Entrepreneurial Strategy for Tesco plc

This report discusses the entrepreneurial strategy used by Tesco plc to achieve its goals and improve its market position. It includes PESTLE and SWOT analysis, global market situation, strategic objectives, and strategic choices. The report provides recommendations to improve market position.

Entrepreneurial Strategy

TABLE OF CONTENTS
1. INTRODUCTION.......................................................................................................................4
2. Overview of the organization .................................................................................................4
3. Pestle analysis of the company ..............................................................................................4
3. Global market situation of the Organization...........................................................................7
4. SWOT Analysis .....................................................................................................................9
5. The key strategic objectives..................................................................................................11
6. Strategic choices....................................................................................................................11
7. Implementing strategies........................................................................................................13
8. Recommendations.................................................................................................................14
9. CONCLUSION..........................................................................................................................15
REFERENCES..............................................................................................................................17
APPENDICES...............................................................................................................................18

EXECUTIVE SUMMARY
Entrepreneurial strategy is a method used by company in order to identify their unique
approach and techniques to meet the objectives effectively. By using buiness strategy the tesco
plc has successfully achieved its goals and reach its customer base. With the help of strategies,
company can help guide the decision making process for resource allocation and improve
productivity as well.

1. INTRODUCTION
Entrepreneurial strategy is the systematic means through which a company establish and
manage its fundamental collection of relationships with its business environment. Every
organization has its own strategy which includes, few of them identify a problem that needs
proper solution and others. With the help of entrepreneurial strategy company will be able to
identify their unique and different approach. By using effective strategy, the firm will be able to
position themselves in the market. The present report will be based on Tesco plc, situated in the
UK providing various types of product or services to customers. With the help of PESTLE and
SWOT analysis, the company can easily find out major factors that may impact the business
operation. Furthermore, the report will provide detailed information about strategic objectives
and global market situation of Tesco plc along with recommendation to improve market position.
2. Overview of the organization
Tesco plc, situated in UK is one of the most popular brand which provide varieties of
products or services to customers. Tesco plc is the second largest retail company in the whole
world which provides large varieties of goods and services in the context of profit. The firm
achieve the title of third largest grocery company in the world which is measured by revenues.
A company offers great deals on products and services like homeware products, financial
services, books, toys, electronics, clothings, food items and groceries. Tesco plc has strong brand
equity in the world, by using effective marketing strategy the firm has achieved success into its
business operations. The firm has curated a large customer base and satisfy customers by
providing them quality services. Also, the major aim of the firm is to reduce price of products or
services but also maintain a good reputation of better quality. By using advanced digital strategy
and updated technology the company has successfully achieved progress in the retail industry.
3. Pestle analysis of the company
The PESTLE analysis highlights the different factors that may impact Tesco plc business
and its operations. By using this method, company can understand market dynamics and improve
its business strategies continuously.

Source: (Achinas and et.al., 2019)
Political factors- since the retail company operates worldwide, political factors greatly
impact the productivity and performance of the firm. A slight change in the political factors can
impact the operation of the company. This includes rules and regulation about taxation, trade
policy, fiscal policy and many more. Due to ongoing financial instability in the world after
COVID-19, government encourage companies to offer jobs for the people. As Tesco plc is one
of the leading company in the world, the firm has to follow major policies that ensure safety of
its products or services and employees (Nandonde, 2019). If the company follow these factors,
then they can enjoy the opportunity to carry out trade. The change in tax policies after Brexit will
impact the profitability of the company.
Economic factors- These factors are the main point of concern for the company, as they
are most likely to leverage demand of products or services. Along with this, it is mostly

leveraged costs, prices and profit margins. A slight change in the policies like changes in rates,
taxation, interest rates can impact the accessibility of finance. Tesco plc managers have to keep
track on such changes related to pricing as it will impact the sales and revenue.
social factors- nowadays, purchasing power and behaviour of people is mostly
influenced by social and cultural factors. In today's environment, people are more attracted
towards organic products. Due to this trend, the company has planned out its stores to facilitate
these needs and wants. As the people prefer buying everything in bulk, the company has also
provided this facility at its stores. With the attitude of customers, Tesco has successfully
managed to capture its clients base by promoting organic items so that they can easily satisfy the
needs of clients. But in the future, the firm has to keep track on changing trends so that they can
offer with sufficient products or service to satisfy its customers.
Technological factors- new trends related to technology have been changing at a fast
pace, and to stay relevant in retail industry, it is important for Tesco plc to keep up with changing
and advance technology. Nowadays, customers are attracted towards online shopping and fast
delivery system and spends more time on social media (Adamyk, 2019). By providing various
technical benefits and other facilities to customers the company has successfully managed to
shift the trends of online shopping and getting their products home delivered. Tesco has also
invested more amount on energy efficiency in order to meet the long term goals to reduce its
carbon footprint and maintain sustainability.
legal factors- A small change in policies made by government, directly influence the
business operations of the Tesco. It is mandatory to follow both domestic and international
market laws to run business smoothly. For example- it is essential for retail and food industry to
follow rules made by government that is food retailing commission. In order to maintain
reputation of the company, Tesco plc has to follow legal factors.
Environmental factors- In today's environment, people are more concerned about
environment. Tesco has undertaken major steps in order to help improve the business atmosphere
and focused on creating a more sustainable society and satisfy the needs of customers
(Christodoulou and Cullinane, 2019). Recently, the firm has adopted strategies to remove
wastage and reduced the usage of plastic to minimal level and explore good and new
opportunities to gain competitive advantage.

