Strategic Management of TESCO: Competitive Advantage, PESTLE Analysis and Porter's 5 Forces Model

Strategic management
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Table of Contents
INTRODUCTION ..........................................................................................................................3
Evaluation of the Purpose, Vision, Mission and Objectives in setting the strategic direction of
TESCO ........................................................................................................................................3
Assessing the competitive advantage of TESCO using the VRIO framework............................4
Analyzing the external environment of TESCO using PESTLE approach ................................6
Assessing the competitiveness of TESCO using the Porter’s 5 Forces Model............................7
Reviewing the TESCO's organizational strategies based on the analysis...................................8
CONCLUSION ...............................................................................................................................9
REFERENCES..............................................................................................................................11
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INTRODUCTION
Strategic management is the method through which a company sets its goals and
objectives in order to make it more compatible in the market (Hunger, 2020). It manages the
resources to attain the goals and the objectives of the organization. In this report TESCO plc will
be analysed by its mission, vision and objective statements to evaluate its strategic management.
How these vision, missions and objectives when integrated helps the company in formulating its
strategies for growth and development will be evaluated. VRIO model which is used to analyse a
company's competitive advantage over its competitors will be used to study the competitive
advantages of TESCO over its competitors in the market. External and internal environment of
the chosen company will be analysed through PESTLE and Porter's 5 Model Approach. How
these approaches helps in accessing the competitiveness of the chosen company will also be
discussed.
Evaluation of the Purpose, Vision, Mission and Objectives in setting the strategic direction of
TESCO
TESCO is Britain's most profitable, oldest and largest retail supermarket chain operating
globally. It sells products like homeware, consumer electronic, beauty products and groceries
and many others. It has physical stores and it operates on online platforms too. It also offers
banking products like loans, savings accounts and credit cards.
Purpose: A purpose of a company is the reason because of which it is standing in the market. It
is the affirmation for which the company decided to corporate in the first place. The purpose of a
company never changes rather, it goes along as the company grows, develops and diversify. It
binds the whole organization together (Fuertes and et al., 2020).
Purpose of TESCO is to serve its customers better and good products and services. It
wants to give its customer a better experience every time they buy something from them. It try to
provide a better and easier standard of living to its people and customers.
Vision: Vision of a company is what or how the company view's itself in the future. A vision is
long term goal of an organisation. Day to day activities are performed to achieve the mission in
the ultimate future. Vision is achieved through missions. It is a roadmap for the company which
the company follows and focuses on.
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The vision statement of TESCO is to be highly valued business by its people i.e. its
customers, employees, shareholders and communities in which it operates. It wants to be the
high valued company by its customers and to be appreciated by its stakeholders.
Mission: Mission is the short term goals of a company. It describes what exactly the business is
about. It generally gives the answer of how the company will be achieving its visions in the
future. A mission statement is what the employees try to attain each day in the company.
The mission statement of TESCO is to make the things/products which matters the most
to the people. It also wants to achieve customer loyalty.
Objective: Goals are the steps to attain vision of the company however, the Objectives of a
company are brief time bounded targets that are performed to attain goals of the company. They
are achievable, measurable, and relevant in nature. Objectives are more specific than goals
(Ansoff and et al., 2018).
TESCO have many objectives, some of which are to increase its market share, product
development and product diversification, increasing profits and sales, providing products at
cheaper rates and developing its digital coverage.
Mission, vision and objectives of a company are inter-related. Mission and vision of a company
are the means to communicate its purpose to its stakeholders. If the employees can understand
the purpose of the organization clearly, then only they can perform its mission and vision. They
formulate strategies of a company. In vision statement, mission is explained as to guide the
strategy. The strategy formulated by the company is evaluated on the basis of how well the
mission and vision of the company are attained. Mission and vision statements of a company
provides direction for achieving goals and also, reveals the success of these strategies.
Assessing the competitive advantages of TESCO using the VRIO framework
VRIO is a composition of 4 elements: value, Rarity, Imitability and Organization. It is
used to reveal and protect the abilities, strengths and resources which provide the competitive
advantage to a company (Chatzoglou and et al., 2018). It is created after the company have
developed its vision statement. It helps the company in formulating the strategy through which it
will approach the market.
TESCO uses the VRIO structure very frequently to formulate competitive advantages
upon its competitors.
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