Strategic Management and Planning for TESCO

This report covers analysis about strategic management and planning process used by TESCO, impact of internal and external environmental variation on organisational strategy, and a review of their business plan. It includes a SWOT analysis, VRIO framework, and PESTLE analysis of TESCO. The report provides an action plan for the organisation on the basis of a change.

Strategic Planning
1

Table of Content
Introduction............................................................................................................................2
Definition of strategic management.......................................................................................2
A critical assessment of the process used by organisations to determine their strategy........3
A critical evaluation of the impact of internal and external environmental variation on
organisational strategy...........................................................................................................4
A review of an organisation’s strategic plan (Business Plan), providing an action plan for
the organisation on the basis of a change...............................................................................8
Conclusion..................................................................................................................................9
References..................................................................................................................................9
2

INTRODUCTION
Strategic planning is that process through which organisational leaders determine their
vision for future as well as identify their objectives and goals for an organisation. The
process also includes establishing the sequence in which those goals should fall so that an
organisation is enabled to reach its stated vision. When there is a strategic plan then it will
help in terms of tracking the goal into positive manner(Bonsu, S., 2019). In the present
report, TESCO is taken into consideration. TESCO is a general British merchandise retailer
company and it is headquartered in Welwyn Garden City, England(TESCO company
profile). The present report covers analysis about strategic management and also about
process used by TESCO organisation to determine their strategy. In addition to this, report
will cover discussion about impact of internal and external environmental variation on
organisational strategy. Moreover, the report will cover analysis about organisation’s
strategic plan that gives the action plan for the organisation on the basis of change in internal
and external environment.
MAIN BODY
Strategic management
Strategic management is the continuous monitoring, planning, assessment and
analysis of all necessities an organisation is required to meet out the goals and objectives.
When changes have occurred in the business environment then it is required that an
organisation constantly assess the strategies for success. The process of strategic
management supports an organisation to take stock of their present situation, deploy them,
chalk out strategies and analyse about the effectiveness of implemented management
strategies. It is that type of management who have financial and non-financial benefits. It is a
process which supports an organisation and its leadership to think and plan for its future
existence. Strategic management basically sets direction for an organisation and its
employees.
Effective strategic management continuously monitors, plans and tests an
organisation’s activities which results into greater operational efficiency, profitability and
market share(Witcher, B. J., 2019). The concept of strategic management is basically based
on vision and mission of an organisation and where they want to be in their future life and
the values also guide their actions. Strategic planning basically involves activities, strategic
3

decisions and allocation of resources which is required in terms of achieving goals. The
process always require a commitment to strategic planning and a subset of business
management that involves an organisation’s ability to set both long-term and short-term
goals.
Importance of strategic management is defined into the following manner:
 Shows right direction to an organisation: Strategic management helps in terms of
giving direction to an organisation. In terms of TESCO organisation it gives proper
direction towards their goals and objectives.
 Support companies in terms of remaining proactive: Strategic management is the
way through which companies remain themselves into proactive nature rather than
reactive. In terms of TESCO organisation they make their strategies in such a manner
that they show their proactive nature into the international market by their unique
services and concept.
 Support in terms of decision making: Strategic management is the way through
which proper decisions can be taken because it gives a proper plan in terms of their
next step. In terms of TESCO organisation, they make their strategies through
strategic management and decision-making is also dependent on it.
 Help in terms of business development and success: Strategic management is the
way through which business can be developed into positive manner(Doyle and
Brady., 2018). In terms of TESCO company, they have grown their business through
proper planning and monitoring the market into appropriate manner. TESCO has also
developed their business and achieve success through strategic planning.
 Guides in terms of facing challenges in future: Strategic planning is that planning
which basically predicts forthcoming challenges and difficulties. It is the way through
which planning can be done in advance for future problems. In terms of TESCO
company, they always ready to make their customers happy and give satisfied
services through their unique services and concepts.
In order to determine the strategy critically evaluate the process used by organisation
The process which is used by TESCO company is strategic planning process which
ensures an organisation that it will provide good profit results and also be able to maintain its
output. It also gives an idea to the that where they will be in future after some years. It is a
systematic process which talks about the number of steps which identify about the current
4

status of an organisation. It basically involves vision, mission for future operating values,
goals, prioritised actions and strategies and monitoring plans. Strategic planning is the main
parameter for every organisation and without strategic planning it is difficult to analyse
where the organisation is going and where they are. TESCO’s employees work together to
ensure about whether the team goal can be meet out.
To work within a strategic planning process, it is important to have an overall vision
or goal. If company is not clear about their goal it is difficult to do any type of
work(Secundo and et.al., 2015). TESCO company does not set a strategy for themselves
which defines about the direction then it is challenging for them to achieve objectives and
goals of an organisation. Only by setting strategy company can come closure to the goals of
an organisation.
Strategic planning is that process through which it envisage about the desired future. In this
way, it translates the vision into broadly defined goals and objectives and process which
support in terms of achieving these goals. For long term purpose estimated future needs can
be decide by this strategic planning and if this is not framed into appropriate manner then it
is challenging to meet out the future requirements(Miller., 2018). For working appropriately
in strategic planning process it is necessary that TESCO should be clear about their vision
and mission statement. Vision statement is basically about the clear view regarding the
future of an organisation. Mission statement which describes about who makes up the
association and who it represents.
Under strategic planning process, it is important to set goals which an organisation
wants to achieve in the near future. In terms of TESCO company, their major goal is that to
provide best services to their customers and their customers are their priority. An organisation
has to set objectives with SMART parameter which defines about specific, measurable,
achievable, realistic and timely factor. Within this process, they have to make strategy so that
they can achieve their objective within a set period of time. With respect to TESCO
company, they tried to make shopping convenient for their customers and also try to reduce
prices in order to provide convenience to their customers. If TESCO company, does not
frame strategies for their customers then they can’t increase their sales on such a large scale.
They also can’t retain customers for longer period of time. So in this process strategy plays a
very important role.
5