3. Global market situation of the Organization
Source: (Tesco plc share price forecast, 2021)
 Tesco plc has achieved good market position in the retail company because of its
marketing strategies and growth methods. As of 2016, Tesco plc is the fifteenth most
valuable retail industry providing varieties of goods. The company is leading grocery
retailer with a market share of over 25% which is quite high as compared to others. Tesco
has numbers of stores worldwide where more than 400000 employees are working. As
per latest report, the market share is 28% which is quite good among all the retail
company in the UK.

 Now, the company is focusing on expanding its online capacity because people are
spending more time on social media. Due to COVID-19 customer are more concerned
about social distancing, so they only want to purchase products or service online via
website, mobile application of company. Tesco plc is also providing servicing like
telecommunication, financial services, loans and others to satisfy the requirements of
customers.
 Tesco bank- The company also provide facility of financial support to customers and
offers varieties of financial services, this bank is situated in UK and was formed in the
year 1997 named as Tesco personal finance. This bank offers a range of insurance and
schemes to its customers it also offers credit cards, savings, mortgages and travel goods
to its loyal customers. They also provide cross sell financial services and hence become
the third popular bank in the British bank awards. By offering finance services they firm
have achieved success in customer satisfaction.
 Tesco mobile- The firm also provide mobile telecommunication facilities to its
customers and own its market position in the UK retail industry. They mobile services of
Tesco plc provide free calls facility and free text benefit to people. They also offer bill
pay, prepay, mobile sim card plans and many more to satisfy its customers.
 Around 4673 stores are available worldwide where customer can purchase products or
services as per their convenience.

Source: (UK grocery market share., 2022)
 Due to rapid changing in the political, economic and technological factors the company
has to face a lot of challenges. This has created pressure on managers of the firm to deal
with changing tax rates, legislation and economic condition (Guo and Wang, 2019). The
company has also faced pressure of providing jobs to local people of UK so that
unemployment rate can be maintained to develop the economic growth.
 Despite its success, the company also faced many problems and issues such as the horse
meat scandal, BREXIT, decreased in its quality of products and failure to understand and
identify the changing trends and culture in the other locations.
4. SWOT Analysis

Source: (Soegoto, 2021)
Strengths-
 The major strength of the company includes Tesco is one of the popular groceries and
retail organization in the UK.
 The company follows new advanced packaging method to attract more new customers.
Also, the firm has shifted towards promoting organic products.
 More than 400000 staff members working in various roles and achieving goals according
to their responsibilities.
 Along with this, the company has more than 7000 physical stores so that customers can
easily purchase things. In addition to this, the firm has its own online website where
customers can choose products or services as per their choices.
 The firm also focused on using digital marketing in order to promote the brand image via
social media and other marketing campaigns.
Weaknesses-

 As compared to other retail company, Tesco has limited presence in emerging countries
which has limited scope to achieve success in those countries.
 Due to its weak operating performance in few locations has affected its brand image.
 The marketing department of the company has to focus on research and development
strategy and work on doing sufficient ground research before implementing any
techniques.
Opportunities-
 Due to changing customer and market trend related to eco-friendly products or services
and advanced technology, the Tesco plc has big opportunity to expand its business
operations in different countries by using good strategy related to promoting brand
reputation, the company can grasp many opportunities to attract more new customers.
 The company has good opportunity to partners up with the local market and learn
knowledge about the local business strategies to achieve goals and objectives.
Threats-
 Due to Brexit, the company has faced lot of challenges related to trade because Tesco has
been running its business activities in many European countries.
 Due to heavy competition in the retail industry, the company has to maintain
relationships with other firms which is a big concern.
 Rapid changing in the policies and rules made by government related to taxation can
impact business operations of Tesco plc.
 Nowadays, Rapid changing of advanced technology, has created high pressure on Tesco
plc and other retail industry. So companies has to focus on constant innovation requires
attracting more customers and gain competitive advantages.
5. The key strategic objectives.
STRATEGIC OBJECTIVES- strategic objectives are the big picture goals created by the
company which provide detailed information about what the firm will do to fulfil the
requirements of the customers and to meet the organizational goals (Strategic objectives., 2022).
Basically, it is a kind of performance goals set by the industry. There are different types of
strategic objective Tesco plc needs to focus on:
 To increase profitability throughout the year
 To increase internal revenue over the upcoming years

