Business Strategy Assignment | TESCO

Added on - 21 Feb 2021

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BUSINESSSTRATEGY
Table of ContentsINTRODUCTION...........................................................................................................................1P1. Macro environmental analysis.........................................................................................1P2. Internal Analysis..............................................................................................................6P3. Porter Five Force Model..................................................................................................9P4. Strategic Planning..........................................................................................................11CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................14
INTRODUCTIONBusiness strategy is defined as the alignment of company with its goals and objectives bymaking use of tactical and strategic course of action. Through the usage of a business strategy, anorganisation intends to enhance its share in market place as well as its positioning so as to stayahead of the rival firms prevailing within the same sector (Bell, Bryman and Harley, 2018).When the strategy of a corporation is effective and strong, this tends to provide a competitiveedge to entity and provides the enterprise with a scope to capitalise upon its internal and externalstrengths as well as opportunities.This report is conducted upon TESCO to gain comprehensive knowledge of itsorganisational strategy. TESCO is a well renowned brand within the British retail market andoperates successfully at the top position in UK by relying upon its diverse product portfolio. Thisreport includes the internal as well as external analysis of entity with the help of various theoriesand models. Further, it constitutes the strategic choices as well as the selection of mostappropriate one for the entity. Lastly, a strategic management plan is included.P1. Macro environmental analysisIt is essential for a business organisation to constantly analyse its external environmentwith a view to devise the strategies for the company. In this regard, the management team ofTESCO has carried out PESTLE analysis as this helps to gain knowledge of the impact ofexternal factors upon the working of entity.PESTLE AnalysisThis can be defined as a strategic framework that lays out the influence of macroenvironmental factors upon a business organisation. PESTLE of TESCO is as follows:-Political Factors:This consists of policies and procedures laid down by the political system of a country. Itconsists of taxation and fiscal policies, trade tariff, etc. Being a stable country, UK benefitcompanies such as TESCO with its consistent policies and regulations and helps them to ensurelong term, sustainability within the market place (Cavusgil and et. al., 2014). TESCO is alreadyat the top position of UK and thus political factors assist the entity to enhance its market share.1
The major goal of an entity is to go global and facilitate expansion. Thus, if this entity enters acountry where the political system is unstable, it may have to face adverse consequences.BREXIT has resulted in fall of value of pound which imply negative consequences for all thesectors of UK. This reflects that TESCO would also be impacted by BREXIT in case the effectsof this phenomenon are not effectively tackled by the organisation. Tariffs and taxation policiesare also to be duly considered by TESCO and company has to operate in its confine or it mayhave to face severe consequences.Economic Factors:This consists of factors associated with economy of a nation such as interest, savings,foreign exchange and inflation rate which have a massive impact upon the operations andfunctioning of a company. TESCO takes into due consideration all these economic aspects so asto sustain in market for a long term and is largely benefitted by the strong economy of UK.Further, the share of the respective organisation within UK is ascertained to be 30% whichsignifies that a negative economic change within the nation may have severe consequences forthe entity (PESTLE Analysis for Tesco discusses its Business Environment,2019). To deal withthis, TESCO should constantly carry out research the economy of United Kingdom so thatchanges can be detected at an earlier stage.Further, the relationship of USA and China isdeteriorating which presents threat for this entity as both these countries are a major source ofrevenue for TESCO.Social Factors:This consists of the demographical aspects such as latest trends and lifestyles patterns ofpeople.The population of UK have grown their likelihood towards bulk and one-stop shoppingexperiences. Taking this into account, TESCO has increased the quantum of its non-foodcommodities. Also, it has introduced organic food items for the health conscious segment ofpopulation (Brewster, 2017). The people of UK are aware of the latest products and techniquesprevailing in market and thus desire offerings of high quality and involving innovation. Thus,TESCO should keep launching new products at regular intervals to keep the customers satisfied.Further, changes in climatic conditions would pose threat for TESCO as this would imply severefluctuations in demand for food items sold by entity.2
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