Strategic Management: Tesco's Direction in the Competitive Market

Running head: STRATEGIC MANAGEMENT
January 4
2019

STRATEGIC MANAGEMENT 1
Executive Summary
An organization requires direction such that it can have a plan to arrange its key activities. If
the company does not set the objectives by the process of strategic management, then it
means the company is operating is a reactive mode. The strategic management is used to plan
principles and arrange a course for the business and to invest the resources of the business in
different ways that will support in attaining the objectives. Concentrating on the direction
also support in reducing wastage. The intent of this study is to represent the strategic
direction of Tesco in the competitive market. The study has presented the company’s
operations, strategies, financial situation, and the state of the sector in which it is operating. It
has evaluated the strategies of the company in terms of suitability, acceptability, and
feasibility.

STRATEGIC MANAGEMENT 2
Table of Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................3
State of Retailing Industry.....................................................................................................3
Strategies of Tesco in Market................................................................................................3
Strategic Position of Tesco in Retailing Industry..................................................................5
Market Share......................................................................................................................5
Investors’ Expectations......................................................................................................6
Ansoff Matrix.........................................................................................................................6
Product Development Strategy..........................................................................................7
Diversification Strategy.....................................................................................................7
Market Penetration Strategy...............................................................................................7
Market Development Strategy...........................................................................................8
BCG Matrix............................................................................................................................8
Cash Cow...........................................................................................................................9
Stars....................................................................................................................................9
Question Marks..................................................................................................................9
Dogs.................................................................................................................................10
SAFe Framework.................................................................................................................10
Suggested Strategy 1........................................................................................................10
Suggested Strategy 2........................................................................................................10
Suitability.........................................................................................................................11
Acceptability....................................................................................................................11
Feasibility.........................................................................................................................11
Conclusion................................................................................................................................12
Recommendations....................................................................................................................12
References................................................................................................................................13
Appendix..................................................................................................................................16
Appendix 1...........................................................................................................................16
Appendix 2...........................................................................................................................16

STRATEGIC MANAGEMENT 3
Introduction
Tesco Plc. deals in general merchandise and groceries business as a British multinational and
traded as Tesco. The United Kingdom is the location selected by the company to place its
Headquarter. In 1919, the company was introduced in the market. In the world, Tesco is
known as the third leading retailer in case of gross revenue and the ninth leading retailer in
case of revenue (Tesco Plc., 2018). Tesco possesses shops in seven countries across Europe
and Asia. The segment of Tesco comprises Republic of Ireland and the United Kingdom. The
brand portfolio of the company comprises Everyday Value, Technika, Finest, and Chokablok.
Every day and Finest are the two United Kingdom’s brand of the company. The key
competitors of the company are Sainsbury’s, ASDA, ALDI, etc. Tesco’s annual revenue in
Northern Ireland and the UK in 2017/2018 amounted to around 45 billion British pounds
(Statista, 2018).
State of Retailing Industry
In 2017, the entire retailing sector of the United Kingdom reflected a slow and steady growth,
because of the influence of Brexit referendum. The succeeding economic ambiguity led
numerous customers to control their spending habits because they have become price
sensitive. The key retailers of grocery continued to remain at the foremost position in the
retailing industry during 2017 (Euro Monitor International, 2018). However, Asda and J
Sainsbury have lost their market share due to increasing competition from the online players
and discounters.
Strategies of Tesco in Market
A strategy is said to be a plan that helps in setting the deployment of resources to attain the
objective. Some of the implemented strategies of Tesco are: