Strategic Analysis of TESCO

This document provides a strategic analysis of TESCO, including an explanation of M.E. Porter's model of competition, a case study analysis of Microsoft's performance, a recovery plan for Toshiba Corporation, and a risk management strategy for Tesco. The analysis covers various aspects of strategic management and offers insights into the success and failure of different strategies.

SIM336 STATEGIC MANAGEMENT Strategic Analysis

TABLE OF CONTENT
INTRODUCTION......................................................................................................................3
MAIN BODY.............................................................................................................................3
1.Explain M.E. Porter’s model of competition supports the experience of practitioners?
Use a practical example to reflect on Porter’s model and examine success or failure..........3
2. a case study approach: for example, is Satya Nadella, C.E.O. managing Microsoft as
effectively as he might? Do an analysis of Microsoft’s performance in relation to declared
strategy and the efficacy of his strategy.................................................................................5
3. A recovery plan: for example, my advice to the Chief Executive Officer of the Toshiba
Corporation is i.e. suggesting a way forward for the organization in light of their poor
performance over recent years...............................................................................................6
4.A risk management strategy: for example, my advice to Tesco’s Chief Executive Officer
in light of their 2014/5 £6.4 Billion trading loss....................................................................8
CONCLUSION..........................................................................................................................9
REFERENCES.........................................................................................................................11
Books and Journals..............................................................................................................11

INTRODUCTION
The strategic management is described as process in which it is necessary to
communicate various factors such as support operations, setting objectives, organize
resources, emphasize on energy and make sure that staffs operates their work in order to
achieve goal as well as objective of organization in stipulated period of time. In this
assignment, it is based on company named as i.e. TESCO. It is the international chain of
supermarket which is located in UK. This company was given by Jack Cohen in the year of
1919. There is Porter five force models is given for assessing level of competition at
marketplace. And also identify issues for succession and failure of this strategy is mentioned
in this report. There are various strategy used for assessing level of performance within
business organization. At last, the risk management strategy is used for overcome from risk
and taking effective decision is discussed in this assignment (Bakker, 2016).
MAIN BODY
1.Explain M.E. Porter’s model of competition supports the experience of practitioners? Use a
practical example to reflect on Porter’s model and examine success or failure.
TESCO adopts Porter five force models for assessing appropriate basis of
competitive benefits at marketplace. Thus, for identifying competitive atmosphere of TESCO
that is going to be mentioned below:
Threat of substitute products: The threat of substitute n relation to groceries is low
in retail sector. There are various retailers who operate their business at small scale such as
convenience store and organic shops as well as many more. But they do not impose threat on
TESCO. It is the multinational chains of supermarket provide superior quality products and
services to its customer at affordable cost. On the other hand, the threat of substitute on other
items such as clothing is high. Due to economic recession, the customer is attracting towards
those firm who provide discounts which created threat for TESCO (Balaman, 2016).
Threat of New Entrants: The threat of taking entrance by new rivalries in food
sector is low. There is the need of large amount of finance for create brand name in order to
gain competitive advantage over rival firm at marketplace. There are various competitive
firms such as ASDA, Sainsbury’s as well as Morrison’s, thus it is vital for TESCO to offer
superior quality products at relatively fewer price in order to gain competitive advantage over

rival firm at marketplace. And, there is requirement of huge amount of finance and resources
for start innovative supermarket thus, it is not possible for newly started firm (Menon, 2018).
Competitive rivalry: The level of competition in retail sector is relatively high. There
are various competitor of TESCO such as Sainsbury’s, ASDA as well as Waitrose and many
more which impose direct competition related to promotion, products and price. Thus, it is
important for company to offer superior quality products and services to its customer at
relatively low price in order to gain competitive advantage over rival firm at marketplace
(Chopra, Gupta and Chhabra, 2017).
Bargaining power of buyer: The bargaining power of buyer is high in retail sector.
There is wide variety of products is available and the switching cost of buyer is low from one
brand to another. Therefore, TESCO offer differentiated products and services at fewer prices
for retaining them for longer period of time. The main focus of company is to increase
experience level of customer for increasing their sales as well as level of profit in future
period of time. It increases brand image and reputation of business organisation in front of
customer at marketplace.
Bargaining power of supplier: The bargaining power of supplier is low in retail
sector. There is large number of supplier provide similar kind of products and services to its
customer. Therefore, it is easy for user to switch their brand to other one. Therefore, TESCO
focuses on gaining competitive advantage over rival firm at marketplace. In addition to this,
the company focuses on offering innovative products as per need of customer at affordable
cost in order to satisfy them. It helps them in achieving goal as well as objective of company
in stipulated period of time (Dixit, 2016).
Therefore, it has been analysed that, the TESCO adopts competitive strategy for
achieving competitive benefits over rival firm in the market.
A practical example used that affect Porter’s model and examines their success and failure.
For example: A criticism of this model is that Porter signifies all competitors in an
industry are equal. Therefore, it is not considered always true and imposing threat for TESCO
as per the size to industry. In addition to this, it is necessary to consider external
environmental factor for implementing this model. Otherwise this is not operated in isolation
is the failure of this model which impose negative impact on success and growth of
organization (Edwards, 2018).

