Strategic Management: Definition, Process, and Impact on Tesco

This report provides an overview of strategic management and its impact on Tesco. It includes a definition of strategic management, an analysis of the process used by Tesco to determine their strategies, and an assessment of the internal and external environment of Tesco. The report also includes a SWOT analysis, PESTLE analysis, and action plan for improving the internal environment of Tesco.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Providing the definition of the strategic management:................................................................3
Analysing the process used by the organization to determine their strategies in the context of
the firm “Tesco Plc.”:..................................................................................................................4
Impact of Internal and External Environment of Tesco ..............................................................5
Strategic Business Plan................................................................................................................7
Action plan for Improving Internal Environment .......................................................................7
CONCLUSION............................................................................................................................8
REFERENCES................................................................................................................................9
Appendix........................................................................................................................................10

INTRODUCTION
Strategic management is the process of setting goals, procedure and objectives related to
the company in order to make the company more capable and competitive (Makadok, Burton,
and Barney, 2018). The report based on the strategic management of the firm Tesco plc. A
British multinational groceries and merchandize retailer. Operating with its headquarter in
Welwyn garden city, England. The firm operates with around 367321 numbers of the employees.
The report will be including the proper definition of the strategic management. A critical
assessment related to the process used by organizations to determine their strategy and the
impact of the internal and external environmental variation on the organizational strategy. Later
in the report, a review of the organization's strategic plane on the basis of the internal and
external environment will be shown.
MAIN BODY
Providing the definition of the strategic management:
Strategic management is the process that helps in defining the goal of the company,
procedures and objectives of the company to help it achieves the competitive edge in the market
and make it more capable to survive in the business run. Strategic management works by looking
in the effective way on the staff and use of the resources to achieve the overall goal. This
management includes the strategy evaluation of the firm, internal organizational analysis and its
strategy execution in the overall company process to make the firm achieve its goals and
objectives. The term strategic management helps the firms in finding more of the ways to
achieve the goals and become more of the competitive in the business run. Strategic management
helps in planning out the practices that are related to the planning process of the organization and
with its all important aspects (Bryson, and George, 2020).
Strategic management plays an important role in the development of the firm and analyse
their main areas of operations also by making them where the improvement is required to have
smoother business operations. The firm can follow out the analytical process that can help the
firm in identifying the threats and the opportunities for the business and helps the business to
grow by following some simple guidelines. Organization can follow either the prescriptive
approach or the descriptive approach of the strategic management. In the prescriptive model the
strategies are made in a that they help in development and execution of the firm. Under the
descriptive approach, it describes that how the firm can develop these strategies by implementing

them in the organization. Strategic management helps in the firm to have the financial and non
financial benefits. This management plan helps the firm to plan for its future and helps in setting
the direction for the organization and for its employees.
Analysing the process used by the organization to determine their strategies in the context of the
firm “Tesco Plc.”:
The primary purpose defined by the process is to help the firm, to set the goals for the company
and provides with the actionable plan to achieve those goals. The stages involved in the process
of the strategic management of the company are as under:
Understanding the need of the strategic plan: the first step of the plan is to identify the need of
the plan in the company. In the management process the thing needed is to be aware about the
environment in the industry with in which the firm is operating so it will be easy to identify the
opportunities for the development in the business and internal operations should also be taken in
to account so that the problematic spot can be identified and solved.
Setting goals: this comes as the second step in the process. The goal can be set up as per
individual department and for the overall business depending on the purpose. A goal for the
business must be set in a way that it must be specific to all members by making them understand
what all proper activities are to be performed to achieve the goal. Everything in the goal must be
detailed in the specific way (Witcher, 2019).
Developing the assumptions or the premises: while making the plan the things related to the
future must be kept in mind that makes to know about the development in the premises. Forecast
must be made to involving the certain plans for the future of the business. Development of both
internal and external premises is needed. Internal premises includes resources needed to facilitate
business operation and external premises includes the political, social and technological
environment.
Searching about the different ways for achieving the objectives: research on the different
ways to achieve the objectives must be done as it provide flexibility to the managers to direct
their team. Some might prefer innovative solutions and some might prefer traditional ways of
achieving the goal. The goal must be narrow down that it put down some choices. After the
identification of solutions, the best one must be used to achieve goal (Graebner, 2021).
Choosing in the action plan: the action plan must be chosen to make all the options help in
achieving the success for the business. For selecting the action plan few things must be kept in

