Strategic Management: Theory, Practice, and Case Study of Tesco

Strategic Management
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INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Compare theory and practice..............................................................................................3
2. A case study approach........................................................................................................6
3. A recovery plan..................................................................................................................7
4. A risk management strategy...............................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
Strategic management is a systematic process in which activities of an organisation get
access in order to fulfil determined goals and objectives with higher efficiency. In simple terms
strategic management is mainly concerned with the development of company’s strategic vision,
framing objectives, developing and implementation of strategy and undertaking corrective
measures as to accomplish organisations strategic intentions (Ahammad, Glaister and Gomes,
2020). Main aim of this process is to ensure higher competitive advancements by outperforming
other competitors. Strategic management act as a guide to company that allow them to survive
the changes in business environment.
Present report is been made on Tesco which is conducting their business services in retail
industrial sector. Company was established in the year 1999 and offer a wide range of qualitative
products and services to consumers. Present report include discussions upon comparison between
theory and practice, for this Porter five force analyses is being done in report. Along with this
case study evaluation of Tesco and recovery clan is also included in this project. Lastly risk
management strategy is being mentioned through which entity can control and monitor their risk
effectively.
MAIN BODY
1. Compare theory and practice
Porter five force analyses assist company to identify competition prevailing in respective
industrial sector in which they are operating their functions. With the help of this entity can
identify opportunities and can further take competitive advantages from them. With the
assistance of Porter five forces evaluation management of Tesco can identify changes that can
affecting their organisation functions and can develop strategies against them to assure the
leading image in super market industrial segment:
Threat of substitute products: Low
By evaluating grocery retail sector it has been identified that this market segment is
facing low threat of substitution in terms with services and products of food items (Beirman,
2020). As number of substitute goods in this industry are from organic and off-licensing shops,
small chain of convenience store which is not posing any form of major threat upon leading
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companies like Tesco. Respective company offers high quality product as well as services in
affordable price range to consumers. However it has been underlined that TESCO can face threat
of substitution of services and products in their non-food item segment. Thus, in order to
overcome this threat Tesco management by taking use of strategic measures like, conducting
their operations with having service oriented approach rather than product oriented and
determining the actual needs of consumers can assure higher competitiveness.
Threat of New Entrants: Low
By evaluating food retail industrial sector it has been determined that, threat of new
entrants is low in this sector as new entrants require high capital investment to establish their
company in marketplace. Along with this has been identified that, this market segment is mainly
captured with supermarkets like Morrison’s, Sainsbury, Asda, Tesco and more who are
satisfying needs and demands of customers with high quality and low price services and products
(Alstete and Beutell, 2020). This makes new entrants to provide their organisational offerings in
exceptionally low price range compared to the leading entities. This enhances the opportunity for
Tesco to gain large number of consumer base and retain them for long period of time. For this
continuous innovation in the services and product segment will assist TESCO to assure
maximum market shares in this sector. Along with this entity also needs to conduct extensive
research and development process in order to bring destructive products and services in this
segment.
Competitive rivalry: High
There is high competitive rivalry in food and grocery retail sector. It has been identified
that Tesco is mainly facing high competition from other leading entities like Sainsbury’s,
Morrison’s, Waitrose, Asda and more. These organisations are providing relatively low price
services and products to consumers. This develops aggressive competitive environment in this
sector which is affecting profitability and leadership positioning of Tesco (Randrup and Jansson,
2020). Thus, respective company by taking advantage of sustainable differentiation strategy can
offer wide range of unique services and products to customers in competitive price range. This
will allow entity to gain more competitive advantages compared to other rivals. TESCO can also
undertake advantage of collaborating with small scale convenience stories, this strategy will
facilitate company go to expand their market reach and gain more market share holdings.
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