Situation Analysis of Tesco Express SITUATION ANALYSIS

Running head: SITUATION ANALYSIS
Situation Analysis of Tesco Express
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1SITUATION ANALYSIS
Table of Contents
Component 1:....................................................................................................................2
1. Summary....................................................................................................................2
2. Analysis......................................................................................................................2
3. Ideas for action...........................................................................................................7
4. Conclusion.................................................................................................................7
References.........................................................................................................................8

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Component 1:
1. Summary
The report is based on examining the production processes of Tesco Express,
which is the sub brand of Tesco Plc. It is the largest market in UK where it is operated
under four of the banners such as Extra, Superstore, Metro plus Express. Tesco
Express shops are stocking mainly foods like fizzy drinks; biscuits processed food
chocolates, crisps as well as sweets and required to maximize the revenue. The
location of the company is in Cranford, Bath road (Tesco plc 2016). The stores are
located in city centre districts, smaller towns plus villages. In the year 2010, Tesco was
working on price of Tesco Express; charge more into the Express branches as
contrasted to normal branches. In UK, the total stores of the selected company are
calculated to be 277.
The vision of Tesco Express is: “gaining modern and innovative ideas and
growing business full of opportunities and earning loyalty from the customers and
communities”. The mission of the company is: “We make what matters better, together”.
The core business value of Tesco Express is to provide better quality of life and easier
technique of living style to the target consumers (Tesco plc 2016). The targeted
customers are needed higher quality of services and business value which is delivered
by the organization.
2. Analysis
According to Gurel and Tat (2017), situation analysis is performed on the
business case of Tesco so that the researcher can determine both inner as well as
outer surroundings of the commerce organization along with business environment of
selected organization. The list of situation analysis tools are categorized as below
based on Tesco Express, a sub brand of Tesco Plc.
SWOT analysis: This tool is used to determine internal as well as outer business
surroundings of Tesco Express. It is used to identify strengths as well as opportunities
that the company is facing into their internal business operations. It is basically

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connected to the development planning which is required to specify the internal
business objectives. SWOT analysis is used to determine extent to which the inner
business situation is mismatched with the external business environment (Flostrand, Ho
and Krider 2016). Mainly, the researcher is used this situation analysis tool for
understanding the key issues affect the inner and exterior businesses of Tesco Express.
The tool is used to analyze effects based on the economical situations of selected
company.
Strengths1.Varietiesoffoodproductssuchasfresh,healthlyitemsoffood2.AdditionofnewproductlinesofTescoExpressWeaknesses1.Poorfooditemsprices,limitedstoresinsomeareas2.LowturnoverofinventoryandnotrespondtothequeriesOpportunities1.OpeningofnewstoreinEuroareas2.SatisfactionofcustomerstogivedensityareaThreats1.Highercompetitioninthemarket2.HigherrateofinterestintheUK

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Figure 1: SWOT Analysis of Tesco Express
(Source: Flostrand, Ho and Krider 2016, pp-85)
PESTLE analysis: It is considered as the external analysis tool for analyzing and
monitoring the macro-environmental issues which should provide huge influence on the
concert of company. It is used to investigate a new or existing business which is just
entered into the international market (Baltes 2015). Based on six factors (political,
economical, social, technological, legal and environmental), it is performed based on
selected company. Political factors determine the political situations of the company,
economical factors determine the financial issues which the company faces, and social
factors determine importance of the culture into the selected international market. The
technological factors determine technological innovations, legal factors determine
regulations of the business and finally environmental factors determine issues in the
selected industry (Fozer et al. 2017).
PoliticalTaxonthelargersupermarketswhilethegovernmentisbeingrefusedtoovercomeonpricerisesImportofthefooditemsaswellasgoodsEconomicPricefactorcanprovideaninfluenceonthesupermarketsbusinessofTescoExpressIncreasethecostwhichwilldecreasetheprofitSocialHugeshoppingexperiencesforsatisfyingthecustomersMeetwiththecustomer'sdemandsandtastesTechnologicalUsinginnovativetechnologyfordeliveeringfooditemsIntroductionofbillingsystemLegalSmokingfreebusinessenvironmentStrictorganization'srulesEnvironmentalCollectionofunwantedbagsofplasticUingrenewablesourcesofenergyGenerationofelectricity

