Global Strategic Management: A Case Study of Tesco's Business and Corporate Strategies

This report examines Tesco's business and corporate strategies, external and internal environment analysis, strategic tools used to enhance performance, and critical analysis of contemporary strategic issues. The report includes a case study of Tesco's CEO and their approach to global strategic management.

GLOBAL STRATGIC
MANAGEMENT
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Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY ..................................................................................................................................3
Examining the business and corporate strategies used by the CEO of Tesco which has brought
about positive contribution to the organisation......................................................................3
Undertaking external and internal environment analysis along with an evaluation of how the
CEO at Tesco managed to overcome challenges...................................................................4
Describing the strategic tool or model that is being used by Tesco CEO to enhance its
organisational performance....................................................................................................6
Explaining how CEO of Tesco has created or developed the strategic planning in company7
Critical analysis of different contemporary strategic issues along with different levels of
strategy that is used by Tesco CEO........................................................................................8
RECOMMENDATION ..................................................................................................................9
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
The concept of global strategic management refers to a formulation of business policies
in a way that can be applied at international level business. This includes a real execution of
business strategies into actionable activities through which a business earns higher profits and
competitive advantage in market. The strategic management assists in having complete
organisational direction for a company. The global strategic management serves as a clear
picture & insight upon the globalisation effect within companies as well as in their management
which assists them in achieving their objectives at international level (Bolland, 2020). The
present report includes an examination of certain business strategies that are being used by the
CEO of Tesco, an analysis of external as well as internal environment with respect to solving
business complexities. Different strategic techniques, models or tools are applied in order to
enhance business performance along with an effective strategic planning. Lastly, it includes level
of strategy that is utilized by Tesco CEO through some theories.
MAIN BODY
Examining the business and corporate strategies used by the CEO of Tesco which has brought
about positive contribution to the organisation
The term corporate strategies refers to the plans or policies which a company includes in
its business operations. The corporate strategy which is being used by Mr David John Lewis who
is the CEO of Tesco is that he has focused upon industry specific as well as on media promotion.
This has done by David through following concepts which has bought the positive contribution
into the business: Regaining high competitiveness: This was the first priority of CEO where before him the
company was not able to maintain its market share in retail supermarket industry and
brand recognition. But after him through an effective leadership the company has
enhanced its sales as well as return in market has achieved their targets. This was done
through focusing upon recruitment of talented staff and providing training to the existing
one so that a company Tesco can have better availability of human resource. New structure of management: The CEO Mr. David is committed towards the
development of its management structure that focuses more upon developing motivation
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or morale of its staff members as well as upon providing higher services to customer.
They also created small divisions under the divisional organisational structure which are
allotted with different specialized tasks so that can consolidate whole objective into
smaller one and achieve their target effectively.
 Focusing upon international investments: Tesco at international level was facing huge
complexities due to which their existence became a major concern. Later with the
guidance of CEO Mr. David the company started its investment in international market
through remodelling company’s physical stores or extending the choice and reach for e-
commerce service. The company was able to gain its international market share again and
operated its business with this beneficial corporate strategy.
Through bringing the above changes the CEO at Tesco Mr David achieves organisational
success as the changes bought positive outcomes to the business which helped them in gaining
their brand recognition or market share back. Through this they are also able to attain
competitive advantage and accomplished the objective of business expansion.
Undertaking external and internal environment analysis along with an evaluation of how the
CEO at Tesco managed to overcome challenges
The analysis of Tesco's external factors are mentioned below: Political: Having a UK based company, Tesco use to function its business in different
nations. As one of the biggest supermarket in the world, the organisation is required to
follow different regulations like taxation, trade policies, etc. which ensures the safety &
compliance of all its offerings. Being a multinational operation the company faces huge
fluctuations in political stability or in policies due to which it is a challenge for Mr. David
CEO of Tesco to focus upon its business. In order to overcome this challenge the CEO
has appointed separate managers for each country of area of operation upon which they
individually can focus and conduct their operation with country's political stability. Economical: In order to be a successful multinational business it is mandatory for
company to be aware of different monetary or fiscal policies of country along with
inflation and other measures like policies in UK are different that of in US. Since all
countries possess their own economical policies which is generally different from others
and acts as a challenge for Mr. David to take care of all. In order to overcome this
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challenge the CEO has bought changes in its strategy or policies such as formulation of
new international business plan that can pay higher emphasis upon the various issues of
each country. Social: In today's time period the people prefers to buy their essentials from one stop
shop or via online. By understanding this society trend the Company Tesco has came up
with its supermarket chain. But then also company is facing less sales and to overcome
this challenge the CEO Mr. David has analysed the need of online platform to make its
sales high and attract large customers. Mr. David has also analysed the changing
customers trend and needs which is highly based upon the social influences for which
they has formulated different strategies to influence young customers towards the fashion
and beauty products.
