Strategic Planning in Tesco: Ansoff's Matrix and BCG Portfolio Analysis

The assignment content discusses the importance of strategic planning in businesses, particularly for Tesco. It highlights two models used to determine business growth strategies: Ansoff's matrix and BCG portfolio. Both models have strengths and weaknesses, with Ansoff's providing information on product-market growth but lacking accounting data, while BCG portfolio categorizes businesses into four parts but may not accurately represent the medium level. The assignment concludes that Tesco needs to consider various factors in formulating its strategic plan, including competition direction and planning systems, and that analyzing the strengths and weaknesses of models is crucial for their effective application.

BUSINESS STRATEGY:
TESCO
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TABLE OF CONTENTS
Business Strategy:Tesco..................................................................................................................1
Introduction......................................................................................................................................3
Factors to be considered whilre Formulating strategic plans and role of planning.........................4
The effectiveness of techniques while developing strategic plan....................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7
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INTRODUCTION
Business strategies play an important role in every business for achieving long terms
goals. These strategies cover approximately 3-5 years for the planning and development. Before
making any planning, company considers all the internal and external factors (Abraham, 2012).
The present file is based on the business strategies’ of TESCO. It is big food retailer firm; their
planning supported the satisfaction of their customers by the product. This file covers some
major topics like process of strategic planning, formulation and approaches of evaluations. After
all this, how companies implement the new strategic in their firm and increase their customers
have also been studied. This file also explains the effect of SWOT, PESTLE in the organization.
MISSION, VISION AND OBJECTIVE OF TESCO WITH CORE
COMPETENCIES
Mission, vision, objectives, goals play a key role to determine the strategic planning of any
company. Same applies to areas such as core competencies, strategic architecture and strategic
control. Their importance in strategic planning with respect to Tesco has been discussed below:
Mission- Business strategies should cover all the mission of company. TESCO’s main
mission is to cover all the latest changes in food market and environment. Mission should be
clear for the cited retail firm otherwise company can lack their concentration and cannot achieve
their goals (Gregory, 2015). For achieving the mission, business strategies of Tesco should focus
on new innovation in technology and the second main goal is to gain more trust and loyalty.
Vision - Company vision is concerned with modern and innovative ideas which inspire
customers and colleagues. The main action which Tesco follow is they work all together to make
things better and smooth. By focusing on vision they can grab different knowledge and make
perfect strategies.
Core competencies – Core competencies play a role of glue between organization and
customers. These are one of the most unique ideas now days for giving a new shape in business
strategies. In this company can design competitive position and increase corporate strengths
(Hübner, Kuhn and Sternbeck, 2013). Core competencies help to understand the management
priorities, outsourcing and invent a new market. As per example, TESCO business strategies are
based on customer preferences so they observe the buying behavior and according this they
maintain their retail store.
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Objectives and goals- TESCO is a private firm so the main aim is to achieve more profit and
raise the business standard in retail market. In objectives, company wants to sell more services
and new products.
Strategic control – For strategic control, TESCO update their management structure or
portfolio (Mukerjee, 2013).
Strategic intent - It is a new approach for business growth. In this for achieving their vision,
company take a feedback from their past and then apply on the future polices and planning.
FACTORS TO BE CONSIDERED WHILRE FORMULATING
STRATEGIC PLANS AND ROLE OF PLANNING
Formulating the strategic plans involves some factors like direction of competition, planning
system and some time the impact on firm. These planning should be composed by top level
management so they consider all factors. In direction for competition company can divide the
work among teams and senior members guide new employees. TESCO open more brands and
retail store for their customer convenience. For directing the competition company adds new
things like provide home delivery. Planning system plays a major role in company for achieving
long term goals. During the planning TESCO always considered all sectors like marketing, HR,
finance. The reason behind this company take feedback from these sectors than make an
appropriate plan (Ramírez and Selsky, 2014) . For achieving the goals planning system and
strategies process should be clear in each and every employees mind. For more quality company
use “situation design” because the demand and supply can be change due to inflation. This
design helps to formulate the strategies. Managers are the main bone of a company, so by
strategies formulating they can easily know about the structure and their work. Like which
method they have to follow for training and development (Group Strategy, 2016).
Planning is very necessary in any work and area. TESCO considers each elements like
customers taste, their like and dislike, internal environment of company, competitors etc. after
analysis all these thing planners make a plan for future goals (Xie and Allen, 2013). Usually
project manages make a plan for the company but single person is not enough for this work. In
role of planning project managers, management team, sponsored and stakeholder play an
important role.