In order to define strategy into appropriate manner, it is necessary that brand of the
company should have strong stand into this international market. Within this strategic
planning process, it is important that brand should be recognised by their customers. With
respect to TESCO company, they used brand image strategy (Aithal and Aithal., 2019). They
have started selling their products through their own name with cheaper price and good
quality. This kind of strategy is adopted because now customer not know about the cheaper
products of the company but also about their own product. In this way, strategy has been
defined by the company through this strategic planning process.
A critical evaluation of the impact of internal and external environmental variation on
organisational strategy
VRIO FRAMEWORK IN TESCO
It is an analysis framework used by various organizations that altogether constitute in firm’s
overall strategies. This analysis let firm understand about its competitive advantages and
helps it to grow by elevating on the basis of their strengths(Fynn and et.al., 2016). Tesco can
use this framework to gain competitive advantage in market as it is already surrounded by
other giants such as Sainsbury’s, Asda etc. Vrio is a contraction of four basic questions that
company ask itself those are question of value, of rarity, of inimitability and of organization.
Resources Value Rare Inimitable Organization Competitive
Advantage
Elastic
supply
system
yes yes yes yes Strong
competitive
advantage
Presence
across world
yes yes no yes Unused
competitive
advantage
Potential of
using e-
commerce
yes No no yes Temporary
advantage
Availability
of cheap
yes no no no Unused
competitive
6

capital advantage
Valuable: This is the basic for any resource a company want which will aid firms in
achieving competitive advantage in market, if firm’s most resources are valuable then it has a
strong competitive stand in industry(VRIO framework of TESCO). Tesco in terms of value of
its supply chain, availability of cheap resources etc give great gamesmanship to firm.
Rare: proficiency which is rare are acquired and evolved by only few firms in industry
which help in develop competitive gains for Tesco(Aithal and Acharya., 2016).
Multinational presence and problem solving skills of Tesco are rare and helps in gaining
advantages.
Inimitable: these inimitable proficiency aids firm in competitive advantage as well as long
term continuity. These knowledge and skills are difficult and expensive to copy by others in
industry. Pricing, position of stores, quality of products of Tesco are hard to emulate.
Organization: these resources are matchlessly developed with no substitute for Tesco, which
can’t be used by others in industry and thus allows Tesco to explore opportunities and grow
in business.
PESTLE ANALYSIS OF TESCO
It is external analysis tool used by Tesco and other firms to examine various factors such as
political, economical, social, technological, legal and environmental(Ateba and Prinsloo.,
2019). It is vital for Tesco as it helps in dynamic industrial environment. Various factors are
as follows:-
Political: - this element includes factors like policies of government, governmental
influence in company etc which effects Tesco in following ways:-
 Positive – Tesco sometime gains governmental support because of social works.
 Negative – effects of Brexit and us-china trade war effected Tesco’s business.
Economical:- this include changes in forex rates, credit cost and fluctuation in currency’s
value Tesco gets effected in following ways:-
 Positive – reduction in credit cost may benefit Tesco.
7

 Negative – instability in forex and changes currency’s value can cost much to
Tesco.
Social:- this factor includes population density, religion of area etc which influence
Tesco as under:-
 Positive – Tesco planed its store in a way that attracts each type of people.
 Negative – fulfilling various choices of different peoples may disturb Tesco
arrangements.
Technological:- this is prime factor in modern world which is innovation in technology,
development of online stores this influence Tesco in following ways:-
 Positive – developing online stores by Tesco let them acquire additional market
share.
 Negative – changes in technology at pace may come costly to Tesco.
Legal :- these include laws such as consumer protection laws, food safety laws etc which
affect Tesco in following ways:-
 Positive – Tesco follow all consumer safety laws and produce genuine products.
 Negative – allegations for age-gender biasness in 2016 affected Tesco’s
credibility.
Environmental: - this includes physical environmental factors like global warming, climatic
changes etc influence Tesco in following ways.
 Positive – Tesco initiatives of 4R’s and waste management system improved their
goodwill.
 Negative – keeping updated with environmental laws of various countries insures
additional cost to Tesco .
A review of an organisation’s strategic plan (Business Plan), providing an action plan for the
organisation on the basis of a change.
A business plan is basically a formal written format which contains the goals of the
business and methods for attaining these goals. In addition to this, a business plan also
contains the time-frame for achievement of goals(Hertz and et.al., 2017). TESCO has
achieved competitive advantage through development of retail low prices, experienced
customer service and high quality which leads towards growth
Mission and Vision of TESCO company
8

