Business Strategy for Tesco Plc.

This report discusses the business strategy for Tesco Plc. including PESTLE and SWOT analysis, competitive environment analysis, and valid strategies to achieve overall objectives. The report also evaluates different types of strategic directions available to the firm and provides recommendations for appropriate growth using Ansoff matrix strategies.

BUSINESS STRATEGY

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Part A:..............................................................................................................................................3
Analysation of the pestle and the swot analysis of the company and evaluation of the resources
and the capabilities in the context of the organization “Tesco Plc.”:..........................................3
Analysing the competitive environment of the firm by using the porter five force analysis in
the context of the firm “Tesco Plc.”:...........................................................................................5
Justification of the organization's potential competitive advantage in the context of the firm
“Tesco Plc.”:................................................................................................................................6
Analysation of the valid strategies to achieve the overall objective of the firm:.........................7
Part B:..............................................................................................................................................8
Evaluation of the different types of strategic directions available to the firm “Tesco Plc.”:......8
Recommendations related to the appropriate growth by using the “Ansoff matrix strategies”
for the firm “Tesco Plc.”:...........................................................................................................10
Analysation of the Ways and means by which strategies can be monitored for the firm “Tesco
Plc.”:...........................................................................................................................................11
CONCLUSION..............................................................................................................................12
REFERENCES................................................................................................................................1

INTRODUCTION
The business strategy works as the outline for the actions and for the decisions a
company makes achieve the goals and the overall business objective of the firm. The report
based on the company Tesco plc. A multinational retailer of the groceries and general
merchandize operates with its headquarter in the Welwyn Garden City, England, United
Kingdom (Farrukh, and et.al., 2020). The firm operates with around 367321 numbers of
employees. The report based on the business strategy will be phrasing the topics related to the
pestle and swot of the company, competitive environment of the company, justification related to
the potential competitive advantage of the company and strategies related to the overall business
objective of the firm. Report will further show about the different types of strategic directions of
the company and about the appropriate growth platforms of the company. Later means and other
ways for the success will be evaluated in the report.
MAIN BODY
Part A:
Analysation of the pestle and the swot analysis of the company and evaluation of the resources
and the capabilities in the context of the organization “Tesco Plc.”:
Pestle analysis:
Political factors:
The company operates as the biggest retailers and that leads the company to follows different
political regulations of the different countries that might put company under dilemma sometimes
(Adamyk, 2019).
Economic factors:
Company needs to observe the factors in the economic changes every time as it might affect
company's revenue, distribution process and sales in some cases.
Social factors:
With the fast pace in the lives, the company needs to keep up with the changing social trends in
the market to be in the business run and keep the customers attracted towards the business.
Technological factors:

In the accordance to the changing trends and technological advancements, the firm needs to be
more aware about the change in the technology and adopt it to let the company enjoy the
benefits.
Legal factors:
Changing governmental policies directly affects the business operations. The company needs to
be active in adopting the policies to facilitate the smooth functioning (Alanzi, 2018).
Environmental factors:
The company should adopt the environmental norms to protect the environment and must adopt
the 3R strategy of reuse, reduce and recycle to create the sustainable environment.
Swot analysis:
strengths of the firm:
The firm operates as the biggest retailer by having the diversified business with huge range of
products and services. Company follows out the new advance packaging techniques with
personal labels with the brand equity and another level of the customer differentiation in the
market.
Weakness of the firm:
The company's weakness are the things that helps it to improve in the future, but weaknesses of
the firm are that its faces the different lawsuits and legal issues impacting the brand image.
Company operates with it limited presence in the countries not like its competitors.
Opportunities of the firm:
Firm have the opportunities of the getting into the emerging markets and grow their business by
acquisitions with the smaller chains to boost up the business (Teoli, Sanvictores, and An, 2019).
Threats of the firm:
Organization can face the threats from the substitute that can imitate their products. New
governmental policies can affect the business of the firm.
Vrio analysis to show resources and capabilities of the firm:
Valuable:
 The firms financial resources are valuable as it helps in investing for the further
opportunities arising in front of the company.

