Strategic Management Plan for TESCO: Analysis of Macro and Micro Environment, Competitive Advantage, and Strategic Directions

This report provides a strategic management plan for TESCO, including analysis of macro and micro environment, competitive advantage, and strategic directions. It includes PESTLE and SWOT analysis, Porter's Five Force model, and strategies and tactics for achieving overall strategic objectives.

Strategic Management
Plan
Table of Contents

INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
PART A...........................................................................................................................................3
Evaluating appropriated frameworks in order to analyse the impact and influence of the macro
environment on organization and its strategies......................................................................3
Evaluating appropriated frameworks in order to analyse the impact and influence of the micro
environment on organization and its strategies......................................................................5
Evaluating competitive advantage of organization................................................................6
Strategies and tactical objectives for accomplish overall strategic objectives.......................8
PART B............................................................................................................................................9
Evaluating different types of strategic directions...................................................................9
Developing and recommending strategic plan by applying theories and concepts..............10
REFERENCES..............................................................................................................................13

INTRODUCTION
The strategic management plan is a document that enables an organization to effectively
communication the goals, priorities and resources within the organization. This ensures
enhancement of operations along with providing direction to employees and other stakeholders
to work towards common objectives. For the following report TESCO company is taken into
consideration (Adyana and Hanani ., 2020). TESCO is a British multinational groceries and
general merchandise retailer headquartered in Welwyn Garden City, UK. They are the third-
largest in measure of gross revenues in the world along with being the ninth-largest in measure
of revenue as well. The following report will consist of analysis of macro environment and its
impact on the chosen organization by utilizing PESTLE and SWOT framework. In addition to
this it will evaluate the competitive environment of the organization with the help of Porter's
Five Force model. Moreover, it will focuses on valid justification relative to competitive
advantage along with evaluation of different types of strategic directions that are available.
MAIN BODY
PART A
Evaluating appropriated frameworks in order to analyse the impact and influence of the macro
environment on organization and its strategies.
It is crucial for a business to understand its external/macro environment in order to
identify various threats and opportunities that can impact the functioning of an organization. The
effective evaluation of external environment enables a business to develop appropriate strategic
management plan. In order to understand external environment PESTLE analysis is used in
context to the chosen company and is elaborated below:
PESTLE analysis:
This analysis can be explained as the study and careful evaluation of political, legal, social,
economic, environmental and technological ingredients which hinders the flow and working of a
business in market. In other words it can be elaborated as a set of tools to examine and observe
prevailing market situations in an market region which affects in smooth-flow of business. The
analysis of TESCO is elaborated below:
Political Factors

It focuses towards tax policies, foreign trade, fiscal policy, quota and tariff reforms which
exert influences complete working and profit creation of an organisation (Brandtner ., 2018).
Political instability can affect strategic management with varying degrees of damage or profits to
organization. The company's strategic management was negatively influenced due to Brexit, and
meddling regulations of governmental regulations in countries had lead to decrease in sales of
commodities across the globe.
Economic Factors
It includes inflation or declination at prevailing wages, interest rates, credit availability,
living standard of people, employee wages etc. in the economy. Therefore a company should
keep focus over the persistent economic shifts in order to tackle them for its own good. Increase
or decrease in household and disposable incomes of people could shift the company's strategies
toward profit-margins of the preplanned strategies of the business mangers.
Social Factors
Social factors adheres with ascendency of customers towards demand of certain product
through intervening their cultural expectations, norms, career attitude, tastes, preferences, health
and safety needs, etc. Nowadays customers want one-stop-shop, therefore by using a vicious
method of trend towards convenience the company fulfils this demand. Irregularity of norms,
culture and ethics among new generation is leading to inability of quick switch of products in the
business that hampers the strategic management of company.
Technological Factors
It is related to up-gradation of technology for betterment of organisation. For example,
online marketing and digital marketing are new technologies that helps to widen the scope of
business (Chernev ., 2019). The alliance of TESCO with Amazon to create e-cashier billing to
in-surge to work along-with helping customers to dodge hazel-less transit and pigtail billing. In
the continuous erratic world stagnated technologies could lead to instant downfall in production,
management and company would be incompetent to its rivals.
Legislative Factors
These factors regulates licensing, contract, civil rights and immigration of a company
across national and international borders for its working. TESCO is religiously following the
rules and regulations administered by the Food retail corporation, UK which can be seen in the