 To decrease unnecessary expenditure
 To develop new product line
 Maintain budget for marketing initiatives to avoid any uncertainty in the future
 Reduce wastage in order to maintain sustainability in the world
 Create proper feedback strategy for Employees
 Develop innovation and technology
 Initiate satisfaction of customers
6. Strategic choices
For every business industry, it is necessary to focus on developing strategies with the
help of effective growth techniques. An effective leader understand that if their company is to
grow in the upcoming year which is long-term success, they can't stick with one model or
mindset even when business operation are going well. They need to understand the concept of
changing trends and cultural difference. Therefore, Tesco plc leaders need to find new
techniques to improve profitability and meet the strategic objectives as mentioned above. By
using new ways the firm will be able to increase customer base which is beneficial for their own
brand image and profitability. There are many options available such as entering in new markets
or emerging markets. But the company needs to understand the fact about how to enter the
market and which strategy will work best for the firm's success.
Ansoff matrix- product/ market expansion Grid is another name of Ansoff matrix.
Basically, it is a tool used by company in order to plan and analyse their growth strategies which
is beneficial to improve overall performance (Yaqoob and Omer, 2021). The Ansoff matrix
shows four important strategies the company can utilize to grow their business and helps them to
analyse the risks associated with each one.

Source: (Khajezadeh and et.al., 2019)
Market penetration- In this strategy, the company uses its goods or services in the
existing market in order to increase its market share which can be beneficial for them to achieve
goals. By using this method, the organization can increase distribution channels and promotional
activities. In addition to this, the firm can decrease prices of its product or services in order to
satisfy the needs of customers in the market. By using market penetration strategy, the industry
can acquire a competitor in the similar market position.
Product development- In this strategy, the company can develop its new goods or
services to achieve success to the existing market. Basically, this method advice to focus on
research and development system in order to expand business (Sukma, Lubis and Utami, 2019).
By using this strategy, any company can understand their current market strategy and strategies
used by other firms. This method is employed effectively when organizations have a deep
understanding of their current market and are able to offer innovative solutions in order to
achieve the customer satisfaction.

Market development- According to Ansoff matrix, this strategy is used by company
when they want to enter a new market with its existing products or services. Basically, this
method says expanding into new location will be quite challenging but using this strategy
company can enter into new regions and customer segment.
Diversification- As per Ansoff matrix views, the company enters a new market with a
new product or services. This strategy is the riskiest and quite challenging among all because
product development and market development are required here. Here, skills and knowledge of
experts is needed because the company is trying to sell completely different goods or services to
various types of clients.
7. Implementing strategies
With the help of Ansoff matrix, Tesco plc will be able to achieve goals and meet its
strategic objectives as mentioned above.
In order to implement this strategy, Tesco plc needs to adopt some major steps:
 By using swot and pestle analysis, the firm can easily identify opportunities and
threat in this different market and understand the factors that may impact its
business operations.
 To implement this strategy in the company, Tesco needs to analyse Ansoff matrix
approach.
Market penetration- For market development strategy firm needs to acquire strategies
used by competitors in the same marketplace then only they can easily meet its strategic goals.
Also, if the firm reduce its product price with the help of pricing method, then they can attract
more new customers because low price with good quality is the first choice of people. Also, they
can also implement pricing strategy by decreasing price of products to attract new clients.
Product development- For this strategy, the firm needs to implement few techniques
such as investing in research and development in order to improve new products to cater to the
existing marketplace. They can attract customer by using new and attractive packaging and focus
on improving customers service without affecting quality of products (Zanjani and et.al., 2020).
After that, firm needs to acquire strategies used by competitors to meet the requirements of
customers. If the company develops new product line to cater to the existing market, then they
need to form strategic partnerships with other industries too so that they can easily gain access to

