Factors Influencing Business Success

This assignment examines the various external factors that influence the success of businesses. It delves into political, economic, social, technological, environmental, and legal aspects, highlighting their impact on organizations. A case study comparing Tesco, Marks & Spencer (M&S), and British Home Stores (BHS) illustrates how these factors play out in real-world scenarios. The analysis considers market position, internal resources, opportunities/threats, and strengths/weaknesses of each company.

Global Corporate Strategies
PG
campus - 2016/2017
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Word Count: 3494 “Kindly please reduce 374 Words” only
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Table of Contents
EXECUTIVE SUMMARY.............................................................................................................3
INTRODUCTION...........................................................................................................................4
Question 1...............................................................................................................................4
Question 2.Retail internationalisation: Strategic alliances, M&As........................................5
Question 3.Corporate governance:.........................................................................................7
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16
Illustration Indexes
Illustration : CSR of Tesco target and Actual..................................................................................9
Illustration : Financial data of Tesco last 5 years..........................................................................11
Illustration 3: Market share of Retail in UK..................................................................................12
Table of Appendices
Appendices 1.
PESTEL analyse of the Tesco18
Appendices 2.
Table 1. 21
Appendices 3. Dichotomy (Tesco, M&S and BHS)22
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EXECUTIVE SUMMARY
This project is based on global corporate strategy that is very important aspect because it
helps in achieving the desired result or competitive advantages over the competitors.
In this project, it will be explained that portfolio versus integrated perspectives between TESCO
AND M&S, meaning of strategic alliances and merger and acquisition, corporate governance,
corporate social responsibility, leadership and competitiveness and what my learning during this
project report.
While doing merger and acquisition, firstly, TESCO should made strategy so that it can merged
effectively and can achieve it is desired result and outcome and can run in the market efficiently.
This report will explain the importance of CSR activities that provides many benefits to the
company like increase market share, brand image ,good reputation etc. while corporate
governance makes the rules and regulation for the company.
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INTRODUCTION
Global corporate strategies means to adopt new methods and techniques to develop their
business in the effective manner. In the global level many companies are apply effective method
to develop their develop earn profit and also increase economic scale of the country (Purce,
2014). Tesco and M&S both are the retail company those are provide all kind of products and
services to customers and already build effective and brand image in the market to achieve the
objectives and goals of the business.
To increase profit and diversify risk of the business so company will apply some methods
like merger and acquisition and strategies alliances all in these methods are two or more parties
are merge together to earn mutual profits and benefits related to the business. In these methods
mutually divide all risk and profits relating to the business (Marchi, Maria, & Micelli, 2013).
All kind of business have some responsibilities to develop their business and earn profits as well
as do some social benefits to the society just like provide security and safety , to their welfare
activities and programmes those help to develop society and their standard of living. In the other
hand, global corporate strategies are help to develop business industries with new and innovative
ideas and view.
Merger and acquisition and strategic alliances in which two or more parties are work together to
earn profits and diversify the risk of the business and start a new company with new name.
Question 1
Tesco is an international company in UK which provide retails goods to their customers.
Tesco wants to expand its market in the whole world for this purpose they make strategies for
their business. It is essential for a business organization is that to use various aspects in order to
achieve organizational goals and objectives in an effective manner (Barrientos, 2013).
For this the firm is required to use a strategic choice which h can help to implement their
activities to deliver their vision. A strategic portfolio management is a systematic process which
helps to deciding organizational resources to meet their strategic objectives in an effective
manner (Sparrow, Farndale, & Scullion, 2013). In the context of Marks and Spenser which is one
of the leading company required that to use various tools and techniques in order to attain their
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desired goals and objectives. According to the annual report of the cited business organization
they focused on the various aspects which can help to improve their business performance . The
higher authorities required that to expand their business which can help to maintain their
profitability in an effective manner (Hahn & et. al, 2015).
Please see the Appendices 1. PESTEL analyse of the Tesco
Please the Appendices 2. Table 1.
