TESCO's Strategic Transformation

This assignment examines Tesco's strategic transformation, analyzing its strengths, weaknesses, opportunities, and threats (SWOT) using a case study approach. It also delves into the external macro-environmental factors affecting Tesco through a STEEP analysis, considering sociocultural, technological, economic, environmental, and political influences. The assignment highlights Tesco's efforts to expand globally and diversify its offerings, while acknowledging challenges such as competition and ethical concerns.

Integration of business
functions

Table of Contents
INTRODUCTION...........................................................................................................................1
ESSAY.............................................................................................................................................1
Strategic changes in TESCO.......................................................................................................1
Conclusion.......................................................................................................................................9
REFERENCES..............................................................................................................................11
APPENDICES...............................................................................................................................13

INTRODUCTION
Integration of business is an approach used by organisations to integrate technology,
culture, goals and objectives of company with strategy. Business integration supports in
improving customer services, environment, sales and generating more revenue. TESCO is
leading grocery company of UK. It is a multinational retailer organisation which have stores in
more than 12 countries across the world. The company was found in year 1919. It is a fastest
growing retailer company which has 100 TESCO stores in UK. Present report describes about
strategic changes and their impact on organisation' s operations. Impact of strategic change on
structure, culture, environment and market strategy have been discussed. Model have been
applied to identify the impact of strategic change on environment of business. Furthermore,
impact on stakeholders have been illustrated in report.
ESSAY
Strategic changes in TESCO
TESCO is third largest retailer store in UK which provides grocery services in UK. It is a
fastest growing company and has modified its strategy to improve its sales, environment and
many other areas (Mahoney, 2013). Strategic changes in any company bring many positive and
negative impacts with it. Modification in strategy influences internal and external environment
of business. TESCO has changed its strategic plans in last 10 years and it has impacted overall
business activities of the company. It has supported business to accomplish its grand objectives
and visions in practical way. Modification in strategy has been done by company in different
steps such as planning, execution, monitoring and analysis. In planning phase organisation has
created a strategic vision with the help of mangers. Managers of company has applied many
testing and researches to collect information about significance of alteration in strategy. In
implementation of strategy company has tested how well strategic plans are working and impacts
of changes (Pang, Zheng, and et.al, 2015). In monitoring phase plans are monitored and
reviewed for further changes.
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Impact of strategic changes
Changes in strategy have brought many positive impacts on TESCO. New strategies have
helped organisation to deal with alteration in global market. New approaches are helping
company to generate more revenue and perform business activities efficiently. Changes in
strategy has supported company to start its business in new country. Growth rate of organisation
also increased (Brannen, Piekkari and Tietze, 2014). However, modification in internal
environment of venture affected employees and daily activities of company. Some failures are
also seen due to changes in past ten years in TESCO.
Discussion on leadership
Leadership styles style in organisation gives the way to achieve goals of it. Culture and
structure of company define about leadership style is best suitable for it. TESCO was previously
using autocratic leadership style in the company (Precup, 2013). In autocratic leadership style
company used to make decision with the help of only top management. Organisation was not
taking inputs from employee in decision making process. In this style, all the authority remains
with manager. All the employee has to follow the directions given by manager. In this style only
leaders make all the decision and there is no input from low level workers. Work done under this
style of leadership is highly structured and rigid in nature. This style has many disadvantages and
has caused many problems in TESCO. This style has resulted in dissatisfaction among the
employees of organisation. Autocratic leaders in business entity were making decisions without
involvement of employees (Rashid and et.al 2013). Due to this sometimes decisions made by
leaders were lacking in creativity and causing many problems in organisation. Participation
form employees was very low in TESCO due to which their morale was low.
