Strategic Management: Tesco's Competitive Advantage and Industry Scenarios

This document discusses the strategic management of Tesco, focusing on its past strategic direction, competitive advantage, and industry scenarios. It also analyzes the alignment of Tesco's mission and vision statements with market demands and explores its strategic capabilities. The document provides insights into the strategies Tesco could follow to defend its core business and evaluates the resource implications of these strategies.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................3
Strategic direction that company has followed in the past and the way in which strategic
thinking has developed within the past 5 years...........................................................................3
TASK 2............................................................................................................................................4
Use of appropriate frameworks...................................................................................................4
Critical discussion of the company’s competitive advantage......................................................6
Probable industry scenarios facing the company.........................................................................7
TASK 3............................................................................................................................................7
Mission and vision statements are aligned to the demands of the marketplace..........................7
Company's strategic capabilities..................................................................................................7
TASK 4............................................................................................................................................9
Discuss possible strategies that the company could follow to defend its core business..............9
TASK 5..........................................................................................................................................10
Analyse and evaluate the resource implications of your recommendations that the company
has to address.............................................................................................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
Strategic management refers to the development of suitable objectives determination of
competitive environment and analyse the internal characteristics of company that helps in
developing Strategies and making sure that management implement these strategies across the
company regarding the growth and development. Strategic management is the management that
helps in achieving suitable goals and objectives of an organisation. Strategic management
include the formulation and execution of major objectives and initiatives that are taken by the top
managers of company and it is based on the consideration of probable resources including the
internal and external environment in which company operate (Ansoff and et. al., 2018). It is
useful in offering suitable direction to the company and also includes specifying the probable
purpose of the company and also helps in developing prominent norms and plans to achieve
those objectives.
In order to carry forward this report Tesco is considered that is the British multinational
grocery store and the third largest retailer in the world measured by its gross revenues. Tesco
deals in groceries and general merchandise and headquarter in Hertfordshire England. The
support covers the probable strategic direction of company which they follow in past 5 years and
the detailed analysis of industry. Moreover it also analyse the Vision and Mission statement of
the company that is aligned with the demand of market and also analyse the strategic capabilities.
TASK 1
Strategic direction that company has followed in the past and the way in which strategic thinking
has developed within the past 5 years
The strategic directions of an organisation are helpful in achieving suitable goals and
objectives which helps in gaining competitive advantage and sustainability with the dynamic
business environment for the longer period of time. In terms of this the respective company
Tesco need to bring suitable transformation and its business strategies regarding the smoothening
and operations of an organisation and some of the probable strategies are discussed below:
Human capital strategy: It describe the HR policies of the company which is useful in
retaining existing employees and motivating them to perform more efficiently that helps in
achieving the desired goals and objectives. In terms of this the profitability of Tesco scold
around 20% in the last year and also take the record of 2 billion in order to set the new milestone

for the retail business of UK and it is possible because of the simplification strategy of the
human resources (TESCO human resource management, 2020).
Strategic planning: By considering the planning of Tesco they make suitable strategy in
order to increase their business by undertaking the four probable parts of strategy that are strong
core business non-profit retailing services and internationalisation that are useful in keeping the
focus in order to enhance their focus towards the consumers. The motive of strategic planning of
Tesco is to make their customers shopping trips quite easy according to their convenience. After
implementation of this strategy Tesco got another recorded achievement with the profit of up to
12.3% that is around 3.8 billion from its sale (Tesco 5 year strategic plan, 2020).
Technology strategy: After analysing the past 5 years strategy of Tesco company make
probable changes and transformation in its digital technology in order to enhance its customer
experience and business model in order to operate their business with the help of suitable
investment (Rothaermel, 2016). Along with this Tesco make its stores digitalised that are data
driven towards the customer loyalty platform and make its website just click and collect
functionality considering the convenience of their customers.
TASK 2
Use of appropriate frameworks
Porter’s Five Forces:
This model comprises of five serious powers that help an association to recognize the
degree of rivalry in a viable way. All the five powers are given beneath comparable to the picked
organization:
Threat of new entrants: So as to open such a market in which TESCO bargains require
high speculation and time too. In any case, there are part of little shops is which is anything but
difficult to open. It is establish that danger of new participant is mode for TESCO (PORTERS
FIVE FORCES ANALYSIS OF TESCO, 2020). So as to manage this serious power, it is
significant for TESCO to give best quality items to clients as it help them to draw in client for
long timeframe and increase their trust with the goal that they didn't move to some other brand.
Threat from substitutes: There are lot of substitutes winning in the commercial centre
and subsequently danger of substitute is high for the organization. It is significant for

