Influence of Macro Environment on Business Strategy

This report analyzes the influence of macro environment on the organization and its strategies. It includes a critical evaluation of the macro environment to inform and determine strategic decisions. The report also analyzes the internal capabilities and environment of the organization using appropriate strategies.

Business Strategy
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Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
P1 Analyse the influence of macro environment on the organisation & its strategies...........3
M1. Critical evaluation of macro environment in order to inform and determine strategic
decision...................................................................................................................................7
TASK 2............................................................................................................................................8
P2 Analysis of internal capabilities and environment of organisation by using appropriate
strategies.................................................................................................................................8
M2. Critical evaluation of internal environment to assess weaknesses and strength of a
company’s internal structure capabilities & skill set............................................................11
TASK 3..........................................................................................................................................11
P3 Porter’s five forces and evaluation of competitive forces of the give market sector of
company...............................................................................................................................11
Ansoff Matrix.......................................................................................................................12
M3 Analysis of appropriate strategies in order to improve market position and attain
competitive advantage..........................................................................................................13
TASK 4..........................................................................................................................................13
P4 Apply range of theories and concepts to devise and interpret strategic planning...........13
M4 Strategic management plan............................................................................................15
D1 Critique and interpret information applying environmental & competitive analysis to
produce a set of valid strategic directions, tactical actions and objectives..........................18
CONCLUSION..............................................................................................................................19
REFERENCES..............................................................................................................................20
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INTRODUCTION
Business strategy is define as a set of actions that helps an entity to achieve overall objective
in an effective manner. It is basically a master plan that is develop by the higher authorities of an
organisation in order to attain competitive advantage at marketplace and to achieve higher
position in the particular industry. It is important for an entity to consider the mission, core
values and vision of company while developing business strategy (Dodgson, 2018). An effective
strategy is one that help companies to attain higher growth and development that directly leads to
success. Moreover, an effective strategy aid organisation to sustain in market for longer period
and enhance their productivity level. For the present report, TESCO is taken into consideration.
The company mainly offers high quality home essentials and groceries, which is the main reason
of its success. The company was established in the year 1919 and its headquarter is located at
Shire park, England. TESCO serve its product through supermarkets, superstore, hypermarket
and by convenience shop. It offered products in more than 12 countries and consist of around
4,70,000 employees. One of the main reason of its success talented and effective employees who
performed all the activities as well as operations in an effective manner. The report covers
analysis of macro and micro environmental factors that has an influence on the overall
performance and business activities. Along with this, VRIO analysis is applied in order to gain
knowledge about the internal capabilities. Moreover, Porter’s five force model is describe in the
report that help an entity to identify level of competition in a proper manner. Furthermore, there
is discussion about Bowman’s strategy clock that allow an entity to develop an effective strategy.
In the last, a strategic plan is developed that help in attaining objectives within stipulated time
period.
TASK 1
P1 Analyse the influence of macro environment on the organisation & its strategies
Every organisation has an influence of macro environmental factors and it is important for
an entity to analyse the impact of all this factors on the business performance as well as
strategies. This assist an entity to develop an effective strategy and decline the level of risk
associated with the factors. In addition to this, it also help in gaining knowledge about factors
that has high impact so that best and suitable actions is planned. In order to analyse the impact,
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the higher authorities of TESCO adopt Pestle analysis and Swot analysis. Both the frameworks is
described below in relation to the company.
PESTLE analysis
It is defined as a framework that help companies to analyse the factors, which impact on
their overall performance. In addition to this, it consist of factors such as social, political,
economical, environmental, legal and technological factors as well. All this factors are dynamic
in nature and affect on the business activities. It is determine that all this factors has both positive
as well as negative impact on the organisational performance. The factors is described below in
relation to the chosen company:
Political factor: This factor include unemployment rate, tax rate, political instability, tax
rates, impending and current legislation and many more. The political factors impact on the
overall business performance as well as activities of the company (Chelliah and Swamy, 2018).
In relation to TESCO, the company is operating in more than 13 countries, which include Europe
as well as Asia. It is determine that political condition of United Kingdom is quite well and its
government supports business organisations to expand its operation all over the world as it leads
to the growth of the economy. This is the advantage or an opportunity for the TESCO to earn
higher profits and enhance its market share as well. This factor has also negative impact, for
instance, if the import duty on products or goods is increase the there is decline in the level of
revenue level as it import goods from china, East Asia and many more. Moreover, the Europeans
referendum is undertaken as a risk factor for its major investors and for the British Economy as
well. It is determine that Tax on supermarkets is going to increase by the government that effect
on its performance in a negative manner.
Economical factor: This factor include labour cost, income level, economic conditions,
inflation rate and many more. It is a dynamic factor that has high influence on the productivity as
well as growth of an organisation. In context to TESCO, there are various factors that impact are
price, cost and profit as well. The labour cost is one of the essential economic factor, which
impact the supermarkets. It is important for company to focus on the raise in borrowing cost of
United Kingdom as it will enhance cost and price of products offered by the company that
directly leads to decline in the profit level of the company. In addition to this, it decline the
market image or reputation of company at marketplace. Moreover, it has positive impact also as
it is determine that people living in UK has high buying power that directly leads to increase in
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profits and revenue level of company. TESCO have the advantage to attract large number of
people and earn higher profit that has a positive influence on its overall growth and development
as well.
Social factor: This factor include values, norms, consumer trends, opinions, perception of
people living in the society. In order to gain success, it is important for an organisation to analyse
market trends as well as customer needs before offering products and service in market. The
behaviour and attitude of customers towards shopping is keep on changing with the trends as
they like to consume those things that is trendy in market. The people of UK has their own and
busy schedules and prefer to purchase from the organisation that provides fast and quick deliver
without compromising the quality (Macarthy, 2018). With reference to TESCO, its higher
authorities focuses on fulfilling the requirements of customer that help in retaining the for longer
time period. On addition to this it also aid company to attract more number of people and earn
higher profits. The company is planning to offer organic food as the demand for health product
us increased. It is determine that obesity is one of the major issues in society as people are more
concern towards their health, offering of organic and healthy food help organisation to enhance
their customer base level that leads to increase in sales as well as profit of Tesco.
Technological factor: One of the most important factor that impact on the performance as
well as strategies of organisation is technology. Technology is changing rapidly and affect on the
purchasing behaviour and attitude of customers as people are so trendy and like to purchase
innovative and new product coming in market. with reference to TESCO, it has the advantage to
make use of innovative technology and grab the opportunity. By the adoption of advanced
technology, it is able to provide on time and quality service to customer that develop a positive
mind set of customers towards the brand. In addition to this, TESCO make use of social media
applications as a new way of promoting goods and services. The applications such as Facebook,
Instagram, YouTube is used by company in order to reach maximum number of people and
enhance their customer base level that has positive influence on the overall sales and profit level
of the organisation. It has negative impact also as change in the technology occurs cost to
company, which sometimes decline the profitability and revenue level of TESCO.
Legal factor: It is essential for an entity to follow all the rules and legislation that is made
by government as it help in implementing out all the activities as well as operations in a smooth
and effective manner. In context to TESCO, its manger ensure that all the laws is followed so
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that there is no interruptions and delay of activities and operations. After the case of workplace
discrimination in 2017 by its employees, the reputation of company is declined and affect on its
market position. In order to deal with this, its managers develop effective strategies that is allow
employees to participate in decision making, providing equal opportunity to the staff members in
order to maintain cultural and diversity at workplace. The company follow all the legislation
associated with the benefits of employees as well as customers, it help company to build up their
high position at marketplace and increase their market share level.
Environmental factor: There are many companies facing issues due to environmental
factors. Most of the people like to prefer those goods that is environmental friendly and did not
harm the environment. With reference to TESCO, its motivates customer to buy products from
tesco,com. In addition to this, it’s van drivers make use of fuel saving routes and also collect
plastic bags from users in order to recycle them. By the assistance of this, TESCO is able to
attract more number of people that has a positive influence on its market image and market share
as well.
SWOT analysis
This model was used by companies in order to know about the strength and weaknesses so
that improvements can be take place in an effective manner. In addition to this, it also aid in
analysing the threats and weaknesses which in turn help company to develop effective strategy
on order to decline the level of threats and grab the opportunity at marketplace. The SWOT
analysis of company is given below in relation to the chosen company:
Strength Weaknesses
 One of the strength of company is its
market presence as it offer products in
more than 18 countries, this help
company to attain higher profits.
