Strategic Analysis of Tesco PLC

Unit Number & Unit
Title
Unit 32 BUSINESS STRATEGY
Project Title
Project Submission
Signature: .................. ........................... Date: ___________________

Contents
Introduction...........................................................................................................................................3
Activity 1b (This Activity provides evidence for P1 and M1)..............................................................3
1.1 An Environmental Analysis conducted on your chosen organisation using PESTLE. (P1)...3
1.1 Environmental Analysis (PESTEL).................................................................................................3
1.2 An Organisational audit conducted on your chosen organisation using SWOT (P1)..........4
Activity 2 (This Activity provides evidence for P2 and M2)................................................................5
An analysis of strategic capabilities of your chosen organisation carried out using the VRIO
framework.....................................................................................................................................5
2.2 M2 A critical evaluation of the internal environment (internal capabilities, structure and
skills set) to assess strengths and weaknesses of your chosen organisation ..................... using the
McKinsey 7-S Framework..............................................................................................................5
Activity 3 (This Activity provides evidence for P3 and M3)................................................................6
Applying Porter’s Five Forces model evaluate the competitive forces of a given market sector for
your chosen organisation (P3)...........................................................................................................6
Explain the Porter’s Five Forces Model..........................................................................................6
(M3) Appropriate strategies devised, using Ansoff matrix, to improve competitive edge and
market position of your chosen organisation based on the outcomes..............................................8
Activity 4 (This Activity provides evidence for P4 and M4)................................................................9
4.1 Interpret and devise strategic planning for your chosen organisation applying Porter’s
generic strategies (cost and price leadership strategy, differentiation strategy, focus strategy)
and the extended model of Bowman’s strategy clock (P4)............................................................9
And also recommend to apply one hybrid strategy based on Porters generic strategies............11
4.2 Based on the SWOT carried out in Activity 1(1.2), and from the diagram below, choose
and recommend two Growth Strategies for your chosen organisation. (P4)..............................11
Identify and Explain Each Chosen Strategy..................................................................................12
4.3 M4 A Strategic Management Plan for your chosen organisation that has tangible and tactical
strategic priorities and objectives....................................................................................................12
Reference list.......................................................................................................................................16

Introduction
There are different business strategies are used by the business organization
to gain success in the market place. This report is about Tesco PLC that was
established in year 1919 at Hackney, London, United Kingdom. Various micro and
macro analysis will be considered in report to evaluate the business environment for
the business organization. Different strategies that can be used by the business
organization will be explained and evaluated in the study.
Activity 1b (This Activity provides evidence for P1 and M1)
1.1 An Environmental Analysis conducted on your chosen organisation
using PESTLE. (P1)
 Explain briefly what is PESTLE.
 Include a diagram of the PESTLE of your chosen organisation, if any.
 Using PESTLE, critically analyse the impact and influence of the macro
environment, on your chosen organisation and its business strategies.
1.1 Environmental Analysis (PESTEL)
PESTEL Analysis
Political Factor
TESCO Company has huge impact of the political factor because this company is operating
their business more than 12 countries, including Europe and Asia. This exposed to the many political
factors which can be affect the operations of the TESCO Company. One of the political factor which
affect them is different tax structure which affect their profitability.
Economical
Economic factors like labour cost is an important economic factor which can affect the UK
supermarket. For examples, their annual wages bill us amounting GDP 4.5 billion In 2018 UK
Minimum Wage Rate is increased by 4.4% for 25 years old and onward (Pupo Kairuz, Ponce Ruiz,
Viteri Pita and Bustillo Mena., 2020). This upward shift has cost Tesco millions of pounds in UK.
Social
Customers shopping trends are constantly changing over the times. People have tough
schedules and want same day and fast delivery with a flexible goods return policy. They prefer one-
stop shopping. Tesco is relying on UK customers and must understand and provide the services to
meet these issues.
Technological

Technology trends provide huge profit to the TESCO Company where this helps to increase
their production and they were able to show their presence in the market as large retail store. To
stay in the competition it is necessary for the TESCO Company to follow those trends.
Environmental
Government institutes are forcing the companies to address the environmental issues and
they are liable to respond to these Issues to benefit to the society. Now this company also
encouraging their buyers to shop at their website. TESCO. This company drivers will not only use
Fuel-saving routes, but they also collect the unwanted plastic bags from the customers and recycle
them.
Legal
In 2016, Tesco 17 workers took legal action against the employer on the basis of age and
gender discrimination. Workers were extremely frustrated after noticed low pay rates for night,
weekend and bank holidays shifts.
1.2 An Organisational audit conducted on your chosen organisation
using SWOT (P1)
 Explain briefly what is SWOT.
 Include a diagram of SWOT of your chosen organisation, if any
 Using SWOT, critically analyse the impact and influence of the macro
environment on your chosen organisation and its business strategies.
Swot analysis of Tesco
Strength
 Tesco is known as biggest grocery retailer it has the highest revenue and sales.
 It has diversified product and market range such as home ware items, mobile phones
clothing range and many more.
 Tesco is known as the larger opportunity builder as it has around 743K jobs
opportunities for employees from all over World.
 Firm has diversified its business globally as it has 6800 stores within 14 nations,
Apart from North America and Europe.
Weaknesses
 Tesco has low cost strategy as it can decreased their profit margins.
 Tesco has facing poor operational performances as its few stores as well as grocery
outlets are unable to perform well within some nations.
Opportunities
 Tesco has the opportunity to grow its online shopping by home delivery services.
 Tesco has opportunity to grow its market within several developing nations such as
South Korea, Indonesia and many more.