Introduction To Set of Activities

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Introduction
Set of activities that assists the company in achieving the objectives are termed as business
strategy. Organizations through business strategy identify mission, vision and objectives and
based on these mission and vision develop plans and policies to accomplish the objectives.
Business strategy is essential and important for organization as with proper strategy and plan
business cannot operate successfully. To achieve the objectives of this assignment the
organization selected is Tesco. It is leading retail chain in the UK and operates in different
countries around the world. In this assignment different concepts of business strategy will be
discussed and a new innovative product will be developed for Tesco.
Task 1
1.1 Evaluate the role of organizational values, mission,
vision, goals and competencies in strategy formulation.
Strategic planning can be defined as a process that identifies the strategy and direction of the
company and assigns the resources to achieve the set goals and objectives. It is important to
understand the current situation and future of the company to determine the direction of the
company. Few main elements are included in strategic planning and preparing a strategic plan
without these elements is impossible.
Mission: Mission statements defines the main objective of the company. The purpose of
company’s existence and how is achieves its vision is stated in it. For the company mission
statement is significant and motivates the employees to work as a team to achieve the vision
and objectives of the company. There must be a synchronization between mission stamen and
operation of the company. For instance mission statement of Tesco indicates that its aim is to
offer value to its customer so that lifetime loyalty of these customers can be earned
Vision: Vision statement defines what organization desires to be in future, or the objectives it
wants to achieve in given time period. Usually, vision is developed based on the long term goals
and operations of the company in future. For every organization vision is inspirational and
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motivating. For example the vision statement of Tesco defines that it wants to be highly valued
by the customers and communities in which it operates, by the employees and other important
stakeholders.
Goals: The desires of the organization are its goals or it is a particular target. Goals are short-
term objectives of the company and are used to assess and review the performance of the
organization. Goal can be defined as the ultimate destination that an organization wants to
achieve. Goals are developed by the top management and are communicated to all the
employees of the company. Strategic plan are then developed to achieve these goals. For
instance in Tesco the top management develops the goal and plans for accomplishing the goals.
Employees then according to the developed plans. When developing goals of the organization
management must align the personal goals of the individuals with the organizational goals.
Objectives: Objectives and goals are often treated as one and as synonyms by managers most
of the time, however they are two different concepts. Objectives can be used by the
organizations to measure the progress needed to reach a specific target. On the other hand
goal provides the detail of the target. Steps necessary to achieve the goals are the objectives.
Hence it can be said that objectives are part of goal however goals cannot be considered as a
part of objective.
Core competencies: Core competencies helps the achieving the success of the company.
Company gains competitiveness through its core competencies. Competitiveness helps the
company to successfully penetrate the market. For companies like Tesco, customer service and
effective processes are the core competencies. For manufacturing companies core
competencies can include manufacturing process, supply chain, effective procurement
procedure and product development. Core competencies provides cross functional business
process hence they are necessary element for organizations to achieve success. Cost, quality
and outcomes must be measured by the cross functional business process.
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1.2 Choose/select an organization and analyze factors to
be considered when deciding its strategic planning and
monitoring of effectiveness.
To achieve the goals of the organization strategic planning is significant as they direct the ways
to reach the targets set by the company. Strategic planning has some important factors and
these factors must be analyzed properly and must be prioritized based on time and importance.
Members involved in planning process
All the members within the company must be involved in the planning process. Involving all the
members helps in covering all the areas in the planning process and also helps in effective
development and implementation of the plan. Planning process is performed by the top
management of the company and middle management executes the plan (Batt and Nohara,
2009). Daily operations are performed by the low level employees to accomplish the goals and
objectives of the company.
 Top level: Senior executives are included in the top level and they develop plans in
Tesco. Different factors like employee engagement, organizational growth and
development are considered by them. In planning process important role is played by
the senior management level.
 Middle level: Middle level management is responsible for the implementation of the
plan developed by the senior management. To effectively execute the plan middle
managers ensures that there plans are effectively implemented within the company.
 Lower level: In the planning process lower level employees are also involved as they
perform daily operations related to the plan which are directed by the middle managers.
This operation include, purchasing, inventory management and production etc.