Question 2.Retail internationalisation: Strategic alliances, M&As
Strategic alliances are refers to when two or more parties are merge with each other to
earn higher profits and develop their business to that's called strategies alliances. In which two or
mare parties working together to earn profits and there are all partners are mutually working with
each other’s and divide profits and losses with each other. In which mutually divide fund, capital,
resources etc. by the partners (Kuratko, Hornsby, & Hayton, 2015).
In the other hand, strategies alliances are create when two or more parties want to work together
to earn mutual benefits and profits by the business (Arevalo and et. al, 2013). Strategies alliances
are legal but it is less than joint venture because there are two or more parties are work together
not for permanent in the future they are working for earn profits and benefits. Merger and
acquisition(M&A) in which two or more companies financially to purchase their company and
start a new company with new name and with new objectives and goals (Linnenluecke &
Griffiths, 2013).
Merger in which mainly two or more companies are merge together for start a new company
with new and innovative ideas views those help to build a brand image in the market and help to
achieve decided targets and goals of the business . In which all parties are working together for
mutual benefits but they are start a new company with new name. To the merger have to made a
legal agreement under the legal law and act of this department and should take permission to the
government.
On the other hand, acquisition is one company take over on the other company and continuously
working in that company by the acquire person (Purce, 2014). M&A is the most powerful
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aspects in the financially corporate world in which two or more companies are working together
to their mutual benefits and start anew business.
All these are help to increase market share of the business and change the techniques and
strategies to produce effective products and services. In the other hand, all these are help to
develop business in the systematic a manner and help to build a market image to use new and
innovative techniques and strategies to produce product services to their customers (Marchi,
Maria, & Micelli, 2013).
Merger and acquisition in all terms are legal in the country because in which two or more
companies are come together legally and made a legal agreement. So there are follow some rules
and regulations those are regulated by government of country. If in case there are not legal
agreement so all illegal according to the government.
Tesco is the retail chain that want to start business with M&S. This company provide all type of
products and services to customers and already build a effective image in the market and also in
the customers mind (Barrientos, 2013).
These both are retail companies in the UK market. These want to develop their business and
increase market share of the company so according to this situation merger and acquisition is the
best solution to both company. Mergers and acquisition having some advantages and
disadvantages to the develop a new business with new and innovative ideas. There are some
advantages those are help to develop business like: when two or more companies are merge
together so those companies of power and control are mutually merge and help to develop
market share of the company. Through the merger and acquisition diversify risk of the business.
Its help to increase economic scale of the business (Sparrow, Farndale, & Scullion, 2013).
Merger and acquisition of main benefit is tax benefits in this aspect of finance tax saving method
to merger companies and start a new company with new name. In the other hand, there are some
disadvantages those are harmful for both parties like: mergers and acquisition method in loss
experience with both parties and have to share all knowledge and techniques with each other so
there are loss experience of the parties (Zona, Minoja, & Coda, 2013).
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In this method company will facing many difficulties and issues to start a new company also
there are increase cost to develop business and their productions and there are using some new
and innovative techniques in which have to invest money to develop business and achieve
objectives and goals (Guoyou & et. al, 2013).
In the other hand, merger and acquisition is the financial aspects in which Tesco and M&S to
develop their business so that will merge and acquisition method will apply to develop business.
Question 3.Corporate governance:
The BHS company determine the corporate governance for the decision making process
and also define the many rules and regulation in the organisation. This governance determine the
many policy of the decision making (Linnenluecke & Griffiths, 2013).
It also determine the company profile and performance in the organisation. This organisation
developing the rules and regulation related to the work environment. This governance determine
the company manager, director and other stakeholder in the organisation. This governance taking
the profile of the company (Hahn & et. al, 2015).
This governance provide the best rules and regulation related to the product services and
evaluating the best sources in the way of the product. The governance also determine the budget
and profile of the company (Grant, 2016).
This governance evaluating the many factor relating to the social factor, economic factor and
organisation factor. Decision making process developing the company goals and objectives and
create the best and innovative plan related to the BHS company. This company applying the
many strategy of the government rules. This rules take the best process of the product
manufacturing. The government evaluating the many research of the customer satisfaction and
dissatisfaction and also evaluating the company data (Arevalo & et. al, 2013).
