Global Corporate Strategy Assessment 2019

This document is a Global Corporate Strategy Assessment for the year 2019. It covers topics such as open innovation, internationalization, organizational purpose, profitability, and social responsibility. The document provides insights into the concepts and strategies used by Tesco, the largest retail store chain in the UK, to attract customers, compete successfully, and achieve organizational goals.

GLOBAL CORPORATE
STRATEGY ASSESSMENT
QUESTION 2019

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Open Innovation and Internationalisation..............................................................................3
Internationalisation, Localisation and Competitiveness.........................................................5
Organisational Purpose, Profitability and Social Responsibility...........................................7
Personal reflections on learning.............................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Business strategy is a set of competitive moves and actions that a business uses to attract
customers, compete successfully, strengthening performance, and achieve organisational goals.
Tesco is the biggest retail store chain in the UK with the market share of 28.1 percent. This
report highlights the concept of the open innovation and close innovation and the differentiation
in between them. After that the report highlights the different factor impact on the competition in
the market. After that the report goes on to highlights the demand of the internationalization and
the demand of the localization and the advantage and the disadvantages of the both and on the
basis of the same the best demand which can be applied in the Tesco. After that the report
highlights the different strategy which can be used by the organization head to compile with both
the corporate profit and corporate social responsibility. In the end the report highlights the
reflection of the learning which has been taken by the writer.
MAIN BODY
Open Innovation and Internationalisation
Open innovation is the innovation mechanism which used throws the light on the
structure that the organization should use the external and the internal idea in the organization to
move forward in their innovation process. Generally using both inflow as well as outflow of the
knowledge to bring the innovation and expand the market (Johnson, 2016).
Closed innovation is the innovation mechanism which used to have belief that the
innovation in the organization can only be maintained internally in the organization. As the
mechanism has a opinion that generation of idea to development and marketing, all the process
need to be perform internally only in the organization.
Difference between Open innovation and Close innovation.
Basis Open Innovation Close Innovation
Open innovation Company which uses open
innovation in the organization
used to operate on the basis of
the sources of the external
knowledge of their innovation
management strategies.
Company which uses the close
innovation in the organization
used to operate in the
environment where self-
contained innovative
environment.

View point Open innovation company
used to have the view point
that the innovation used to take
place beyond the four walls of
the organization as the product
which will be developed is
developed with the motive of
satisfying the need of the
employee outside the four wall
of organization.
Close innovation has the
opinion that the employee of
the organization are the best
person to make and implement
the innovation in the
organization as they are the
one who have the better
knowledge of the
organizational product rather
than the outsider.
Role of Department Research and development
department used to compile
with the promotion department
and the sales department in the
open communication.
All the department employee
are the one who used to bring
the new idea in the
organization in close
innovation.
 Factor endowment: Factor endowment is the amount of the land and labour and capital
which is possess by the Tesco and the impact which is brought by the same (Thompson,
Strickland and Gamble, 2015). Tesco used to have the 6784 stores all across the globe
and used to hire 597,784 employee in the organization this has helped the company in
getting the good amount of the information to support the external innovation in the
organization at the same time it has also helped in surviving the competition as number
store is enough for the customer to reach at any time.
 Related and supporting industries: Involve industries in the country that are considered
as the leader of a particular product. By the help of this industry information Tesco used
to develop the product in the organization at a lower cost which help the company in
attracting the different customer in the market.
 Demand condition: Demand conditions refer to the nature and size of the domestic
demand for an industry's products and services. There is a good demand of the Tesco
product in the domestic market as Tesco is the leading retailer firm in the UK with the
market share of 28.1 percent it has helped the business in dealing with the competition

very effectively as there are many loyal customer of the Tesco in the market. This has
helped the company in getting advantage in the local market (Olson and et.al., 2018).
 Strategy: Tesco Aim to be a Zero carbon company by the year 2050. This will help the
company in improving the customer satisfaction in the organization and also it will help
the company in fulfilling the different type of the corporate social responsibility of the
organization. This will also help the organization in getting the competitive advantage
also. Organization will be investing 1 billion to achieve the same.
 Rivalry: The biggest rival or the competitor in the market for the Tesco is the Asda. As
Asda is the second largest retail firm in the UK market. As Tesco has developed the
goodwill which always help the company in getting the competitive advantage. At the
same time there are some sector where product of Asda used to win the race. One of such
sector is the clothing sector of the organization.
Internationalisation, Localisation and Competitiveness
Internationalization is the word used for the process which includes planning and
implementing the product and the service of the organization in such a way that the Tesco
product can easily adapt market of the new nation in which organization is looking to operate.
Meeting the demand of the Internationalization used to bring the variety of the benefit to the
MNCs. Some of them are as follow:
 Increases the market area: Meeting the internationalization demand help the Tesco in
increasing the market area coverage of the company as the product of the company used
to be sell in the wider market as compare to the past.
 Goodwill of the company: It also help the company in improving the goodwill of the
company as the company which used to operate in global market always creates a good
impact on the customer in reality (Higgins, Omer and Phillips, 2015).
 Access to the talent: This is another big benefit which is brought by the
Internationalization to the organization as the Tesco is able to access large amount of the
talent from the market to carry out the operation of the business. This may also help the
company in improving the human resource quality in the organization.
As Internationalization is the result of the variety of the decision of the step there are
many demerits of the same if the organization is not able to full fill the demand of the
internationalization successfully in the global market. Some of them are as follows:

 Increases the cost of the company: One of the biggest demerit of Internationalization is
that it increases the cost for the Tesco. As fulfilling the demand of the
Internationalization requires a quality of the resource in the organization. This eventually
increase the finance requirement which increases the cost of the company (Strategy,
2017).
 Increase the competition: It is the another demerit of fulfilling the demand of
Internationalization as it increases the number of the competitor of the Tesco in the
market as product of the company has to dealt with the competitor of the different nation
also.
 Localization is the process of developing the product in the Tesco which can easily
satisfy the need of the particular language, culture or desired population's. Generally
company has to understand the difference of the consumer behaviour, purchasing habits
and cultural difference in the two nation and on the basis of that has to develop the
product to satisfy the need of the consumer. There are many merits of fulfilling the
demand of the localization in the market.
 Customer satisfaction: This strategy used to improve the customer satisfaction for the
company as localization will help the company in avoiding the damages of the raw
material and appeals the user experience for the diversified customer (Sanders, 2017). It
will eventually pass on the message to the customer that the organization used to care
about them and understand their need and satisfy them.
 Risk: It is less risky to full fill the demand of the Internationalization as compare to that
of satisfying the demand of localization. As Localization used to work as a precautions to
many cultural difference in different country. As Internationalization sometime may
create the situation in the organization that there is conflict of cultural difference
 There are many disadvantages of Localization also which has to be seen by the
organization some of them are as follow:
 Social Problem: localizing a business to the different location generally used to carry out
the issue variety of the social problem for the Tesco. As it gets difficult for the
organization to understand the current situation of the nation as the data can be brought
on weekly or monthly basis to interoperate the change in the culture of the organization.

 Unhealthy Competition: This approach also used to create the variety of the competition
for the organization as when a business establishes another branch on a local region, there
is a possibility of rivalry to occur.
Out of this two demand the Internationalization will be the biggest demand which can be
applied in the Tesco as the business strategy. The biggest reason behind choosing
Internationalization over localization was that the internationalization will help the company in
understanding the current trend and the demand of the nation (Maier and et.al., 2015). This is not
possible in the localization that the reason the Internationalization will be better option as Tesco
used to dealt in the retail industry and used to offer the variety of the product in the market so it
is very necessary to understands the culture and on the basis of the same the product is developed
in the organization. Another reason is that Localization is not that sure strategy when it comes on
delivering the product on time to the customer in the market as it depends heavily on the
transportation this can affect the business. As Tesco has the good goodwill in the market any
delay in the delivery of the product can affect the company in the negative way also.
Organisational Purpose, Profitability and Social Responsibility
Organizational purpose is the motivational force of the Tesco which used to drive and
motivate the organization in achieving the organizational goal of the business. Generally the
organizational purpose is known as the fuel of the organization which drive them to achieve the
goal of the business.
Corporate profit is the profit or can be said as the money left with the organization after
paying its expenses. Corporate profit is determine with the help of ascertaining the net income of
the organization with inventory replacement and differences in income tax and income statement
depreciation taken into consideration.
Corporate social responsibility’ is a business model which makes all the business
accountable for the different responsibility. Some of the accountability is to itself, its
stakeholders, and the public. In simple words it can be said that this are the activity to pay back
something to the betterment of the society in return of the different resources which are offered
by the society to the business (Bush, Bell and Middlewood, 2019).
In Tesco the senior management in the organization used to implement the variety of
strategy in the organization in such a way that the organization is able to achieve the corporate
profit as well as CSR objective of the business.

First strategy which was used by the management was that the Tesco has associated with
the different NGO all over the globe and used to contribute some part of their earning to them.
Tesco has promoted the same message to the consumer in the society also by highlighting that
some part of their spending will be given to the social responsibility of the nation. For example:
The add which used to come on the television used to clearly specify that if the customer in the
market will purchase the product of the Tesco than their spending will contribute to the social
care also as some part of the profit will be given to the NGO. This has eventually increased the
sale of the company immediately as the consumer are attracted toward the product of the
company so there was in the rise of the corporate profit for the organization. At the same time
Tesco is also able to contribute toward the social care of the nation (Montgomery and Kennedy,
2016). As some part of the profit was send to the NGO all across the globe.
Another strategy which was adopted was that Tesco was that the company has adopted
the new technology in the organization to develop the product which also used to fertilize the
wastage in the organization this has contributed very positively toward the society and at the
same time the technology has improved the quality of the product which is developed in the
organization which has eventually increased the corporate profit for the organization.
Relevant Management Principle
There are 14 management principle which is defines as a Fayol's 14 principle this used to
support the organizational value and used to have the impact on the organizational direction.
Some of the special management principle of Fayol's which used to be used in the Tesco are as
follows:
Authority and Responsibility: It is the principle which defines that all the
organizational head used to have the responsibility to give the order to the different employee in
the organization. This will eventually help the employee in going on the right path in the
organization which will make sure that the organizational goal is achieved by looking at the
organizational value.
Unity of the direction: It is the principle which used to impact the organization direction
in the long run of the business (Worth, 2018). As this principle specify that all the employee in
the organization used to move forward in the same direction to achieve the organizational goal.
As the manager used to monitor the progress of the employee, Tesco manager always make sure