organization to create compelling methodologies and pull in clients towards the brand with the
goal that they didn't move to some other substitute brand (David and David, 2016).
Bargaining power of buyers: The dealing intensity of staple clients is high as they are
carious associations offering comparable item at the lower cost. It is significant for organization
to keep up powerful relationship with clients so they didn't think to buy result of another brand
(PORTERS FIVE FORCES ANALYSIS OF TESCO, 2020). Also, it is fundamental for
organization to keep up its quality with the goal that it can draw in its client for longer time.
Bargaining power of suppliers: There are types of suppliers in the market that give crude
materials to the general stores. In this way, the dealing intensity of providers is low and friends
have the chance to buy in mass at lower cost and procure higher benefit also.
Competitive rivalry: The significant contenders of organization are Sainsbury's, Asda,
Walmart and, some more. It is resolved that TESCO has the higher danger of contenders as it
legitimately influence on its deals just as benefit level in a negative way. It is fundamental for
TESCO to create viable methodologies and give quality to clients as it causes them to keep up its
market position and achieve upper hand at commercial centre (PORTERS FIVE FORCES
ANALYSIS OF TESCO, 2020).
SWOT Analysis:
Strength Weaknesses
 One of the qualities of organization is
its market nearness as it offers items in
excess of 18 nations, this assistance
organization to accomplish higher
benefits.
 TESCO offer great items to its client
that guide in picking up trust of clients
and hold them for longer timeframe
(Hill, 2017).
 It is one of the productive grocery
stores on the planet because of which it
has the chance to achieve upper hand at
commercial centre.
 It is verify that a portion of the
association auxiliaries isn't performing
better because of outside variables. This
decay the income level of organization
as it embraced as a shortcoming of
TESCO.
 The organization is exceptionally
relying upon the Europe and United
Kingdom for its deals and along these
lines didn't spent assets in other
creating markets (TESCO SWOT
Analysis, 2020).

 The organization till now isn't offering
natural food which decreases its deals
and by and large execution level.
Opportunities Threats
 TESCO has the chance to go into new
market portion as it is a famous
organization and didn't require
spending more on advancements.
 In expansion to this, TESCO has the
chance to offer natural food at
showcase as it help in drawing in
progressively number of individuals
and improve benefit of organization
also (TESCO SWOT Analysis, 2020).
 The organization has the critical chance
to build up its online market and offer
home conveyance to the more number
of zones, this will help TESCO to gain
higher benefits and improve their piece
of the pie level too.
 One of the significant danger of
organization is its rivals, for example,
Aldi, Walmart and some more, it
influence legitimately on the deals and
net revenue of TESCO in a negative
way.
 Increase in the expense of crude
material decay the productivity level of
organization which thusly likewise
decline income percent of organization.
 The political scene and government
guidelines is squeezing association to
follow new laws, because of which
TESCO is require to make changes in
its activities and hierarchical structure
also (TESCO SWOT Analysis, 2020).
Critical discussion of the company’s competitive advantage
Price and promotion is the key factors by which Tesco achieve competitive advantage
regarding its overall development for its retail business by offering low prices and high quality of
customer experience and service in order to earn more and more profit. In terms of this Tesco
develop suitable strategies that are helps in achieving its desired goals and objectives. Along
with this, the probable strategies of Tesco help in offering efficient products and services and
also improve and promote its competitive image (Hitt and Duane Ireland, 2017). For this,
porter’s five forces and SWOT framework helps in analysing the competitive market area and
advantage within the dynamic business environment.