 Technological: The present trends are changing with a huge fast pace, & to stay updated
in today is highly important for a business to bring constant technological changes in
company's operations. But this sometimes brings a challenge for company to adapt new
technology with fast pace. In order to overcome this challenge the CEO at Tesco Mr.
David has adopted a way of online sales as well as advertisement through social media
platform which helped them to attract large customers and enhance their sales.
The various internal environmental factors with respect to Tesco are mentioned below: Organisational Culture: As every nation is having their own culture or philosophies by
considering which a company performs its various activities. Being operated at
multinational level Tesco is facing a multi cultural challenge which is hindering
organisational internal performance. In order to overcome this challenge Mr David has
has developed its global strategy in a way that managers within each country will follow
the organisational culture is a way that is accepted by employee's as well as the customers
of such nation.
 Employee's: The employee's for Tesco are highly valuable and holds a very respective
position within the organisation but the employees being a human carries different views
of attitude. This also happens from country to country due to which it became a challenge
for Mr. David to motivate and unite all under single umbrella. So in order to overcome
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this challenge the CEO has adopted a democratic leadership style in which all the
employee's are given an opportunity to speak. This motivates employee's to work with
more dedication and productivity.
Describing the strategic tool or model that is being used by Tesco CEO to enhance its
organisational performance
The strategic tool which is being adopted by Mr David, a CEO at Tesco is an application
of Michel Porter's generic strategy which is described below: Cost Leadership: In respect to cost leadership, an organisation plans its strategies in a
way to become the firm which produces its products at low cost producer. In order to
have cost advantage from different perspective. In this respect the company's CEO has
adopted technique of bringing economies of scale as well as preferential access to the raw
materials which are being utilized for manufacturing. This helps in enhancement of
organisational performance in a way that a sale of low cost product attracts more
customers in market and industry which provides an opportunity of earning more profits.
With the proper utilization of profits in different business achievements the company's
overall performance enhances automatically (Kalkhouran, Nedaei and Rasid, 2017). Differentiation: In case of differentiation strategy the business is required to bring some
uniqueness in its operations or product that provides a distinction to the firm in industry.
For this Mr David has adopted a technique of positioning the company with unique
method in industry and provide high value products. This has been done through its
vision. This helps in enhancement of organisational performance in a way that customers
more likes to buy the product or service which has a unique identity or feature. This leads
to enhancement in sale hence develops the overall performance of Tesco.
 Focus: The company here chooses a group of different segment within the industry and
permits the employees in executing them. Here a company tries to bring cost advantage
to the firm along with a differentiation within its target market. This has done by the CEO
of Tesco through segmenting its buyers as well as focusing upon the concept of cost
behaviour and different industry segments. Through this a company is able to enhance its
organisational performance in a way that has a proper knowledge of industry and its
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competition so that can take necessary steps by focusing upon things (Kolesnikov and et.
al., 2018).
Explaining how CEO of Tesco has created or developed the strategic planning in company
The company Tesco has divides its all products and services into a structured way that
helps in generation of strong synergy in company's portfolio. The CEO at Tesco Mr David has
applied a tool of BCG matrix in order to develop and create a strategic plan for the firm. This
technique shows the company about four different forms of outcomes that could be experienced
by Tesco in coming future business operations. It assists the firm to identify the time when to
venture in their current products, when to have diversion of its earnings along with an analysis of
right time to attract new brand. The application of BCG matrix in context to Tesco with respect
to the four challenges are mentioned below: Stars: Large market share & large market growth: Under this case, the CEO at Tesco
develops its business higher profits & maintains a quick market share then this will have
a category of cash cows. Under this a business is expected to speed from its company.
