Business Strategy

This report discusses the importance of business strategy in promoting growth and expansion of companies. It covers topics such as macro environment framework, internal environment factors analysis, Porter 5 force analysis, and strategic directions. The report focuses on Tesco, a leading retail company in the UK, and provides insights into its strategies and market position. Get study material and solved assignments on business strategy at Desklib.

Business Strategy

TABLE OF CONTENT
TABLE OF CONTENT.........................................................................................................................2
INTRODUCTION.................................................................................................................................3
LO1.......................................................................................................................................................3
P1 Macro environment framework....................................................................................................3
LO2.......................................................................................................................................................6
P2 Internal environment factors analysis...........................................................................................6
LO3.......................................................................................................................................................7
P3 Porter 5 force analysis..................................................................................................................7
LO4.....................................................................................................................................................10
P4 Theories and conecpts to analyse and inerpretation of staretgic directions.................................10
CONLCUSION...................................................................................................................................12
REFRENCES......................................................................................................................................13

INTRODUCTION
Business strategy refers to various plans and policies of company that promote growth
and expansion of business across various nations. Macro factors refers to external and
internal factors that impact on overall growth and expansion of business so company need to
frame effective strategies and plan so that best outcome can be gathered. Internal factors
such as organisational culture, structure and employees that are offering different services
and products to customers can helps firm in gaining competitive advantages and protect itself
from various threats. This report is about Tesco which is one of the leading firm in UK
having large market share, resource and capital to operate its business in retail industry. The
report discusses about macro environmental factors that impact on Tesco operation through
use of Pestle model so that effective strategy can be formulated. Swot Model is used to
analysis internal strength and capabilities of firm whereas Porter five force model is used to
evaluate level of competition within industry. At last the report has use porter generic
strategies and Bowman model to formulated effective strategies so that company can
maximise its profitability and sales volume.
LO1
P1 Macro environment framework
Business strategy is one of the high functional strength onto which global companies
are highly stressing for occupying strong position among other competitive industry to gain

strong customer base goodwill and high profitability marketing position. The global business
strategy has been highly adaptive with latest thresholds to gain high functional strength,
optimum use of resources and technical efficiency among delivery of various products. Tesco
is one of the biggest high quality production retail company producing large portfolios of
innovative products and services on global parameters. Tesco being one of the biggest retail
companies offering large portfolio of products and service to world customer segments and
has high goodwill, strong position among industry has high performance standards among its
product delivery. The macro environment is one of the most important factors which
companies have to analyse for strong business standards among other brands to enable large
customer base formulation. Pestle analysis is the most important framework through which
companies gain knowledge on various aspects of how macro environment affects for long
term vital usage and goodwill formulation (Akter, Wamba, and Childe, 2016).
 Political factors: Tesco faces huge impact from external parameters of political imbalance
within UK and its exports to European union countries where the raising tariff barriers and
the increased taxation has changed the price graphs variably. Political factors explain the
need to high strategic planning for formulation of end target growth among large customer
base, high expansion into new countries market segments. Political factors has been highly
important for gaining strong position among competitors within the external framework,
where countries demographical situation brought high impact on sustainability of business
and revenue generation.
 Economic factors: The changing economic situation with less disposable income factors
among consumers within UK scenario has been large changing factor for Tesco to expand its
international horizons into larger scale markets. The prices of products need to be highly
strategically developed with the high economic parameter for gaining strong position among
consumers market share. The UK economic position, changing international demographics
for various parameters of economic situation has highly impacted retail industry companies
(Appleyard and Chesbrough, 2017).
 Social factors: The changing social factors where customer preferences are highly changing
with the demand of strong innovation, creativity factor and high relative demand for various
new quality parameters are the strong social factors which are impacting Tesco (The high
competition among marketers new brands and retail companies coming up within UK,
global position among various high paradigms developed which impacts the relative synergy
of Tesco. Tesco needs to strategically plan its marketing position with social factors keeping

