can become upcoming barriers for the
company6.
2.3 Significance of stakeholder analysis when formulating new strategy
While structuring a new strategy in market, stakeholders analysis helps in understanding
and identifying needs, expectations, interest levels, administration planning and position of entire
public of a company. This also highlights those person of a company which have most influence
over the organization's issues and other important matters. This explains that how duties of a
stakeholder is eliminated in two parts win which one decide the co-operation of them and their
involvement in various segments of an Volkswagen.
Stakeholders are those people of an organisation who is directly and indirectly connected
with enterprise and participate in the management of company including investors, sponsors,
employees and owners etc. Leaders of company will to increase annual income of Volkswagen
through using various strategies. Employees whereas, wants better and sufficient wage in
exchange of their labour. Investor desires to maximize their investment from company activities.
Public, gov., consumers, sponsors, suppliers and creditors are services market
stakeholders which helps in increasing the benefit and loss of company indirectly with their
activities in respect of Volkswagen 7. Government expect from company to follow laws and
regulation, participate in taxation process and report their financial level. Customers whereas
wants from a company to provide better quality of services in low process. Creators wants to be
repaid properly and suppliers desires to maintain the relationship with Volkswagen by being
purchased constantly.
Stakeholder analysis helps in maintain the relationship with stakeholder through building
an effective support framework for the programmes of Volkswagen. Consolation with the people
of company is essential because some stakeholder own and affect major part of organisation and
its decisions. Activities and implementation of strategies is affected by the public. Examining the
6 Fowzia, Rehana. "Strategic management accounting techniques: Relationship with
business strategy and strategic effectiveness of manufacturing organizations in
Bangladesh." World Journal of Management 3. no. 2 (2011): 54-69.
7 Fox, Vanessa. Marketing in the Age of Google, Revised and Updated: Your Online
Strategy IS Your Business Strategy. John Wiley & Sons, 2012.

expectation and requirements of them aids new innovation and determines the limitation of
company in decision making process and according to the culture.
Stakeholder should be stay connected while ma,king an strategy for the business in order
to better interest of company 8. They often be affected by the activities of organization which is
taking places and have a great impact over the productivity and profitability of Volkswagen.
2.4 Present a new strategy
For presenting a new strategy in case of Volkswagen, it is essential to understand the
goals, objectives, tactics and strategy.
Goals -
Volkswagen aims to facilitates effective sales and circumstances sound auto-mobiles
which can compete the rivals and sustain in industry as well as create an attractive image of
company in market.
Objectives -
 To become the largest automotive selling company.
 To increase and amend the amount of sales through attracting more consumers.
 To enhance and improve the quality of products and make them more eco- Friendly.
Strategy -
The new strategy of Volkswagen is TOGATHER – 2025 which is a large process that
aims to become the leading company in market and sales higher services in among all
competitors.
Tactics -
Volkswagen will advertise with the help of internet, flyers, posters, hoardings, online
ads, and point of eye selling techniques 9. The features and new facilities will be add and
communicated to the consumers though help of various promotion mix tools.
Target Market –
8 Galpin, Timothy, and J. Lee Whittington. "Sustainability leadership: From strategy to
results." Journal of Business Strategy 33. no. 4 (2012): 40-48.
9 Helms, Marilyn M., and Melissa Whitesell. "Transitioning to the embedded librarian
model and improving the senior capstone business strategy course." The Journal of
Academic Librarianship 39. no. 5 (2013): 401-413.

Target market refer to consumers which is main focus of a company. Volkswagen have
eliminated their consumers according to the different segments and included psychographic,
geographic and demographic.
Psycho-graphic – According to lifestyle and annual income of customers in which
Volkswagen is concentrating to provide products to middle and high class families as well as
some services they are producing for average one's also by 2025.
Demographic – Segmentation according to the regions, gender and other demographic
factors. Volkswagen is aiming to families, businesspersons and youth.
Geographic – This refer to partition of consumer according to geographical concepts of
customers. In case of Volkswagen, company have set most populated cities and models and
structured according their place and geographic parameters 10.
Positioning -
Positioning refer to position of company in the perception of consumer's mind.
Volkswagen have a good and positive recognition in market. Creditability of brand and its
products is effective and better in business persons, family people and usual public. Whereas
economist and environmentalists may criticise its vehicles because of its modelling.
Marketing Mix –
Marketing mix involves the major factors of company and its products that affect sales,
profits and assist in identifying key elements in which development is require 11. Here are
promotion mix of Volkswagen:
Place -
 Situated in most developed and developing countries such as USA, China, India, Russia,
Indonesia, Germany and other.
 Established new manufacture plant in order to produce cost effective cares and provide
the localites.
 Showrooms are available in each mega cities and prime location of many parts of world.
Product -
10 Hoejmose, Stefan, Stephen Brammer, and Andrew Millington. "An empirical
examination of the relationship between business strategy and socially responsible
supply chain management." International Journal of Operations & Production
Management 33. no. 5 (2013): 589-621.
11 Johnson, Gerry. Exploring strategy: text and cases. Pearson, 2017.