diligence of work ethics of the business. But aside this organisation had been alligated by a fake
case of gender and age biased pay rates which had been a bad name to it.
Environmental Factors
It can be referred as the examination of the changes in economic condition due to
capricious demography and physical environments, in which the company is working. The
company implemented 4(R) which helped grow consumer awareness and attract customers
towards a environment conscious business tycoon. Efforts done by company in lieu of its
environment friendly policies it is unable to do much on environment health that somehow is
negative publicity for the company.
Evaluating appropriated frameworks in order to analyse the impact and influence of the micro
environment on organization and its strategies.
The micro/internal environment of a business refers involves their current or future
threats along with their weakness which can impact the organization negatively. Moreover, the
micro environment also contains the overall strength and opportunities of the business. The
effective evaluation of micro environment enable a business to develop strategic management
plan relative to their strengths, weakness, opportunities and threats (Davis and Bendickson .,
2021). To understand micro environment SWOT analysis is used in context of chosen company
and is elaborated below:
SWOT analysis:
This analysis enables an organization to effectively understand its strengths, weaknesses ,
opportunities and threats in order to develop suitable strategic management plan. Given below is
the SWOT analysis relative to TESCO.
Strengths Weaknesses
 The organization has high level of
financial resources which enable them
to be the competition in market.
 The organization has been able to
capture a large market share relative to
its competitors which enhances the
growth of their customer base.
 Alteration in leadership has caused the
organization to face dysfunctionality
which has impacted its efficiency.
 The organization suffers form an
inefficient quality control system. This
has impacted their brand image along
with productivity negatively.

 The company has heigh level of
research and development which makes
them innovative and productive in their
business operations.
 The organization has a high level of
adaptability due to their experience in
the market and utilizing appropriate
management strategies.
 The organization has had various food
safety issues which has decreased the
trust of customers in products and
services of the company.
 The company has weakness in its
inventory management system. This
results in large financial losses due to
missing products of the company.
Opportunity Threats
 The organization can expand its online
market and sales by optimizing their
online service. It will ensure high rate
of sales and profitability.
 The high rate of unemployment rates
can be an opportunity for the company
to hire cable individuals (de Lautour .,
2018)(Desai ., 2019). This will improve
effectiveness of business operations
along with ability to expand in the
market.
 The organization can focus of vegan
meat alternative products to expand
their market and meet the demand of
customers who are environmentally
conscious.
 The situation of Brexit has become a
threat for the organization as it has
disrupted their overall supply chain.
 COVID-19 pandemic and the
restriction of lock down have made the
distributing channel of the business
ineffective.
 There is a constant threat of existing
competition in the market in order to
gain large market share.
 Economic recession can be a threat for
the company as it will result in
decreased purchasing power of their
customers. This will result in low
number of sales and profitability.
Evaluating competitive advantage of organization.
It is vital for an organization to have competitive advantage in the market as it assists in
distinguishing from the competitors. Moreover, it helps a business to set high prices for the
products along with attracting more customers which helps in creating brand loyalty.

Understanding of competitive advantage enables a company to develop an effective strategic
management plan which enhances organizational growth. Porter's Five Force model is utilized to
evaluate competitive advantage of the chosen organization and is elaborated below:
Porter's Five Force model:
It is a framework that allows a business to understand its competitive market on the bases
of five forces. This helps in determine the competitive nature and intensity of the market along
with it attractiveness and profitability (Diderich ., 2020). Given below is the Porter's Five Force
model in context to TESCO:
Existing competition ( High):
There is high-level of competitiveness in the existing market of TESCO due to the
increase in customers demand and supply for basic products and services. There have been
various companies such as Sainsbury's, ASDA and Morrisons who provide TESCO with a stiff
competition. Although TESCO has been able to capture the largest market share relative to its
competitors by offering its high-quality products and services at affordable pricing. This has
enabled them to gain competitive advantage in the market.
New entry (Low):
The TESCO company has a fairly low level of threat form the new entrances of
companies in the market due to the amount of capital required. Moreover, small and medium
star-up require large space to conduct their business if they want to compete with TESCO. The
large financial resource of the company enable them to have competitive advantage in the market
and discourage new entrances.
Power of supplier (Low):
The impact of power of suppliers is low in context to TESCO, due to the high presence of
suppliers in the market which business can approach to attain raw materials for their products
and services. The TESCO has gained competitive advantage in the market by establishing strong
and reliable relations with various suppliers to attain raw material.
Power of customer (High):
The availability of various vendors in the market enable customers to have high-level of
power relative to TESCO. The increase in number of competition provide customers the ability
to switch organization who offer best products at the lowest price possible. The TESCO