in mind for gaining strong customer base of market share for long term goodwill and higher
profitability revenue margins among sales. Tesco also needs to invest in high customer
satisfaction services by developing various online market position segments, leveraging
various market sources and being highly available to customers for various products delivery
and high ethical business service. Socially Tesco needs to reinvest and functionally be strong
with latest determinants of production standards, marketing factors and high utilisation of
best resources to develop keenly new parameters.
 Technological factors: Tesco needs to highly invest in new technology frameworks,
production techniques and various parameters which reflect the strength of internal
production standards with the high competition among marketers. Technology factors are
highly important for gaining large customer base goodwill , strong relative services through
integration of high ethical production standards which will also potentially serve marketing
demands. Tesco through nee technology innovation can gain strong customer base
functionality, leverage new horizons and highly develop the overall functioning scenario.
 Environmental factors: Tesco has to upscale its CSR activities with the changing
environment factors among global parameters, with leverage of high reusable sources for
larger innovation. Environmental factors are highly important for Tesco with ther high
growth among competitive companies business situation where there has to be upgraded
functionality. Tesco may face the external barriers impact of which may also negatively
potentially lower the sales revenue from customer. The environmental factors are highly
important for companies to gain huge goodwill among various brands where there has been
high increase of investments coming up for performance into CSR activities (Burgelman,
Floyd and Whittington, 2018).
 Strategic management decisions are part of various high planning components for Tesco onto
which the external factors analysis plays an highly important role, for occupying large
demographics of customer base and high market share position. Strategic planning by
keeping in mind the various rational usage of strong innovative marketing factors will
enable Tesco to gain strong position among marketer and high profitability revenues.
LO2
P2 Internal environment factors analysis
Tesco being one of the best retail company in industry has various strong points
within its internal framework, along with various parameters of weaknesses, opportunities

and the various potential threats which may impact on long term business positioning. The
internal environment which are the micro factors for Tesco working within the company
standards have huge parameters and the various potential development horizons onto which
strategic planning can be taken for long term goodwill attainment. SWOT analysis is the
framework which recognizes various impacts of internal business factors where Tesco needs
to highly focus for higher goodwill attainment and larger customer base segments within new
expanded working horizons.
Strengths: The strength of Tesco is the high goodwill attained among global customer base,
large portfolio of high innovative products and large workforce which works as internal
strength for large scale productivity. The strength of Tesco is also the huge capital funds
within company which can be later highly used for further investment and functional
operations into larger marketing segments among untapped business segments and
international countries. Strength of Tesco is the large number of stores, varied large websites
portfolio and the high range of portals for shopping which are highly available for large
customer satisfaction and online presence among retail industry (Chang,2016).
Weaknesses: Tesco faces the weakness within internal structure with less skilled employees
working within company internal structure which highly impacts revenue growth parameters
for highly up scaling various new parameters. Tesco has also weakness of using old
technology frameworks which limits innovation funnel, creativity parameters and the very
rational use of high growth business segments for large competition among customer base
segments.
Opportunities: Tesco ahs further opportunity to leverage it services among stores with
various new departmental chains into new untapped countries market position., expand with
innovative products portfolio and bring forward new services. Tesco has the opportunity to
skill and train its employees working in company for larger cost effective usage of
technology, and keeping them motivated with strong dynamic leadership which will keep
them working for larger periods and successfully program new strategic goals. Tesco has the
opportunity to build diverse portfolio of various products and services where the customer
preferences should be highly constructed for larger business objectives, strong marketing
objectives (Cortimiglia, Ghezzi and Frank, 2016).
Threats: Tesco faces threats of high competition from external factors within the business
segments of global companies where various new brands are coming up with various high