Subsequently to strategic changes in TESCO, the company has changes it leadership style to
perform well. Organisation has adopted democratic leadership style in which participation of
employees is include in decision making process. In this style of leadership company is taking
input from its employee. Organisation is involving employees in making decisions. Final
decision is taken by leaders of the company. This style is boosting employees and make them
feel that their thoughts are valuable for company (Spieth, Schneckenberg and Ricart, 2014). It is
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helping company to make decision making process effective. It also supporting organisation to
meet sit objectives in less time. Creative solutions given by the group members are supporting
TESCO in innovation process. Democratic leaders are making strong teams in the company and
giving required output. This style is making creative environment in the organisation which is
motivating employees. Solutions for typical problem in company are being solved by democratic
leaders (Yu, Ramanathan and Nath, 2014). Collaborative environment is taking place in venture.
Innovative ideas from employee in TESCO is helping organisation to generate more revenue and
profits.
Discussion on structure of company
Organisational structure used in any company defines how the function, roles and activities flows
within. Earlier TESCO was using flat organisational structure in which less number of level are
used in the company (Love and et.al, 2014). There were no levels between top level and staff
members. In this structure, low level workers were more responsible and they were directly
getting involvement in decision making process. This structure customers feedback was coming
directly to the employee which was creating difficulties. This structure has many disadvantages
due to which organisation was facing many problems. Management of the company faced many
issues regarding involvement of employee’s behaviour. Flat structure does not possess any
superior to report due to that reason it was creating power struggle among staff members. This
structure was also hindering growth of the company due to absence of proper management.
Organisation was unable to decide objective and time ned to achieve them. The major problem
with this structure is that it causes frail competition among the workers. There was very less
motivation and encouragement of employees in the company (Ellram and Cooper, 2014). Role
of individual was also no defined in the organisation which was also creating major issues in
TESCO.
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New strategic direction adopted by company has influenced structure of the company.
TESCO has started using hierarchical organisational structure in which there are various number
of levels between top management and staff members. Role of each person is defined in the
company which help in smooth functioning of business entity. Adoption of this structure by
company has proven beneficial as roles and responsibilities of each person is clear. Employee
reports about their problem to senior person in hierarchy (He and Da Xu, 2014). Communication
issues are also solved in company as this structure gives proper line for communication. Workers
get proper guidelines from manager who are superior r to them. Hierarchical structure is also
helping to implement strategies effectively. Promotion path in the company are also clear and
well defined after changing organisational structure. Hierarchical environment motivates the
employees and managers. Employee loyalty has bend increases in company after changes in
structure. Most importantly goals setting procedure of the organisation has been improved due to
changes in strategy (Edwards, Marginson and Ferner, 2013).
Discussion on Culture of company
Earlier in TESCO power culture was used in company. In this culture only some people
of organisation were responsible to make decisions. This culture in company was causing major
issues due to which performance of the company was decreasing. Involvement of less number of
people in decision making was has created many conflicts within the organisation. Skills of other
employees remain unused in the company and those people were feeling invaluable in company.
This culture revolves around leader of the organisation. Competitors for TESCO have also
increased due to power culture. Many failures were faced by business entity because of this
culture. Growth and revenue of company was also affected.
Adoption of new strategy has made cultural change in TESCO. Company has
implemented task culture (Wong, Wong and Boon-itt, 2013). In this culture venture has assigned
specific task to particular team. Teams work has helped company to achieve goals by dividing
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tasks among people. Every team gets specific task which is to be completed within the set
deadline. This culture has supported organisation to accomplish its objective effectively. In this
culture staff of the organisation feels motivated because they are getting chance in making
decision for company. Employees are feeling empowered because they get opportunities to
achieve objectives of the company. Creative solutions from worker are also helping in product
innovation of company.
Impact of market forces: To analyse strategy change impact on market forces of TESCO
STEEP model can be used for it. Steep model is used to evaluate external factors that can affect
performance company. This model evaluates the external factors like environment, political,
economic, technological and social. Detailed description of steep model is as follows:
Social factors: Social factors for TESCO are related with behaviour of customers, changes in
trends, demographic changes, lifestyle and values (Yusuf, and et.al 2014). These factors also
include population of customers age, sex, extent of migration and educational level of people.
Social factors have power to impact the marketing of company. In new strategy leaders are
focusing on these factors and their influence on company's performance.
