Strategic Analysis of Tesco | Report
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Added on 2020-01-28
Strategic Analysis of Tesco | Report
Added on 2020-01-28
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Strategic Analysis1
TABLE OF CONTENTSINTRODUCTION...........................................................................................................3Strategic choices taken by the companies..............................................................3The impact of strategic decisions on the selected company...................................6Blue oceans and red oceans...................................................................................7What extent decisions has aided or disrupted the pursuit of competitiveadvantages.............................................................................................................8CONCLUSION .............................................................................................................9REFERENCES.............................................................................................................102
INTRODUCTIONStrategic analysis is considered as a procedure for processing and developingthe strategies for the organization through researching and investigating theinternal and external business environment under which they operate theiroperations and activities (Janczak, 2005). There are diverse strategic tools andtechniques through which management can measure their capability to sustain inthe market. Presently, the report focuses on two different companies that operatewithin retail industry that is Tesco and Sainsbury. With the help of using differenttools and models company can easily compare and contrast their strategic choicesand decisions with the rival companies. Lastly, the report will also analyse that howproduct and market decisions has supported the company in meeting their visionand objectives. Strategic choices taken by the companiesIn order to succeed in the competitive market, management have to takedifferent strategic decisions that will directly impact the direction of company in thelong run (Ashill, Frederikson and Davies, 2003). However, these decisions are oftenconcerned with measuring the whole environment under which the retail firmoperates their activities so that they can easily manage overall resources to ensureoptimum utilization of the resources. In order to achieve success in the global world,it is significant for the management to focus on appropriate strategic choices.Basically, there are three forms of strategic choices that businesses takes so that itcan support companies in meeting their vision and objectives (Cravens and Piercy,2008). The different types of decisions are-Strategic decisions Tactical decisions Operational decisions These are complex andlong term decisions thatare taken by themanagement so that theycan easily succeed in thefuture. Another form of decisionsinclude tactical decisionsthese are often taken bythe middle manager whichaims to achieve theobjective of the company(Zott and Amit, 2013). Lastly, operationaldecisions are taken on thedaily basis to accomplishthe routine activity of theretail organization. 3
There are assorted models that support the management of chosen companyto take effective strategic choice which support them in gaining competitiveadvantage (Papadakis and Barwise, 2012). Ansoff matrix is an effective strategicplanning instrument that supports both the companies in providing model that helpthe management in devising and developing effective strategy for enabling thefuture growth. The Ansoff matrix basically provides four alternative choices to Tescoand Sainsbury so that they can ensure corporate growth in the competitivemarketplace. The foremost organization is Tesco. This is one of the renowned foodretailers in the UK region that operates 2,318 stores worldwide. The key objective ofTesco supermarket is to become successful worldwide, another objective is toexpand their core business in the UK as almost 70% of gross sales and profit thatcompany earns is from the operations of UK business. Therefore, with the help ofdifferent growth strategies they can easily attain objectives and this also result ingaining competitive advantage (Chen, 2011). The Ansoff matrix focuses on fourgrowth strategies that is-Market Penetration: The foremost strategy within Ansoff matrix is marketpenetration strategy under which Tesco generally seeks to attaindevelopment with their present products in the existing market segment.Therefore, management of Tesco focuses on using competitive pricingstrategies for their products so that large customers get attracted towards it.However, the firm often uses sales promotional techniques like offeringdiscounts, free products etc. to sell their existing products in the currentsegmented market (Bell, Masaoka and Zimmerman, 2010). Market development: Another growth strategy of Ansoff matrix includesmarket development under which chosen firm seeks growth anddevelopment by targeting new market segment with the existing products sothat they can easily achieve their objective to expand their core businesswithin UK region. The key mission of Tesco is to become the leading retailerin international market for accomplishing the above mission statement of thechosen firm market development is fruitful strategy. Product development: Another strategy within matrix includes productdevelopment strategy under which Tesco creates new products to target4
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