Business Strategy Assignment - Tesco
Added on 2020-12-10
12 Pages3271 Words274 Views
BUSINESSESSTRATEGY
INTRODUCTIONBusiness strategy defines to the making of plan that gives direction to the operation ofcompany. It provides assistance to an organisation along which the activities to be performedwith an aim of achieving the set goal. In the following assignment.Tesco which is amultinational retailer dealing in segment like clothing, furnitures, software, financial services etcis taken. It stands at third position in the name of retailer in the world measured in the terms ofgross revenue (Amran and et. al., 2016). This report discusses about business strategy and itscontribution toward the success of an organisation. The report also drawsthe effect of macroenvironmental factors on business strategy by applying the PESTEL analysis.SWOT as well asVRIO analysis is also done in order gain an insight into operation capabilities. Apart from this ,the report also includes Porter's Five Force Model for analysing the industrial competitivesituation. Further more Ansoff matrix has also been used to study the available plan of action.Task 1P1 Analyse the impact and influence which micro environment has on the organisationExternal environment defines as the factors that exist outside the environment and have aimpact on the operation of a company. To conduct business operation successfully in a effectivemanner, organisation is required to understand the impact of macro environment. For the properfunctioning of Tesco, it conducts a PESTEL analysis that discuss about the major changes thatwhich affect the operations of a company. PESTEL AnalysisIt is a tool that is used to analyse the external environment and its impact on theorganisation. The company uses this tool as the time of starting a new tool is often used at thetime of starting a new enterprise or at the time of entering into an international market. PESTELcommonly stand for Political, economical, social, technological, environmental and legal factors(Anwar and Hasnu, 2016). It is very crucial for the TESCO to know whetherthe impact haspositive or negative on the environment. Below is the PESTEL analysis of TESCO : Political factors: Tesco has its operation throughout the world and there are some factorsthat affect the performance of company. It include the factors like government policy, taxetc. Government is encouraging the retail company to create job opportunities and Tescoplays a great role in creating the employment opportunities. If political factors are1
implemented in efficient manner this will help the organisation to carry out the businessoperations in effective manner. It help the organisation to ascertain tax benefits.Economical factors: It include the factors like economic growth, inflation, interest rateand so on. The impact of Brexit has a negative influenceon economy of the organisation.To handle this situation Tesco need to provide its product at reduced price to itscustomers. This situation has a big impact on the business operation as Tesco need to cutprice of the product and services in order to sustain in the market. Trade was suffered alot due to the brexit impact which has lower down the sale of Tesco.Social factors: Factors which include here are population growth, social trend, culturenorms etc. These are the factors that include the shared belief of the population. Theculture of UK is changing at a fast rate which creates an opportunities for Tesco topresent new products in the market ( Boyd and et. al., 2017). As customers are now sohealth conscious so the company is now focusing on the demand for organic product. Byfocusing more on customer required it has a opportunity ofr the Tesco to attract largenumber of people. Technological factors: Advancement in technology proved to be very beneficial forTesco. Introduction of online shopping has enable the company to attract the customersand also give them facility to shop at any time or any place. This will result in developingof customer base. Adoption of new technology is expensive as Tesco has also investedin carbon efficiency project which affect their financial plan.Environmental factors: It refers to the factors that affect the environment and one hasno control over it. In includes factors such as climate change, scarcity of raw material etc.Tesco is making a step to build a clean environment. Tesco is committed to drop theircarbon foot print use by 50% The company is also committed to use renewable sourcesand generate 100% of electricity b 2030. By this the company is able to manufacture theproduct which are Eco friendly. Legal factors: These are the laws which are formed by government and must be followedin order to work effectively. Tesco must conduct its practice according to the foodretailing commission which suggest that price of product cannot be change withoutnotice. Earlier the company has faced some legal action on the basis of age and genderdiscrimination. Tesco must look after its employees and treat them equally. This will2
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