Technological factors: This phase of steep analysis determines impact of technological
advancements on TESCO' s marketing strategy. It also evaluates the impact of change in strategy
of marketing on technology (Rao, 2014). It involves various factors like innovation, energy,
research techniques, and regulations. This helps to identify technological changes impact on
marketing of company. In new strategy approach, Technological factors are being considered by
organisation to enhance performance.
Political factors: Development in politics can impact the marketing strategy of TESCO.
Company need to be aware about political factors which can affect its marketing. Political
factors involve political stability, laws, taxation policy, financial regulations, jurisdiction etc.
Political development can impact environment and capital markets. Company is considering
these factors of politics in its new strategic approach.
Economic factors: Economic factors are directly associated with buying power of customers.
Income of consumer is most important factors which affects the market position of nay
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organisation (Smith, and Rupp, 2013). These factors include interest rates, inflation rates, rate
of trade, employment rate etc. TESCO is taking care of these economic factors in its new
strategy approach.
Environmental factors: Environmental factors includes natural resources like water, food, soil
and any others resources which can impact organisations strategy. These factors also involve
rules and regulations made for environment protection. TESCO is considering these
environmental factors in the new strategy which is resulting in increased performance.
SWOT analysis: SWOT analysis is tool used to identify the strength, weaknesses, threats and
opportunities of a business organisation. Below is the swot analysis of strategic changes in
TESCO:
Strengths: Strategy adopted by TESCO has helped company to get leading position in UK's
market. It has also support company to maintain its operation effectively. Company has gained
brand popularity among its consumers (Pérez and et.al 2017).
Weaknesses: Changes in strategy has a little weakness in which some of its subsidiaries are not
performing well. Previous scandals in TESCO is also impacting on growth of company. Morale
of the employee has also diminished after strategic changes. It is largely dependent on UK's
global market.
(Source : Precup, 2013)
Opportunities: Strategic changes in company is giving opportunities to expand its business in
new markets. TESCO is pursuing growth in international markets. Company has increased its
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Illustration 1: SWOT analysis

non-food retail chain also (Yusuf and et.al 2014). New strategy of organisation has enhanced
strategy of marketing used by company. Financial condition of the business entity has also
improved by changing strategy.
Threats: Strategy change in TESCO has brought the threat of new leadership which can turn
over the organisation. There is also an emerge situation in company to deal with new problem
which are related with ethics.
Impact on business environment
Change in strategy of TESCO has impacted environment of the company and challenges
created by another organisation has been reduced. New approach is supporting company to
reduce the impact created by political factors. Company with new strategy is considering these
factor sand trying to reduce impact of new legislations made by government (Loveland et.al,
2014.). For example, business of import and export of company has increase after new business
strategy. Restrictions on many local chains of TESCO has been removed and these chains are
growing well. Company is now considering these factors to work effectively.
Economy of company is improved after strategic changes as company has found many
new sources of income (Vahlne and Ivarsson , 2014). Organisation is now able to understand
economic environment properly. Social environment of business entity has also enhanced by
new strategic approach. It is now capable to deal with change in trends and values of people. It
is now contemplating social influences to provide effective services to its customers. New
strategic approach has made organisation able to understand social trends and lifestyle of people.
Understanding of these factor is helping company to make appropriate marketing strategy.
Changes in technology are also understood by company after new strategy
implementation (Crane , Matten and Spence, 2013). Business organisation is now able to keep
itself updated about new technology arrivals in market. It is supporting company to deal with
latest technological environment in market. Communication problem due to lack of technology
in company has also been solved. Business venture TESCO now have potential to determine
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emerging markets. In previous years company has faced many legal issues in operating it
business functions. After implementing new strategy organisation is able to work according to
rules and legislation defined by government. Internal obligations in company’s smooth
functioning has been decreased (Ellram and Cooper, 2014). TESCO is now dealing with imports
and export restriction on businesses and implementing them properly. New strategy
implementation is supporting company to reduce impact of its products on environment.
Organisation is finding ways to minimize its business operations impact on environmental
resources. Business entity is trying to lower down the consumption of energy. Positive impact of
new strategy is that it is attracting many customer dues to change in it environmental policy.
Impact on business functions
Marketing department of TESCO is making new strategies to publicize its brand.