that their team is moving the right direction to achieve the organizational goal and compile with
the different organizational value.
Equity: This is the principle which explains that all the employee in the organization
should be treated equally in the organization. Employee should be at the right place in the
organization and doing right thing. As this equality is one of the ethical value of the organization
this principle use to support the organizational value of the organization.
Leadership principle
There are many Leadership principle which is proposed by 'Great Man' theory to support
the organizational value and used to have the impact on the organizational direction (Slack and
Brandon-Jones, 2018). Some of the special Leadership principle which are seen in Tesco are as
follows:
Ownership: It is the principle of the leadership which explains that the leaders are the
owner of the team and they used to think about the long term goal of the business that is to
achieve the organizational goal effectively. So this principle help the leader in giving the
organization employee a direction to follow in the organization and on the basis of the same
organization is able to shape the organizational direction.
Earn trust: Leader need to be good at listening more than the speaking as it helps them
in building good trust with the employee and also help them in building the good trust among the
group of the people in the organization. This will eventually help the business in supporting the
organizational value as building good and environment friendly environment is one of the
important value for all the organization.
Drive Deep: This principle explain the leader in the organization used to work at the every
level of the organization with the every level of the employee in the organization. This
eventually help the company in diverting the employee in the direction which can help the
organization in shaping their organizational direction (Johnson, 2016).
Personal reflections on learning
Gibbs reflection model is the model which was applied by me in evaluating the different learning
which I have learned by proposing the different strategy which is used by the Tesco. As the
Gibbs model also used to look at learning by doing. I have also learnt all the learning by doing
the assignment on the strategies of the Tesco.

This assignment has helped me in gaining the variety of the knowledge about the MNC's
and their operation which I was lacking in the past. This assignment has also helped me in
improving my sourcing skill. As for collecting the data I have taken the help of the different
sources and offline and able to get the best information so that I can conduct the assignment on
the basis of the same. Also due to the help of the assignment I am able to understand many new
concept and the benefits and drawbacks which is brought by the different aspect to the
organization. As external innovation help the business in getting the information but at the same
time the reliability of information is problem. Internationalization help the company in
improving the market area but at the same time increases the finance requirement of the
company. Localization used to lover down the risk at the company but at the same time also
increases the chances of the cultural difference in the organization. Organizational purpose used
to help the company in setting the different goal in the organization with compiling with the
value and the organizational objective.
CONCLUSION
After going through the above report it has been summarized that open innovation used to
source the information from the market and close innovation used to take place on the
information of employee. After that it has been summarized that Demand of Internationalisation
is the better option to increase the productivity of the organization. After that the report
summarized that the organization can use the two strategy that is promotion and association to
improve the organizational performance. In the end the report summarized the different principle
relevant to supporting the organizational value and shape the organizational direction in the
organization.

REFERENCES
Books and Journals
Bush, T., Bell, L. and Middlewood, D. eds., 2019. Principles of Educational Leadership &
Management. SAGE Publications Limited.
Higgins, D., Omer, T. C. and Phillips, J. D., 2015. The influence of a firm's business strategy on
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Johnson, G., 2016. Exploring strategy: text and cases. Pearson Education.
Maier, T., Tavanti, M., Bombard, P., Gentile, M. and Bradford, B., 2015. Millennial generation
perceptions of value-centered leadership principles. Journal of Human Resources in
Hospitality & Tourism. 14(4). pp.382-397.
Montgomery, D. and Kennedy, J., 2016. Leadership Mosaic: 5 Leadership Principles for
Ministry and Everyday Life. Crossway.
Olson, E. M and et.al., 2018. The application of human resource management policies within the
marketing organization: The impact on business and marketing strategy
implementation. Industrial Marketing Management. 69. pp.62-73.
Sanders, J. O., 2017. Spiritual leadership: Principles of excellence for every believer. Moody
Publishers.
Slack, N. and Brandon-Jones, A., 2018. Operations and process management: principles and
practice for strategic impact. Pearson UK.
Strategy, B., 2017. Business Strategy. MARKETING. 1(2). p.3.
Thompson, A., Strickland, A.J. and Gamble, J., 2015. Crafting and executing strategy: Concepts
and readings. McGraw-Hill Education.
Worth, M. J., 2018. Nonprofit management: Principles and practice. Sage Publications.