Global Strategic Management: Examining Tesco's Business and Corporate Strategies

This report analyzes Tesco's business and corporate strategies, including its focus on growth and diversification, use of technology and innovation, and customer-centric approach. It also examines the external and internal environment through SWOT and PESTLE analysis, and describes strategic tools used to enhance organizational performance. The report concludes with an explanation of the Blue Ocean strategy and recommendations for sustaining Tesco's market position.

GLOBAL STRATEGIC
MANAGEMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
(A) Examining the business and corporate strategies used by TESCO plc CEO.......................3
(B) Undertaking external and internal environment analysis.....................................................5
(C) Describing the strategic tools used by the CEO of Tesco to enhance the organisational
performance................................................................................................................................8
(D)Examining strategic planning designed and created by CEO of TESCO for company......10
( E )Explaining Blue ocean strategy..........................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................14

INTRODUCTION
Global strategic management defines systematic method used by company to capitalize
on competitive advantages globally. The concept of this management emerges from a
combination of globalization and application of this strategy on companies. Due to rise of
globalization, the business structure changed in this world. Tesco plc, UK is one of the largest
retail Organisation deals in groceries, healthy and sustainable food items and others. Mr David
john Lewis, the CEO of TESCO used various management style in order to deal with challenges
and issues faced by the company. The report will examine the business and corporate strategies
used by Tesco plc MR David john and its impact on organisation. Further the study will
undertake external and internal environment analysis and describe about strategic methods used
by the CEO of Tesco in order to enhance the organisational performance. At last, the case study
will examine strategies with the help of theories and model in order to gain competitive
advantages and provide recommendation to sustain its business position.
(A) Examining the business and corporate strategies used by TESCO plc CEO
The CEO of the company expand its business in retail services and established new stores
by adopting various strategies in order to satisfy the needs of customers. The main aim of the
firm business model is to provide quality service to their customers globally and make them
happy. The firm focus on growth strategy and diversification method to develop the large stores
and create positive environment for customers where they can easily shop. The firm has strong
brand equity in the competitive market which make them high business presence in UK. They
are using latest technology and strong integration of innovation into its business operations in an
effective way. The company has more than 2200 physical stores and online website where
customers make purchase. Online success of the firm attracts more new customers because of its
huge variety of original product available on application and website. Moreover, digital
marketing strategy of the firm is responsible for making customer loyal towards brand. The
company has its foothold in other industries like insurance, electrical customer products,
telephone devices and gadgets, banking.
The firm market strategy focus on feedback system in order to understand the needs and
preferences of clients. by doing that Tesco plc managers guide marketing and sales team to
distribute their goods to their customers. To make shopping experience better and easier for

audience, the company is also focusing on improving its business components to target market
and types of clients. The company believes in product strategy as they offer quality products that
are improved or managed by product team. The production department focus on quality of
product, transparency, fair and mutual relationships with vendors. The CEO has created a
positive standard and work environment with rules and regulation, in order to maintain team
work among employees. The team works with vendors to sources quality products that can meet
the requirements of customers wants. For example- The firm is now focusing on improving
distribution channels to attract more clients, they invest in different channels for convenience of
customers.
Here, the major focus is customer requirements and preference, so, the firm deliver the
best shopping experience in terms of price of product, varieties, availability and service.
According to strategic plan of Tesco, the firm aims to become more effective in reinvestment
process. They are reinvesting some of the savings in order to improve the shopping trip for
customers and future needs. This can ultimately improve revenue, sales, profit margins and
competitive advantages.
Not only is Tesco marketing method very successful with respect to selling of goods or
services but it’s also very known to be unique in its ways of managing business operations.
These strategies have made the firm so successful and make its market position in this
competitive world in retail sector.

(B) Undertaking external and internal environment analysis
SWOT analysis
Source: (Teoli, Sanvictores and An, 2019).
Strengths- Tesco has improved the utilization of latest technology throughout its business
operations, by creating long term stability and greater cost efficiencies in order to enhance
services experience and customer expectations. The firm has wide range of property which is yet
undeveloped and offers a strong financial business position to weather different types of
economic cycles in order to gain competitive market advantages.
Weaknesses- Due to heavy competition, pressure have let to price wars and impacted the
marketing strategy. After pandemic, customers may not be purchasing as many products related
to having less income and also retailer has not adjusted its inventory price.
Opportunity- The firm has major opportunity to grow online shopping and home delivery
facility in more locations, in order to attract more new customers (GURL, 2017). The firm can
invest more on promotional activities and expand its business with the help of sales and
marketing team. They have opportunity in the private labelling market and offer more range of
goods in certain target markets to maintain its market position.