Short term and long term targets
Tesco Long term objective is to constantly meet the needs of customer by obtaining their
perspectives about innovation, product quality, store services and facilities and choices and
accordingly take actions. To provide customer with products and services at an affordable price.
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Tesco Short term target is to develop the skills and capabilities of the employee’s by training
then and also develop the core competencies of the company.
Appropriate timing for the planning
Planning is a continuous activity however plans must be developed within a specific time. In the
planning process all the objectives are separated in short, medium and long-term objective so
that all objectives must be achieved in time.
Task 2
2.1 Generate ideas for an innovative product or service.
Focus on the following key steps:
Idea generation
Idea generation can be defined as process through which new creative ideas are identified by
the company to develop innovative product and services. In idea generation many ideas are
brought up in group discussion, then good idea or ideas are selected, plans are developed to
implement the idea, and feasibility of the idea are assessed. The ideas generated at this stage
can be either tangible (something that has physical presence and can be touched) or intangible
(something that cannot be touched). Techniques like brainstorming can help the company in
creating many ideas for the new product or service of the company. Ideas are not assessed or
analyzed in the brain storming stage. Hence employees can freely and easily share their ideas
without fearing critics. In brainstorming all ideas good or bad are accepted.
Tesco is willing to introduce to introduce new innovate product or service, this the idea of
launching a budgeted smartphone is generated. The budgeted smart phone of Tesco will
compete with the leading brands in the smart phone industry like Apple and Samsung. The
operating system of Google android will be used by the Tesco Smartphone. Other built-in
service that will be included in the smartphone are Blinkbox, movie and music streaming and
internet shopping and may more.
Touchscreen smartphone were invented and are being used by people for just nine year,
however it has already completely penetrated the market. Societal and commercial impact of
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Smartphone was massive and no other personal device had such impact. At initial stage Tesco
smart phone will be launched in the UK only and will also operate in UK only. The current
trends in the mobile industry were analyzed by the UK mobile consumer survey and some of
the main findings are listed below:
 Individuals belonging to the age bracket of 18-24 years have a habit of checking the
mobile at midnight.
 Fingerprint reader is included in 27% of smartphone and 76% individuals use these
fingerprint reader.
 2% of adults own smart lights and smart appliances, this indicates that connected home
devices are still used by majority of people.
 By the mid of 2016, half of the adults in the UK had access to one entertainment
product or service.
 The adoption rate of 4G doubled from 25% to 54% in 2016.
 No traditional voice calls are made by 31% smartphone user. This percentage was 4% is
2012.
 The users of smartphone are expected to grow to 45m in 2017.
Opportunity evaluation and SWOT
SWOT analysis is a strategical tool that is used by the organization to assess its internal strong
points and weak points and external opportunities and threats.
Strength
Strengths are internal traits and resources of the company that provides it advantage over its
competitors in the industry.
 Products and services offered by Tesco are innovative and have unique design.
 Low cost of production allows the company to compete on price in the industry.
 Good image and reputation of the company due to its focus on the environment
 Market share of Tesco is large
 There are many loyal customer of Tesco.
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 In its day to day operations Tesco follows industrial standards
 Inventory management system of the company is strong and effective
Weaknesses
Weaknesses are the internal attributes that can negative influence the company and its
operations. They can also reduce the competitiveness in the market.
 Tesco does not have its own operating software
 There is too much variation is the product
 Lack of focus on core competency of the product
 Strong competition is faced by Tesco in smart phone industry from leading companies
like Apple.
 profit margin are low
Opportunity
Opportunities are the external factors that can be exploited by the company and can help in
gaining sustainable competitive advantage.
 The market of smartphone is raising
 Growth in the industry due to increasing interest of people in portable devices
 The demand of quality processors is growing rapidly
 Patents can be gained through acquisition.
Threat
Threats can hinder the business and operation of the company and are mainly external factors.
Threats like weaknesses can decline the competiveness of the company in the market.
 The growth rate of smartphone market is slow in developed countries
 Changes in the technology are taking place rapidly
 Intensive level of competition
 In hardware production margins are declining.