 Company's food products are highly valuable resources as these are differentiated along
with its patents.
Rare:
 Having the highly capable employees is a rare resource for the company due to their
capabilities and skills (Ariwibowo, Saputro, and Haryanto, 2021). The distribution network of the company is the rare resource as its competitors needs
more and more investment to come with the better distribution network.
Imitable:
 Patents of the firm is very difficult to be imitated as it not legally allowed to imitate a
patent product. The distribution network of the firm comes as costly one so it cannot be imitated.
Organization:
 The financial resources of the firms are organized and captures the value and are used in
right place.
 The distribution network of the firm is organized and it uses it for networking in the
market.
Analysing the competitive environment of the firm by using the porter five force analysis in the
context of the firm “Tesco Plc.”:
Threats of new entrants:
By operating as the biggest retailer, the company face the main threats from the new entrants.
But in this case the new entrants might find it difficult to bulk out this big position as the firm is
already having the organized distribution chain and is a big player. The company also have a big
labour force, management teams. This help the firm is on the big side and new firms might find it
difficult to put these efforts. Thus, the firm is having low force of the new entrants (Bruijl, and
Gerard, 2018).
Threats of substitutes:
The company faces the minimum value of the substitutes as the firm deals in groceries,
electronics, clothing and petrol that have demand whole year. This means that stock can be
replenished once it is exhausted. Pricing of the products also works as the another factor that
cannot let the substitutes to enter the market as the company gives the products with the finest

levels this also lower downs this threat of the firm by giving the upper hand to the firm to be in
the market run and be above the competitors.
Bargaining power of the customers: this is the concerning factor for the company because of the
competing retailers in the market. The products offered are mainly those that fulfils the basic
needs this can lead the customers towards that store having more of the economies of the scale,
but the prices for such products keep on changing. The quality of the products across the stores
are also considered to be the same. But the switching cost for the products of the firm is low that
develops the minimum hope of the developing the loyalty with the customers.
Bargaining powers of the suppliers: the suppliers have less power when it comes to the
organization's supplier count. As, the firm can have plenty of different options to switch and this
does not come as the big task for the retailer like Tesco. The negotiation power vests over here
and haves the upper hand by closing the deal with the decided price. These all circumstances
allow all the firm to select the product from those suppliers who have low prices. This thing
makes the bargaining power of the suppliers weak in the case of the firm.
Competitive rivalry: the firm operates with lot of competitors in the markets like Sainsbury,
Asda, Walmart, etc. these all firms are well-established firms and have huge chains of managing
its different activities like the production, distribution, etc. These all firms works with the strong
work force in the market, and they often face insane price wars due to same range of products.
Hence, the tactics that the firm implies are always, and can be replicated by the competitors.
Justification of the organization's potential competitive advantage in the context of the firm
“Tesco Plc.”:
There in the markets there are hell lot of competitors of the firm in the markets of every firm and
in every industry. The term that helps in differentiating the organization from other firms is the
competitive advantage of the firm. Competitive advantage can be experienced by the firm when
it develops the different combinations or the sets of attributes that helps the firm in getting over
the competitors in the market. Competitive advantage can be felt by adopting the modern
advancements in the technical fields like using of the robotics, automation, artificial intelligence,
etc.
The firm operates with having the modern day competitive advantage in the market run.
Organization operates by having one of the strongest brand name in the fields of the retailers.
The company have their own distinctive way of marketing that differentiate them from that of

their competitors. Company have large variety of the product range and gives their customers
multiple options to buy their products this makes the company more distinctive from their
competitors and allow the firm to enjoy more of the brand value and increased profitability in the
business (Hagiu and Wright, 2020).
By operating under the competitive advantage and above from the competitors this led
the firm to enjoy the profitability. This also can help the company if the firm reduces their cost
and manage their logistic organization by enjoying the cost leadership. To maintain the
advantage of the cost leadership the firm can have the low price range of their products and can
serve the broad market area with the lowered prices then that of their competitors. The
maintenance of the cost leadership in the market will allow the firm to create the brand loyalty.
Tesco have one of the best advantage of the modern era that is firm uses the internet for
the maintenance of the stocks and taking the orders and delivering them in the markets on the
different spots like to the supermarkets, retail stores, customers, etc. the firm also uses the
modern ways for the maintenance of their business operations. The IT department of the
company have taken a big role in the gaining the advantage in the business run. These
competitive advantages of the company can help the firm in creating the priority in the relevance
of their firm in the markets and creates more beneficial and hiked brand value in the markets and
to have good collaborative services with their fellow members.
Analysation of the valid strategies to achieve the overall objective of the firm:
 Setting smart goals: the company can set of the smart goals, that can help the firm in
increasing the profitability and that will be helping in achieving the company goals. The
smart objectives of the firm can be defined in the way like: The company can set these
goals in the way like they should in specific manner, to be described in details in
measurable way, that should be in the relevancy with the company's values and to be in
the time bounded way.
 Creating clear action plan: the company can create a plan that can be in the prescribed
manner, is relevant with the firm's goals and objective. The firm must have a meet up
with the overall authorities of the firm that can help in creating a more powerful strategic
plan that will help in achieving company's goal and have the increase in the profitability
of the firm. Authorities must carve all the activities under the single plan that will be
coming under the plan to achieve the objective (Chapple, 2018).