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Figure 2: PESTLE Analysis of Tesco Express
(Source: Fozer et al. 2017, pp-70)
Porter five forces analysis: It is considered as the outer tool for examining the
business environment of Tesco Express. It is such a tool used to determine the five
forces which are providing competitive influences on selected industry. It is used to
determine both strengths as well as weaknesses of the chosen organization into the
international market (Aithal 2017). The selected five factors which are shown in
following table shows the developed business strategies assist the business to turn into
aggressive in the market to become gainful.
Bargainingpowerofsuppliers1.Effectvesupplierstodeliverthefoodproducts2.Highercompetitionsfromsupplierside3.ImprovementoveroperationalBargainingpowerofbuyers1.Largecustomerbaseiscreated2.Keepingfoodproductspriceaslowandbetterqualitytoacheiveprofitability3.InnovationThreatofsubstituteoftheproducts1.CreatinguniquebrandequityofTescoExpress2.Increaseincustomer'sRivalryamongexistingcompetitors1.Determiningasustainablefoodproductdifferentiations2.Riseinmarketsizeduetom

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Figure 3: Porter’s five force analysis of Tesco Express
(Source: Kerr and Patti 2015, pp-328)
BCG matrix: It is considered as the situation analysis tool for determining both
internal as well as external business environment of chosen company. It evaluates the
strategic positions of selected brand together with its potential market (Sever 2015). The
business is classified based on growth rate (attractiveness of the industry) and market
share (competitive position). It is such a tool where the industry units plus products are
being examined. BCG matrix is also termed as growth and share matrix.
Stars
High market growth
Higher growth of Tesco Express due
to creating new food products,
therefore the company invests more
in food market.
High market share
Due to gaining higher market
growth, in coming days, Tesco
would gain higher market share.
Question Marks
Low market share
There is low revenue of the products as
Tesco Express has smaller stores,
leads to lower the market share.
High market growth
Higher development of the market leads
to positive sources of the products
stability.
Cash Cows
High market share
The food products of Tesco Express
have reached its maturity point to
achieve higher market share.
Low market growth
There is required to have capital
input for gaining lower growth, then
cash cow is profitable for the
organization.
Dogs
Low market share
There is improper managing of
business units, the company has
invested in other market leads to losses
of products.
Low market growth
There is low chance of the company to
grow as there are issues regarding food
items.
High
Low
High LowMarket Share
Market growth
rate

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Figure 4: BCG Matrix of Tesco Express
(Source: Sever 2015, pp-45)
3. Ideas for action
In order to analyse the business environment of Tesco Express, current
positions of the market is analyzed based on its future directions plus growth. Tesco
Express is required to continue its competitive edge plus raise the turnover margins
such that the company can gain and achieve higher level of customer satisfaction. The
main action which is taken by the company is to keep their prices of products low by
increasing the business profit. Following are recommendations which are suggested to
the company such as:
Analyze the business environment with current business strategies: Tesco
Express should require performing environmental analysis of their business. The
internal environment should require analyzing based on factors such as operation
efficiency, employee morality and financial problems. The external environment should
require analyzing based on factors such as political changes, economical changes plus
change in customer’s demands.
Formulate of strategic alternatives: Tesco Express should require introducing
online trading over the customers so that through online website the customers can
place orders as well as purchase the food items. The store should also introduce club
cards so that they can calculate sales and improve its financial problems.
4. Conclusion
From this particular situation analysis paper, the tools are analyzed for identifying
the internal as well as external business situations of Tesco Express into the UK
market. The tools are being analyzed to recognize how the organization is taking
advantage of the market opportunities to make a higher profit margin so that they can
gain customers. In order to identify the problems in the market, primary data collection
method is used by surveying the existing customers. Stakeholder and risk management
plan is used to justify the business approaches. The researcher is carried out based on
business theories so that the company can develop in the international market.

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References
Aithal, P.S., 2017. Industry Analysis–The First Step in Business Management Scholarly
Research.
Baltes, L.P., 2015. Content marketing-the fundamental tool of digital marketing. Bulletin
of the Transilvania University of Brasov. Economic Sciences. Series V, 8(2), p.111.
Flostrand, A., Ho, J.Y. and Krider, R.E., 2016. Implementing “Marketing Me” A
Simulation Enhanced Variant for a Student Self-Marketing Exercise. Journal of
Marketing Education, 38(2), pp.83-89.
Fozer, D., Sziraky, F.Z., Racz, L., Nagy, T., Tarjani, A.J., Toth, A.J., Haaz, E., Benko, T.
and Mizsey, P., 2017. Life cycle, PESTLE and multi-criteria decision analysis of CCS
process alternatives. Journal of cleaner production, 147, pp.75-85.
Gürel, E. and Tat, M., 2017. SWOT ANALYSIS: A THEORETICAL REVIEW. Journal of
International Social Research, 10(51).
Kerr, G. and Patti, C., 2015. Strategic IMC: From abstract concept to marketing
management tool. Journal of Marketing Communications, 21(5), pp.317-339.
Sever, I., 2015. Importance-performance analysis: A valid management tool?. Tourism
Management, 48, pp.43-53.
Tesco plc 2016. About us. [online] Tesco plc. Available at:
https://www.tescoplc.com/about-us/ [Accessed 4 Mar. 2019].