 TESCO offer high quality products to
its customer that aid in gaining trust of
customers and retain them for longer
time period.
 It is one of the profitable supermarket
in the world due to which it has the
 It is determine that some of the
organization subsidiaries is not
performing better due to external
factors. This decline the revenue level
of company as it undertaken as a
weakness of TESCO.
 The company is highly depend on the
Europe and United Kingdom for its
sales & therefore did not spent
resources in other developing markets.
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opportunity to attain competitive
advantage at marketplace.
 The company till now is not offering
organic food which decline its sales and
overall performance level.
Opportunities Threats
 TESCO has the opportunity to enter
into new market segment as it is a
renowned company and did not require
to spent more on promotions.
 In addition to this, TESCO has the
opportunity to offer organic food at
market as it help in attracting more
number of people and enhance
profitability of company as well.
 The company has the significant
opportunity to develop its online
market and offer home delivery to the
more number of areas, this will help
TESCO to earn higher profits and
enhance their market share level as
well.
 One of the major threat of company is
it’s competitors such as Aldi, Walmart
and many more, it affect directly on the
sales and profit margin of TESCO in a
negative manner.
 Increase in the cost of raw material
decline the profitability level of
company which in turn also decrease
revenue percent of company.
 The political landscape and government
regulations is putting pressure on
organisation to adhere new laws, due to
which TESCO is require to make
changes in its operations and
organisational structure as well.
M1. Critical evaluation of macro environment in order to inform and determine strategic decision
In order to be competitive as well as profitable, it is important for an organization to identify
the factors that has influence on the overall business activities and performance as well. It is
essential to analyse the threats and opportunities present in the environment as it help in
developing an effective strategy. It is analysed that TESCO has positive political impact as the
government of United Kingdom support companies to expand their operations. The company has
favourable environment factors which help them to enhance their profit level. In addition to this,
it is determine that technology is changing rapidly and to cope with this, there is a requirement of
huge investment that decline the profit margin and revenue of the company. Moreover, the
companies strength and opportunities it has, impact positively whereas the threats of TESCO has
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negative influence on the overall performance and on the decisions made by the higher
authorities of the organisation.
TASK 2
P2 Analysis of internal capabilities and environment of organisation by using appropriate
strategies
It is essential for companies to analyse the internal environment as well as capabilities as it
help in taking better decision, which has a positive influence on the organisation. In order to
analyse internal capabilities, the higher authorities of TESCO uses framework such as VRIO
analysis and Mckinsey 7s model. This models are give below in context to company.
VRIO ANALYSIS
VRIO analysis: driver Framework analysis tool which is designed to help the
organisation in uncover and detect the resources and capabilities that can give the organisational
long-term competitive advantage within competitive market.
Valuable
Valuable are those resources which are important for the organisation and organisation
must keep them according to their needs. Is identified from the analysis of Tesco that company
have four major valuable resources which are described below'
Financial resources: financial resources of the company of highly valuable as they help
company in investing into the external opportunities which are arrived in the market it also help
organisation in combining with the threats of external market.
Local food products: are also valuable resources of the organisation as company can
make a highly differentiation between them. This also provide the organisation that it can precise
the value of these type of customers who are directly related to food products of company.
Employees: Is also valuable resource for the organisation this is because they are highly
trained. A good de trend workforce will bring more productivity within the output of
organisation as well as increase the profitability and productivity of firm (Hernández, 2019).
Distribution network: of the test score is also valuable resource for the organisation as it
help organisation in reaching more and more customers. Help in increasing the revenue for the
Tesco as it ensures the proper promotional activities of organisation.
Rare:
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Financial resources: Financial resources of Tesco are found prayer for the organisation
according to drive analysis this is because strong financial resources are the only forces by the
few companies within the industry where Tesco is trading.
Employees: employees of the organisation are also their resources while doing the
analysis of this is because highly trained in skill employees are not present in every organisation
within the industry so it is in competitive advantage.
Distribution network: distribution network of Tesco is also a resource for the organisation
this is because competitive would require a lot of investment and time to come up at that level of
a solution network which test is posing in current time(Yudiono, 2019).
Imitable
Financial resources: Financial resources of Tesco private limited are costly to imitate as
there are number of procedure which have to follow for using the financial resources like Tesco.
So it is impossible for competitive to imitate the financial resources of Tesco.
