Strategic Management: Tesco's Strategies and Competitive Advantages

Strategic management

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Types of strategy that are used by Tesco in relational to school of strategy and strategic
concept.........................................................................................................................................3
TASK 2............................................................................................................................................4
Different model are used to review of external environment of firm..........................................4
Critical evaluation of company competitive advantages among its direct competitors..............6
Industry Scenarios.......................................................................................................................6
TASK 3............................................................................................................................................6
Extent to which firm is facing strategic drift...............................................................................6
Mission and vision statement aligned to market demand............................................................6
Internal capabilities......................................................................................................................7
Business model canvas................................................................................................................8
TASK 4............................................................................................................................................9
Suggestion of possible strategies that can be used by firm to defend its core business..............9
TASK 5..........................................................................................................................................11
Interrelationship between key resources areas of firm..............................................................11
Critical analysis and application of strategic implementation model........................................12
CONCLUSION..............................................................................................................................13

INTRODUCTION
Strategic management refers to several plans that are made by organisation in order to
make optimum utilisation of their resources for attainment of specific objectives. Company
through making effective strategies is able to cover large market share or gain competitive
advantages. Globalisation and digitalisation has increase level of competition in various industry
that have forced firms to provide better or best quality products or services in order to retained
maximum customers. This report is about Tesco which deals is products and services like food,
clothes, furniture, equipment and financial services with maximum market share in retail
segment. It discuss about past strategy of companies, impact of external environment on business
operation or strategy and the way it have gained competitive advantages. It also analysis firm
internal capabilities and strength which contributed in effective satisfaction of customers
requirements. At last few suggestions are given the way company can improve its operation and
evaluation of resources implementation.
TASK 1
Types of strategy that are used by Tesco in relational to school of strategy and strategic
concept
There are several strategy which have been used by Tesco to cover large market share in
retail segment and maximum amount of profit margin in near future. Mintzberg has suggest 10
school of though for strategy formulation that are used by manager of Tesco so that firm can gain
competitive advantages (Ethiraj, Gambardella and Helfat, 2018). Therefore several strategies that
are used by company in past 5 years to maximise its customers and profitability can be illustrated
as follow:
Design school: Top management have make use of SWOT model in order to identify its strength
and weakness that is internal factors at the same time wants to learn about external factors that is
opportunities and threats. By knowing opportunities that are available in market for firm is able
to make optimum utilisation of its capabilities and remove its weakness to grow and sustain in
market for longer term (Adegbile, Sarpong and Meissner, 2017). Such as Tesco have decided to
created a differentiate brand so that most of the people prefer products or services of firm rather
that other competitors in market.
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Planning school: Manager of Tesco have plan in advance about various strategies that need to
be followed by company in order to sustain its business operation. Thus, able to cope up with
external changes of environment such as preference of customers, technological development etc
and satisfy needs of customers beyond their expectancy.
Positioning school: Tesco has used differentiate positioning strategy to attract existing as well as
new customers to become part of organisation. Company have always make strategies to serve
customers in better manner for future growth and success of enterprise. Therefore, now Tesco
have it strong presence in mind and hearts of customers that lead to more profitability and sales
volume of firm.
Culture school: It can be stated that Tesco manager have created supportive and friendly
culture environment in work place so employees can be motivated to give their best for
achievement of company objectives (Ethiraj, Gambardella and Helfat, 2018). Encouragement of
employees view, idea and opinion has contributed towards brining continuous innovation and
better customers services.
Environmental school: There are several changes in strategies of Tesco as per environmental
situation which have lead to growth in profitability and market share of firm in retail sectors.
Such as make changes in its products or the way services needed to be delivered so that large
number of individual are motivated to make purchased of Tesco products or services.
TASK 2
Different model are used to review of external environment of firm
Pestle Analysis is effective model that can be used to analysis external environment of
Tesco that helps in planning several strategies so that firm can retain its market share and
profitability. There are several factors in business environment such as policies of government,
preference of customers, technological development and economic condition of country that
impact adversely on strategy and operation. Therefore, Pestle analysis of Tesco helps in
identifying external environment of business such as:
Political factors: There are several changes in policies of government such as free trade
regulation which have provided opportunity to Tesco to enter into new market in order to expand
its business operation and achieve its objectives (Veselovsky and et.al., 2019). On the other hand
Brexit is another policies of government that have lead to decreased in overall sales and
profitability of enterprise as most of the import and export of UK was with EU. Therefore, Tesco
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