strategic planning avenues. Tesco faces threats of unstable political scenario, high
competition among various new marketing parameters and the changing demands and
preferences of customers through which large customer segments need to attracted for larger
marketing efforts. There is large threat of changing economic situations among the various
parts of world which affects expansion decisions on long term basis and the relative
functionality for various business aspects. Tesco also faces threat of various external factors
which are the various new brands and companies coming up with various impactful customer
segments attraction for gaining huge market position segments.
Organisation internal capabilities structure, skill set are the various poetntail
development arenas onto which Tesco can develop higher growth revenue among large
customer base, gain huge optimum profits for larger time and keenly develop various new
marketing strength base on retail industry factors. Internal capabilities are the strength of
company for strong marketing position, higher market position parameters and various
fundamental targets positioning along with which Tesco can gain huge technical efficiency
among industry. Tesco with high market position and high functional goals can develop
various new targets onto which it can effectively implement strategic plans for long term
viable business services (Dodgson, 2018).
LO3
P3 Porter 5 force analysis
Porter Five force
The report further explains five force analysis factors which explains the various parameters
onto which higher productive target can be set for larger functional strength (Johnson, 2016).
It is one of the most important and necessary tool that is used to identify existing rivalry,
threats of new substitute products, new entrance and power of consumer and supplier.
Company by identifying all such factors able to effectively formulate business strategy to
gain differentiate positioning within market. Porter five force model is also used by Tesco to
analysis various factor that are present within industry so that it can achieved its
predetermined objectives and enhanced its market share . There are five force that determine
competitive intensity within particular industry in term of profitability such as Tesco operate
in retail industry so company has to identify existing competitors and threats of entrance
within industry so that it can gain competitive advantages.

 Threats of new entrants (medium ): Tesco faces medium threat of new entrants among retail
industry where there are various new companies coming up and brands of retail products
with new innovative products and services catering to high customer based services. Tesco
still has the differentiated strength of high capital funds within internal strength which
works as high determinant factor for gaining strong marketing position among various new
companies. Threat of new entrants can be impactful if company is not expanding its
business horizons into various new parameters, high growth marketing activities and
function optimum with latest resources for gaining strong position. Thus for gaining
competitive advantage Tesco must continuously bring improvements and innovation in its
services and product range. It helps to enhance the customer base and retention.
 Threats of substitutes (high): There is high threat of substitutes of retail products provided
by various new brands and companies in global industry where world parameters of
functional strength are very high. Customer segments highly look forward for various new
products, creative development funnel with high class strong innovation, creative
development of various new parameters through which Tesco faces tough competition
among its market share holders. Substitution power is affecting the current position of
Tesco as the high retail competition among industry is very high which impacts company
goodwill, strong financial records and the stakeholders working patterns on long term
functional arena where there has been low relative development by Tesco management
(Linder and Williander, 2017).
 Industry rivalry (high): Tesco faces huge industry rivalry among retail industry with various
new companies and global brands coming up with high integration of new technology
frameworks, high creativity of strong functional units. Tesco need to upgrade its
production standards and various relative utilisation if various new services into funnel of
working parameters into employees working within departments which will high ethical
functional utilisation of new resources and gather high up gradation of various new
relative upscale services. Tesco can productively beat industry rivalry with high
promotional avenues onto new resources which are highly available into social media
marketing platforms, where there is high demand for high synergy by customers into the
market demands. These factors are highly attributive to latest market demands by
marketers where Tesco by being actively available can gain high profitable marketing
position.

