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Business Strategy - Tesco Assignment

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Added on  2021-02-21

Business Strategy - Tesco Assignment

   Added on 2021-02-21

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BUSINESSSTRATEGY
Business Strategy - Tesco Assignment_1
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1TASK 2............................................................................................................................................4TASK 3............................................................................................................................................6TASK 4............................................................................................................................................7CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................11
Business Strategy - Tesco Assignment_2
INTRODUCTIONBusiness strategy is defined as the set of tactical decisions which direct the actions to betaken in order to achieve competitive edge. These set of actions provide a direction in whichorganisation must move in order to deal with threats present in market and availing theopportunities for further growth or success (Bell, Bryman and Harley, 2018). TESCO is a largerBritish multinational organisation which is headquartered in London, UK. It is discount retailerwhich offer several product categories like grocery items, clothing, electronic, furniture,software, petrol, toys, financial services etc. This report contains information regardingevaluation of macro environment and ansoff matrix for external environment evaluation alongwith VIRO to determine internal capability. It also describes porter's five force model along withporter's generic to formulate effective strategic plan for achieving competitive edge. TASK 1Business growth and success depends upon the strategic decision an organisation takes inorder to perform its operations effectively. But for formulating effective strategic decisions, it iscrucial for TESCO to consider forces that are present in external environment which have directinfluence over the operations performed by them (Brewster, 2017). Hence, for performing macroenvironmental analysis, a strategical tool is used, i.e. PESTLE which perform evaluation of 6macro-environmental factor to determine the opportunity or threat present in externalenvironment that may influence organisational performance. The PESTLE analysis of TESCO ismentioned below: -Political: - It evaluate the current state of government and changes in political policiesthat affect business operations. The political situation of UK is stable and government of UKmaintains good political relation with US and many other countries along with having permanentmembership in UN. This is the greatest opportunity for TESCO as it can expand its tradepractices in these countries and maintain it for longer duration which ensures higher flow ofprofit as well as growth. Economic: - It perform evaluation over the factors like Forex rate, inflation-deflation,taxes etc. UK considered as 5th largest economy in world and it considers as popular destinationfor FDI which is a biggest opportunity for TESCO as it can get investment from the foreigninvestors much easily for the business (PESTEL analysis of the UK, 2019). 1
Business Strategy - Tesco Assignment_3
Social: - It involves analysis of factors like customer taste, preferences, cultural influenceetc. that directly influence the buying behaviour of customers. UK considers as big consumermarket where it holds the population of 66.4 million recorded in 2018. Among them 18% peoplewere 65-year-old while 2.4% population is 85 or over it. Hence it is a greater opportunity forTESCO as it offers one-stop solution where range of household products can be access by peopleat a time which old age people mainly seeks. Technological: - It involves analysis of factors like advancement and up-gradation thattakes place within the technological environment and its influence over business. UK is mosttechnological advanced country in which London is a big hub of technology (Cavusgil and et. al.,2014). Though it is a positive factor for TESCO as it gets easy access to advancement but, themajor threat which company hold is that there are majority of big retailers like ALDI, ASDA,M&S etc. which provide high competition to TESCO. As these rivals are technological advancedwhich increase the parameters of competition for TESCO. Legal: - It involves legal aspects present in UK which need to consider by retailersoperating in country such as employment law, consumer law etc. UK government is strict towardthe implementation of laws and standards formulated for retailers (PESTLE Analysis for Tescodiscusses its Business Environment. 2019). This is biggest threat for TESCO as Food RetailingCommission has brought a new code of practice and if TESCO fails to comply with any kind ofstandard then, it directly influences the reputation of company. Environmental: - The businesses that are operating as a part of economy are required toperform their operations in interest of environment and society in order to survive inmarketplace. UK government put emphasis toward ensuring that organisations must involve insuch practices that leads to CSR, recycling, saving nature and reducing negative impact. This isthe biggest sustainability opportunity for TESCO as it has taken an initiative to reduce carbonfootprint and minimise its wastage within outlet which support in achieving higher goodwill.Ansoff matrixIt is a strategical tool which is based on four strategies that help in formulating futurecourse of action for further business growth and development (Chang, 2016). After evaluatingthe macro environmental factors, TESCO must focuses toward evaluating strategical practicesthat it can adopt for achieving sustainability in marketplace. Current company is using marketpenetration strategy in order to maintain larger market base. But, in order to further enhance its2
Business Strategy - Tesco Assignment_4

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