Distribution network: the distribution network of Tesco is also very costly to imitate by
the competitor as company have an intense distribution channel. Take number of years for
developing this type of distribution channel so computer has to invest the huge amount within
this for intimating a similar distribution channel (Indartono, 2017).
Organisation
financial resources: the financial resources of Tesco organised to capture value as
identified within the analysis of this company this is because these are the sources which are
used as a strategy to invest in a right place and grab the opportunities within the market by
combating from threats of organisation So it can be identified that these resources provide
company and opportunity to get the sustainable competitive advantage within the market
(Ocasio, 2016).
Mckinsey 7s Framework
The Mckinsey 7S model describe the linkage between the seven factors that has positive
influence on the overall business. As per this mode, an entity have soft and hard values that has
high influence on the behaviour and performance of employees. The 7 elements is described
below in relation to the chosen company:
Strategy: It is important for entity to develop an effective strategies in order to gain success
and attain market position. The strategy adopt by the Tesco is cost leadership as it provide high
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quality goods at an affordable price. This assist company to sustain in market for longer time and
attract more number of people towards the brand in an effective manner.
Structure: It is determine that organizational structure of Tesco is highly hierarchal in
nature and it also comprises of many layers of management that is from chief executive officer
to the sales assistant. In addition to this, the company have around 10 members as BOD and 11
members of executive committee as well.
System: Most of the supermarkets are rely mainly on the system of daily basis in order to
sustain in market in an effective manner. In addition to this, it is important to companies to
measure the performance with the set standards so that all the system is effectively and properly
managed.
Shared values: This element consist of the norms, values and standards of accompany that
has influence on the attitude as well as behaviour of employees. It is important for TESCO to
shared values to all the employees as it positively impact on the actual behaviour of staff
members. In addition to this,
Staff: One of the reason of success of companies is its staff members as they work
effectively in order to achieve the objectives of company within stipulated time frame. In relation
to TESCO, it ensure that requirements of its staff is fulfilled as it motivate them to performed
effectively that leads to raise in performance of an organisation.
Skills: It include the capabilities as well as talent of employees to work in an effective and
proper manner. TESCO provide training session to both the existing and new employee in order
to enhance their skills and capabilities. In addition to this, it help employees to deal with the
situations and handle customer query in an effective manner. Moreover, it help company to
increase their level of efficiency and earn higher profits as well.
Style: It is defined as an approach that is used by the company in order to influence
productivity, corporate culture and performance as well. The company adopt democratic style as
it allow employees to participate in the decision making and give their suggestions and point of
view in a proper manner. This sometimes help company to bring out some creative and
innovative idea that leads to raise in productivity as well as profitability of the organisation.
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M2. Critical evaluation of internal environment to assess weaknesses and strength of a
company’s internal structure capabilities & skill set
It is analysed that evaluation of internal factors help company to gain an insight about their
weaknesses and strength. The analysis of internal capabilities aid companies to gain the
opportunities and decline the level of threats effectively. It is evaluated that the opportunity of
expansion will be availed by making proper utilisation of market team as it help in creating
awareness to maximum number of people. In addition to this, an effective structure aid
companies to carry out all the activities and operations in a smooth and effective manner that
directly leads to attainment of objectives within stipulated time frame. Moreover, it is important
for an organisation to provide training to all the employees in order to enhance their skills that
has positive impact on the productivity as well as profitability of the organization.
TASK 3
P3 Porter’s five forces and evaluation of competitive forces of the give market sector of
company
This model consist of five competitive forces that help an organisation to identify the level
of competition in an effective manner. All the five forces is given below in relation to the chosen
company:
Threat of New Entrants: In order to open such a market in which TESCO deals require
high investment and time as well. But there are lot of small shops is, which is easy to open. It is
determine that threat of new entrant is medium for TESCO . In order to deal with this
competitive force, it is important for TESCO to provide best quality products to customers as it
help them to engage customer for long time period and gain their trust so that they did not shift
to any other brand.
Threat of Substitutes: There are lot of substitutes prevailing in the marketplace and
therefore threat of substitute is high for the company. It is important for company to develop
effective strategies and attract customers towards the brand so that they did not shift to any other
substitute brand.