Corporate social responsibility: This responsibility determine the self-regulation system in the
organisation. This responsibility determine the moral and standards of the social factor. The CSR
making the slandered of the national and international objectives. The company provide the
many facility related to the new product and new product development (Hahn R. , 2013).
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This is also define the small scale industry and provide the small industry also define the long
term relationship for the industry and governance. This responsibility determine the company
employees size and their personality. This is also making the best decision and create the
management process related to the product. The BHS company provide the human resources
management process in the organisation. This process setting the new employees entry in the
company (Sparrow, Farndale, & Scullion, 2013).
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CSR Target of Tesco:
Illustration 1: CSR of Tesco target and Actual
As per the above given data of Tesco CSR activities is given it shows that the firm having
enough resources in order to attain their CSR target in an effective manner. The cited business
organisation is set the target which is related with the reducing of CO2 emissions. The set their
target was 6 percent but actual target are more which can create an ideal image of the company
in the public (What Is a Business Strategy? An Overview, 2016).
The company also provide the level of the organisation person. The small level and the median
level. The small level organisation apply the CSR process in the organisation and medium level
organisation taking the best plan and innovative ideas. This is provide the supply chain
management. The supply chain determine the relationship between the company employees and
target customers (Barrientos, 2013).
Leadership: The leadership create the company structure and evaluating the vision and mission.
Leadership also define the company manager. This process also define the selection and
recruitment process of the new employees (Marchi, Maria, & Micelli, 2013).
This process provide the human satisfaction and their product productivity. The leadership also
very important in the motivation, co-ordination. The leader of the company provide the
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organisation objectives and goals. It also create the best structure of the organisation. Leadership
making the best decision in the different situation and provide the alternative resources in the
organisation (Purce, 2014).
The leadership also determine their profile and taking the marketing mix strategy. This strategy
also determine the promotion techniques including the sales promotion, personal selling,
advertisement, sponsorship, online and direct marketing and also evaluating the packing process
in the market related to the product. The leadership as a friend and making the best sources and
alternatives plan in the organisation (Arevalo & et. al, 2013).
The leader of the BHS company is an intelligent and create the best skill and knowledge related
to the product. Case study define the role of the leader in the organisation. The role create the
management process of the product.
Competitiveness: The company use the many competitiveness related to their product
and setting the best product in the organisation. This is determine the company position in the
market. The company use the many sources to developing their product and services. Company
reduce the cost of the product and increasing the profitability ratio of the product (Klettner,
Clarke, & Boersma, 2014). This is determine the many sector and sub sector this sector provide
the goods and services of the supply and taking the alternative resources in the organisation.
Company increase the brand of the product. This brand determine the best product and services
in the organisation. Company also provide the pre purchasing process and post purchases
process.This is also create the organisation goals and objectives (Linnenluecke & Griffiths,
2013). BHS uses many sources in order to develop their product and services. Company reduce
the cost of the product and increasing the profitability ratio of the product. BHS increase the
brand of the product. This brand identify the best product and services in the organisation.
Company also provide the pre purchasing process and post purchases process.
Business performance of Tesco in the UK market:
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Illustration 1: Financial data of Tesco last 5 years
As per above given data, BHS have good amount of financial resources that is very important for
remaining competitive in the market and achieving the competitive advantages over the rivals.
The turnover of the cited business unit in current year is 51433.0 million pound. On the other
hand, the last year is 62281 million pound. The net profit of the company is 129 million pound
which is good as compare tom last year.
Question 4.Impact of the global retail industry competition
At present time market take place on global level. Many manufacturing and the other
companies deal on the global level. Market refers a slogan on the broad level which is “Each for
everyone and every one for each” (Whiteman, Walker , & Perego, 2013).
 Increase Competition:- All the company have to face more and more competition on the
broad and global level. Market is same for all on the global level. Customer have many
option on global level (Klettner, Clarke, & Boersma, 2014). Customer can easily select
the right product.
