Business Strategy: Analysis of TESCO's Competitive Position

This presentation analyzes the business strategy of TESCO, a major British retail organization operating internationally. It delves into key strategic theories, models, and frameworks relevant to TESCO's operations, including corporate-level, business-level, and functional strategies. The presentation also explores various models like strategy maps and gap planning, along with the application of product differentiation strategies to gain a competitive edge. The organizational audit examines both internal factors, such as strengths and weaknesses (SWOT analysis), and external factors through PESTLE analysis, impacting sustainability and competitive position. The presentation also discusses Porter's generic strategies (cost leadership, differentiation, and focus) and concludes by emphasizing the importance of business strategy in addressing organizational challenges and achieving sustainable market positions. The references used are also included.

Business Strategy

Table of Content
Introduction
Key strategic theories
Models
Types of business strategy for obtaining competitive-edge
Organisational audit of the internal and external factors that
affect sustainability and competitive position
Porter's generic strategies
CONCLUSION
References

Introduction
The term business strategy refers to the action, tactics,
plans etc. that is used to perform all work according to
decided action and decisions for completing work
according to organisation goals and objectives. In
simple terms business strategy is explained as a way
that guide decision-making process to hire and allocate
all resources towards company goals and objectives.
This report is written from perspective of TESCO
which is a well-known British retail organisation that
perform work in international market.

Moreover, this report highlights on key strategic
theories, model and framework to implement them in
TESCO business. Business strategy will also be
formulated to obtain sustainable position in market. In
the last, two possible strategies for completing work
with decided strategies will also included in this report.
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Key strategic theories, model and conceptual
framework for organisation
Strategy-making is engaged and identify as the way by
which organisation undertake and accomplish
company target. Strategic theories that are beneficial
for TESCO are mention as below:
Corporate level strategy- According to corporate
level strategy management define the market and
business by which organisation operate business as
per top level management. It also describe overall
direction for managing task with product lines.

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Business-level strategy- This is explained as the business-
unit level strategy. TESCO higher authorities are responsible
for formulation of business-level strategy. In context of
TESCO management formulate strategy that leads to make a
competitive-edge in market.
Functional strategy- Tesco perform work with functional
strategy because it helps in completion of work according to
each department. Moreover, functional strategy aids TESCO
to complete all task according to various retail section.

Models of business strategy
Strategy map- This is explained as a business tool that is
used to communicate effective strategic plans to
accomplish various goals in decided time period. Further, it
is easy way to complete work as per balanced scorecard.
Gap planning- The term gap planning refer to the need-
gap-analysis this is used to complete work that primarily
identify for specific details. “Change agenda” define
perspective gap planning that makes specify internal
deficiencies.

Framework
Strategy framework are the tools that makes and
formulate an organisation strategy in order to complete all
task with organised approach. This is also used for answer
about fundamental question in order to solve all problems
that generate barrier for organisation. Selection of right
framework leads TESCO to complete all task in an
organised manner.

Types of business strategy for
obtaining competitive-edge
The existing conditions of marketing are too
competitive so it create competition for TESCO due
to which it is complex to retain better position in
market. In the context of TESCO it is analysed that
with use of business strategy this is easy for
management to complete all task in an appropriate
manner. Business decide strategy by which size and
nature of organisation work as per competitors.

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Product differentiation strategy is appropriate for
managing the prices which is deemed as per essential
factors. One of the major reason behind strategy is to
manage and deal with machine-manufactured units for
offering products that is easy to customise by
organisation. Moreover, customer is ready to pay more if
nature and value of product is similar with the price of
product. Professional cleaning services provide services
to package because it leads to sell all products according
to terms and conditions in order to deliver better value
among products. This also define management gain and
obtain value that leads to gain competitive-edge in
market by accomplish aim of obtaining sustainability in
market.

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Along with this product differentiation strategy is also
beneficial because it leads management to expand their
business size by providing valuable products which satisfies
need of customer in an organised manner. Example- TESCO
provide all types of product in their store so with use of
product differentiation strategy range of products is also
increased. This leads management to increase and enhance
size of respective organisation into different countries.