 Mitigating the distractions while trying to achieve the business objective: the firm
must turn around to the business with the focused mentality and urge the staff members
of the company to work accordingly in the way that is enough tough to achieve the
business objective by making the conscious efforts to cut off the distractions and get the
rid out of them to give the outstanding performance in the business run achieve the
business objective. The firm must keep with the staffs of every department of the firm
that helps in attaining the goals established by the firm.
 Employ efficient time management: the firm can achieve the objectives and the goals
established once it works with the proper time management. By managing the time in the
accordance of making the efforts can help the firm in achieving the business objectives
on the fast pace and get better results. By improving the time management in the firm it
will help in prioritizing the things for the better stability of the organization and helps in
figuring out the what task should be performed first.
 Applying the Pareto principle: this is the principle that helps the firm in achieving the
objective on the basis of 80:20 rule like around 80% of the sales of the firm are to
obtained once the company focus is on the other key element of the left out 20% that are
the customers of the firm. This can be done by figuring out the small set of efforts to help
the firm in bringing out the big results.
By adopting these steps the firm would be working in the beneficial ways and the overall
business objectives of the related to its competency, reliability and the overall brand image in the
market can be achieved in the distinctive way and firm can enjoy competitive advantage over its
competitors and can enjoy more of the profitability.
Part B:
Evaluation of the different types of strategic directions available to the firm “Tesco Plc.”:
The strategic directions are the plan that helps the firm to get the progress towards the vision and
the mission of the company. The strategic directions related to the firm are as under:
Differentiated brand: the firm is the brand that invest in building more loyal image in the eyes
of the customers and get differentiated with the products and the services they offer in the market
with the great quality and with own labels and branding in the market is helps the firm in driving
through the customer experience and with the reasonable prices (Zahorskyi, and et.al., 2020).

Reduced operation cost: the firm have reduced the cost of operations and have saved around the
1.5 billion euros by having the opportunities to simplify the operations of the stores of the firm.
This led the firm to take the improvement of the services to the utmost priorities by serving the
customers with proper satisfaction. This also helped the company in improving the stock flow
and firm purchased various goods and services that made the firm to drive through proper
directions.
Generation of the profits: the organization operated in the efficient direction that helped the firm
in generating good profits from the operations. The firm focused on the capital discipline that
helped the firm in improving the cash flow in the business. This also helped the firm in
improving the balance for their long term investments that might help the firm in delivering more
cash.
Maximizing the mix to achieve margin: maximize the mix means looking at the full picture of
everything the firm do to ensure that they are delivering great service for their customers, and
driving growth in areas that are delivering sustainable profits to achieve margin in the financial
years of their operations. This also helps the firm in serving with the wide range of services to
their customers.
Maximizing the value from property: the firm drive there business through the property
portfolio. These all help them in generating the revenues by optimizing the freehold and
leasehold mix of the business. Settling the space in stores, parks and malls help the organization
in improving the sales of the business. The firm got the opportunity of selling the air rights to the
small numbers of the shops to build in the residential properties by working with different
developers.
Innovation:the company drove through the innovation by going to the different trends of the
customers and the firm operated with the great range of the product with the bringing in the great
quality to the customers. With the innovation the company can maintain the relationship with the
customers.
These all factors help the company in drive through the competition and make the business win
in the competition with its competitors and have the huge presence in the market. This also help
the business in creating the brand image in the market and take the best strategic direction by
accomplishing the mission of the company that is “serving our customers, communities and
planet a little better every day”.

Recommendations related to the appropriate growth by using the “Ansoff matrix strategies” for
the firm “Tesco Plc.”:
Market penetration: This approach is used by the companies within the market that have the
least risk. In this strategy, an organization expand their market share by increasing the sales of
their existing products in the present markets. This approach is considered as least risky as the
organization is well versed with the products and services offered by them in the markets. They
know the taste, preference of the customers and also their demand related to the product. Thus,
by following this approach of growth the company have the least risk of failure (Dawes, 2018).
Market development: This strategy works by aiming to increase the customer base of the
company by selling their existing products in to the new market. In this kind of strategy, a
company aims at expanding its market by target a different group of customers of new market, or
by working internationally. As, the organization is well diversified with their existing product
range, this gets easy for them to target another range of customers in the new market and thus
helps the organization to grow.
Product development: under this strategy organization plans to innovate new product either by
introducing a new product or by modifying their existing product range. To work under this
approach, the organization might plans to invest in the research and development department for
the development of the new product to introduced with in the markets. In some of the cases. The
company can also purchase the patents of the different companies and can sell their products in
the markets. This helps the companies to move towards the achievement of the goals and its
objective related to the business (Cleberg, 2019).
Diversification: the term diversification refers to introduction of a new product into the
complete new market with the purpose of expanding a business and increase its profitability and
revenue generation. The approach is said to be one of the riskiest approach for business
expansion as the company plans to introduce completely new range of products into a different
market. Here, the business is at risk because the company might face failure if the new product
does not get successful in complete new market.
Recommendations:
One of the best strategy that will help the Tesco Plc in enhancing their sales and help the
company in growing and expanding is the market development approach. This approach will

