Business Strategy for Tesco Plc: Impact of Macro Environment, Internal Environment Analysis, Porter's Five Force Model and Ansoff Matrix

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
Main Body.......................................................................................................................................1
P1. Appropriate models and frameworks to analyse the impact of macro environment........1
P2. Discuss the internal environment and capabilities using appropriate framework............4
P3. Discuss the Porter's five force model to analyse the competitive forces.........................5
P4. Discuss theories, models to interpret and devise strategic planning................................7
CONCLUSION................................................................................................................................9
References:.....................................................................................................................................10

INTRODUCTION
Strategy is the term that defines the actions that are taken in order to support the plans of
organisations for attaining their goals and objectives. In relation to this business strategy is
refereed as the long term action plan in order to attain the desired organisational output. The
effective business strategy framework helps the organisations in creating successful market
position in their specific market segment (Yuan and et. al ., 2020). The present report on
Business strategy will discuss the strategies of the “Tesco Plc”- Tesco is the multinational
supermarket chain based in UK. The company is the leading grocery and general merchandise
retailer of the UK. The present report will discuss the impact and influence of macro
environment on organisation and its business strategies. The report will also assess internal
environment and capabilities of the organisation. Further in the report porter's five force model is
discussed for the chosen organisation. In the end, models and theories are applied and discussed
to understand the strategic direction available to the organisation.
Main Body
P1. Appropriate models and frameworks to analyse the impact of macro environment
The strategic Context:
Vision: The Vision of Tesco is to become highly valued organisation for its customers,
community and to their loyal and committed workers and staff and their shareholders.
Mission: The main purpose of Tesco is to make the that matters better, together and to identify
the strategies that fits their business model and guarantee potential success.
Objectives: the aim of the Tesco is to stay the leading retail supermarket and to provide the
customers with good quality service and low cost products to main their their competitiveness
through low price strategy. The other objective of the Tesco is to maximize the sales to increase
the profit. Tesco also has an objective of developing the largest internet shopping site (Farrukh
and et. al., 2020).
Strategy is basically involves the setting of aims and objectives, identifying actions to
achieves those aims and objectives by mobilizing the resources. In business environment the
business strategy are developed by analysing the macro environment so that adequate strategy is
developed that can foster organisation's productivity.
PESTLE Analysis
1

The PESTLE analysis of Tesco plc is used to recognise the influence of macro
environment factors on the business and its strategies of the Tesco plc.
Political factors: Tesco is the multinational organisation and work within different political
landscapes which bring a influence on the business of the Tesco. The failure of membership and
future trading relationship of UK and EU which is Brexit has disruptive results on the Tesco
supply chain strategy. This has also impacted the financial results and operations of Tesco. For
this Tesco has developed Brexit contingency plan to reduce the impact of Brexit on market and
their customers (Um and et. al., 2018).
Economic factors: the economic stability is very important for the Tesco for the smooth flow of
its operations, But, the impact of COVID-19 has impacted the economic conditions of the Tesco.
The low disposable income has caused the risk to the liquidity of the Tesco and has also
impacted the financial performance. This also affected the group funding strategy of the Tesco
due to to the decreased ability to continue the fund operations.
Social factors: the changes in the customers taste and eating habit has created a positive
influence on the Tesco's innovation strategy. The company to meet the customer trends in order
to stay competitive the effectively using the social factors and their changes by focusing on
innovation in their products and developing organic and healthy food and drinks.
Technological factors: the technology is growing at fast pace and Tesco need to keep pace with
technology to sustain in the market. This factor brings a positive influence to Tesco strategies
and its business by making their operations faster and more secure. With advanced technology
the technology security programme of the Tesco continues to enhance the information security
capabilities and infrastructure.
Legal factors: failure in the compliance of the legal regulatory leads to the downfall in the
reputation of the Tesco. The government of UK has complied the minimum wage act for the
workers of the UK which has influence the company's cost strategy as due to this the labour cost
is increased and also the company can be penalised or sued for misleading its workers.
Environmental factors: the environment related restriction of government of UK on the
businesses to reduce the impact of their operations ion nature and to safeguard the environment
from damaging. This change in macro environment of Tesco has resulted in better development
of strategy such as waste management strategy which is helping Tesco in reducing the food
wastage (Navissi and et. al., 2017). The closed loop packaging strategy to reduce the
2