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New product/service planning
There are different stages involved in the development of new product, which are discussed in
detail below:
The Idea: The first step of product development is the idea. Idea can be simple that leads to
development of new product that is similar to current products of the company or it can be
unique or revolutionary. For example the idea of smartphone by Tesco is unique and
revolutionary. Product ideas can be generated by seeking the help of employees, particularly
the employee who often interact with the customer. Customer survey can also be performed
from creating new idea as it helps in understand the needs and wants of the customers.
Organizations can also research the market to see if there are any gaps that can be fulfilled by
new product development. Companies like Tesco can use social media to perform online survey
of customers. In the process of idea generation many ideas can be developed however
management must assess all the ideas and pick only good ideas and drop bad ideas.
Research: After selecting the best idea/s the next step that Tesco must follow in search the
market. Marker research will help Tesco is better understanding of the industry and customer
expectation. Needs and wants of the customer can also be assessed by the company through
market research
Development: Development of the product is the next stage of new product development.
Prototypes are develop which can be modified until the manufacturing stage so that finished
product is the one that customer is willing to buy.
Testing: Before the product is actually launched in the market, new product is tested within
small group of customer. This helps in testing the viability of the new product and any
modification that must be made in the final product.
Analysis: Results of the testing in the previous stage are analyzed and necessary changes are
made if necessary. These results are also used to develop marketing strategies of the company.
The company decides how the new product will the introduced in the market. Pricing and
promotion strategies are also decided at this stage.
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Introduction: Introduction is the last stage in which the product or services are introduced in
the market and are available to the customers. After the product is launched in the market,
Tesco must effectively manage the product life cycle
Market research for the new idea.
There is a rapid growth in the smartphone industry. In next two year the smartphone market of
the UK will succeed with increase in the unit sales set by 5.5% to 25m in 2018. In 2015 the sales
of smartphone was 23.7m which increased to 24m in 2016 and these figures are expected to
rise by one million in the coming two years. By the end of the 2017 it is expected that UK will
be ranked as fourth valuable market by worth of $13.1bn just behind India ($ 14.8bn), japan
($16.2bn), US ($70.0bn) and China ($117.8bn). 71% of overall market was accounted for the
sale of 4G unit in 2015 in the UK. This reached 77% in 2016 and is expected to reach 82% this
year and 91 % next year.
In 2015 73% was the penetration of smartphone in the UK and is expected to increase to 76%
by the end of 2017. This means that smartphone will be owned by more than three quarter
users.
In the UK most rapidly growing market will be the SIM-free market. In 2016 3miilion units were
sold.
Market Share
99.1% of the smartphone market is accounted for the iOS and Android. With Android leading
the market. Window 10 Mobile make 0.6% of the market where as BlackBerry OS makeup 0.1%
of the market. Even tough new phone are still being made by Window, this platform is being
backed out ty Micro sot. At the same time Blackberry is developing Android devices which are
bundled with the legacy application of BlackBerry. However the smartphone market is being led
by the Apple and Google.
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TASK 3
3.1 Identify, then evaluate a target market for the new
product and select an appropriate market segment.
Target Market
Wide range of customers use smartphone in daily activities which can be targeted by Tesco. The
main target group of Tesco for the smartphone will be customers falling in the age group 20-50
as they are well aware of the functions of smartphone. Whereas people in older age find it
difficult to adopt new technology.
Young Generation to early adults from age 14 to 25 years will be the target market of Tesco
smartphone as this age group is technology savvy. The spending power of this age group has
increased from the power they had in past.
Large portion of target market for the smartphone of Tesco can be formed by the Adults
belonging to the age group 26 to 50 years. This target group are more capable of procuring the
products and service of purchasing the smartphone of Tesco. In coming years there will be an
increase in this target customer.
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SEGMENTATION:
Market Segmentation is one of the main principle of marketing. In segmentation entire market
is divided in groups of customers. Within the group the individuals are similar to each other and
two groups differ from each other. Different types of segmentation strategies are used by the
organizations. Two best segmentation strategies for Tesco smart phone is demographic and
behavioral segmentation. These are discussed in detail below:
Demographic Segmentation
Age: customers can be segmented based on their age. For Tesco smartphone teens, young
adults, adults in early and mid-30’s will be the age segment targeted by Tesco.
Income: The individuals from middle and high income class will be income segment of Tesco.