mind that are like a costly plan must be avoided, plan must not have more of the negative
consequences, and an adaptable plan must be chosen for the successful operations.
Developing the support plan: after selecting the action plan, second plan must be developed so
that it can help in executing the primary plan. For instance, if the organization is planning to
launch new product in the market the secondary plan must be developed to implement the first
and the main plan (Karpenko, and et.al., 2019).
Implementing the strategic plan: the final step in the overall process of the strategic
management, comes up the implementation of the plan. The manager of the firm must include
their skill set so that the smooth functioning can be facilitated and the manager must make sure
that the team members must understand their overall responsibilities. After the implementation
of the plan of the strategic management the members must be guided to work in team and help
the organization to achieve success.
Impact of Internal and External Environment of Tesco
Tesco's Pestle Analysis
PESTLE model is the analysis of business environment to find out the Political, Economical,
Social, Technological, Legal and Environmental factors.
 Political Factors: As Tesco operates globally, political factors affects the working of the
company. It includes tax rates, tariff policies, foreign trade policies etc. Due to the
ongoing financial pandemic in the world, Government encourages business to provide job
opportunities. Tesco played important role in providing job opportunities to people and
diversified its workforce.
 Economic Factors: The economic factors are the main concern of Tesco, as they include
monetary terms like cost, prices,and profit and the company should be aware of the
changes. Due to financial circumstances, Tesco focussed more on essential products than
the luxury products.
 Social Factors: This factor depends upon the consumer beliefs and community.
Nowadays, customer are shifted to one stop destinations, so Tesco started dealing in non-
food items like clothing and household for gaining customer satisfaction(AKMAN,
2020).
 Technological Factors: Technological advancements have brought new opportunities for
Tesco. It introduced online shopping facilities for consumer to provide home delivery to

consumers. They also developed their own mobile app known as PayQwid which is used
for online payments.
 Environmental Factors: With the increasing Pressure of government to save
environment and to achieve the benefits of Social welfare(Rosnizam and et.al, 2020).
Tesco has taken various initiative to save the environment.
 Legal Factors: Government policies and restrictions directly affects the performance of
Tesco. UK's Tax rate system, intellectual property rights also affects the industry in UK.
In 2016, employees took legal action against gender description prevailed in company.
PESTLE analysis helps Tesco in examining the external factors which impacts its business along
with legal and environmental factors. It helps the organization by increasing the product demand
and by diversifying the workforce.
SWOT ANALYSIS
Strengths
 Tesco offers variety of product range starting from clothing range, homeware items and
telecom services. It is diversifying the range of products for satisfying the needs of
consumer at one place.
 Tesco use modern technology according to the needs and preference of the consumer.
They recently launched RFID barcode system and online payment facilities,
Weakness
 Tesco recently delayed in making payments to suppliers to improve its own financial
positions. This shows an unethical behaviour of organization.
 It also did workers exploitation by doing gender biasness in factories and by abusing
migrant workers(Djellabi and et.al, 2021).
Opportunities
 Tesco should collaborate with different brands to diversify the work and to increase
the profit margins. It can bring good opportunity for Tesco.
 Due to the pandemic situation, there is a huge decline in the number of employment.
Tesco can hire new employees for the growth and development of the company.
Threats
 Inflation in economy can become a risk factor for Tesco as it reduces the purchasing
power of the customers. Eventually, this will lead to less profit ,margins.

 Tesco is also facing huge competition as so many industries are dealing in the same
products. Industries like Walmart can become a threat for Tesco's market.
SWOT is an important technique used by the Tesco to identify the internal factors of
organization which helps the organization to understand the positive traits and also helps to
overcome the negative traits. It also includes external factors which helps the organization to
identify the available benefits to the organization and to analyse the negative traits to the
business.
Strategic Business Plan
( Attached in Appendix)
Action plan for Improving Internal Environment
 Targeting: The company is only focussing on the targeted market which is diabetic
patients. This is going to create a small market for Tesco as the product is going to be
consumed by the diabetic patients only. This will lead to lower profit margins and
decrease in sales.
These internal environment can be improved by creating changes in the Targeted market.
It should focus on the product which is beneficial to both diabetic patients and the general
people. It can also make some strategies which helps people to get free from diabetes. It must be
made by focussing on the overall health of the organization. This can be done through analysing
market and implementing strategies accordingly.
 Pricing: The company is following the Skimming method of pricing, where the company
is setting high prices for product and lowering them when the competition enters. Due to
setting up high prices for the product, most of the consumers may not buy the product.
This is an important factor for company, as consumers are highly influenced by the
pricing of the product. The company should make changes in the pricing by following a
competitive pricing method to gain a market share and by keeping the relevant profit margins.
 Segmentation: Tesco is segmenting a narrow market by focussing on the demographic
segmentation by grouping customers according to the age and behaviours. It is focussing
on the age group of 40-60 years, as this age group is going to be more cured with
diabetic. This is going to create a small market for Tesco(Camilleri, 2018). This will not
help Tesco to widen its market and will affect as barrier for Tesco in accomplishing the
goals.