company has been able to gain competitive advantage in the market relative to its competitors by
offering the highest possible products and services at affordable pricing.
Threat of substitution (High):
The TESCO company has a high level of threat from substitution of products and
services as their are various vendors in the market who offer similar products and services
relative to TESCO. Although the chosen organization has been able to gain competitive
advantage in the market by launching their own specific brand of products and services which
assist them to be differentiated from their competitors.
From the above analysis it is evaluated that TESCO has gained competitive advantage in
the market by ensuring it provides it high-quality products and services at affordable pricing to
theirs customers (Emamisaleh and Taimouri ., 2020). Moreover, they have established strong and
reliable relations with their suppliers to keep the supply chan clear and efficient. The company
can further strengthen its competitive advantage by focusing on developing their technological
aspect of their business. This will enable them to be innovate and differentiate themselves
relative to their competitors.
Strategies and tactical objectives for accomplish overall strategic objectives.
There are various strategies and tactics businesses use in order to accomplish their
strategic objective in an effective manner. It allows an organization to enhance its productivity
and ensure increase in overall performance in business operations. Given below are few
strategies and tactics objectives which TESCO can utilize to achieve their strategic objectives:
Strategies:
Acquiring strategy:
The acquiring strategy will enable TESCO to utilize its large financial resource to acquire
other companies who can assist them in their business operation. This will result in TESCO
achieving its strategic objective in an effective manner.
Product differentiation strategy:
This strategy will allow the TESCO company to further expand its portfolio of products
and services. It will enable the organization to differentiate themselves from their competitors
and fulfil the objective of expanding market share.
Growth strategy:

The growth strategy will assist the company is expanding it market and enable them to
attain growth in their sales and customer base. Moreover, it will also assist them in generating
high level of revenue which will further help them to achieve their organization objectives.
Tactics:
Measure progress:
The measurement of progress can be utilized as an effective tactic by TESCO company in
order to achieve their strategic goals as it will enable them to understand where they are lacking
relative to their competitors.
Develop short-term goals:
The TESCO can focus on developing various short-term goals rather than few long-term
goals as a tactic to achieve more objective and goals in a timely and effective manner. This will
assist the company to increase it productivity along with efficiency.
Employee retention:
The company can utilize retention of employees as an useful tactic to achieve strategic
objectives as employees who are aligned with organizational mission and vision enable it to
achieve its goals and objective on time and with high level of effectiveness.
PART B
Evaluating different types of strategic directions.
Strategic direction refers to the overall structure of ideas and actions that enable a
business to promote consistency in strategy over time. It assist a company in achieving its goals
and objectives along with providing uniting organizational strategies for enhanced stability in the
future. Given below are few strategic directions for TESCO:
Mission:
It is vital for TESCO to develop an effective mission which is attainable and works as a
guide to meet their organizational goals and objectives. It will enable the company to provide
high-quality products and services relative to competitors in the market. This will allow the
organization to have a great long-term strategic direction which is focuses on quality rather than
focusing on objectives such as cost saving.
Culture:

The company culture refers to the overall attitude and behaviour of employees within an
organization. The culture at TESCO will allow it to shape its strategic direction as it will
provides its employees and business to adapt to various complex situations.
Values:
It is important for TESCO to have values within their organization as effective values
will enable them to move towards the achievement of their goals in an effective manner
(Fernandes, Lopes and Sargento ., 2019). Moreover, it will assist the company to help its
employees to perform better and work towards a common goal.
Ideology:
The ideology is the belief that defines purpose of an organization. It is important for
TESCO to have effective ideologies in order to gain strategic direction through consistent and
stable polices. Moreover, it will enable the company to aspires in what objective it wants to
achieve.
Developing and recommending strategic plan by applying theories and concepts.
Strategic plan refers to the process by which the leaders in an organization determine
their vision for the future along with paying emphasis on their overall goals and objectives for
their organization. The structure process of the plan includes establishing sequence of goals
which will enable to business to reach its desired vision. Given below are theories and concept
which enable a business to develop strategic plan:
Ansoff Matrix:
The Ansoff Matrix helps an organization to develop a strategic plan for growth. It helps a
business to identify the market and focuses upon 4 strategies that can be used according to
situation for a different strategy for growth. Given below are the 4 aspect of the matrix:
Market penetration:
It refers to the expansion of sales of products and services offered by a company in the
existing market. This strategy can be executed in various ways such as decreasing prices to
attract new loyal customers, focus on increasing promotion and distribution efforts along with
acquiring competitors in the same market.
Product development:
This strategy for growth is based upon introducing new products in the existing market of
the company. This strategy involves various ways for it to be implemented such as investing