each partner promotional activity. For example- promoting organic product line as customers are
more attracted towards eco-friendly services.
Market development- To meet the market development strategy, the company needs to
use different sales channels such as online sales, marketing campaigns and direct selling method.
By implementing market segmentation, the firm can easily target different group of customers
related to gender, ages and lifestyle. Use the marketing mix to know how to reposition the
company's products or services which can attract more customers and make necessary changes to
avoid any uncertainty in the future.
After identifying and analysing Ansoff matrix, it is important to manage risks by using
risk analysis method to gain a better understanding about the threats associated with each option
of Ansoff matrix.
In the next stage, the company can use risk impact chart to manage risk, it is important to
choose the best option among all. By using decision-making process with the help of decision
matrix analysis different factor can be analysed. For Tesco plc, product development strategy
would be better option to meet its strategic goals and objectives.
8. Recommendations
 It is recommended to improve a new marketing strategy in order to motivate people to
choose company's product.
 It is also advisable to introduce a loyalty program and offer schemes, discount to
customers.
 Use effective pricing strategy to meet the requirements of customers without affecting the
quality of products or services.
 It is also recommended to increase sales force's activities and promote brand image with
effective marketing methods like campaigns, online sales and more use of social media
networking.
 Tesco plc needs to launch effective programs and training sessions for employees to
motivate them towards company's strategic goals or objectives.
 The company is suggested to improve customer service in emerging markets by
extending the techniques.
 It is advisable to make proper budget planning to avoid any kind of unnecessary
expenditure.

 As per the new customer trend, maintaining sustainability is important for companies.
However, Tesco plc has started promoting organic products but it is suggested to focus
on spreading awareness about eco-friendly services to attract customer satisfaction.
 Using key performance metrics and benchmarking, the company can measure its progress
and success of employees. It is suggested to collect feedback from people and also from
employees to make necessary changes in the company and offer good services.
 The best way to increase sales and revenue of the company, is to grow geographic reach
and target repeat customers.
 It is suggested to review business' bottom line performance on regular basis and
benchmark business goals to meet the strategic objectives.
9. CONCLUSION
To conclude, Tesco plc is undoubtedly a very big multinational retail company. But
nowadays its competitors are also growing aggressively and adopting different strategy to meet
objectives such as customer satisfaction. Therefore, Tesco plc should take advantage of as many
opportunities to meet the requirements of customer trends. Before implementing any strategy, the
company should resolve legal problems and clear its brand name from all the legal proceedings
to attract more new clients and stakeholders. By using various strategies, company is providing
needs of customer and people are trusting the brand name again. From the above report its has
been summarized that Tesco plc has successfully used PESTLE analysis which highlights
various elements which may affect its business operations. Furthermore, the study also
concluded that by using effective marketing strategy, company is able to evaluate the critical
external business factors and threats. By Implementing Ansoff matrix, the firm is able to meet its
strategic objectives. In addition to this, the company has successfully achieved its market
position by adopting innovation and advance technology.

REFERENCES
Books and Journals
Achinas, S. and et.al., 2019. A PESTLE analysis of biofuels energy industry in
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Adamyk, K., 2019. PESTLE Analysis on Tesco PLC.
Christodoulou, A. and Cullinane, K., 2019. Identifying the main opportunities and challenges
from the implementation of a port energy management system: A SWOT/PESTLE
analysis. Sustainability. 11(21). p.6046.
Guo, L. and Wang, Z., 2019. Ratio analysis of J Sainsbury plc financial performance between
2015 and 2018 in comparison with Tesco and Morrisons. American Journal of Industrial
and Business Management. 9(2). pp.325-341.
Joy, J., Implication of the cyber threats and its issues in the business process organization; A
case study of Tesco.
Khajezadeh, M. and et.al., 2019. Application of neural network in portfolio product companies:
Integration of Boston Consulting Group matrix and Ansoff matrix. International Journal
of Economics and Management Engineering. 13(6). pp.809-813.
Matrix, A. and Ansoff, I., Tools for Generating Strategic.
Nandonde, F. A., 2019. A PESTLE analysis of international retailing in the East African
Community. Global Business and Organizational Excellence. 38(4). pp.54-61.
Soegoto, F. A., 2021. Product Development using SWOT Analysis. International Journal of
Entrepreneurship & Technopreneur (INJETECH). 1. pp.1-10.
Sukma, D., Lubis, P. H. and Utami, S., 2019. Analysis of Marketing Strategy of Minyeuk Pret
Using STP, Ansoff Matrix, and Marketing Mix.
Yaqoob, M. K. and Omer, H. A., 2021. The Role of Digital Marketing in Promoting Ansoff
Matrix Strategies: A survey study in Al-Alamiah store in Mosul City. Muthanna Journal of
Administrative and Economic Sciences. 11(3).
Zanjani, S. and et.al., 2020. Designing a Corporate Growth Strategy Based on Ansoff Matrix
Using Fuzzy Inference System. Innovation Management in Defense Organizations. 3(2).
pp.151-178.
Online
Strategic objectives. 2022. [Online]. Available through: <https://www.indeed.com/career-
advice/career-development/what-are-strategic-objectives>
Tesco plc share price forecast 2021. 2021. [Online]. Available through:
<https://capital.com/tesco-share-price-forecast-2021>
UK grocery market share. 2022. [Online]. Available through:
<https://www.economicshelp.org/blog/6288/economics/uk-grocery-market-share/>

APPENDICES
Market share of Tesco plc and its Competitors

Tesco plc stores worldwide