Bargaining power of buyers: The bargaining power of grocery customers is high as they
are carious organisations offering similar product at the lower price. It is important for company
to maintain effective relationship with customers so that they did not even think to purchase
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product of another brand. In addition to this, It is essential for company to maintain its quality so
that it can engage its customer for longer time.
Bargaining power of suppliers: There are lot of suppliers in the market that provide raw
materials to the supermarkets. Therefore, the bargaining power of suppliers is low and company
have the opportunity to purchase in bulk at lower price and earn higher profit as well.
Competitors: The major competitors of company is Sainsbury’s, Asda, Walmart
and ,many more. It is determine that TESCO has the higher risk of competitors as it directly
affect on its sales as well as profit level in an negative manner. It is essential for TESCO to
develop effective strategies an provide quality to customers as it help them to maintain its market
position and attain competitive advantage at marketplace.
Ansoff Matrix
Ansoff matrix is adopt by the higher authorities of company in order to analyse strategies
that help in attaining growth and success at marketplace. This matrix include four strategies
which is given below in context to Tesco:
Market penetration: Herein, the company offers the same product into the existing market
with an objective to earn higher profits. The organisations make use of promotional tools in order
to aware more number of people prevailing in the existing market. TESCO can make use of this
strategy by using social media applications, which help in reaching more number of people and
enhance sales of the company effectively.
Market development: In this strategy, the company enter into the new market with its
existing product in order to enhance its customer base level that has positive influence in the
overall profitability of company (Kim, 2019). In order to adopt this strategy, it is important for
TESCO to conduct market research as it help in gaining insight about the customer requirements
and market trends of new market.
Product development: Herein, an entity offer new product in its existing market so that
they can attract more number of people that directly leads to increase in efficiency of company.
It is determine that this strategy is risky as whether the new product is accept by the existing
customers or not. TESCO can make use of this strategy by analysing the taste and preferences of
customers prevailing at marketplace.
Diversification: In this strategy, the organisation is enter into the new market with its new
product. This strategy consist of high risk as companies have no knowledge about the market and
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its customers. if the product get failed then it occurs high loss to company that has negative
impact on profit and revenue level.
From the above strategy, it is determine that one of the suitable and beneficial strategy for
TESCO is market development. It is a renowned and reputed company along with this ut has
loyal customers who spared positive word of mouth. Market development strategy help company
to strengthen its market position and earn higher profits as well.
M3 Analysis of appropriate strategies in order to improve market position and attain competitive
advantage
Strategies are mainly a set of actions that is developed by the companies in order to attain
their desired goals and objectives as well. From the above analysis, it is analysed that company
have low impact of new entrants and bargaining power of suppliers, it can only be maintained by
the company offers quality products in market and maintain good relationship with customers.
The threat of buyers and competitors is high, it is important for organisation to provide unique
features and attract more number of people towards the brand as it help in attaining competitive
advantage and decline the level of threats as well. In addition to this, TESCO can make use of
Market development strategy as it can offer its existing product into the new market. It is
analysed that the product is accepted the new market as it has high reputation in market and
customers have the trust on brand. In order to attract more number of people, TESCO can start
offering organic food at marketplace.
TASK 4
P4 Apply range of theories and concepts to devise and interpret strategic planning
There are various theories and models used by higher authorities of TESCO for interpret
strategic planning are as follows:
Porter’s generic strategies
This strategies is developed in the year 1980 by Michael porter that describe how an
organization attain competitive advantage by selecting right strategies. It mainly include three
strategies which are as follows in relation to company:
Cost leadership: Herein, the company offers products as well as services at lower price
without compromising the quality. One of the main objective of choosing cost leadership
strategy is to gain leadership position by the help of efficient value chain management. This
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strategy assist TESCO to attract more number of people and increase its customer base level that
leads to raise in sales and profit of the organisation.
Differentiation: In order to attract more number of people and attain competitive
advantage, it is important for companies to offer something unique and different to customers as
it also aid in retaining customer for longer time period (Ocasio, 2016). With reference to
TESCO, it adopt cost leadership strategy along with the differentiation strategy with an aim to
attain higher growth and gain success at marketplace.
Focus: It is consider as the third or last generic strategy, which influence organizations to
focus on its resources and target the right market in an effective manner. It is determine that if an
entity adopts this strategy, it serve products on the specific market segment and rely in niche
marketing in order to attain competitive advantage.