2. a case study approach: for example, is Satya Nadella, C.E.O. managing Microsoft as
effectively as he might? Do an analysis of Microsoft’s performance in relation to declared
strategy and the efficacy of his strategy.
Case Study of TESCO
TESCO operate their 2300 supermarkets which is located in UK. It is multinational
company which provide superior quality products and services to its customer at marketplace.
As per analysis, it has been examined that there are various issue which is faced by TESCO.
And the first issue is related to pricing strategy due to economic recession, the competitive
firm such as ALDI, LIDI provide discount to its customer that imposes great challenge for
company. Therefore, it decrease sales and erode level of profit of TESCO during the period
of time. TESCO make strategies of providing discount to its customer on the occasion of
Christmas and at that that there are rivalries firm who also cut down the price which affect
firm in negative manner. In addition to this, the organisation operates their business in Japan
as well as in America which seems to be fail in these market that decreases level of customer
satisfaction at marketplace. Their outlets are failed in both markets which impose direct
impact on sales as well as profitability of TESCO in future period of time. In addition to this,
there are various issues which are faced by company including dishonest corporate policy as
well as eco-towns and the environment which imposes direct impact on reputation and
goodwill of company in front of customer at marketplace. It imposes negative impact on
customer towards products and services which is provided by company (Ferlie and Parrado,
2018).
And also, they face issue related to safety concern. It is claimed that. TESCO does not
provide safety and security to its staff which decreases sales as well as erode profit. And there
are various claims which are confronted by company such as they provide products and
services which injured to its customer which decreases trust and loyalty of user during the
period of time. It decreases level of performance as well as productivity in future period of
time. And also it ruined the brand image and reputation of business organisation in front of
customer at marketplace. Therefore, it lower down sales or erode profit of TESCO in
upcoming period of time. They make effective strategy for providing eco-friendly products
and services to its customer for welfare of community people of society. Due to failure of
outlet which is located in America as well as in Japan, which is the reason for ruined
reputation and goodwill of TESCO in front of customer in the market. They lose the
satisfaction level of customer towards products and services which provided by business

firm. Thus, it is necessary to manager and overcome from these challenges for operating their
business activities and functions in better way (Lange and Bundy, 2018).
From the case study of TESCO, it has been analysed that the safety and health issue is
being claimed on organisation which decreases performance as well as productivity of
business organisation in future period of time. The employees do not perform their work well,
and it decreases satisfaction level of its user during the period f time. Therefore, it is
necessary for TESCO to make effective strategies, policies as well as procedures in order to
overcome from these problems which is faced during the period of time. They also provide
products as well as services at discounted price in order to gain competitive advantage over
rival firm at marketplace. It also helps in achieving goal as well as objective within stipulated
period of time. They also eliminate reasons of reducing sales and profit in upcoming time
period (Lazareva, Anopchenko and Lozovitskaya, 2016).
3. A recovery plan: for example, my advice to the Chief Executive Officer of the Toshiba
Corporation is i.e. suggesting a way forward for the organization in light of their poor
performance over recent years
Recovery plan:
My advice to the CEO of Tesco limited is that, the profit of the organization is
continuously defeating which also impacted in the closure of operations in America and
Japan. This also decreases the customer satisfaction which is impacting negatively on the
organization performance within the market. For increasing the performance it can use
different type of activities which will help it in maintaining the performance as well as
increasing the profitability within the markets. ANSOFF matrix can be used by the Tesco for
increasing its performance as well as minimizing the negative impact of all the findings and
incident which happened and prior level (Napshin, and Marchisio, 2017).
ANSOFF matrix
ANSOFF matrix is also called the product and market expansion grid which is used
by different organization for analyzing and planning the strategic growth of the organization.
This metrics can also use butter score for increasing its market operations as well as
analyzing the risk associated with the each strategy.
Market penetration: Industry Company always focus for increasing the sales of the
existing product and existing market. Tesco can use different type of tools for increasing the

sales of its Existing product within the market where it can use the strategy in which it can
promote its product by bringing some small Innovation and using advertising techniques. The
proper strategy which can be used by the test for improving its performance, It can be seen
from the above mentioned information that is performing bad within New market saving the
interest of the organization and improving the performance it can use the local products in
local market where it can improve its performance with the help of advertisement. It will be a
great opportunity for the organization for development (Ozkan-Canbolat, Beraha and Bas,
2016).
Product development: it is that strategy which of the organization in which
introduction of new product in the existing market is done. Hear, Company launches a new
product with some new specification and new facilities to improve the customer satisfaction
within the existing market. Tesco is performing at global level where it is performing in
different markets in economics. Company clearly identifies each and every economy where it
is currently trading for the need of launching a new product. After identifying need it can
launch a new product which is up to the requirement of customers within the target market.
Strategy will help the score in improving its performance as well as increasing the customer
satisfaction by launching the new products.
Market development: it is a diversification type of strategy where company adopts a
new market for launching its product. These products are existing product of the company
which is said by the company within different economy but for expansion it used new market
to launch this product. In context of Tesco, company has to clearly identify the new market
where it has to do a proper market research. Research will help the organization in identifying
the potential of company as well as requirement of the market. Company can take suggestion
from its future failures within the America and Japan market.
Diversification: it is the most risky strategy which can be adopted by an organization
when improving its performance. This is because it includes launching a new product within
a new market. This strategy is risky because it involves the highest of failure as companies
unable to identify the market because of its new feature and it does not know about what the
response will it get from launching a new product with this market. it is unfavourable
technique for Tesco because it is performing at global level where it is impossible for
organizations to cope up with new economics because it is feeling it operation in existing