 Bargaining power of suppliers (low): The bargaining power of suppliers is very low among
suppliers of Tesco as there are individual channels of company build with strong
investment into high strong innovative quick supply chains by Tesco into various new
funnels. The bargaining powers of suppliers is low as Tesco as one of the biggest retail
company has huge positioning for itself among customers and the goods are reached into
stores within the set time periods and delivery among customers is also impactful as per
their preferences which do not impact negatively on Tesco reputation (Kharub and
Sharma, 2016). The bargaining power of suppliers being low works as an important set for
company high scale services being largely spread into numerous international marketing
horizons which makes it highly available for larger extended market segments (Rugman,.
and Verbeke, 2017).
 Bargaining power of buyers: The bargaining power of buyers is also not impacting the Tesco
financial strength and composition of sales management and various fundamental horizons
into which the functions are spread. Tesco has very low reliability among customers base
demands into prices, as the marketing position and goodwill is strong enough to keep
strong position for itself on long term base. Tesco has also large goodwill and internal
assets for high productive strength which can be used for high diversification into
untapped countries segments of international functional units. The customers do not hold
large power to curb the graph of company profitability downwards for Tesco as the quality
standards of products are highly correlated with latest determinants of customer’s
preferences which upscale its reputation among global set parameters and develop various
horizons onto which company can gain huge profitability. Tesco working records have
successfully shown that the brand uses strategic environment for its functional gaols
establishment among it prices which are highly stable for providing high ethical business
services. Tesco pricing strategies are highly focused with latest functional determinants of
customers where there is strong threshold and focus towards putting high competitive
marketing position with high effective pricing stage. Tesco working ethics are also an
integral part within this strategy for high focus towards high pricing strategy among
competitors, which ahs impacted its goodwill strongly (Teece, 2018).
Porter force Tesco Asda
Industry rivalry High High
Substitution threat High High
Threat of new entrant Medium High

Bargaining power of supplier Low Medium
Bargaining power of buyers High High
LO4
P4 Theories and conecpts to analyse and inerpretation of staretgic directions
The report further explains how strategic plans can be formulated for high position
strength among companies, the various steps under process and implementation of
technology for higher growth factors. Tesco bieng highly present to adopt to the latset
working parameter of the changing business world has been highly relevenat to various
innoavtive theories and craetive marketing models to upgrade its services with latest
strategic direction approach. The cpampny has been planning to deevlope its fucntioanl
units of productiuon standards with latest marketing paramters which are highly relevenat
with the changing business scaenrio, intergartion of latest technology and using best
optimum methods for bringing fowards new changes into strategic planning models.
Strategic model: Tesco can use following porter straegies to devise competitive benefits.
Cost leadership: For reminaing in competitive retail industry company must be able to
withstand high competition from organisations such as Asda, Sainsbury and Marks &
Spencer which are offering high discount and low price services. With cost leadership Tesco
can use low pricing strategy to enhance the market share and customer involvement.
Differentiation: Another straegic direction available for Tesco is differentiation strategy.
Organisation must differentiate in its product and service range so that customers can choose
its services over other available options. The differentiation can be in terms of service
delivery, product range and promotional mehtods. For instance organisation use multiple
promotional mehtods such as website and email marketing along with the social media
promtions.
Focus: With this strategy to increase the profitabilty Tesco must use focus strategies so that it
can emphasis on niche marekt and preferneces of targeted customers. The complete focus on
the targeted customers enhances their loyalty towards organsiation and weaknes the
competitive forces.

