Analysis of Business and Economic Trends

The assignment provided is a compilation of various case studies, research papers, and statistical data on business and economic trends. It includes a list of references to relevant publications and online sources, providing valuable information for students and researchers in the field of economics and business. The assignment also touches upon topics such as product life cycles, transformational leadership, and resource recovery from waste, highlighting the importance of innovation and sustainability in modern businesses.

PRINCIPLES AND
PRACTICES OF
MARKETING

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
SOSTAC Model to enter into Germany......................................................................................1
SOSTAC Model within UK........................................................................................................9
SOSTAC Strategies of UK applied within Germany................................................................11
REFERENCES..............................................................................................................................13

INTRODUCTION
Marketing refers to all those activities and operations undertaken by companies which
adequately assist them in communicating and presenting their offerings to people in the market
effectively (Vasilcovschi and Georgescu, 2012). It is an important activity which is essential in
terms of influencing customers to buy the products and services offered by organisation through
building up clear and effective perception of their commodities in front of customers.
The following report is based on Tesco Plc, which is one of the most reputed
organisations in the UK, having multiple supermarket chains within the country and beyond. It
deals in product segments such as books, electronics, clothing, toys, grocery, general
merchandise, watches etc. It covers a detailed SOSTAC model for the marketing strategy
adopted by the company, as well as a detailed evaluation of effectiveness of this current strategy
of the organisation. Further, the report covers evaluation of effectiveness of current SOSTAC
strategy of company within UK. Lastly, it includes assessment of the extent to which current
marketing strategy of entity can be executed within international markets.
TASK 1
SOSTAC Model to enter into Germany
Tesco Plc is a British multinational company dealing in a number of product segments
and providing its offerings to people spread across the globe. Across the world, this organisation
is regarded as the third largest retailer in terms of gross revenues and the ninth largest retailer in
terms of revenues. This company has outlets spread across seven countries within the confines of
Europe and Asia. It is the leader within Grocery market with a share of approx. 28.4% in UK,
Hungary, Ireland and Thailand (Anıl and Ficici, 2017).
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Illustration 1: Leading 10 retailers based on sales in the United Kingdom (UK) in 2017/18
§
(Source: Leading 10 retailers based on sales in the United Kingdom (UK) in 2017/18, 2019)
Having its headquarter within United Kingdom, this organisation is the leading retailer
within the retail business sector owing to its high quality products and optimum pricing. In this
regard, looking upon the success of the organisation, the managers of this company are
considering expanding the operations of entity into Germany. In this regard, the management of
this organisation is looking forward to make use of SOSTAC model so as to ensure growth and
success within the new international market.
SOSTAC is a model which comprises of a general marketing strategy that can be feasibly
applied with a number of commercial situations (Charfeddine, 2016). It can be said to be
focussed upon the execution of the different stages of the process inclusive of situational
analysis, objectives, strategy, tactics, actions and control. This model will enable Tesco to make
better decisions in order to develop effective plans for gaining a strong share in market of
Germany. In this regard, the various elements of SOSTAC in context of Tesco are explained
below:-
Situational Analysis: While gaining entry into new markets, it is essential that company
takes into account the business environment of such place owing to the presence of a number of
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factors which may impact upon the functioning of entity. Micro and macro environment factors
significantly impact upon the operations and functioning of businesses. In this regard, the macro
environmental factors that may impact upon the functioning of Tesco within Germany are
analysed by company with the help of PESTLE analysis as follows:-
Political Factors- Germany is a democratic republic. The political system of the country
operates under the guidance of a framework. The German government comprises of three
important wings, namely, legislature, executive and the judiciary. The democratic system allows
new businesses to gain rapid success and growth post gaining entry into this nation. This will
assist Tesco to enter the nation and significantly enhance its sales and profitability by making use
of the supportive governmental policies. The Federal Ministry for Economic Affairs and Energy
strives to foster the innovation capacity of Germany by way of a strategic policy named “High-
tech Strategy – Innovation for Germany” (Innovation Policy, 2019). It covers all the measures
taken by government to promote innovation, technological advancement and research.
Economical Factors- The economy of Germany is the 4th largest across the globe with a
nominal GDP of USD 4.2 trillion and also, the largest of Europe (The World's Top 10 Largest
Economies, 2019). This nation is the leading exporter for vehicles, chemicals, machinery,
household equipments and gain benefits from the highly competent and skilled labour force.
Further, the scope for companies to bring up innovation and get support from Government of
Germany is huge owing to the aid received from The Federal Ministry for Economic Affairs and
Energy. This will foster Tesco to enter Germany by capitalising on the strong economy of this
nation and its excellent infrastructural facilities and consequently, gaining a high stake in
marketplace (Germany stands out for business innovation, 2019).
Social Factors- Germany is the most populous country across the European Union and at
the 19th rank in the world with a population of 82,416,629 as of 2018. This population is
expected to reach 82.44 million in the year 2019 (Germany Population 2019, 2018). Tesco has
used Hofstede Model to expand into Germany and work optimally with people belonging to a
diverse set of cultural and national backgrounds. This model has 6 elements, namely, Power
Distance Index (PDI), Individualism vs Collectivism (IDV), Masculinity Versus Femininity
(MAS), Uncertainty Avoidance Index (UAI), Long Versus Short Term Orientation and
Indulgence Versus Restraint (IVR). Being highly decentralised and supported by middle class,
Germany is among the lower power distant countries with a score of 35. The society of Germany
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is individualistic with a score of 67. Further, Germany thrives of Masculinity with a score of 66.
This country comes under the uncertainty avoidant countries with a score of 65 which indicates
that there is a little preference for UA. Germany is a LTO country possessing a score as high as
83. The low indulgence score of 40 on IVR depicts that the culture of Germany is found to be
restrained in nature and have a tendency to adopt pessimism (WHAT ABOUT GERMANY?, 2019).
Tesco will have to take these cultural and national aspects of Germany into account while
facilitating expansion into this international country.
(Source: WHAT ABOUT GERMANY?, 2019)
Technological Factors- Germany has an excellent track record for a companies coming
up with innovations and new technologies with a view to enhance the overall share in market.
This will facilitate the organisations which enter this nation to foster business growth and
expansion. In this regard, Tesco will make use of the cost-effective and efficient techniques
prevailing within the corporate sector to significantly increase the revenues as well as profits of
enterprise.
Objectives: “To enhance the sales of company by 20% by the end of 6 months of entering
Germany.”
Strategy: The strategic choices that an entity possesses to facilitate business growth are
evaluated with the help of Ansoff Matrix. The four strategies that form a part of this matrix are
explained in context of Tesco as under:-
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Illu
stration 2: Hofstede Insights of Germany