Tesco should segment its market by including geographic, demographic, behavioural and
Psycho graphic segmentation. It helps in improving the performance of business and will
increase the product development.
 Place: Tesco is going to make available its products through its present physical stores.
This will lead to decline in sales as it is impossible for all consumers to reach to the place
where stores are situated.
It is an important factor for business as it will help in increasing the sale and the profit
margins of the company. Tesco should also make available its products through online platforms
to increase the range of area.
CONCLUSION
From the above report, it was concluded that the strategic management is the process that
helps in determining the objectives, process and goal of the business. Tesco uses strategic
management achieve the goal of business and to get a competitive advantage in the market. The
report also focuses on the ways which helps the organization to identify the strategies which
implements best to there business. It also includes the micro and macro environment of business
and there impact on business. It also includes the Business plan and action plan of the
organization which helps in accomplishing the goals of the organization.

REFERENCES
Books and Journals
AKMAN, M. K., 2020. Defence Management and PESTLE analysis. Ante Portas-Security
Studies. 1(14). pp.93-102.
Bryson, J. and George, B., 2020. Strategic management in public administration. In Oxford
Research Encyclopedia of Politics.
Camilleri, M.A., 2018. Market segmentation, targeting and positioning. In Travel marketing,
tourism economics and the airline product (pp. 69-83). Springer, Cham.
Djellabi, R. and et.al, 2021. SWOT analysis of photocatalytic materials towards large scale
environmental remediation. Current Opinion in Chemical Engineering. 33. p.100696.
Graebner, M.E., 2021. EVOLUTION OF QUALITATIVE RESEARCH METHODS IN
STRATEGIC MANAGEMENT. Strategic Management: State of the Field and Its
Future. p.99.
Henriques, P. L., Matos, P. V. and Jerónimo, H. M., 2022. Eager to Develop Sustainable
Business Ideas? Assessment through a New Business Plan (BP4S
Model). Sustainability. 14(2). p.1030.
Karpenko, and et.al., 2019. Strategic management of entrepreneurship based on smart
technologies. Journal of Entrepreneurship Education, 22(5). pp.1-6.
Lim, W.M., 2021. A marketing mix typology for integrated care: The 10 Ps. Journal of Strategic
Marketing. 29(5). pp.453-469.
Makadok, R., Burton, R. and Barney, J., 2018. A practical guide for making theory contributions
in strategic management. Strategic Management Journal, 39(6). pp.1530-1545.
Rosnizam, M. R. A. B. and et.al, 2020. Market opportunities and challenges: A case study of
Tesco. Journal of the Community Development in Asia (JCDA). 3(2). pp.18-27.
Witcher, B.J., 2019. Absolute essentials of strategic management. Routledge.
Online
What is PESTLE Analysis? An Important Business Analysis Tool. 2022. [Online]. Available
through: <https://pestleanalysis.com/what-is-pestle-analysis/>

Appendix
Vision
Tesco's vision is to become the most valued business by there customers, the
communities in which they deal and by their trustworthy stakeholders.
Mission
Tesco's mission is to serve its customers with the high quality product to satisfy their
needs which helps them in getting better quality of life(Henriques, Matos and Jerónimo, 2022).
Customers want good products with great value and it's there duty to provide them.
Business Objective:
 Tesco increases the revenue rate by 6% for the year 2021-22 It is going to increase the sales by 3% at constant rates from last year.
Description of product and Services:
According to the current situation of ongoing world pandemic has made people realize
the importance of their health. Industries dealing in healthy food has shown a rapid growth after
pandemic. All industries are willing to enter into the healthcare products. Tesco is launching new
products known as diabetic drinks which are made for the people suffering from diabetes. This is
a sugar free drink with some herbs which helps in controlling diabetes.
Competitor Analysis
Basis of difference Tesco Sainsbury
Pricing Method Tesco uses the price
skimming method.
Sainsbury uses the
competitive pricing method.
Product Range It deals in wide variety of
products.
It deals in narrow variety of
products.
STP Approach Segmentation- Tesco is going to place more focus on the demographic and lifestyle
segmentation as they are focussing on the diabetic patients and also the preference of the
consumer. Targeting- The companies main target is to satisfy the needs of diabetic patients by
creating a diabetic drink.

 Positioning- Tesco is going to positioning the market with diabetic drink. It will contact
the consumer through promotional strategies.
Marketing Mix Product- The companies product must satisfy the needs of the consumer. Drink must be
made by keeping in view the needs of the consumer. Price: The price of the drink is decided by keeping in mind the cost of the product and by
keeping a relevant profit margin. Place: Tesco's diabetic drink is going to be available in all the physical stores. Promotion: The company is going to promote its product through advertising and social
media platforms which will helps the company in increasing sales(Lim, 2021). Physical Evidence: The company is going to meet the specification given by brands. It
will add the flavours mentioned by them. People: The company is going to hire employees according to the skills mentioned. They
will also provide proper trainings to employee.
 Process: Tesco has several departments like production, sales, marketing etc. These
departments are going to help the company to follow proper process .
Monitoring & Control
Tesco monitors and controls the process by collecting information, analysing it and
tracking the process of product towards meeting its strategy.