Approches to startegic directions plannig :
 Situational analysis: Tesco to build strong staretgic planning paramters onto future
paarmetrs have to focus towards iitailising the stretgic evalaution andf analysis of current
scenario o functioanlity, where the comapny is serving customers. Teco in sitiational
analysis will poetnatiolly develop various metrics for analysing how swot nad pestle factors
have look upto these paramtersb and how they can fundakmnetally aid foward to compny
for high innovative growth and effective distribution of products, services. Profile of
stakeholders analysis, the various aspects and delivery methods throgh whcih tesco has
been growing in history , and where the vision aims to be in future. For situational analysis
the comapny can use various metrcis to check its online market position among indsutry
where there are various retail brands comoing up with innoavtive structure (Hickman and
Silva, 2018).
 Future develoopment: Tesco for future deevlopment has to focus towards aim and vsion
formualtion in the upcoming business targeting periods, formukltae the high end strategic
objectives whcih arew the base for gaining strong market position. The future development
arena works as an importnat determinant which will enable in gaining strong competitive
place among industry brands where competion is high. This phase wil enbale Tesco to
keenly upgrade its working ethics and business gaols with the chnaging target fucntioality,
use besyt resources whih will further add to high quality outputs generation and devlopemnt
of strong profits for long tern prtofitability. Tesco can work forawrd within the future
development arena with formaultion of strong smart objectives with analysi of current
business scaenrio, latest technology paramters nad innovative marketing methods.
 Strategy deevlopment: This phase can be understood as essentail tool of the working
developemnt where comapny need to vitally invest for further working paramters, paln out
the further porogressive tools whcih will add to higher goodwill. Straetgy development
works as high asset for longer term goodwill and as an internal tool through whcih Tesco
can formualte higher business gaols, work with the latest data as analysed with the current
business scaenrio and bring fowrd varisus innaovative tools along with high ethical
fucntiaoning parmter for gaining strong position among customers worldwide. Strategy
development will enablke tesco to work towards the set parametrs and fucntiaol goals
strcuturatiuve planned methods with cost effective technology.
Tangiblle and tactical strategies: The training given to various employees will be used as
high determinant onto which comapny can hugely focus for bringing out high quality

production satndards. The resource planning is also an important component under this step
wherre the comapny can collectibely build its working strength ands program out the high
end fucntiaol units, use best technology stanadrds for higher growth in outputs (Hitt, Li, and
Xu, 2016). Tesco focuses towards promoting the best management practices, strategic
planning for gaining strong position among other brands by highly upgrading the standards
are changing within the macro environment. Tesco needs to upgrade its marketing segments
activities with new functional synergy of huge optimum functional units, large skilled
management teams which are not only an internal asset for company but also potentially
develop new marketing parameters. Tesco needs to gain high innovation and various new
functional units with large competitive cost effective technology for upgrading new services
among consumers with high satisfaction.
 Monitoring and evaluation: This is the last phase and most essenatail phase for develoing
strong parmeter of grwoth, strong working developemnt and genertaion of stroing keen
energy among people whcih are the poetnatil stakeholders for Tesco. Monitoring and
evaluation will enbale in gaining strong position among the retail brnad in industry,
fucntion morw actievly toswards market positioning of csutomer preferences. Evaluation of
strategic objectives as oragnised by various planning obejctives and set by Tesco
functioning goals will enable in structuring the realtive servies among high ethical
stanadards and the latest marketing trends by customers. The strategic plan formualtio will
have various tangible and tactical strategic objectives fomaultion of which, will potentaially
develop new relative services and program out the high parametes of growth into new
fucntioning arenas. There are also various objectives and startegic priorities whcih needs to
be upgraded with latest technology innpvation investemnt for yielding best high growth
services and fucbtionally leverage various new productive targtets .
These are the various strategic planning methods and fundamental steps which
will enable company to gain strong place among marketing threshold parameters in retail
industry for higher growth, expansion into new horizons globally and potentially develop
employees.

CONLCUSION
It can be concluded from above report that various internal and external environment
affect company operation so they need to be analysed for future growth and success of
enterprise. Pestle model is an effective tool to identify various external factors that influence
company profitability and sales. External environment of business affect positively and
negatively such as low economic growth has resulted in low sales and profitability. Whereas
changing customers trends and technological development has provide opportunities to
company toe expand their business across world to satisfied needs of customers. It can also
be concluded from above analysis that firm strength helps in effective utilisation of available
opportunities and remove of company weakness protect company from various external
threats such as increase competition. It can also be illustrated that porter five force model
helps in finding level of competition, power of consumers and supplier within particular
industry so that various business strategy. At last effective analysis of external and internal
factors has helps Tesco in effective expansion of business and satisfaction of customers need
by enhancing company market share and profitability.

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