From the above discussion, it is determine that TESCO adopt combination of strategies
that is cost leadership and differentiation strategy. The company focuses on providing quality
product to customer at low price, which help in increasing customer base level and profit level of
TESCO.
4.1 BOWMAN’S strategy clock
It is model which is used by organisation to identify and determine their firm strategy in
market by comparing it with rivals or competitors. Tesco use this tool so that they are able to
face market uncertainties in proper manner. This framework is divided into 8 segments and
which are mentioned below-
Low price- low value
This aspect states the how cheap and value of product is low. This strategy is mostly is
selected by those firm which are in small or local areas. In this, good and product qualities are
low as well as cheap. In relation with Tesco, they do not select this strategy because their product
as well as good is of high quality in market (Echchakoui, 2018).
Low price- This is strategy in which price of the product is set to low to gain high
volume of product. In relevance with Tesco, they can go for this strategy as it helps in gaining
low margin.
Hybrid- In this approach, firm uses and focus on both product as well as quality. It is not
easy to carry out both in simultaneously. This also means that competition is being focused on
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both sides. In context to selected brand, this strategy is helpful as it increase goodwill of entity
(Haselwanter, 2016)
Differentiation- In this, it main approach is to be different and unique in market and
from competitors. It is crucial to be unique because being random in this competitive era will not
make business successful. So, Tesco uses this strategy for example- they are have shifted their
business to technology by implementing Tesco mobiles in market.
Focused differentiation- This approach involves luxurious brands that rule in market for
their product, value etc. Through this strategy, organisation is able to focus on high share of
market and larger market share. In relevance with Tesco, they have the potential to go with this
approach so that their brand becomes more recognisable.
Increased price- Standard product- This specifies that prices are increased without any
change in product or quality. It is riskier because sales, profits or revenue might go down when
going with this method. In relation with Tesco, there sales scale is rising so going with this
approach will not be suitable. This is because it attracts negative attention of customers which is
not beneficial for enterprise.
High price—low value- Then comes the high pricing strategy in which prices are set to
be high and it is mostly done when business have monopoly in market and also some of the
business also set their prices high when competition is low & provide low quality of products. In
relevance with Tesco, they have competitors like Asda, Sainsbury etc. which offer same products
at affordable prices.
Low value- Standard price- In this, it specifies that if firm is providing low quality
products and the price is standard than business may not be survive for longer period of time. In
relation with Tesco, they follow business ethics properly and do not accept such strategies.
M4 Strategic management plan
Strategic management plan is considered as a document which is adopted to
communicate effectively within business organisation for achieving goal and objective in
stipulated time period. The manager focuses on optimum utilization resources for working in an
appropriate manner. In context of TESCO, the supervisory team emphasised on performing their
work in such manner that helps in accomplishing vision and mission of organisation in less time
period. In addition to this, they prepare strategic management plan for achieving success and
growth of organisation (Habib and Hasan, 2017). They take effective decision which will be
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beneficial for organisation in future time period. In addition to this, their main focus is to
accomplish favourable outcomes in less time period. They adopt cost leadership strategy which
is going to be discussed below:
The manager of TESCO adopts cost leadership strategy within business organisation.
They offer superior quality products and services to its customer at affordable cost. The main
aim of company is to satisfy the customer by satisfying their need and wants. The only reason of
adopting this strategy is to provide cost effective products as well as services to its user for
satisfying them. In addition to this, it aid assistance in boosting sales as well as profitability level
in future time period (Tukdeo, 2016). And also it is useful in attaining goal and objective within
given period of time. Apart from this, they offer high quality products and services at affordable
cost for gaining competitive advantage over rival form at marketplace. It helps them in boosting
brand image and reputation of company in front of customer in the market. There are strategic
management plan in relation to TESCO which is going to be mentioned below:
Vision: “The vision of company is to achieve leading position across the world”. They
want to operate their business in different counties for increasing success and growth of
organisation in upcoming period of time (Linder and Williander, 2017).
Mission: The mission of business organisation is to provide superior quality products and
services to its customer at affordable cost in order to increase profitability level at marketplace.
Strategies: The manager of TESCO follow cost leadership strategy in order to offer high
quality products at relatively less price in order to gain competitive advantage over rival firm at
marketplace.
Objectives: The main objective of organisation is enhancing its market share by 20% in
order to boost income by 25% in upcoming period of time.