Threats- Due to heavy competition in retail industry, the company is facing threatens
from other global competitors who may be able to provide low-cost product and reasonable
services with different varieties (SWOT analysis, 2021). For example- Rapid changing in
technology and innovation, the firm is facing issues because its competitors like Sainsbury,
Morrisons and others are more innovative and know how to use technological elements and new
or latest version of sources.
PESTLE analysis
The firm uses this method to analysis external factors which can impact the business
strategy and business reputation. It is used by company to understand market dynamics and
develop its business operations and strategies in an effective way.
Source: (Pan, Chen and Zhan, 2019)
Political factors- The government of UK has made different rules and regulations for
retail industry, such tax policies, trade policies and others. Due to changes in tax standards, it has
impacted the profitability of the company and another biggest decision of UK is Brexit which
has impacted the markets.

Economic factors- due to rules made by government, the firm is focusing on taxation
policies in order to leverage the same, to achieve goals. It is noted by owner of the firm that, any
changes in the rules and regulations in UK may lead to major change in business model. It can
affect the design of company, cost strategy and other business strategy too.
Social factors- due to market and customer trends, people are more concern about
facilities provided by companies. So, they prefer buying products o services according to
marketing trends and bulk buying of goods (PESTLE analysis, 2021). The company has planned
out its physical stores in order to provide wide ranges of goods as per the needs of customers.
The buying behaviour and choice of goods is now totally depended on various cultural factors
like family and upcoming generations.
Technological factors- In today’s business environment, the trends have been changing
rapidly in order to gain competitive advantages with respect to technology and innovation. So, it
is important for firm to keep changing technology and experiment with different aspects of
retailing sector. For example- By providing various technical benefits to customers with the help
of digital marketing and social media, the company has managed to shift the market trends of
online shopping and home delivery facility.
Legal and environmental factors- Due to changes in policies of UK government, the
company have faced a lot of challenges, it has also influenced the business operations (Wajid and
Zafar, 2021). So, it is important for management team to keep track on new policies and follow
local and foreign laws in order to continue the business with smooth operations. For example-
the rules and policies have been made by food retailing commission which need to be followed
by all the retail industry in UK.
In order to improve environment, the firm has undertaken various steps such as reducing
the waste, providing organic food, recycling plan, say no to plastic. In this way, the firm is
focusing on eco-friendly environment in order to establish a more sustainable society for the
benefit of people.
CEO of the company has declared to switch major food products to a food cum non-food
model in order to satisfy the social factors which has been impacted by policies made by
government. For example- In the recent times, the company has changed its product design and
helped business environment in order to reduce wastage of plastic which is hard to recycle.

(C) Describing the strategic tools used by the CEO of Tesco to enhance the organisational
performance
Business strategy and strategic tools is the long-term action plan that the company uses to
achieve a goals and objective. An effective strategy is matured in three categories such as
analysis, integration and implement. Mr john has focused on better operational efficiency and
performance of business with positive and safe environment to satisfy customers and employees
both. They are more focused on delivery value, customer needs, valuing shareholders to maintain
cash flows, technology and innovation. High quality products and services, relations with
investors and suppliers. Strategic planning tools can be used by company to gather the important
information and data which is required to structure organisation process. This will ultimately
increase the performance and productivity of the firm which is beneficial to gain competitive
advantages. The company follows PIMS strategy which shows the strategic relationship between
decisions and its outcomes. The manager of the company can gain a better understanding about
business environment and measure factors which can impact the company’s performance. It also
identifies element in order to develop strategies that will help them to gain competitive
advantages. This method also evaluates business performance and monitor quality of services to
achieve new market opportunities. Another benefit of this tool is to use proper utilization of
resources in order to create company results effective.
Michael porter has made major contribution to corporate strategy which is beneficial for the
company to achieve success. With the help of external analysis porter provides information to
managers so that they plan, organise things and take strategic decisions.
Porter’s generic strategies
In order to achieve successful sustainable competitive advantages, the company can utilize this
strategy.