Probable industry scenarios facing the company
By considering the present conditions of company it is analysed that retail industry face lot
of changes because of causes of COVID-19 as it leads to bring major changes in the functioning
and dealings of Tesco. In relation with this, Tesco make suitable changes in its digital methods to
reach out their products and services to their customers. Therefore, make all its purchase and
selling through online mode which helps in neglecting human contact and leads to prevent
people from being in contact with other (Morden, 2016). Hence, by considering the whole
current scenario Tesco needs to make probable changes in its digital technological features.
TASK 3
Mission and vision statements are aligned to the demands of the marketplace
Mission: This mission of Tesco is to bring new and innovative products and services
according to the needs and requirements of customers that lead to develop suitable satisfaction
among their customers.
Vision: The vision of Tesco is to offer the highly valued products and services to its
customers that lead to improve its image in the dynamic business environment. Along with this,
company tries to serve its services its customers and communities in which they operate.
Therefore, by considering the both vision and mission statement of company it is analysed
that both the statements are helps in achieving competitive advantage and fulfilling the demands
of customers which helps the company in its long term survival.
Company's strategic capabilities
VRIO Analysis:
Resources Valuable Rare Imitable Organised
Products and
services
Yes - - -
Employees Yes Yes - -
Distribution
network
Yes Yes Yes -
Financial
Resources
Yes Yes Yes Yes
Valuable

 Financial Resources of the organization of exceptionally significant as they help
organization in putting into the outer open doors which are shown up in the market it
additionally help association in joining with the dangers of outside market.
 Products and services are additionally important assets of the association as organization
can make a profoundly separation between them. This additionally gives the association
that it can exact the estimation of these kinds of clients who are legitimately identified
with food results of organization (Meyer, Neck and Meeks, 2017).
 Employees are likewise significant asset for the association this is on the grounds that
they are profoundly prepared. A decent in vogue workforce will bring greater efficiency
inside the yield of association just as increment the gainfulness and profitability of firm
 Distribution network of the grade is additionally significant asset for the association as it
helps association in arriving at an ever increasing number of clients. Help in expanding
the income for the Tesco as it guarantees the best possible limited time exercises of
association.
Rare
 Employees of the association are likewise their assets while doing the investigation of
this is on the grounds that exceptionally prepared in ability representatives are absent in
each association inside the business so it is in upper hand.
 Distribution network of Tesco is likewise an asset for the association this is on the
grounds that serious would require a great deal of speculation and future time up at that
degree of an answer arrange which test is presenting in current time (Trigeorgis and
Reuer, 2017).
 Financial Resources of Tesco are discovered petition for the association as per drive
examination this is on the grounds that solid monetary assets are the main powers by the
couple of organizations inside the business where Tesco is exchanging.
Imitable
 Financial Resources of Tesco private restricted are exorbitant to copy as there are
number of technique which needs to follow for utilizing the monetary assets like Tesco.
So it is inconceivable for serious to mimic the money related assets of Tesco.

 Distribution network of Tesco is additionally expensive to impersonate by the contender
as organization have a serious appropriation channel. Take number of years for building
up this sort of dispersion channel so PC needs to contribute the enormous sum inside this
for suggesting a comparative dissemination channel.
Organised
 Financial Resources of Tesco composed to catch an incentive as recognized inside the
examination of this organization this is on the grounds that these are the sources which
are utilized as a methodology to put resources into a perfect spot and get the open doors
inside the market by fighting from dangers of association So it tends to be distinguished
that these assets give organization and chance to get the manageable upper hand inside
the market.
TASK 4
Discuss possible strategies that the company could follow to defend its core business
Ansoff Matrix: Ansoff grid is embraced by the higher specialists of organization so as to
examine methodologies that help in achieving development and accomplishment at commercial
canter. This grid incorporates four methodologies which is given beneath in setting to Tesco:
Market Penetration: In this, the organization offers a similar item into the current market
with a goal to procure higher benefits (Certo and et. al., 2016). The associations utilize limited
time devices so as to mindful increasingly number of individuals winning in the current market.
TESCO can utilize this procedure by utilizing online networking applications, which help in
arriving at progressively number of individuals and upgrade deals of the organization
successfully.
Market Development: In this procedure, the organization goes into the new market with
its current item so as to upgrade its client base level that has positive impact in the general
productivity of organization. So as to receive this technique, it is significant for TESCO to direct
statistical surveying as it helps in picking up knowledge about the client necessities and market
patterns of new market (Hitt, Ireland and Hoskisson, 2016).
Product Development: Thus, an element offer new item in its current market so they can
pull in increasingly number of individuals that straightforwardly prompts increment in
proficiency of organization. It is resolved that this system is hazardous as whether the new item