Market Penetration- This strategy stresses upon delivering existing products within
current markets. In relation to Tesco, the company can make use of this strategy to enhance the
already existing customer base within United Kingdom by focussing upon the quality of products
and their pricing.
Market expansion- This growth strategy focuses upon provision of existing products in
new locations. This helps in tapping the attention of new people towards the products sold by
entity with a view to expand the current market share (Burayidi, 2013). Tesco can gain entry into
untouched locations so that more people are acquainted with information about high quality good
offered by entity in marketplace.
Product expansion- In this business growth strategy, organisation is engrossed in
provision of new products in current markets. With reference to Tesco, it can be said that this
company has the potential to launch new product segments within non food category, such as
fashion accessories. This will assist the enterprise to attract new set of customers towards the
brand with a view to enhance its sales and profitability.
Diversification- This growth strategy stresses upon provision of new products within new
markets. It is regarded as a risky strategy as it becomes difficult for an entity to get support and
acceptance from population of international marketplace (Otoo and Drechsel, 2018). Tesco can
adopt this strategy by gaining entry into new emerging markets and expanding its non-food
product segment there. Positive response from customer will facilitate the company to enhance
its sales and profitability.
From the above analysis, it has been analysed that market expansion will be the best
strategy for facilitating business growth and expansion as the people of the new country are
already aware of the offerings of company and would be willing to consume the high quality
products of this entity. In this regard, Tesco is gaining entry into Germany by offering the
existing products such as clothing, toys, electronics, general merchandise etc. This will provide
assistance to the organisation to expand the customer base, thereby, enhancing the share in global
marketplace.
Tactics: To feasibly enter into Germany and increase its sales and profitability, Tesco is
making use of three essential and significant tactics, namely, products, price and place. These 3
tactics are briefly explained as follows:-
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Products- Over years, Tesco has been offering high quality products within United
Kingdom.
Product Portfolio: Tesco deals in a wide variety of products such as clothing, electronics,
grocery, general merchandise, toys etc. (Hussin and et. al., 2017). The organisation will continue
to provide the existing offerings within the new market (Germany) so as to gain the attention of
untouched customers and significantly enhance the sales and profitability of enterprise.
Product Life Cycle (PLC): Tesco is now gaining entry into Germany where its managers
are gaining knowledge about the stages of Product Life Cycle in order to easily offer its products
to customers thereby facilitating business growth and expansion. In this regard, its stages are
explained below:-
(a) Introduction: In this stage, the products of a company are introduced. In this regard, Tesco
will introduce its existing offerings to people within Germany in order to gain their attention.
(b) Growth: This is the stage where the products of organisation get sold at the fastest rate. This
will be the stage where Tesco will receive the highest appreciation and recognition for its high
quality offerings.
(c) Maturity: This is the stage where the sales is maximum for the company, however, the
growth rate is slowing down owing to rivals present in marketplace. In this regard, the products
of Tesco will be able to generate highest revenues at this stage yet the growth rate would be
slowing gradually. This will owe to the presence of well renowned and established market
players within Germany such as LIDL. ALDI, Edeka, Rewe, Kaufland, Amazon, Otto (Hacioglu,
Dincer and Celik, 2012).
(d) Decline: This is the stage wherein the sales of products offered by company in market start
declining. In this regard, Tesco will have to take effective measures to deal with such situation so
as to ensure that this stage does not affect the financial performance of entity significantly. In
this regard, to avoid the decline stage, company can consider one of the below mentioned
strategies:-
Advertising- This is a measure whereby Tesco will try to capture a new audience or make
stronger the current audience by focusing upon advertising.
Price reduction- This is a strategy whereby Tesco will significantly decrease the price of
products in order to make the products seem more attractive to customers.
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Value Addition- Here, company adds new features to the existing products so as to gain
trust of customers.
Explore new locations- Here, the organisation enters new markets or expand by targeting
different customer segments within same country (Toedt, 2014).
New packaging- This is yet another effective measure whereby company brightens up the
old packaging style by bringing about certain subtle changes.
(Source: Product Life Cycle, 2019)
Boston Matrix: This is a model which assists an organisation to significantly analyse its
product portfolio. In this regard, the BCG Matrix for Tesco is given below:-
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Illustration 3: PRODUCT LIFE CYCLE

