Strategic Analysis of TESCO

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).