is acknowledge by the current clients or not. TESCO can utilize this system by breaking down
the taste and inclinations of clients winning at commercial centre.
Diversification: In this system, the association is going into the new market with its new
item. This procedure comprises of high hazard as organizations have no information about the
market and its clients (Baumgartner and Rauter, 2017). In the event that the item gets fizzled, at
that point it leads to happening high misfortune to organization that has negative effect on
benefit and income level.
From the above technique, it is verify that one of the appropriate and valuable systems for
TESCO is advertise improvement. It is an eminent and rumoured organization alongside this it
has faithful clients who saved positive informal. Market Development system causes
organization to reinforce its market position and gain higher benefits too.
TASK 5
Analyse and evaluate the resource implications of your recommendations that the company has
to address
Therefore, by considering the preceding information and discussion it is analysed that Tesco
need to address the performance of employees in order to increase their sales and profitability
and monitor it regarding the overall maintenance that helps in achieving desired outcomes and
growth (Peppard and Ward, 2016). In order to monitor the performance the managers of Tesco
need to significantly manage the performance of employees and also conduct resource audit by
considering suitable frameworks like Porter’s and SWOT analysis which is useful in analysing
the significant risk factor from the business environment and leads to develop suitable strategies
in order to protect the business as well.
Along with this VRIO analysis is conducted in order to analyse the competencies and
capabilities of Tesco by considering the use of resources according to the prominent factors like
valuable rare imitable and organised. In addition to this it also find the suitable gap that leads to
hinder the overall performance of employees. In terms of this organisation need to consider and
apply suitable strategies in order to defend their core business and leads to develop the strategy
capabilities of Tesco. In terms of this the significant sustainable strategy is Ansoff matrix which
is useful in identify the most prominent strategy for the launch of product and Services within the
market (Aguinis, Edwards and Bradley, 2017).

CONCLUSION
By considering the preceding information it is analysed to that strategic management is
important in order to identify and analyse the significant condition of the company and it also
leads to provide the significant direction to the company regarding its growth and development.
In addition to this there are probable Strategies and frameworks that are used in the above report
in order to provide the significant guidance and future strategic direction to the company.
Moreover it is also analysed that the existing mission and vision statement of the respective
company are aligned with the demand of market or not and also develop suitable strategies in
order to defend the core business.

REFERENCES
Books and Journals
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management to develop a sustainable organization. Journal of Cleaner Production, 140,
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Certo, S.T and et. al., 2016. Sample selection bias and Heckman models in strategic management
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David, F. and David, F.R., 2016. Strategic management: A competitive advantage approach,
concepts and cases. Pearson–Prentice Hall.
Hill, T., 2017. Manufacturing strategy: the strategic management of the manufacturing function.
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cases: Competitiveness and globalization. Cengage Learning.
Meyer, G.D., Neck, H.M. and Meeks, M.D., 2017. The entrepreneurship‐strategic management
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Morden, T., 2016. Principles of strategic management. Routledge.
Peppard, J. and Ward, J., 2016. The strategic management of information systems: Building a
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Rothaermel, F.T., 2016. Strategic management: concepts (Vol. 2). McGraw-Hill Education.
Trigeorgis, L. and Reuer, J.J., 2017. Real options theory in strategic management. Strategic
Management Journal, 38(1), pp.42-63.
Online
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