Figure 1: BOSTON MATRIX OF TESCO
(Source: BOSTON MATRIX OF TESCO, 2019)
Price- Tesco will make use of premium pricing method within Germany as people
generally possess the ideology that high prices of products are associated with high quality and
thus get captivated to make a purchase. This will help Tesco to ensure that the population of
Germany regard the products offered by the company as demonstration of excellence and
uniqueness.
Place- This tactic is associated with the strategic locations that are selected by company
for selling the products in order to gain the attention of maximum number of persons. In this
regard, Tesco will sell its offerings in the bricks and mortar format at the initial stage of entry
within Germany (Sood, Sukthankar and International Business Machines Corp, 2013). Post
entry, within 6 months, if the management feels that the organisation is earning optimal revenues
from the nation, Tesco will start offerings its products on its website for online sales.
Action: The above mentioned strategies and plans will be undertaken by company within
the international market with a view to enhance its existing level of sales as well as profitability.
Control: Control plan is necessary for every organisation so as to ensure that if the
proposed strategies and plans do not work out positively, a back-up plan can be executed to
significantly reduce the shortcomings. In this regard, Tesco has also made a back-up plan
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wherein it will introduce new products into market so as to enhance the customer base, thereby
increasing the sales and profitability consequently.
TASK 2
SOSTAC Model within UK
It is essential for an organisation to evaluate the effectiveness of strategies adopted at
domestic level in order to ascertain where the company is lacking and needs to bring
improvement. In this regard, the effectiveness of marketing strategies of the organisation is
evaluated by Tesco by examining the SOSTAC Model as follows:-
Situational Analysis: The PEST analysis of company reveals that United Kingdom has
been an effective and lucrative market for company wherein entity has developed a loyal
customer base who do not intend to shift to other brands (Warkentin, Sugumaran and Sainsbury,
2012). Further the analysis depicts that UK government supports innovative companies such as
Tesco who are always willing to come up innovative products. It also demonstrates that the
technologically advanced market of UK fosters Tesco to launch new and unique products with a
view to gain the attention of people.
Objectives: “To enhance the sales of Tesco by 25% by the end of next 6 months”
Strategy: In relation to the this element of SOSTAC, Tesco is adopting a number of
generic and other business strategies within United Kingdom to significantly gain the attention of
people and enhance its market share. Such strategies and their effectiveness for the entity are
given below:-
Cost Leadership- Over the course of time, the main focus of Tesco has been upon
reduction of costs in the best suitable manner. To ensure this, this entity invests heavily in hiring
competent as well as skilled personnel and also making use of effective production technology.
The prices of products offered by Tesco within UK are lower than its competitors such as
Sainsbury’s and Morrison and found to be very close to those of ASDA (Charfeddine, 2016).
Thus, cost leadership serves as an effective strategy for the enterprise to effectively reduce the
costs so that the profits can be simultaneously enhanced. Owing to this strategy, Tesco has been
at the top position within the Retail Industry of United Kingdom for last some years.
Differentiation- Tesco has been continuously undertaking initiatives with an aim to
differentiate itself from its major competitors in terms of delivery, product range, sales channels,
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loyalty schemes etc. This has been done by entity to make sure that it is able to retain the loyal
base of customers for a long period of time in future. It makes use of steering wheel technique to
make sure that the performance of employees is aligned with the objective of company to
become the leader in global retail industry. Further, Tesco makes use of both brick and mortar
style stores as well as online sales to offer products as per the convenience of customers. Thus,
differentiation is found to be an effective strategy that assists this organisation in gaining an edge
over rivals in global market and consequently, enhancing its sales and profitability.
Tactics: Organisation makes use of a combination of product, pricing and distribution
strategies as the tactics to sustain within domestic market place. In this regard, Tesco makes use
of value pricing in United Kingdom. This serves as an effective pricing technique for the entity
as the people of UK are well acquainted with the quality of products offered by this organisation
and thus, they are willing to pay for the value of goods accordingly. Further, this enterprise
offers diverse set of products and services such as financial services, grocery, general
merchandise, watches, clothing, footwear etc. (Charfeddine, 2016). The diverse product portflio
of Tesco provides assistance to the organisation to increase its loyal customer base by a
significant percentage every year. Lastly, in association with distribution, this company is
operating in both online and offline formats so as to captivate the people who intend to shop by
visiting the brick and mortar style stores and also those, who intend to shop via online channels.
This tactic has been very effective for the entity and owing to this, Tesco has constantly been at
the top position since many years. Further, it operates in a number of store formats within the
domestic market, namely, Metro, Extra, Superstore, Express and Others.
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(Source: Tesco UK Sales By Store Format, 2019)
TASK 3
SOSTAC Strategies of UK applied within Germany
The strategies and the tactics used by any organisation varies on the basis of the location
in which it renders services. In this regard, the cost leadership and differentiation strategy of
Tesco within United Kingdom will not prove to be effective within Germany as the company
would be recently entering this nation and thus, adoption of cost leadership strategy would not be
fruitful for the enterprise (Toedt, 2014). Further, the product, pricing and distribution tactics
employed by entity in United Kingdom are decided taking into account the fact that this
organisation holds the leading position within UK Retail Industry. In this regard, the manager is
considering two types of global strategies which are used within UK in order to adopt one
strategy for entering into Germany:-
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Illustration 4: Tesco UK Sales By Store Format