 Most famous and sold models are Volkswagen Passae, Jetta, Polo, Tourna, Beetle and
Tiguan.
 Products are produced the basis of various models such as SUV, MPV, coupe,
convertible, sedan, estates etc.
 Company produce and provide Electrical, Hybrid vehicle and Dual fuel cars.
Volkswegan Marketing Mix, 2017
(Source 1: The Marketing Mix, 2015)
Promotion -
 Organise many ad campaigns and is the parent company of 360 brands.

 Through musing online campaigns through Facebook, Twitter, YouTube, Instagram and
other sites 12.
 Promote safety and other features through electronic media and new media advertising.
 Advertise company by contributing and participating in global program and occasions.
Price -
 More expensive products in comparison to many brands in market·
 Pricing goals of company use the tactics of psychological pricing methods.
 Based on demand, segments, features and competition of automate that they provide
geographically.
TASK 3
3.1 Appropriateness of alternative strategies to market entry, substantive growth, retrenchment
Appropriate market strategies assists in various aspects of business and helps in
sustaining in the market. Volkswagen is a MNC which produce auto-mobile products and
services and trade with various market worldwide. Alternative planning assist in seeking solution
of upcoming issues and challenges in market.
Market Entry -
Through franchise, joint venture and collaboration of other companies, Volkswagen can
deploy its business and develop the company share rate in industry. Through effective strategy of
market entry, expansion of company can properly made. Also it foster and flourish enterprise and
evolve products.
Substantive Growth –
Through integration planning and diversification, assurance of substantive growth can
done 13. Volkswagen can keep prices of vertical and horizontal integration in pattern. Company
can deal with cheaper supplier and lower the cost of products which can help company in
increase revenues and sales as well as sustain in market.
Retrenchment –
12 Li-Hua, Richard, and Lucy Lu. "Technology strategy and sustainability of business:
Empirical experiences from Chinese cases." Journal of Technology Management in
China 8. no. 2 (2013): 62-82.
13 Montgomery, Cynthia A., ed. Resource-based and evolutionary theories of the firm:
towards a synthesis. Springer Science & Business Media, 2011.

To manage adverse condition of business, retrenchment strategies is effective. This can
helps Volkswagen while having problem with particular products sales. This aids is meeting
consumer expectation, assures efficiency of costing and maintain all resources.
3.2 Strategy Justification
According to the study, it is clear that Volkswagen has different market situation from
other companies in industry. Development rate of company is good from past few decades as
they are producing most popular cars such as Lamborghini, Buhatti, which are a good interest in
public. This strategies is appropriate which can be justified in these ways:
Flexible –
This new Strategy of promotion Volkswagen “Together-2025” is flexible according to
different circumstance and consequences. It has its pros ad cons and they are suitable according
to dynamic environment of market.
Reliable –
Volkswagen can totally relay on this strategies its is using effective planing and
budgeting 14. Goals and objectives are proper planned and designed and company have set some
parameters of promotion and marketing mix which can help company in developing in industry.
Sustainable –
Proper planning and implementation of strategies can help company to sustain in market
and constant growth through creating a unique impact over customer despite other competences.
TASK 4
4.1 Roles and responsibilities of personnel
Volkswagen require consider the importance of professional in strategy implementation
process. Personnel role is significant as they assist vitally in the implication of any planning and
execution of activities in environment either internal or external. There are various levels of
personnel which affect and con tribute in such process differently such as:
Top Level -
Leaders and CEO of an organisation is considered as the top management. Volkswagen
leaders are major person who determines the strategy and its different aspects and make the
14 Tesco. 2012. [Online]. Available
through:<https://www.slideshare.net/AshutoshSingh39/tesco-12875122>. [Accessed on
6th September 2017]