Family Life: In this segment young single, married or divorced with and without children will be
targeted.
Gender Segmentation: In this segment both males and females will be targeted as smartphones
are not gender specific.
Psycho graphic Segmentation
In physiographic segmentation the Tesco will target individuals in teens to late 30’s who adopt
new technology and have the financial resource to buy it.
3.2 Construct a sound business proposal for the new
product/service.
THE COMPANY
Grocery retail stores are operated by Tesco Plc. Tesco also operates in retail banking, financial
and insurance industry. Tesco operates in different countries including UK, Turkey, Poland,
Slovakia, Republic of Ireland, Hungary, Thailand, Czech Republic and Malaysia. Tesco considers
that innovation is most essential element for gaining and retaining customers along with the
success of business. Tesco focuses on the innovation of both product and the process. The
focus of Tesco in managing the margin is the key element of innovation at the company. Low
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prices are offered by the company by efficiently managing all the processes. New innovation of
the company is smartphone.
THE PRODUCTS
The product line of mobile phone at Tesco will include different versions and designs of
smartphones and different mobile phone accessories like ear sets, headphone, holsters and
cases.
CORPORATE STRATEGY
Corporate strategy of Tesco has five key elements. These elements are filling the diverse needs
of customer in one place, in the market getting a head start, developing a brand identity rapidly
, forming strategic alliance with OEMs( original equipment manufacturer, effectively main the
website traffic and lower the operating cost by using external service provider and CRM
solutions and cloud ERP.
MISSION AND GOALS
To lead the smart phone industry through cost leadership by 2018. Tesco Smartphone objective
is by 200% increase the revenue from this product line in next five years.
ORGANIZATION AND MANAGEMENT
This product line will be managed by separate department with five key employee who will
report to the head of the department. The hierarchical presentation of this department is given
below:
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A brief summary of the personnel is outlined below
Given below is the summary of the personnel:
COO
Will have experience in the operations sector and will manage the external service provider.
CFO
CFO must have several years’ experience in startup business and must be able to manage the
growth of the business. CFO must also have complete knowledge on government regulation
related to smartphone industry particularly and taxation.
CIO
Must have eight or more years’ experience in managing the cloud ERP and CRM system.
CSO
CSO must have at least seven years’ experience in managing local and global strategy in
multinational company. CSO must also have knowledge in e-commerce strategy.
Pricing Strategy
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Pricing objective of Tesco will be to earn profits within twenty three months after the launch of
the smartphone and achieve 15% of ROI in fourth year. Tesco plans to hold loess of £15 million
or less in the first year which includes product development, production cost along with
communication and marketing cost. Manufacturing capacity and volume will increase in first
two year hence there will be a decline in the variable cost and will improve profit margin for
Tesco smartphone.
As smartphone market is highly competitive so it is best for Tesco to use penetration pricing
strategy. The first smartphone that will be launched by Tesco will have an average price of £130
for wholesalers and average price of £210 for retailers. The projected sales in the first year is
240000 units thus the projected revenue will be £31m
After the launch of first model, Tesco will adjust the wholesale price of its smartphone based on
the prices of its competitors like Apple, HTC, Motorola and Samsung. Price adjustment is
necessary in the industry as smartphone market in instable and dynamic.
Smartphones are often bundled with phone service contract by telecommunication carriers,
this maintaining a reasonable price of mobile set. Carriers and retailers reduce the price of
older models once new models are introduced. This attracts price sensitive customers. Price
comparison is encourage and can provide the opportunity show the value and be competitive in
the market. Tesco will drastically reduce the price of first model after the launch of second
model and will use price to trade-ins and upgrade. This will help in retaining the customers
Marketing Communications and Influence Strategy
Two of the marketing objectives focus on communication strategy. These objectives are to
create brand awareness in 40% of the customers in the target market. In the business to
business target market create brand awareness by 50 %. Brand building campaigns will be run
in different medias and will differentiate it competitors and will obtain feedback from the
customers. As Tesco focuses in low cost thus to cost-effectively create brand awareness high
priority will be given to social media.
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Sales promotion will also be used by Tesco to support the promotion of the product. High-
profile will be held at the launch of Tesco smartphone. This will stimulate publicity through
media coverage.