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THE EFFECTIVENESS OF TECHNIQUES WHILE DEVELOPING
STRATEGIC PLAN
When company is developing strategic plans, they include some business models like
SWOT, PESTLE analysis, Porter’s 5 forces, Ansoff matrix and BCG Portfolio etc. TESCO
always considered these models which are discussed below:
SWOT- This model is helpful in developing strategies by showing the strength and
opportunities in external environment. By this model, organization knows all the weaknesses,
negative aspect and threats.
Strengths- This model explores the possibility of any problem and situation. SWOT analysis
explains company's positive and negative points so that by this, employees can easily understand
the business scenario (Abraham, 2012).
Weaknesses- The main disadvantage of SWOT model is that it creates a subjective analysis
of organization. So, for the shareholders, it is less desirable as SWOT only provides subjective
data rather than quantitative. This model considers technology changes in the threats rather than
in opportunity section. So by this, the vision is changed. Another problem with this model is that
it does not consider what is relevant for the company or what is not.
PESTLE- While developing the strategies, company covers all factors which may come in
internal or external. So PESTLE helps to develop strategic plan by giving all new updates
regarding politics, environment, technology changes, legal formulation etc.
Strengths- The strength of model is that it provides the information related to internal or
external environment of company. This model reduces negative impacts on an organization by
covering overall factors and develops the strategic thinking among all employees.
Weaknesses- This model does not provide any information regarding investment. Another
weakness is that some factors in PESTLE are based on assumptions. So, by using this,
sometimes, company faces the problem (Gregory, 2015). Moreover, this model does not provide
any subjective analysis regarding the evaluation thus, sometimes, firm suffers from losses.
Porter’s 5 forces- By applying this model, TESCO grab idea about the strength and their
current position. After knowing the current situation company, will update their planning
scenario (Abraham, 2012).
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Strengths- Main strength of this model is that it considers all market forces with subjective
data and by this; market structure can easily be analyzed. Porter's five forces model is based on
the competition idea. So, by this, company can easily get all the updates regarding market.
Weaknesses- Porters five force model designer for big organization or entire industry so,
this is not able to provide information regarding sub sectors of the business.
Ansoff’s matrix- This model helps to determine its product and market growth strategy. It is
also helpful for making developing strategies related to market expansion.
Strengths- Ansoff's matrix model providing information about business growth in different
segments (Abraham, 2012).
Weaknesses- This model do not consider any accounting data so if company want to expand
their business in new market so they do not have any accounting analysis of the market.
BCG portfolio- This model explain the market rate and fluctuation. So by the help of this
model, company knows about the market current status. As per example TESCO never launch
their new product in inflation, so this things decided by this model (Hübner, Kuhn and
Sternbeck, 2013).
Strengths- This model divided into four parts, so each part of the portfolio clearly defined
the positive or negative of the company. (Gregory, 2015).
Weaknesses- BCG portfolio moderate the business as high or low. But in reality company
follow three moderate like high, medium and low. So this model, are not able to justified the
medium level.
CONCLUSION
From the report it can be concluded that formulation of proper strategic planning is decided by
the vision, mission, goals, objectives as well as strategic intent of the company. In the same way,
Tesco is required to take many factors into consideration while formulation of strategic plan.
These are related to direction of competition, planning system etc. It is only by giving a due
focus on these factors that the planning can be formulated properly. In this regard, the need is
further to analyze the strengths and weaknesses of the models so that they can be applied
accordingly.
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REFERENCES
Books and journals
Abraham, S.C. ed., 2012. Strategic planning: A practical guide for competitive success. Emerald
Group Publishing.
Gregory, A., 2015. Planning and managing public relations campaigns: a strategic approach.
Kogan Page Publishers.
Hübner, A.H., Kuhn, H. and Sternbeck, M.G., 2013. Demand and supply chain planning in
grocery retail: an operations planning framework. International Journal of Retail &
Distribution Management. 41(7). pp.512-530.
Mukerjee, K., 2013. Customer-oriented organizations: a framework for innovation. Journal of
Business Strategy. 34(3). pp.49-56.
Ramírez, R. and Selsky, J.W., 2014. Strategic Planning in Turbulent Environments: A Social
Ecology Approach to Scenarios. Long Range Planning.
Xie, Y. and Allen, C., 2013. Information technologies in retail supply chains: a comparison of
Tesco and Asda. International Journal of Business Performance and Supply Chain
Modelling. 5(1). pp.46-62.
Online
Group Strategy. 2016. [Online]. Available through: <http://www.tesco-careers.com/Jobs-in-our-
Office/Career-Path/Group-Strategy.aspx> [Accessed on 3rd March 2016].
Where’s the strategy. 2016. [Online]. Available through:
<http://www.theguardian.com/business/nils-pratley-on-finance/2014/oct/23/tesco-wheres-
the-strategy-cash-call> [Accessed on 3rd March 2016].
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