This presentation discusses the strategic planning and management of Tesco, a multinational groceries brand. It explores different models and strategies that Tesco can use to gain a competitive advantage in the market.
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Business Strategy
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Table of Contents Introduction Strategic planning for Tesco by application of different models Strategic Management Plan Interpretation of information and data Conclusion References
Introduction Business strategy can be defined a set of actions that can be used by businesses to attract customers, remain competitive and increase their overall sales. It guides a business on how can it reach its goals and objectives in the most efficient way possible. Organization chosen for this presentation is Tesco, which is a multinational groceries brand headquartered in England. The company was founded in the year 1919 by Jack Cohen in Hackney, London.
Strategic planning for Tesco by application of different models There are different strategies that businesses can use in order to attain their goals and objectives effectively. These strategies can help the respective organization, i.e., Tesco to attain desired results. The strategic model for the company by using different theories is explained below- Porter’s Generic Strategies Bowman’s Strategy Clock
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Cont… Porter’s Generic Strategies It is a set of strategies that can guide an organization about how can it gain a competitive advantage against competitors in the market. The three strategies are as Cost Leadership, Differentiation and Focus Strategies. Cost Leadership –If a company adopts this strategy, the min objective behind the same is to become the lowest cost producer in the market. Tesco can adopt this strategy and offer its products and services at the lowest price possible.
Cont… DifferentiationStrategy–Differentiationstrategyinvolvesmakingthe products and services innovative and different from other companies in the market. In order to gain competitive advantage through this strategy, an organization should carry out a research about its competitors as well as adopt different ways to promote products so that the customers will understand the benefits that the company is trying to market.
Cont… Focus Strategy –Companies that adopt focus strategy primarily focus on a particular market, understand the unique requirements of the companies and accordingly develop specific products that are priced at affordable rates and are not heavy on the pocket. Also, since these organizations cater to a particular market, they have a high brand loyalty among customers. If Tesco adopts this strategy, it will be able to stand out in the market against competitors.
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Cont… Bowman’s Strategy Clock It is a strategic model that can be used by organizations to analyze their competitive position as compared to different competitors. The model was developed by Cliff Bowman and David Faulkner. The primary focus of the model is on making companies aware of their position within the market. Low Price and Low Value Added –It is not compared to be a very competitive position for a company. The product is not differentiated and the customers do not have a lot of information about the products and services of the company.
Cont… Low Price –Tesco does not charge a very amount of its products from the customers and is thus considered to be a low-cost leader in the retail market. The profit margins on every product of the company is low but the volume of output is high. Hybrid –This position involves some part of low price as well as some part of the differentiation. If value is consistently provided to the customers, this position can prove out to be very effective.
Cont… Differentiation –The main focus in this position is to provide products that are of high quality and require strong brand awareness. Branding as well as the quality of products play a major role in this strategy. Focused Differentiation –The main objective of this position is placing the product at high price levels due to which the customers buy the products due to their high perceived value in the market.
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Cont… Risky High Margins –This position involves high risk wherein a business sets high price of products but does not provide anything extra. Monopoly Pricing –In this strategy, the organization offers a specific and fixed price for particular range of products in the market. Loss of Market Share –In this strategy, the customers do not purchase the products of the company because of their high prices which therefore, leads to a loss in the market share.
Strategic Management Plan Mission –The mission statement of Tesco is to make products that are better than its competitors. Objectives –The primary objectives of Tesco are – To provide its various products like groceries, clothing and electronics online to the customers. To develop a seamless online shopping experience for its customers.
Cont… Strategy –The respective company has adopted differentiation as well as hybrid strategies to be able to stand out from competitors in the market. Tactics –The company can make use of a business plan that can guide it in achieving goals and objectives. Tactics that the company can adopt are reviewing the business plan from time to time as well as partner up with different competitors.
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Interpretation of information and data It can be interpreted that Tesco can make use of different tactics so as to gain a competitive edge and be able to stand out in the market. For example, the company can carry out a market research to analyze the performance of competitors. Also, it can use a business plan that can help in formulating effective strategies and monitor its performance.
Conclusion From the presentation, it can be concluded that in order to develop effective strategies, a company can make use of various model, theories and concepts. Theywillnotonlyhelpitingainingcompetitiveadvantageagainst competitors, but also improve productivity. Various models that can be used are Bowman’s strategy clock and Porter’s generic strategies. A strategic management plan can also be used as provides direction and also outlines goals and objectives.
References Chen, Y., Eshleman, J. D. and Soileau, J. S., 2017. Business strategy and auditor reporting.Auditing: A Journal of Practice & Theory. 36(2). pp.63- 86. Johnson, G., 2016.Exploring strategy: text and cases. Pearson Education.
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