Channel Strategy
For Tesco smartphone selective distribution is be used. The two main distribution channels for
smartphone will be Retail stores of Tesco and Tesco website. Second distribution channel for
the Tesco smartphone will be telecommunication carriers who will bundle the handset with
their services.
Tesco must focus on customer service and logistic efficiency to build the image of its new brand
among the customers. Orders can be place online through the secure website of Tesco.
Customer through this website can also track their shipment. At the introduction stage proper
inventor will be managed by Tesco for all the important components so that it can effectively
and timely can meet the demand of the customers. However, it is necessary for Tesco to avoid
the situations like excessive inventory as it will increase the production cost of the smartphone.
Moreover, technology can also become obsolete.
MARKETING RESEARCH
For future developments market research will performed by Tesco to develop effective plans:
Product development: Concept testing, survey and market testing were used to identify the
features, benefits that are most valued by the customer in their smartphones. Additional data is
being collected on usability, quality and value perceptions of the customer. Features preferred
by businessman and woman in smartphones are also being identified to develop new product.
Marketing communications and influence. It is planned to measure the brand awareness before
and after the camping to identify the effectiveness all the channels used to promote the
product among the target customers. Attitude of the customer towards the promotional
campaigns of competitor will also be assessed this will help us understand how a message is
received and interpreted by the customer. This will help in developing an effective
communication message.
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Customer satisfaction. A comprehensive study will be performed to assess the level of
customer satisfaction and identify the drawback or shortcomings of the product that can be
improved.
Porter’s five forces:
Porter five forces will help in understanding the attractiveness of the smart phone industry. Five
forces are analyzed in this model that shapes the industry.
Threat of new entrants- low
The threat of new entrant is low in the mobile phone market. Some key reasons of this loe
threat are:
1. The mobile phone market is already well-established
2. High capital requirement in the mobile phone market such as high manufacturing cost
and research & development cost.
3. Major barrier for new entrants is obtaining patents
4. Customers are loyal towards the brand present in the market.
5. New entrants face the barrier of advanced technology to effectively compete in the
market new companies need to properly develop the technology.
Threat of substitute products or services-moderate
Substitute’s availability can be a major threat for the companies in the mobile phone industry.
Availability of substitutes enforces the organizations to lower their prices to attract the
customers
i) There is a moderate threat of substitute and mainly depends on how substitute
product impact the image, sales and price of products.
ii) Different functions are provided in the smartphone so any product that can perform
an individual function can be considered as a substitute. In this way there are many
substitutes of smartphone such as digital camera, notebooks and PDA.
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iii) Indirect substitutes of smartphone OS can be Apple iPhone and other android
devices.
Bargaining power of customers (buyers)-high
There is high bargaining power of the customer. To overcome this high power product
differentiation is the best strategy that can be used by the company to add value in the
products and services offered to the customer.
i) The bargaining power of the customer is increasing as the customers has wide
selection in the smartphone market and differentiation among the products is low.
ii) Information related to product and price offered by different companies are radially
available to the customer increasing the bargaining power of customer
iii) Switching cost is low hence customer can easily shift from one brand to other brand.
Bargaining power of suppliers-Low
Bargain power of the supplier is low as there are many supplier available in the market that
either offer same or substitute products. This high competition among the suppliers enforces
them to lower the prices to attract the manufacturers. Thus giving an upper hand to the
manufacturers. Supplier depend on bulk orders as it provides the economies of scale. This also
reduces the bargaining power of the supplier.
 Intensity of Existing Rivalry-high
These is an intense completion among the companies in the industry. At present the growth
rate of the industry is 28 to 30% globally. Revenue of some major players in the industry are
given below
 Revenue of Apple id $171 Billion
 Revenue of Samsung is $268 Billion
 Revenue of Microsoft is $78 Billion
 Revenue of Google is $60 Billion
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 Revenue of Nokia is $40 Billion
 Revenue of LG is $45 Billion
 Revenue of Lenovo is $29.57 Billion
This shows that completion in the industry is strong and competitive.
3.3 Work in teams to prepare a presentation for a
business pitch for the new product/service. Deliver the
presentation and evaluate feedback from your audience.