Sources: (Islami, Mustafa and Latkovikj, 2020)
Cost leadership- Due to heavy competition in retail industry, if the company producing
products at the low cost, then it will be helpful for them to achieve competitive benefits.
According to CEO of TESCO, this strategy is well suited for the company and its business
operations. The company uses economies of scale and the best distribution channels for
procurement in order to manage low-cost strategy for product price. For example- The firm is
focusing on cost leadership method which will yield the hight returns and beneficial for company
success.
Differentiation- this strategy means offer unique facility and rare things in order to
attract customers. So, the company can use this strategy to make their customer happy as a result
they are willing to pay high price for goods or services. The firm offers club card loyalty
program, this has created competitive advantage by being the first firm to invent new demand for
goods.
Focus strategy- with this strategy, small scale industry can enter particular market
segment and provide special and high-quality goods in order to attract customers.

A combination of these strategy would be beneficial for the company’s market success
and to sustain position in this competitive world.
(D)Examining strategic planning designed and created by CEO of TESCO for company
Strategic planning is a systematic process used by company’s leaders in order to determine
their vision for the future requirements as well as identify their business objectives. Mr Lewis
has created effective strategic planning and implement them in order to make important
decisions in terms of resources, operational activities and others.
Mission statement- the company wants to make better customer experience and achieve success
to contribute to continued growth of business.
Vision statement- the major purpose of strategy used by company is to service people and
improve shopping experience every day.
According to (Yuan and et.al., 2020), Firstly, company’s manager gathers data and
important information so that they can decide path that the business operations or task will take
to accomplish its target.
Identifying strategic issues- after that, the firm will identify the strategic issues and make
necessary improvement with the help of business tools. Tesco is expanding its business into non-
food sector includes pharmacy, health and financial services also.
On the other hand to support above mentioned comment,( Firoz Suleman, Rashidirad,and
Firoz Suleman, 2019) has commented that Establish strategic goals and objective is important
task for company and cost leadership is important to set cost of product.. An Effective objective
are helpful for company to understand values and contribution towards business. So, the firm
establish goals to complete their task or project. It should be clearly understood by every team
member these work qualities includes SMART goals- specific, measurable, achievable, real,
timely. The firm focusing on brand image strategy and started branded products at good price.
( E )Explaining Blue ocean strategy
It is the method used by company in order to pursuit low cost and differentiation strategy
in order to open up a new market position and create new business demand structure (Madsen
and Slåtten, 2019). In this type of market, there is very less competition or one can say no
competition between companies. It is only can be seen when there is potential of company for
achieving high profit margins. There are total 6 principles of this strategy such as looking across
alternative companies, complementary service and goods, strategic groups, buyer groups,

emotional and functional appeal, look across time. This method provides Tesco managers a
toolbox in order to identify market space instead of competing within the industry. They are
focusing on this strategy to bring differentiation to create brand awareness and make presence in
new innovative world. For example- managers of Tesco plc uses this technique to create demand
in the market space so that they can explore new market or utilized by players existing in the
current retail business world.
Tesco is now started looking at how to assess trends across time in order to know market
trends, in this way company can make position in the market with innovation and create new
opportunities. When the company adopts this method, it eradicates the competition in the market
and change the whole scenario (Blue ocean strategy, 2021). With this method, the firm can able
to create new demand rather than competing with other brands like Sainsbury, Morrisons and
others. In doing so, the company has been able to satisfy needs of customers and experience
rapid development as well as enjoy productivity and profitability.
Examples-
For example- Tesco plc uses strategic processes such as elimination, raising, creating and
reduction. In elimination method, the company identify and eliminates the unnecessary factors
which may be not useful for the brand. Such as obsolete technology, policies and others. Under
raising option, the firm is able to evaluate the factors that needs to be rise well above in the
competitive market for smooth running of business. With respect to creating action, the firm
needs to identify strategic factors that are new to the firm and maintain cost strategy. In terms of
reducing option, the firm reviews and identify elements that should be reduce so that it can
benefit from untapped market position and make new opportunities. In order to compare industry
policies , these factors needs to be reduced for effective work of business.
Recommendations-
Innovation and latest technology is a best way to increase market share so, by evaluating the
report it is suggested to adopt innovative strategy. It can be done in various forms such as service
or product innovation, manufacturing method innovation, introducing new ideas to business in
order to compete with competitors.
Tesco need to keep expanding its business in various locations and provides more services
in order to keep customer with the brand for longer period of time. By lowering price of product