market Justin lose the confidence of form as well as bring it to the losses (Shin, Park and Lee,
2016).
So from the above it can be identified that the market penetration is the best strategy
which can be opted by Tesco this is because company is losing its customer satisfaction as
well as market share because of failure in operation in America and Japan. Company is it is
build the trust of customers and be given them by modifying its existing products and
services within the existing markets. The strategies like product development and market
development are not suitable for Tesco because company already filled in its operation within
new markets which can make it risky for the firm to invest the huge amount on market
research as well as formation of new product.
4.A risk management strategy: for example, my advice to Tesco’s Chief Executive Officer in
light of their 2014/5 £6.4 Billion trading loss.
[15:46, 30/05/2020] Bhanu Pratap Singh: it is important for Tesco to minimize and
identify the risk associated with in different operations of the organization and using the
strategies. Operating at global level where it is facing some issues within the current market
tissues can negatively on the organization performance as well as reduce the credit ability of
the firm within the market because of some non productive activities. There are various type
of risk associated with the production of business strategy which must be eliminated by the
organization effectively. There is a model which can help organization in reducing the risk
where it can increase the chances of success. This model include the five basic steps of risk
management which can be followed by the test score in getting maximum this model is stated
below (Starr, Ganco and Campbell, 2018).
Risk identification: the first step of this model state that organization must identify
the risk associated with the optic business strategy. Major risk to Tesco opts the strategy is
that it can lose its share with in new markets that means obtain the strategy which is related to
improving the current product within the current market can lead the failure of organization
within the new markets or can reduce the chances of growth. The most precious thing which
can act negatively on the organization profitability as well as future growth.
Qualitative risk analysis: according to this step of risk management process its state
that an organization must clearly identify the qualitative risk associated with performance of
organization by using the business strategy. Qualitative risk is those which impact on the

performance of the organization as well as reduce the chances of success because of opting
the particular strategy or not opting any other strategy (Tonelli and Cristoni, 2018).
Quantitative risk assessment: this step states that organization must also identify the
richest in the quantitative method where it have to identify that what quantity of the risk are
affecting to the organization. This can be termed as, the loss of revenue for profit in the
quantitative method. In context of Tesco, this risk is higher as if company of the strategy
where it improve its existing product in existing market then company will get the loss of
revenue around 6 billion dollars because of low market rate as well as decline in share
because no future growth.
Risk response planning: risk response planning is that step of this process where
company have to plan that how it have to response to the risk which are arise within the
organization because of opting the strategy. According to Tesco company have a proper plan
to execute while adopting the strategies, company have proper planning and execution
techniques which can be used to minimize the risk and respond it in current time. Dear
company use effective planning techniques as well as different methods which can help
company in reducing the risk of area in operation and future growth. as company improve its
product within the current market which will help organization in reducing the liabilities of
the firm as well as increasing the sales in the current market which can match the revenue of
market expansion techniques (Venkateswaran and Ojha, 2017).
Risk monitoring and control: it is the last. There are various Tool which is used by
the organization for Risk management in this company will regular monitor and control the
operations and execution of the planning where it can control the risk and manage it for
reducing the negative impacts. Tesco always watch its operations effectively so it is
recommended to the organization that it must use the monitoring and control function
effectively where it can minimize the risk and implement its plan in an appropriate manner
for getting the desired results (Waddock. And Bodwell, 2017).
CONCLUSION
From the above mentioned report, it has been analyzed that it is necessary to
communicate various factors such as support operations, setting objectives, organize
resources, emphasize on energy and make sure that staffs operates their work in order to
achieve goal as well as objective of organization in stipulated period of time. There is Porter

five force models is given for assessing level of competition at marketplace. And also
identify issues for succession and failure of this strategy is mentioned in this report. There are
various strategy used for assessing level of performance within business organization. At last,
the risk management strategy is used for overcome from risk and taking effective decision is
discussed in this assignment

REFERENCES
Books and Journals
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Starr, E., Ganco, M. and Campbell, B.A., 2018. Strategic human capital management in the
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Tonelli, M. and Cristoni, N., 2018. Strategic management and the circular economy.
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Waddock, S. and Bodwell, C., 2017. Total responsibility management: The manual.
Routledge.