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Task 4
4.1 Carry out an environmental audit of a selected
organization and evaluate its strategic position, using
PESTLE and 5 Forces analyses.
Pestle analysis is performed in order to perform the environmental audit of Tesco.
PESTLE analysis:
i. Political factors:
Business in operated by Tesco in different part of the world. Hence business operation of Tesco
are affected by the global political factors. Tax rate, government policies, legislation etc. are the
factors that can effect Tesco. Different nation encourage Tesco to operate the retail stores in
their market as they will offer employment to individuals will ensure trustworthiness.
ii. Economic factors:
Tesco is also impacted by economic factors like demand, inflation rate and interest rate etc. like
if Tesco operate business in market with high rate of interest it will eventually impact the
operational cost and profitability of the company in that market. Inflation is the market will
negatively effect the business transactions of Tesco. Diversification and globalization are two
factors leading to the success of Tesco.
iii. Social factors:
Socio-cultural factor can affect the business of any organization. Such as increasing demand of
healthy food has enforced Tesco to introduce healthy food and it also entered the non-food
business due to social changes. Business activities of Tesco are effected by the changes in
behavior and attitude of the society. Tesco must develop strategies to adopt this social changes.
Focus on improvement of supply chain and operation will help Tesco in improving the overall
performance of the business.
iv. Technological factors:
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Organizations are also influenced by the technological factors. Tesco understands that it is
important to adopt advanced technology to attract and retain customer. Implementing
advanced technology majorly contributes in the success of Tesco. Different technology is used
by Tesco to effectively perform the operations. Some of the technologies implemented include,
ERP, RIFD and self-checkout counters. Aim of implementing technology by Tesco is to satisfy the
customer and gain their loyalty. Technology also helps Tesco in cutting down their cost.
v. Environmental factors:
Business activity of Tesco are also affected by environmental factors. It is necessary for every
organization to carry out business operations in ethical manner. Tesco has well-established CSR
(corporate social responsibilities). Tesco focuses on reducing waste and reduce the impact of its
operations on the environment. Tesco is committed to reduce its carbon footprint by 50% till
2020.
vi. Legal factors:
Different laws and legislation developed by the government of the country affect the business
operations and activities of Tesco.
Porter’s Five Forces Analysis
Threat of substitute products and services
In food retailing there in low threat of substitutes however in non-food retailing this threat is
moderate. Organic shops, small convenience store however these substitute are not major
threats for Tesco as it offers high quality healthy food at low price. Barriers are being created by
Tesco for it substitutes by Express store is towns and cities. In non-food items like clothing
threat of substitute is high. Due to economic recession customer are more inclined toward low
prices hence specialty stores are threat for Tesco.
Threat of entry of new competitors
There is low threat of new entrant in the food retailing industry. This is because entering in
retail industry requires huge investment in order successfully compete against the giant
retailers. In retailing industry major market share is captured by big four, namely Tesco,
Sainsbury, Asda and Morrisons. 80% of shopping in the UK is done through these retailers.
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Hence new entrants have to either offer exceptionally high quality products and service or offer
products at a very low price
Intensity of competitive rivalry
Competition in food and grocery retailing is very intense. There are many direct competitors of
Tesco like Asda, Sainsbury, Waitrose, Morrisons. These retail chain intermittently compete
against each other to gain higher market share. In 2016 market share of Tesco was 27.6% and
its main competitor is Sainsbury with market share of 16.1%, followed by Asda with market
share of 15.7% in the same year. Morrison’s market share in 2016 was 10.4% whereas Waitrose
had market of 5.1% (Euromonitor, 2010). Market rivalry have been intensified resulting in slow
growth in market. This is a threat for the leading position of Tesco.
Bargaining power of buyers
There is high bargaining power of buyer is high. Differentiation among the products is low and
are more or less standardized. Moreover switching cost is low thus customer can easily shift
from one brand to other brand. Customer are price sensitive and availability of online shopping
allows the customer to easily compare the prices of different product.
Bargaining power of suppliers
There is low bargaining power of the supplier. The power is low because the supplier want to
gain orders from leading retail chain and fear losing business of their giant retailers as they
order in bulk. Hence supplier can gain economies of scale. Thus the strength of giant retailers
like Tesco, Sainsbury, Asda increases and can negotiate with suppliers to lower the price.