allow the company to introduce and launch its existing offerings in to the new market outside of
the local boundaries. Using this approach for expanding the business will also help the company
in expanding the market of the firm, also helps in increasing revenue and profits and help
organization to get the growth out of the local boundaries.
Analysation of the Ways and means by which strategies can be monitored for the firm “Tesco
Plc.”:
Financial metrics: An organization that wants to measure and monitor the performance of a
company in the market can look in to the financial statements of the company. A financial
metrics measures sales and profitability index of the company in order to ensure the growth and
development of an enterprise. The net profits of the company is the part of the financial metrics
as it presents a view in terms of the profit by excluding all the expenses, taxes interest and other
expenses of the company (Ali, and Anwar, 2021).
Customer metrics: this helps in measuring the customer efficiency of the organization, and
level of customer satisfaction. There is a customer lifespan value metrics that helps an
organization in deciding the total amount that the company expects its customers to spend on its
products in the span of business and the other one, customer acquisition cost presents a
comparison between the total sales and the market cost of a company in order to acquire a new
customer in the market.
Process performance metrics: this metrics helps in measuring the operational performance of
the company. Under this, the company divides the number of defective pieces by the total units.
In this, the enterprise keeps on working in order to reduce and minimize the number of defective
pieces of the company. The total time taken by the company states the total time consumed by
the company in order to carry out a particular process.
Thus, it can be stated that these key performance indicators can be utilized by an
organization Tesco Plc. To monitor and measure the performance of an organization by
determining the growth.

CONCLUSION
The report based on the business strategy has concluded about the pestle, swot and vrio
analysation of the firm (Al Ahbabi, and Nobanee, 2019). The report also shows about the critical
evaluation of the porter five force analysis. The report shows about the potential competitive
advantage of the firm and strategies to achieve the overall objective of the firm. Further, the
report shows about the strategic direction and appropriate growth platform and the ways to
monitor the growth under this strategy.

REFERENCES
Books and journals
Adamyk, K., 2019. PESTLE Analysis on Tesco PLC.
Al Ahbabi, A.R. and Nobanee, H., 2019. Conceptual building of sustainable financial
management & sustainable financial growth. Available at SSRN 3472313.
Alanzi, S., 2018. PESTLE Analysis. Project Management.
Ali, B.J. and Anwar, G., 2021. Business strategy: The influence of Strategic Competitiveness on
competitive advantage. International Journal of Electrical, Electronics and
Computers, 6(2).
Ariwibowo, P., Saputro, F.B. and Haryanto, H., 2021. Analysis of Strength & Weakness, Using
the Concept of Resource-Based View with the VRIO Framework in Sharia
Cooperatives. Jurnal Manajemen Strategi dan Aplikasi Bisnis, 4(1), pp.279-294.
Bruijl, D. and Gerard, H.T., 2018. The relevance of Porter's five forces in today's innovative and
changing business environment. Available at SSRN 3192207.
Chapple, K., 2018. Just growth: Strategies for growth with equity.
Cleberg, C., 2019. Strategic Success: The Ansoff Matrix vs. The Balanced Scorecard.
Dawes, J., 2018. The Ansoff matrix: A legendary tool, but with two logical problems. But with
Two Logical Problems (February 27, 2018).
Farrukh, M., Meng, F., Wu, Y. and Nawaz, K., 2020. Twenty‐eight years of business strategy
and the environment research: A bibliometric analysis. Business Strategy and the
Environment, 29(6), pp.2572-2582.
Hagiu, A. and Wright, J., 2020. When data creates competitive advantage. Harvard business
review, 98(1), pp.94-101.
Teoli, D., Sanvictores, T. and An, J., 2019. SWOT analysis.
Zahorskyi, V.S., Lipentsev, A., Mazii, N., Bashtannyk, V. and Akimov, O., 2020. Strategic
directions of state assistance to enterprises development in Ukraine: managerial and
financial aspects. Financial and credit activity problems of theory and practice, 2(33),
pp.452-462.
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