 Perfect competition market:- If any company do business on global level so company is
working in perfect competition market. Perfect competition market said that a
organisation should make the strategic strategy to manage product on global level. If
company is dealing at international level then it is working in the perfect market
competition. It means that there are more no. of competitors in the market. BHS should
make strategy that will help in achieving this target.
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Illustration 1: Market share of Retail in UK
Retail position in the UK market:
As per the above given data the market share of Tesco is quite good as compare to other
companies. The having approx. 28 percent market share which is highest in the retail sector. The
cited business unit is price leader in the United Kingdom which can provide competitive
advantage to them.
Key benefits and limitations of the portfolio and integrated organisation perspectives
A portfolio is not the collection of projects. It refers that terms which help to organisation
to transform the business on global level. Company make strategy to achieve the organisation
goal and objective and use all the thing in a portfolio (Zona, Minoja, & Coda, 2013).
 Portfolio help to manage the work of organisation.
 It is easy to conduct and upper level management can manage it.
 Many times portfolio does not provide the fully information related to the organisation
(Sparrow, Farndale, & Scullion, 2013).
 Portfolio fails to save the cost of portfolio. Its increase the cost of organisation.
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Merits and demerits of choosing strategic alliances
There are many merits and demerits choosing the strategic alliances:-
 It is helpful to provide the supplementary services (Barrientos, 2013).
 It is helpful to provide the new market opportunity for new marketers.
 It helpful to increase the brand name, brand loyalty and brand awareness in market.
 It provide the useful information and help to select the right partner for firm or
organisation (Roh, Hong, & Min, 2014).
 It is take more cost comparison of other.
Role of corporate leadership profitability through responsible policies and practices
 A corporate leader play a motivator role in organisation to motivate the team.
 Corporate leader help to solve the problem in organisation.
 Corporate leader work as a policy enforcer.
 Corporate leader should be a positive thinker who can manage the any situation with the
great decision power (Purce, 2014).
Please see the Appendices 3. Dichotomy (Tesco, M&S and BHS)
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Product related core competences Process related core capabilities
Product is one of the most significant area for
each business unit. in the context of Tesco,
where product quality is high at the affordable
price. Whereas, M&S and BHS product are
not match with the Tesco.
Process is related with the supply chain, after
sale services and other aspects. Tesco is having
a unique integrated supply chain system which
is interlinked with all distribution and ware
house department across United Kingdom.
M&S and BHS is also having their own supply
chain management which is meet their current
requirements.
Japanese leadership style Western leadership style
Leadership played a prominent role in the
success of every business unit. In the context
of Tesco, M&S and BHS are using western
leadership style which is quite different from
Japanese leadership models (Berger & Lester,
2015). There are so many differences in the
management style. For example, the Japanese
manager are very general they can rotate from
one area to another.
All three business organization are based on
UK which follows western management style
in order to operate business organization. In the
European leadership style the manager is to
rotate from one field to another (Whiteman,
Walker , & Perego, 2013).
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CONCLUSION
Above information and given report tell about the leadership style in organisation and
how the leader mange the work in organisation.
At present time many company deal on the broad and global level. Company deal with
other company on global level. Company hire the leader to manage the team work and make the
strong strategy to do work and achieve the organisation goal and objective. A corporate leader is
the bone of organisation which provide the many information and help organisation top get the
mission of organisation. There is too much competition on global market.
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Appendices 1.
PESTEL analyse of the Tesco is given below:
Political factor
This is one of the major factor which is related with the government
stability and business policies. in the context of UK, the government is
stable which can help to provide long term consistency in the business
policies. It can help to maintain profitability of the cited business
organization (Guoyou & et. al, 2013).
Economical
factor
This is another significant factor which is related with the economic
aspects of the country. It can involve GDP rate, employment condition,
interest rate, inflation etc. UK is one of the leading economy of the world
approx. $2.5 trillion. It has quite good economic position as compare to
other countries which can provide the new opportunities for the Tesco in
the near future (Roh, Hong, & Min, 2014).