valuable changes in process 15. Also they focus over the budgeting, funding and investors for a
specific scheme for the constant growth of company and set objectives and vision.
Mid Level -
Mid management of company includes HR and other employers and manager of
Volkswagen which organise and coordinate different strategies in working environment and
command and monitor employee as well as control entire process on worldwide.
Employee/Labour -
Employee are company's human resources which play major part in the execution of
planning and strategies by contributing or performing tasks and activities of production and other
management and administration of Volkswagen.
4.2 Resource requirements for implementing a new strategy
In order to execute new planning in market, Volkswagen may need certain assets for
market and product development. In case of lack in resources, to attain success company will
need implementation of effective strategy. The company require to focus those basics for
implication of strong strategies.
Human Resources -
Human resource of a company is very essential for the management. Ability related
resource is needed to monitor consequence and activities for new strategies. Skills of man power
of company is major essential asset of company that can become upcoming strengths. Employee
should be credible and potential in respect of market growth and strategies planning practices.
This consist of staff member, employee and other units of company.
Financial Resources -
Financial Resource means organisation's economical power. Technical machinery and
raw materials need great economical status of organisation for care, woke wages, resources of
buying of machinery and product expenses 16. This is required to managed needed to be
maintained very carefully in respect of launching new planning in industry. This contribute in
result of implemented strategy in regard of failure and success. It includes funds, sponsors and
investments at finance levels.
Technical Resources-
15 Moseley III, George B. Managing Health Care Business Strategy. Jones & Bartlett
Learning, 2017.
16 Scholes, Myron S. Taxes and business strategy. Prentice Hall, 2015.

Technical resources refers to machineries and instrument of manufacturing a product and
service. Volkswagen, therefore, require heavy and innovative technologies in producing
products. Those are expensive and difficult to maintain. To acquire new strategy, investment in
advance and justified machineries is effectively increase probability of success.
Raw Material-
Main and most significant resources of production and manufacture process of company
is raw material that helps a company top exchange that raw substantial into products and
services. It would be hard to produce product from natural things for Volkswagen in case of lack
of resource. Company manage to produce the products into real assets through dealing with
supplier of better material. Also that should be high quality in low prices for low production cost.
This defines that without basic resources it is hard to manage and monitor the entire
process of company as well as proper implementation. to execute those planning, company also
requires some plantings and budgeting strategies which includes important elements such as:
This refers to strategies and required resources to deliver physical capability of products. This
category is needed to execute any strategy in industry with a proper planning and budgeting. This
comprises-
Marketing Resource-
 Merchandising management. System communication.
Presentation Facilities-
 Production facilities presentation; skills, maintenances and requirements
 Present production process- technique, quality, .
 Distribution of entire resources.
4.3 Contribution of SMART targets to achievement of strategy implementation
Volkswagen targets to SMART technique in order to accomplish set goals in better ways.
The major goals of this principle is set some elements that can assists Volkswagen to attain goals
through the helps of determines terms 17. This helps in accomplish the aims in certain way
through helping in implication of particular strategies. This is elaborated terms of SMART in
context of Volkswagen:
17 Slack, Nigel. Operations strategy. John Wiley & Sons, Ltd, 2015.

 'S' states specific goals that is in procedure Volkswagen and in business industry. To
develop in market and increase the sales, company require some goals and objectives to
helps in attaining achievement. Volkswagen has decided to increase the overall benefits
5 -7 % up-to in regard of last month revenues and sale in each three month period.
 'M' means measurable objectives which company set and can be scaled and help in
achieve those goals. Through measuring the shares and margin, Company is able to
achieve 5 -7 % profits in every three year through the help of effective strategy. This can
be measured through counting the sales amount which occur in the market.
 'A' refer to achievable goals which have been set buy the company. Reaching to this
amount of product is achievable in the context of Volkswagen.
 'R' refer to the targets which are achievable or not 18. Target which have been set by
Volkswagen to raise the result up to 5- 7% is achievable are very practical as the
company is largess and one of oldest company and have the credibility in market more
than other.
 'T' stands for the time period in which the goals are are determines to achieve for the
specific organisation. The goals that Volkswagen have set are conveniently attained by
Volkswagen within the time period of 3 to 6 moths. It can also help to motivate and
stimulate employee and worker of company and their productivity.
CONCLUSION
Achievement of a company is entirely laid upon the stakeholder as they play a vital role
in various activities of company. Business strategy is significant to design and implicate in order
to set goals and accomplish them in a desired time. These set objectives helps an organisation to
grow, develop, increase their funds and portray a goodwill in society. For making a better
strategy for the company, it is essential to analysis various aspects of enterprises including
objectives, mission, aims as well as internal and external environment, stakeholder analysis, and
market and customer trends and expectations. Through the helps of SMART principles company
can easily attain and determine aims. But in order to allocate and manage resource properly, an
organisation requires to understand and identify their needs and importance.
18 Verbeke, Alain. International business strategy. Cambridge University Press, 2013.