Tactics: The tactics of cost leadership strategy is to follow for increasing their customer
base. It helps in increasing brand value as well as reputation of company in front of customer at
marketplace. In addition to this, it helps in retaining customer for a longer period of time.
.
Product Products are considered as the things which are offered to its user in order to
satisfy their need and wants. There are wide variety of products provided by
manager of TESCO such as groceries, coffee, milk, sugar, tea and many more.
It is the chain of supermarket providing products as per the requirement of
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customer at marketplace. They also want to take entrance in new marketplace
with similar products. It helps them in boosting sales as well as profitability
level in future time period (Maniora, 2018).
Price The pricing strategy which is adopted by TESCO is cost leadership strategy.
The main purpose of manager of company is to provide unique and specific
products to its customer at relatively less price in order to retain them for a
longer period of time. It helps them in achieving leading position across the
world. In addition to this, it is important to provide products at affordable cost
in order to satisfy customer at marketplace.
Place TESCO consist their own stores as well as strong channel of distribution which
helps them in taking entrance into new marketplace. They provide convenient
delivery to its customer for sustaining them for longer time period. It helps in
boosting reputation and goodwill in front of customer at marketplace. The main
purpose of company is to provide convenience to its client for retaining them
for longer time period. It aid assistance in booting brand image and reputation
of organisation in front of customer in the market.
Promotion TESCO adopt different promotional technique such as advertisement, publicity,
sales promotion and many more in order to target large number of customer at
marketplace. Their main motive is to attract ample of buyer by using different
technique for increasing sales as well as profitability level in future period of
time. It aid assistance in achieving goal and objective in stipulated time period.
They adopt various social media for attracting ample of buyer in order to
achieve target in less period of time. It aid assistance in increasing sales as well
as profitability level in upcoming time period.
Implementation: It is important for business organisation to execute the plan in an
appropriate manner. Therefore, it is necessary to prepare a budget in advance for assigning
resources and make use of them in an effective manner (Trevisan, 2016). In addition to this, they
maintain optimum utilisation of resources in order to implement the plan in suitable manner.
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Apart from this, the primal purpose of supervisory team is to implement the plan in an effective
manner. Thus, it is vital to make preparation of budget for allocating resources in appropriate
way. Beside from this, the marketing budget of TESCO which is going to be mentioned below:
Evaluation: It is necessary for business organisation to evaluate the level of performance
on continuous basis which aid assistance to company to follow the track regularly. In addition to
this, it is important to make comparison among desired as well as actual performance. It aid
assistance in finding any deviation in order to take decision in an effective manner. It increases
success as well as growth of company in future time period. The main purpose of organisation is
to compare both actual and desired budget for finding discrepancies in order to take an
appropriate decision in timely manner.
D1 Critique and interpret information applying environmental & competitive analysis to produce
a set of valid strategic directions, tactical actions and objectives
Strategic directions are a set of actions that guide an entity to perform effectively and
achieve objectives timely. In addition to this, it involve culture and environment of the
organization that has impact on the attitude and behaviour of the employees. It is required for an
entity to identify the influence of external and internal factors that help in declining the level of
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risk. In addition to this, VRIO analysis aid an organisational to analyse its internal capabilities
and garb the opportunities present in the market.
CONCLUSION
From the above discussion, it has been analysed that an effective strategy helps an
organisation to achieve its desired goals as well as objectives within stipulated time frame. In
addition to this, it also aid companies to fight with their rivals and attain competitive advantage
at marketplace. The business strategy consist of core values, mission, vison, objectives,
competencies and many more. PESTLE analysis is adopt by companies in order to analyse the
affect on uncontrollable factors on the organization. In addition to this, SWOT analysis is also
adopt as it help in determining the strength and weaknesses along with opportunities as well as
threats prevailing at marketplace. In order to identify level of competition at marketplace, two
models is used that is PORTER’s five force model and MCkinsey’s model. VRIO analysis is
adopt by the companies in order to gain insight about internal capabilities. It has been analysed
that cost leadership strategy is used by company in order to provide quality products at lower
price at marketplace. This helps an entity to attract large number of people and enhance their
overall productivity and profitability level. Bowman’s strategy is used in order to develop an
effective strategic plan that aid in attaining objectives within given time period.
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