4.2 Use stakeholder analysis to identify stakeholder
needs and influence. Construct a new strategy for the
organization.
Stakeholder can be a person, group or company that is involved in the company and can be
effected by the activities of the company. Stakeholders of the company include employees,
shareholders, suppliers, labor union, community, directors, and creditors.
Stakeholder analysis is a tool that helps in identifying the important stakeholders of the
company that can support the business operations and activities.
Stakeholder analysis is important for development of strategies for following reasons:
 Stakeholder can provide important perspectives and information about the market trends.
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 Stakeholder with power can offer their support in the growth and development of the
business
 Understand the importance and influence of stakeholder by communicating with them.
 Can help in assessing the perspective of people about the company and its products.
There are different steps taken by Tesco for stakeholder analysis. These steps are as follows:
Step-1:
In the first step involved in the stakeholder analysis is to identify the people who can be
affected by the operations of the business.
Step-2:
Second step involved in the stakeholder analysis is to determine power, influence and power.
For this purpose stakeholder grid is developed by Tesco.
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Figure: Stakeholder’s Grid
 Stakeholders with high power and high interest must be satisfied by Tesco. They can
influence strategy.
 Stake holder with high power and low interest can also influence the strategies developed
by the company. However the quickly loss interest in the company.
 Stake holders with low power and high interest they can help company in various way
therefore information must be properly provided to these stakeholders.
 Stakeholders with low power and low interest cannot influence the company and quickly
loss interest in the company. Minimum efforts must be put in monitoring these stakeholder.
However company put try to increase their level of interest in the company.
Step-3:
In stakeholder analysis the final stage is to establish a proper understanding of stakeholders
and prioritize of them according to their importance. This will help the company their support
for the success of the company.
A new strategy for Tesco
The main strategy of Tesco is to create value for the customer and satisfy them. Product
development strategy can be adopted by Tesco. This strategy will help Tesco to meet the needs
of customer by providing them new and innovative products. Higher revenues can be
generated and business can expand through this strategy.
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Task 5
5.1 Assess the roles of staff and the different
departments in your organization when implementing the
new strategy.
A leader is needed to implement strategies effectively. The role of the leader is to guide the
employees and assign work to them according to the role and responsibilities in the
organization. Proper roles and responsibilities must be developed for the personal in charge for
the implementation of strategies in Tesco. Higher management must properly communicate all
the strategies along with guidance to the employees and other stakeholders. Strategic plans are
directed by the higher management.
Employees and managers responsible for the implementation of strategic plans must maintain
proper record. In strategic planning it is very important and helps preventing any legal
responsibilities. Strategic implementation also helps the company in maintaining legal and
ethical standards among the employees. To successfully implement that strategies it is
necessary to properly monitor the employees. Monitoring and controlling is periodic
evaluation of activities of the employees to ensure that strategies are being implemented as
planned. It helps in taking corrective actions when necessary and assess the overall
performance of employees.
5.2 Select and evaluate SMART targets to use in
monitoring progress of the new strategy.
Smart targets means that all the goals and objectives set by Tesco must be Specific, measurable
using a set criteria, attainable, realistic and time oriented in nature.
Importance of SMART target:
i. Targets must be specific as if they are not specific it will cause conflicts among the
employees and management result in low productivity and performance.
ii. Targets must be measurable as it will help Tesco and its management in identifying it
performance and any deviation from the target can be identified and necessary action
could be taken.
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iii. Targets must be attainable as if they are unattainable it will negative effect the
operations of the business.
iv. Targets set by Tesco must be realistic as unattainable targets will be lead to waste of
resource and energy
v. There is a time limit for everything. Hence the targets set by Tesco must have time and
must be attained within this time.
Conclusion:
Business strategies of the company can be effectively implemented by properly analyzing the
internal and external environment of the company. The main business strategy of Tesco is to
create value and satisfy the customer all over the world. It is suggested that Tesco expands its
business in geographically. Different strategies like product development and market
development can be used by Tesco in both local and global market. This will help Tesco is
attracting more customers. The current situation of the market helps in effectivelyo9
implementing the strategy.
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