REFERENCES
Books and Journals
Acquaah, Moses. "Management control systems, business strategy and performance: A
comparative analysis of family and non-family businesses in a transition economy in
sub-Saharan Africa." Journal of Family Business Strategy 4. no. 2 (2013): 131-146.
Auzair, Sofiah. "The effect of business strategy and external environment on management
control systems: a study of Malaysian hotels." International Journal of Business and
Social Science 2. no. 13 (2011).
Chang, Kuo-Pin, and Gary Graham. "E-business strategy in supply chain collaboration: An
empirical study of B2B e-commerce project in Taiwan." International Journal of
Electronic Business Management 10. no. 2 (2012): 101.
Chu, Mei-Tai, PremKumar KrishnaKumar, and Rajiv Khosla. "Mapping knowledge sharing
traits to business strategy in knowledge based organisation." Journal of Intelligent
Manufacturing 25. no. 1 (2014): 55-65.
Fowzia, Rehana. "Strategic management accounting techniques: Relationship with business
strategy and strategic effectiveness of manufacturing organizations in Bangladesh."
World Journal of Management 3. no. 2 (2011): 54-69.
Fox, Vanessa. Marketing in the Age of Google, Revised and Updated: Your Online Strategy IS
Your Business Strategy. John Wiley & Sons, 2012.
Galpin, Timothy, and J. Lee Whittington. "Sustainability leadership: From strategy to results."
Journal of Business Strategy 33. no. 4 (2012): 40-48.
Helms, Marilyn M., and Melissa Whitesell. "Transitioning to the embedded librarian model and
improving the senior capstone business strategy course." The Journal of Academic
Librarianship 39. no. 5 (2013): 401-413.
Hoejmose, Stefan, Stephen Brammer, and Andrew Millington. "An empirical examination of the
relationship between business strategy and socially responsible supply chain
management." International Journal of Operations & Production Management 33. no. 5
(2013): 589-621.
Johnson, Gerry. Exploring strategy: text and cases. Pearson, 2017.
Li-Hua, Richard, and Lucy Lu. "Technology strategy and sustainability of business: Empirical
experiences from Chinese cases." Journal of Technology Management in China 8. no. 2
(2013): 62-82.
Montgomery, Cynthia A., ed. Resource-based and evolutionary theories of the firm: towards a
synthesis. Springer Science & Business Media, 2011.
Moseley III, George B. Managing Health Care Business Strategy. Jones & Bartlett Learning,
2017.
Scholes, Myron S. Taxes and business strategy. Prentice Hall, 2015.
Slack, Nigel. Operations strategy. John Wiley & Sons, Ltd, 2015.
Verbeke, Alain. International business strategy. Cambridge University Press, 2013.
Zott, Christoph, Raphael Amit, and Lorenzo Massa. "The business model: recent developments
and future research." Journal of management 37. no. 4 (2011): 1019-1042.
Online
Tesco. 2012. [Online]. Available through:<https://www.slideshare.net/AshutoshSingh39/tesco-
12875122>. [Accessed on 6th September 2017]

Strategic Management and Leadership at Tesco. 2015. [Online]. Available
through:<https://www.ukessays.com/essays/management/strategic-management-and-
leadership-at-tesco-management-essay.php>. [Accessed on 6th September 2017]
SWOT analysis of Volkswagen. 2016. [Online]. Available
through:<https://www.strategicmanagementinsight.com/swot-analyses/volkswagen-
swot-analysis.html>. [Accessed on 6th September 2017]