Economical
factor
This is another significant factor which is related with the economic
aspects of the country. It can involve GDP rate, employment condition,
interest rate, inflation etc. UK is one of the leading economy of the world
approx. $2.5 trillion. It has quite good economic position as compare to
other countries which can provide the new opportunities for the Tesco in
the near future (Roh, Hong, & Min, 2014).
Social factor
This is related with the various social factors such as culture, belief,
attitude customer preferences, taste, per capita income. In this context, the
per capital income of the UK is $40000 which is higher than other
countries. It can help to increase the per capita income which can provide
new opportunities for Tesco.
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Technological
factor
Innovation and technology played a significant role in the success for
each and every business organization. The cited business required that to
use various technology tools in order to promote firm’s product and
services in an effective manner. For example, they can use social media
tools such as Facebook, Instagram and Twitter in to advertise products
(Hahn R. , 2013).
Environmental
factor
Today, customer is more aware towards the environmental and climate
issues. Therefore, it is responsibilities of the company is to produce their
product in a sustainable way which can help to attain its long term goals
and objectives.
Legal factor
This is another factors which is related with the legal aspects of the
business. there are various rules and regulations which is related with the
business and the operation (Crane & Matten, 2016)s. This is the
responsibilities of the company to follow these guidelines in an effective
manner.
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Appendices 2.
Table 1.
Factors Description
Political factor This is one of the major factor which is related with the government stability
and business policies.
Economic factor This is another significant factor which is related with the economic aspects
of the country.
Social factor This is related with the various social factors such as culture, belief, attitude
customer preferences, taste, per capita income.
Technological
factor
Innovation and technology played a significant role in the success for each
and every business organization.
Environmental
factor
Today, customer is more aware towards the environmental and climate
issues.
Legal factor This is another factors which is related with the legal aspects of the
business.
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Appendices 3.
Dichotomy (Tesco, M&S and BHS)
Market Position Internal resources Opportunity/Threats Strength/Weakness
The Tesco PLC market share is
quite large as compare to other
companies with approx. 28%
which can provide competitive
advantage in the market. On the
other hand, M&S and BHS market
share for the year 2015 approx.
9.5% and 2.5% respectively.
Internal resources are
related with the human
resource, system, financial
resources and expertise.
These all resources played
a prominent role in the
success. In the given case,
Tesco is having more than
0.3 million which are
highly skilled. On the other
hand, M&S is approx.
80000 employees and they
operate their business in to
other country as well. BHS
is quite small as compare
to Tesco and M&S approx.
100 staff (Zona, Minoja, &
Coda, 2013).
Tesco required to use
rebranding campaign by using
social and digital media such as
Facebook, Instagram etc. They
can also have focused in the
various emerging market such
as India, China and so on
(Cornelissen & Cornelissen,
2017). On the other hand, due
to rise in the competition level
in the UK market it can leads to
reducing revenue and sales of
the company.
M&S the required to go online
sales which can help to provide
long term growth in the UK
market. There are various retail
giants which can offer discount
pricing create a serious problem
Tesco PLC having wide presence
across the world such as Europe,
America, Asia etc. This company is
using multi store strategy which can
include hyper market, super market
and small store. It is one of the most
valuable brand in UK which can
provide competitive advantage. On
the other hand, there are recent
controversies can harm the public
image of the firm. The profitability
of the company is affected by debt
and other financial issues.
M&S is one of the powerful brand in
the UK domestic market. The firm is
offer their product at the lower price
to its customer. They provide a wide
range of products which can include
Kinds, men and women wear.
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for the company.
BHS The business entity can
increase its global presence in
the emerging market which can
help to increase its market share
and profitability. The firm is
operating their business in to
cost competition market which
can overcome its revenue and
profit which is the common
goals for each and every
company.
Whereas, BHS This is a brand which
is emotional attached with the
customers can provide competitive
advantage in the market. Their stores
are located in the high valuable area
strategic location in the United
Kingdom. The online services in
limited where the customer cannot
get the relevant information about
the products (Kuratko, Hornsby, &
Hayton, 2015).
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