The mission of TESCO company is that to be champion among their customers. They
want to provide better experience to their customers in terms of their shopping.
The vision of TESCO company is that “to be the most highly valued business by the
customers they serve, the communities in which they operate, their loyal and committed
colleagues and their shareholders as well.
Objective: TESCO basic objective is that to be leading retail supermarket and also provide
good quality products and services at low cost so that they are cheaper than their
competitors( Meresa., 2019). They also want to maximise their sales and also increases profit
into positive manner.
Tactics: The basic tactics adopted by the company is in terms of cost leadership,
differentiation and focus strategy as well.
SWOT analysis of TESCO company
STRENGTHS
 TESCO is the biggest retailer and leading supermarket in the UK country.
 It has also largest market share and also has leading position in this international
market.
 TESCO has also launched different forms of stores.
WEAKNESSES
 TESCO can’t perform their operation activities successfully in US and Japan
countries.
 TESCO has also faced decreasing operating profits
 The low-cost strategy adopted by the company leads towards reduced profit margins
OPPORTUNITIES
 TESCO has developed strategic partnership with reputed companies which will offer
an excellent opportunity for company.
 Joint ventures is the best option through which TESCO company can expand
business area as well.
 Online shopping is the best way through which they can atytract customers on a large
scale.
9

THREATS
 TESCO has faced social media backlash when they launched their Christmas ads in
the year of 2017
 The trade deals and cost matters act as threat parameter due to BREXIT situation.
 Government regulations and legal and tax matters affected the operational efficiency
and performance of the TESCO company.
Porter Five Forces Model
Bargaining power of buyers: The bargaining power of buyers in UK country is low as they
are not properly organised and it is unlikely that they switch to some other option.
Bargaining power of suppliers: TESCO negotiates in a very hard manner with their
suppliers in order to increase their profit margins.
Threat of new entrants: It is very low in the UK supermarket industry because of its capital
requirements.
Rivalry amongst existing competitors: TESCO has number of powerful competitors.
These competitors spend heavily on advertising parameter(Coen and Vannoni., 2020).
Although TESCO is leader into the market but still it has intense pressure from their
competitors.
CONCLUSION
The above stated report concludes that strategic management plays a very important
role in this business world. To implement the process of strategic management it is important
to identify goals and objectives of an organisation and also should have basic understanding
about strategies used by an organisation. It has been concluded that there are some models
and analysis which are important in terms of analysing the eternal and internal business
environment. It has been determined that for making a business plan it is necessary to have
an idea about vision and mission of an organisation.
There should be clarity about different types of analysis and forces which will contribute in
terms of achieving the overall objectives and targets of an organisation.
10

REFERENCES
Books and Journals
11

Bonsu, S., 2019. Strategic management: The concept of competing with self. Journal of
Marketing and Management, 10(2), pp.20-44.
Witcher, B. J., 2019. Absolute essentials of strategic management. Routledge.
Doyle, T. and Brady, M., 2018. Reframing the university as an emergent organisation:
implications for strategic management and leadership in higher education. Journal of Higher
Education Policy and Management, 40(4), pp.305-320.
Secundo and et.al., 2015. An intellectual capital maturity model (ICMM) to improve
strategic management in European universities: A dynamic approach. Journal of intellectual
capital.
Miller, E. W., 2018. Nonprofit strategic management revisited. Canadian journal of
nonprofit and social economy research, 9(2).
Aithal, P. S. and Aithal, S., 2019. Strategic Management of Universal Technologies for
Redefining Productivity & Performance. International Journal of Applied Engineering and
Management Letters (IJAEML), 3(2), pp.81-95.
Fynn and et.al., 2016. Strategic management of livestock to improve biodiversity
conservation in A frican savannahs: a conceptual basis for wildlife–livestock
coexistence. Journal of Applied Ecology, 53(2), pp.388-397.
Aithal, P. S. and Acharya, R. K., 2016. Strategic Management Models & Indian
Epics. International Journal of Management Sciences and Business Research, 5(4), pp.180-
189.
Ateba, B. B. and Prinsloo, J. J., 2019. Strategic management for electricity supply
sustainability in South Africa. Utilities Policy, 56, pp.92-103.
Hertz and et.al., 2017. Neural computations underpinning the strategic management of
influence in advice giving. Nature Communications, 8(1), pp.1-12.
Coen, D. and Vannoni, M., 2020. The strategic management of government affairs in
Brussels. Business & Society, 59(4), pp.612-641.
Meresa, M., 2019. The Effect of Strategic Management Practices on the institutional
Performance; the case of Dedebit credit and saving institution in Eastern Tigray.
Online
TESCO company profile,2021[Online]Available through:< https://corporatewatch.org/tesco-
company-profile/>
VRIO framework of TESCO,2021[Online]Available through:<
https://embapro.com/frontpage/vrioanalysis/4011-fdi-tesco/>
12