Organisational audit of the internal and external factors that affect
sustainability and competitive position
In order to understand external business environment PESTLE
is known as an effective tool. TESCO use selected to improve
the supply chain of organisation because it helps to design and
formulate supply chain strategy according to external
environment of business. Moreover, the current situation of all
industry and market at global level is complex because of
pandemic conditions in market. Further, goodwill of TESCO
is also improved if management provide all products with high
value within decided time-period. Along with this TESCO is
present among different markets that relate with local and
international level so the increase in marketing also create
challenges.

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Like, it is complex to deal with competitors because this helps
for making features related with organisation. Along with this
ASDA, Walmart and other competitors gain success for retail
brands to increase size of market.
In the context of internal environment of TESCO this is
analysed by the management that organisation perform their
work as per inflation that make aspects for business to
increase in the income of market. With the end of overall sales
relates with existing environment define numbers that make
increase in tax. The raise in company sector define that labour
cost increase business expenses.

SWOT Analysis:
It is considered as the strategic planning technique which is
helpful in terms of identifying the prominent strengths,
weaknesses, opportunities and threats which is concerned
with business competition and project planning. Suitable
analysis is mentioned as underneath:

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Strengths Weaknesses
Tesco get various rewards for its
retail excellence, effective
customer service and prominent
shopping experience. It is also
undertaken as the most profitable
supermarket store considering the
numerous competitors.
Currently, Tesco improve the
effective use of technology
considering its operations,
creating great cost efficiencies and
improved experience for services.
Tesco also have wide cash
reserves that offer strong financial
position to all the kind of
economic cycles.
Tesco also has effective competitive
pressure considering the price
range which scoured few retailers
profit margin and also company
tends to put emphasis on various
ways to increase competitive
advantage.
In this, customers also does not
purchase various related items in
terms of having less disposable
income and for this, retailers does
not manage their inventory that
leads to increase the cost of
inventory.

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Opportunities Threats
Strategic alliances with other brands
leads to increase prominent
opportunities and also admire
suitable offers to company that
leads to attract customers for the
effective target market.
Moreover, the emerging market
leads to develop effective
opportunities of Tesco by offering
better access to the western
products.
Economic recession and credits can
become major threat for the market
share and its profitability in terms
of eliminating the number and size
of purchase which is made by their
customers.
Furthermore, government rules and
regulations tends to put effective
pressure on Tesco to adhering the
prominent rules that need
prominent changes for effective
operating structure.

Porter's generic strategies
It is stated that an organisation position in an industry
determines whether a business entity is in profit or below the
average. There are mainly two forms of competitive
advantage that an organisation can posses such as low cost
and differentiation. It is important for higher authorities of
TESCO to analyse strategy to implement which in turn help
in gaining higher growth as well as success at marketplace.
Porter's generic strategy consist of three generic strategy that
is discussed below in relation to TESCO:

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Cost leadership: Herein, the company focuses on offering
products as well as services at low prices without
compromising the quality of goods & services. It is analysed
that the cost advantage are depend and varied on the structure
used by the industry. This help an organisation to attain
competitive advantage at marketplace.
Differentiation: In this strategy, the main focus is on offering
different and unique products and services to the potential as
well as target customers. This strategy assist in attracting large
number of people towards brand that leads to increase in
profitability and revenue level of an organisation.

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Focus: It consist of both cost focus and differentiation focus
and herein an organisation seeks to attain both cost
advantage and differentiation in its target segment
In context to TESCO, it is determined that it uses cost
leadership strategy that help in providing products at lower
prices. In addition to this, it also help company to increase its
customer base level and earn higher profits in an effective
manner.

 CONCLUSION
With the analyse of above report it is identified by
management that business strategy perform an important
role for organisation that support to solve different issue
which create barrier for management. Product
differentiation strategy leads the organisation to enhance
and improve the business size of organisation by
performing their business into different countries. In the
last, PESTLE and SWOT tool helps management to
perform work according to internal and external
environment of business.

REFERENCES
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strategy, and sustainable development.
Holotiuk, F. and Beimborn, D., 2017. Critical success factors
of digital business strategy.
Švárová, M. and Vrchota, J., 2014. Influence of competitive
advantage on formulation business strategy. Procedia
Economics and Finance, 12, pp.687-694.
Burlton, R.T., 2015. Delivering business strategy through
process management. In Handbook on Business Process
Management 2 (pp. 45-78). Springer, Berlin, Heidelberg.