For instance, Mr David invests views for business expansion along with an aim of
increasing consumer base from which Tesco assumes to each more cash or revenue out of
it. Thus David is required to plan its strategies in a way that brings greater profits to the
firm along with huge business expansion (Nathan, 2019). Cash Cows: Large market share but low growth: The services rendered by company
Tesco, along with its products attains a less market growth. The large market share brings
huge revenue or profits to the firm having largest market share. For instance, the CEO at
Tesco Mr. David must ensure the higher employability skills which will ultimately
enhances its services at whole. Because of the cost which comes with certain changes, the
company would have to bear higher costs thus leading a minute growth within the market
but will attain profits in future. Dogs: Low business growth & lesser market share: The multinational organisation
Tesco and its CEO is required to be highly careful about mitigating or reducing
unnecessary expenses or costs that business incurs. The moment business identifies that
the product or service is not beneficial for them they should turn into other product or
services or adopts distinct strategy in its business. This is done in order to attract more
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customers as well as enhance company's profitability. For instance, the CEO at Tesco use
to plan an introduction of latest products in market for their customer provides a surety of
remaining competitive in market (Novikova, 2018). Question Mark: Low market share but high growth: Under this category, the CEO at
Tesco bears huge business risk in developing dog products. If the company's share is
degraded then there is a chance of experiencing huge loss to the firm. A CEO at Tesco
plans its strategies in a way that indicates a launch of new products or services within the
market that will give rise to company's acceptance as well as high recognition in market.
Profit Impact of Market Strategy:
The profit impact of market strategy is a system which presents different evidences in
order to justify and support policies or principles so to have high competitive advantage and long
term sustainability in market. The CEO at Tesco implements this method so to retain its existing
customers towards the company through aligning high value products which brings greater
success to the firm. Such technique would proves to be crucial in the development of Tesco's
organisational strategies which is to be to be implemented in order to have a complete idea as
well as explaining the business expansion plans (Pádraig, 2017).
Critical analysis of different contemporary strategic issues along with different levels of strategy
that is used by Tesco CEO
The analysis of various contemporary strategic issues which a company Tesco faces are
mentioned below: Price of its products: The company Tesco being a multinational organisation
manufactures it products with high value and quality of raw material that involves a huge
cost. This on one hand results into the loss of high profit margin on the other hand leads
to set higher prices for such products. There are some international market where the
customers does not prefers high price product due to which they prefers to go for rival
firm's product and services (Rudaya, 2019). Marketing: In today's time marketing of a company as well as its product plays a very
important role in high sale of company's offerings. Every company plans its marketing
strategy in a way that attracts huge customers through a great appeal. This becomes an
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issue or challenge for the company Tesco and for its CEO to develop such marketing
strategies that involves less cost and appeals greater to the market.
Resource Based View Strategy
The aspect of resource based view permits a firm to consider certain key concepts that
helps in generation of higher competitive advantage to the firm. The resource based view permits
Tesco and its CEO to focus upon key strategic potential utilizing this in a form of as a way of
sustainable competitive advantage. This includes tangible as well as intangible assets which
contributes to the development of business and its higher achievements (Shaulska and et. al.,
2021). The tangible assets for Tesco involves physical and financial resources such as plant and
machinery, cash and cash equivalents, building and land, etc. Whereas, the intangible resources
for the company includes brand value, property rights, intellectual property, etc.
RECOMMENDATION
From the discussion made above following are the recommendations to Tesco as well as
to Mr David who is the CEO at Tesco:
 The CEO must adopt such strategies which can be easily applied at global level so that
can have consistency in its business operations as well as functions.
 Tesco CEO must analyse the external and internal environment time to time so that can
identify the challenges at base and can take corrective actions. This would help David in
mitigating huge loss or risk.
 David can apply different other theories that can be beneficial for them in respect to their
strategic development and management of such actions. This would help them in creating
effective strategies at national as well as for global level.
 Tesco's CEO David can take certain decisions or launch unique products so that can
convert less cash generation areas into the profitable one and bring success to the firm.
 In order to overcome various contemporary challenges David can take suggestions from
its team or employees so that can have deeper knowledge as well as various options to
overcome such challenge.
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CONCLUSION
From the above report it can be concluded that strategic management plays a very
important role in business at global level. The strategic management includes a development of
various business strategies that are helpful in proper guidance and direction of business
objectives along with its procedure. The major role played in a development of strategic
management plans at global level is of Company's CEO who formulates and develops strategies,
objectives of the firm. Since every business use to face certain challenges whether in market or
within the boundaries of organisation so this could be analysed through an evaluation of external
and internal environment which provides a clear picture to the companies. It is mandatory for
businesses and their CEO's to overcome those challenges in time so that can have an effective
application of their strategies. A company can apply different strategic tools such as Porter's
generic strategy, BCG matrix and Resource based view in order to enhance company's
performance as well as bring high growth to the firm.
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REFERENCES
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