Business Strategy Assignment Solution - Tesco plc

Added on - Nov 2020

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Business Strategy
Table of ContentsINTRODUCTION...........................................................................................................................1P.1. Analyse the macro environment for Tesco Plc...............................................................1M.1.Critically analyse the macro environment in order to determine as well as informstrategic management decision...............................................................................................4P.2. Analyse the internal environment and capabilities of Tesco Plc....................................5M2 Analysis of Internal factors.............................................................................................7VRIO analysis on Tesco.........................................................................................................8P3 & M3 Porter’s five forces model.......................................................................................9P4 & M4 Theories, concepts and models for strategic planning.........................................12Corporate-level strategy......................................................................................................14CONCLUSION.............................................................................................................................14REFERENCES.............................................................................................................................15
INTRODUCTIONBusiness strategy is the means by which it sets out to achieve its desire goals andobjectives. It is long termed planning of the business. Business strategy is concerned with themajor issues such as raising the finance in order to build a new factory or plant. The mainpurpose of business strategy is to set entire goals of the business as well as develop a plan inorder to achieve them. It is very essential for the all the businesses or companies to make thestrategies of business so that the best direction of the future will be determine. In this presentreport, Tesco plc will be chosen for assessment. It is a retailing industry which is the thirdlargest food retail company in United Kingdom. This company was founded in 1919 by JackCohen. Its headquarters are located in Tesco House, Shire Park, kestrel Way, Welwyn GardenCity and England. This present report will analyse the impact and influence which the macroenvironment has on an organisation. Furthermore, internal environment and capabilities of acompany will also include in this study.Mission-To become highly valued business by the customers they serve, the communities inwhich they are operating and shareholders.Vision-They make what matters better, together.Objectives-To supply the best and quality of products to customers.They treat all the stakeholders equally.They try harder to satisfy the needs of customers.P.1. Analyse the macro environment for Tesco Plc.The condition that exists in the economy as a whole instead of specific region or sector isknown as macro environment. The framework that is used to tract the impact of macroenvironment on the operations and functions of company is Pestle Analysis (Mahmood, Chungand Mitchell, 2017).Pestle analysis is an approach in order to determine those factors whichinfluence the profit and sales of company in both positive and negative way. Pestle analysis isthe best tool that is used by Tesco to determine the external factors that affects the planning,strategies of company as well as how organisation utilises its resources in order to gain morecompetitive advantages to survive in the market.. There are six elements which are includedwhich Political, Economic, Social, Technological, Environmental and Legal. Here are thefactors explained below-1
Political- This factors ascertain the extent to which government might influence theeconomy and industry such as government taxes, duties, policies, rate of unemployment andeconomic condition influence the profit of company in both negative and positive manner.Tescohas startedthe prospect of an EU referendum is causing uncertainty for capitalist, and this showsa “heavy pebble” placed in the scales of the British economy. Moreover, Tesco has alsobenefited from the promotion of free blocks of trading by the government of UK. On the otherhand,Positive effect:The political conditions of UK has stability as it runs under the power ofparliament system. There are plenty of opportunities for those which are operating in UnitedKingdom and it is only because of stable and fair political conditions (Kew and Stredwick,2017). For employment legislation the government has encourages the retailers in order toprovide people a mix of opportunities from lower, flexible and locally based jobs to highlyskilled as well as centrally located jobs along with higher paid jobs.Negative effect:there are some factors in UK political conditions that affects the entireeconomy in negative manner. For example, In 2014, a group of local council has askedgovernment formally for new powers to tax supermarkets and it becomes Tesco Tax and it isrefused by the government of UK in order to avoid rise in the prices and it affects the Tescobadly.Economic- This is another most important factor that affects the entire operations andfunctions of company. The economic conditions of UK has string economic position. The GDPof country is very high as it is 5thhighest rank in the world and it is a developed country. Theeconomic issues are very less. Thus, the purchasing power is also increases because they are veryconfident about the present financial conditions.Positive effect:The population is very large but still it is very profitable for the allcompanies to raise its position and revenue in the market. Tesco plc is very attentive towards theeconomic factors and it influences the buying behaviour of the company. However, the economyof UK in 2008 has declared under recession officially, the rates of interest was reduced by thegovernment of UK which helps to decrease the rate of unemployment during 2009.Negative effect:there are some factor related to financial condition that affects the Tescorevenue and sales adversely because customers are not interested to spend money on premium2
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