Standardisation: This is a strategy wherein the company makes use of standard
marketing strategies and tactics internationally. It can also be said that, here, business uses the
same marketing strategy from one country to another.
Advantages
 Costs- Tesco will not have to incur expenses for special marketing for Germany as the
standard marketing strategy can be used within the new international market, thereby,
cutting the cost of developing a number of marketing strategies. Brand- A strong brand will tend to have the same impact upon different parts of the
world (Otoo and Drechsel, 2018). Looking forward to the strong presence in UK, it is
deemed that Tesco will have the same effect within Germany.
Disadvantages
 Sensibility- The probability of success and failure of a strategy in new international
market are equal. In this regard, Tesco faces the risk of facing failure in terms of
marketing strategy used within Germany.
Adaptation: While a business gains access into an international market, it should have the
potential to cope with demographic and cultural differences within the new and domestic
country.
Advantages Tackling competition: This serves as an effective strategy to deal with the rivals present
in marketplace. In this regard, this strategy will assist the organisation to deal with
competitors such as LIDA, ALDI, Rewe, Edeka, Amazon, Kaufland, Otto.
Disadvantages
 Cost: This is not a cost-effective strategy and this implies that Tesco will have to incur
huge expenses to develop a new marketing strategy for Germany.
Based on the above analysis, it can be said that standardisation will serve as the best
strategy for Tesco while entering the German market place.
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REFERENCES
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processes (Doctoral dissertation, Université Paris-Saclay).
Hacioglu, U., Dincer, H. and Celik, I. E., 2012. Economic approach to conflict issue: Investment
in post-conflict situation for international business. International Journal of Business
Administration. 3(5). p.1.
Hussin, N., and et. al., 2017. Strategic Information Use (SIU) for Strategy Formulation in
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Otoo, M. and Drechsel, P., 2018. Resource Recovery from Waste: Business Models for Energy,
Nutrient and Water Reuse in Low-and Middle-income Countries. Routledge.
Sood, A. and Sukthankar, V. K., International Business Machines Corp, 2013. Real-time license
metering of a provisioned application in a cloud computing environement. U.S. Patent
8,589,312.
Toedt, M. ed., 2014. Data Revolution: How Big Data Will Change the Way of Doing Business?.
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Universitatii Maritime Constanta. 13(17).
Warkentin, M., Sugumaran, V. and Sainsbury, R., 2012. The role of intelligent agents and data
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