heavily in research and development to introduce new products in the market (Helmold and
Samara ., 2019). It helps to acquire competitors products and merge resource to create new
products and service. Moreover, the strategy provides assistance in forming strategic partnership.
Market development:
This strategy for growth involves introducing existing products into a new market. In
context to this strategy it involves expanding into new geographic regions and customer
segments. Moreover, it involves activities such as catering to different customers segment along
with entering into new domestic market as well as foreign market.
Diversification:
This strategy for growth focuses on developing new products and introducing them into a
new marketplace. This strategy is the riskiest among above mentions strategies as both the
market and the products are required to be developed. This strategy involves 2 types of
diversification which are mentioned below:
Related diversification:
It focuses on the potential combination to be realized between the existing business and
the new products or market.
Unrelated diversification:
There is not potential combination to be realized between the existing business and the
new products or market.
From the above analysis it can be observed that the TESCO company can use the market
development strategy for strategic growth (Hodges ., 2018). It will enable them to expand their
business by utilizing their high-quality products and services to venture into new untapped
domestic and foreign market. It will assist them to reach a wider customer base and help them to
generate high level of profitability.
Mission and vision statement:
The concept of mission statement is defines the overall structured on which the business
operates. O the other hand the vision statement describes the desires for future prospective of
position of the company. The elements of mission and vision statement are combined to provide
an overall statement of the purpose, goals and values of the business. In context to TESCO, the
concept of mission and vision statement will assist the business to enhance their overall
functioning of the business operations. It will provide them with future growth opportunities

which can be utilized to expand market share and gain large number of customer base. In
addition to this the concept will provide the company with strategic direction by ensuring
envisioning the future along with the encouragement for critical thinking (Ivanov and Piskunov .,
2020). Furthermore it will assist TESCO in developing an effective purpose and a guiding
culture within their businesss (Shumaev and et. al., 2018). The concept will help them to enhance
their overall performance and ensure aligning behaviours of employees towards organizational
goals and objectives to. This will not only provide a better strategic direction but will also assist
in developing effective strategic plans for growth and high-level of profitability.
Strategic Plan for Tesco company:
Strategic planning helps an organisation to identify the set of activities, priorities, focus,
resources, operations etc. to ensures that the people in the organisation works towards common
goals. The strategic plan for Tesco is bringing Vegan food product and services in UK as well as
international level:
Objective: The main objective to bring Vegan food product and services in international market
to promote Vegan food and bringing some change to attain more competitive advantages. The
team of Tesco is plan to accomplish revenue up to 12% increase within 12 months.
Tactics: To seeking for better strategic approach that are made by the company to achieve the
target and maintain more competitive advantages. To plan for promote Vegan product and
services through digital platform and social media platform to gain more customer interaction
effective manner (Phillips and Moutinho ., 2018). This will allows more opportunities to the
Tesco company where it would allows the market segmentation and make target customer to
gain more customer interaction to gain more competitive development.
To evaluate the strategic plan for Tesco by using 4ps of marketing mix :
 Product: The product planning for Tesco as they are innovate new Vegan product in
market it contains more specification and also health nature food items that would helps
to customer for their better hygienic system.
 Price: They have strong brand value they are uses premium pricing strategy because the
product that they are having unique way to increase high value. It also make using
penteration pricing process that customer can easily afford those product effectively.
 Place: Tesco company owned many stores and outlets from where they can distribute and
sales their Vegan product in global market.

 Promotion: For Vegan product and services, Tesco Marketing team decides to better
promote in Social media channels and digital marketing effectively. This practise of
promotion would help to attain more customer interaction effective manner.
Implementation : It is important for the organisation to implement the plan so formulated for
which they need to allocate their resources. Tesco can allocate their funds with the help of
marketing budget (Laidlaw ., 2019). While to control the performance various measures can be
adopted by the organisation such as internal audit of the processes which will help them to
compare actual and budgeted performance. Also key performance indicators can be used to
measures and improve the performance.
CONCLUSION
On the basis of above report, it summarised which could adopting appropriate better
strategic management plan. To Analysis such as PESTLE, stakeholders analysis, SWOT,
Ansoff's matrix benefits a firm in acknowledging external business environment in a deep
manner. With the help of VRIO framework, organisational capabilities can be identified. By
using Porter's five forces, a company can acknowledge their competitive edge in market.

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