Marketing strength of company has been increased and it is making innovations in publicity of
its products. Operation management of company is also trying to improve its operation. Strategy
formed by organisation has supported for performing the supply chain activities in effective way.
Human resource management is also performing its operations in effective way after the new
strategy came into effect (Precup, 2013). Human resource is also performing smoothly and
making better policies for employees. They are also providing proper training sessions to worker
to improve their performance. Morale of employees is also increasing and their trust in
organisation has been increased. Finance department functioning is getting improved due to new
strategy. Accounting department is capable to manage all the finance related activities
efficiently. Money related issues with all the stakeholders are getting solved.
Stakeholders discussion
Strategic changes adopted by TESCO has impacted stakeholders of the company. Major
stake holder of the business entity are employee, customer, suppliers, shareholders and local
communities. New strategy has motivated employee a lot by allowing them to take participation
in decision making process of company. Employees are feeling valuable in company and
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getting opportunities to grow in organisation. Worker of business organisation are giving
creative solution and ideas to make the innovation process of company smoother. Revenue of the
business entity has been increased which in turn increasing salary of employees. However,
responsibilities of employees have been increased due to which they are feeling overburdened.
Increased responsibilities have created some conflicts among workers in the organisation. Some
of the employees has left company.
Customers of TESCO (TESCO. 2017) are increasing because new plan of action has
given company a way to provide services according to expectations. Customer base of the
organisation has increased in past ten years. It is one of the biggest achievement for the grocery
retailer. Company is making products according to the needs of customers (Love and et.al,
2014). It is also interacting with its customers to find out the issues they are facing in the
products. Interaction with customer is assisting company to improve its service according to the
requirements of consumers. New strategy also gives parameters to solve consumer resentment by
taking feedback from them (Valene and Ivarsson, 2014). However, company is still not able to
make all of its products according to the need of them. Only some of the products have been
modified according to customers’ expectations.
Suppliers are getting timely payments after the new strategy came into effect. Company
is getting high quality raw material from suppliers. New strategy adopted by company has plans
to give part of profit suppliers. Communication of organisation with suppliers has been
improved. Digital technology is used by TESCO to communicate effectively with suppliers.
Suppliers are delivering high quality material to the business entity (Armstrong and Taylor,
2014). However, number of supplier have been increased due to which company is facing
difficulties to manage them. Shareholders are also getting benefits from new strategic approach.
Company is sharing its profits with its investors in order to attract more capitalist. Shareholder
base of the business is increasing but sometimes company is facing issues to manage them. Local
community people are also getting benefited by modified strategic approach. Company has
invested more amount of money in CSR activities which is helping company to be more
responsible in terms of social values.
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Conclusion
Summing up the above report it has been concluded that changes in strategy of any
organisation is must. Strategic changes support company to do work effectively and efficiently.
Above report concludes that strategic change in TESCO has helped company to increase its
business operations. Structure of the organisation has been changed after new strategy
implementation. Similarly, culture, and environment of business is improving in the company.
which decision making process of organisation is improving due to adoption of new leadership
style by company. Business functions of the company are impacted by new strategy, operation
if business is getting smoother and issues related to it are getting solved. STEEP analysis has
reflected that company is considering these factors in it business activities.
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REFERENCES
Books and Journals
Mahoney, J., 2013.Teaching business ethics in the UK, Europe and the USA: A comparative
study. Bloomsbury Publishing.
Pang, Z., Zheng, and et.al , 2015. Design of a terminal solution for integration of in-home health
care devices and services towards the Internet-of-Things.Enterprise Information Systems. 9(1).
pp.86-116.
Brannen, M.Y., Piekkari, R. and Tietze, S., 2014. The multifaceted role of language in
international business: Unpacking the forms, functions and features of a critical challenge to
MNC theory and performance.Journal of International Business Studies. 45(5). pp.495-507.
Precup, R., 2013.Methods in nonlinear integral equations. Springer Science & Business Media.
Rashid, A. and et.al 2013. Resource Conservative Manufacturing: an essential change in business
and technology paradigm for sustainable manufacturing.Journal of Cleaner production. 57.
pp.166-177.