company can expand its customer base as low price with good quality product is a big attraction
for audience. It will ultimately increase productivity and sales of the firm and gain competitive
advantages.
Tesco needs to invest more in promotional activities as it is the best way to increase market
position so that people can know about the brand image. It is also advisable to make sales and
marketing team aware about new launches so that they can easily attract more new customers
with their marketing skills. They can easily make brand awareness and provide detailed
information about company’s product or services. For example- it can be done through
Promotional activities like advertisement, social media platforms, market campaigns, direct
selling and online marketing is an excellent way of gaining an upper hand over competitors in
the business world.
An effective team work can improve the performance of company so the firm needs to more
focus on working together by adopting various method of leadership, managers can make
employees work in team. In order to gain access to new client base, company needs to acquire a
competitor and understand marketing strategies deeply.
It is also suggested to make higher quality standards on daily basis by adopting various
tools and techniques with respect to retail business. The firm needs to focus on measuring
performance, market share and size, individual employee performance with the help of key
performance indicators and benchmarking or another tool. Moreover, Tesco plc is one of the
market leaders in retail sector, fighting very strong competitors such as Sainsbury and amazon.
Thus, it is advisable to keep track on strategies used by these competitors and also focus on
external factors which can impact company’s performance. The firm needs to keep record of up
to date changing in government policies and follows them in order to avoid any uncertainty.
CONCLUSION
To conclude, strategic management is all about a combination of globalization and
implication of those strategies on the business sector. By evaluating the report, it is
concluded that company’s CEO is focusing on external and internal factors to avoid any
uncertainty. In order to gain competitive advantages company is utilizing various business
strategies and promotional activities to make customer aware about brand image and product
details. By expanding its business in different locations, firm has opportunity to compete in

retail market and online shopping. In addition to this, the firm is utilizing generic strategy by
Michael porter as its business technique. It includes cost leadership, differentiation and
focus strategy but firm is focusing on cost leadership method. This is because nowadays
customers are more concern about cost of product and quality. At last, the report suggested
that to sustain market position firm needs to focus on various strategies such as improving
its online shopping with the help of digital marketing, various promotional activities, market
campaign and advertisement.

REFERENCES
Books and Journals
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Wajid, M. A. and Zafar, A., 2021. PESTEL Analysis to Identify Key Barriers to Smart Cities
Development in India. Neutrosophic Sets and Systems. 42. pp.39-48.
Pan, W., Chen, L. and Zhan, W., 2019. PESTEL analysis of construction productivity
enhancement strategies: A case study of three economies. Journal of Management in
Engineering. 35(1). p.05018013.
Firoz Suleman, M., Rashidirad, M. and Firoz Suleman, S., 2019. The applicability of Porter's
generic strategies in pure online firms: A case study approach. Strategic Change. 28(3).
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Islami, X., Mustafa, N. and Latkovikj, M. T., 2020. Linking Porter’s generic strategies to firm
performance. Future Business Journal. 6(1). pp.1-15.
Yuan, Y. and et.al., 2020. Business strategy and corporate social responsibility. Journal of
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Priilaid, D., Ballantyne, R. and Packer, J., 2020. A “blue ocean” strategy for developing visitor
wine experiences: Unlocking value in the Cape region tourism market. Journal of
Hospitality and Tourism Management. 43. pp.91-99.
Madsen, D. Ø. and Slåtten, K., 2019. Examining the emergence and evolution of Blue Ocean
Strategy through the lens of management fashion theory. Social Sciences. 8(1). p.28.
Online
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swot-analysis-and-how-to-do-it-right-with-examples/>
PESTLE analysis. 2021. [Online]. Available through:
<https://www.analyticssteps.com/blogs/what-pestle-analysis>
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