Strategic Analysis of Tesco PLC

Running head: STRATEGIC ANALYSIS OF TESCO PLC.
STRATEGIC ANALYSIS OF TESCO PLC.
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STRATEGIC ANALYSIS OF TESCO PLC.1
Table of Contents
Introduction....................................................................................................................2
Analysis of internal and external environment..............................................................2
SWOT analysis of Tesco Plc......................................................................................2
Porter’s five forces analysis of Tesco........................................................................4
PESTEL analysis of Tesco.........................................................................................5
Proposal – strategic choice.............................................................................................7
Implementation and recommendations..........................................................................7
Conclusion......................................................................................................................8
References......................................................................................................................9

STRATEGIC ANALYSIS OF TESCO PLC.2
Introduction
As discussed by Barros, Hernangómez and Martin-Cruz (2016), strategic study can be
defined as a method that mainly involves research based on the business environment in
which the firm has its processes. The method based on strategic study is considered to be
significant for the proper development of strategic plans that are related to the smooth
working of the organization and proper decision making process as well (Daspit et al. 2017).
The modern firms constantly struggle to improve the operations and the development of
strategic management process is important for the proper determination of parts in which
development is essential. The proper running of the companies implementation of positive
changes is considered to be highly important (Demir, Wennberg and McKelvie 2017).
The firm that has been considered for study in the assignment is Tesco PLC. Tesco is
a global organization that mainly provides general merchandise and groceries to the
consumers in diverse parts of the world (Tesco.com 2019). The headquarter of the
organization is located in Welwyn City in Hertfordshire, United Kingdom. The shops of
Tesco are located in around seven countries in Europe and Asia. The internal and external
environment of the company will be studied with the help of SWOT framework, PESTLE
framework and Porter’s Five forces study. The strategic choice of Tesco will also be analysed
in the report (Tesco.com 2019).
Analysis of internal and external environment
SWOT analysis of Tesco Plc.
The SWOT analysis framework is helpful for the firms for proper identification of
factors that have to be considered in order to develop a corporate strategy and marketing
strategy. The internal strengths and weaknesses of the company will be studied with the

STRATEGIC ANALYSIS OF TESCO PLC.3
support of this tool. The external threats and opportunities provided to Tesco can be
discussed as well (Durand, Grant and Madsen 2017).
Strengths – Tesco is leading the UK retail sector with the market share of 28.1%. The
organization also offers a huge product portfolio and variety to the customers in different
countries. The diversification based strategy that has been implemented by Tesco has proved
to be quite beneficial for the proper processes of the organization (Dyer et al. 2015). The
mobile phone related business that is developed by Tesco has proved to be a major aspect to
the diverse business operations of the organization (Tesco.com 2019). The clothing based
range of the organization is considered to be a major part of the growth that has been depicted
by Tesco in the retail industry (Engert, Rauter and Baumgartner 2016).
Weaknesses – The major weakness of Tesco is on the investigations that have been
recently faced by the organization based on the misrepresentation of profits. Tesco had faced
major fraud charges in the year 2017 due to which the share prices of the organization have
fallen below the peak value. The buyouts that have been recently made by Tesco have been
quite profitable for the effective growth of the organization in the highly competitive retail
industry (Ethiraj, Gambardella and Helfat 2018).
Opportunities – Tesco has recently announced the introduction of the low cost based
rival in the industry in comparison to Lidl and Aldi. The organization has been provided with
opportunity to grow the business operations and to develop a position as the low cost based
organization. The organization can also upsurge the range of premium products that are
provided to the consumers (Frynas and Mellahi 2015). Tesco Plc. can also implement
diversification strategies in order to increase the consumer base in the industry. The growth
of online business operations is considered to be an significant factor that can have an