Spieth, P., Schneckenberg, D. and Ricart, J.E., 2014. Business model innovation–state of the art
and future challenges for the field.R&D Management. 44(3). pp.237-247.
Yu, W., Ramanathan, R. and Nath, P., 2014. The impacts of marketing and operations
capabilities on financial performance in the UK retail sector: A resource-based
perspectiveIndustrial Marketing Management. 43(1). pp.25-31.
Love, P. E. and et.al, 2014. A benefits realization management building information modeling
framework for asset owners. Automation in construction. 37. pp.1-10.
Ellram, L. M. and Cooper, M. C., 2014. Supply chain management: It's all about the journey, not
the destination.Journal of Supply Chain Management. 50(1). pp.8-20.
Armstrong, M. anWong, C. W., Wong, C. Y. and Boon-itt, S., 2013.d Taylor, S.,
2014.Armstrong's handbook of human resource management practice. Kogan Page Publishers.
He, W. and Da Xu, L., 2014. Integration of distributed enterprise applications: A survey.IEEE
Transactions on Industrial Informatics. 10(1). pp.35-42.
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Edwards, T., Marginson, P. and Ferner, A., 2013. Multinational companies in cross-national
context: integration, differentiation, and the interactions between MNCS and Nation States
introduction to a special issue of the ILRReview.Industrial & Labor Relations Review. 66(3).
pp.547-587.
Wong, C. W., Wong, C. Y. and Boon-itt, S., 2013. The combined effects of internal and external
supply chain integration on product innovation.International Journal of Production Economics.
146(2). pp.566-574.
Yusuf, Y.Y. and et.al 2014. A relational study of supply chain agility, competitiveness and
business performance in the oil and gas industry.International Journal of Production Economic.
147. pp.531-543.
Rao, T.V., 2014.HRD audit: Evaluating the human resource function for business improvement.
SAGE Publications India.
Smith, A. D. and Rupp, W.T., 2013. Supply supplier integration, procurement, and outsourcing:
case study of SCM social capital benefits.International Journal of Logistics Systems and
Management. 14(2). pp.221-241.
Pérez, C. Á. and et.al 2017. Integration of Balanced Scorecard (BSC), Strategy Map, and Fuzzy
Analytic Hierarchy Process (FAHP) for a Sustainability Business Framework: A Case Study of a
Spanish Software Factory in the Financial Sector.Sustainability. 9(4). p.527.Vahlne, J.E. and
Ivarsson, I., 2014. The globalization of Swedish MNEs: Empirical evidence and theoretical
explanations. Journal of International Business Studies, 45(3), pp.227-247.
Vahlne, J.E. and Ivarsson, I., 2014. The globalization of Swedish MNEs: Empirical evidence and
theoretical explanations. Journal of International Business Studies, 45(3), pp.227-247.
Crane, A., Matten, D. and Spence, L.J., 2013. Corporate social responsibility in a global context.
Online
TESCO . 2017. Accessed through<https://www.tesco.com/groceries/>[Accessed on 8th May
2017]
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APPENDICES
Strengths : Strategy adopted by TESCO has
helped company to get leading position in
UK's market. It has also support company to
maintain its operation effectively. Company
has gained brand popularity among its
consumers (Pérez and et.al 2017).
Weaknesses : Change in strategy has a little
weakness in which some of its subsidiaries are
not performing well. Previous scandals in
TESCO is also impacting on growth of
company. Morale of the employee has also
diminished after strategic changes. It is largely
dependent on UK's global market.
Opportunities : Strategic changes in company
is giving opportunities to expand in new
markets. TESCO is pursuing growth in
international markets. Company has increased
its non food retail chain also (Yusuf and et.al
2014) . New strategy of organisation has
enhanced strategy of marketing used by
company. Financial condition of the business
entity has also improved by changing
strategy .
Threats : Strategy change in TESCO has
brought the threat of new leadership which can
turn over the organisation. There is also an
emerge situation in company to deal with new
problem which are related with ethics.
13

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Illustration 2: STEEP analysis