Strategic management analysis - Tesco Plc

STRATEGIC
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
Q1 Brief Introduction of the selected organization................................................................3
Q2 Explain the Analysis of the market environment.............................................................3
Q3 Explain the Company industry and the Competitive Advantage of the company............4
Q4 Explain the Critical Success Factor, Opportunities And Threat Of The Market..............5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
Strategic management is the process of setting the strategy and guiding the organization to go on
the same direction. Tesco, is a British company well-known for the groceries and general
merchandise retailer store chain. This report highlights the PESTLE report of organization.
Further this report highlight the Analysis of Industry and sector and in the end it highlights the
critical success factor by the help of porters five model.
Q1 Brief Introduction of the selected organization
Tesco Plc. trading as Tesco, is a British company headquartered in Welwyn garden city,
Hertfordshire, England, UK. Tesco is well-known for the groceries and general merchandise
retailer store chain all across the globe. Tesco has their shop in seven countries including Asia,
Europe and ranked first in the UK with the market share of 28.4%. Tesco now looking to grow
globally by investing highly in the developing country at initial stage itself which has proven
beneficial for the organization in past also as Ireland, hungry and Thailand are the country where
company enter at the initial stage itself and now they are the market leader over their, but it has
always been difficult for the company to adopt the culture of the new country which follow the
different culture than UK countries like Us and India and try it difficult to grow the business as a
region they have to shut down their business from the US in the past.
Q2 Explain the Analysis of the market environment
PESTLE
Political factor
As the Tesco operates in the global market business is very much affected with the political
factor as they have to dealt with the flexibility of the Political rules depending upon the country.
Tax rates, acts of legislation and of course, the stability of the country it operates in are the few
factors which impact the organization as a region they have to reduce the profit margin as
increasing the price will eventually hurt the company in competitive market (Ansoff And et.al.,
2018).
Economic factor
Economic factor are the factor which relates to the economic performance of the country. Factor
include inflation rate, demand and supply, labour rate etc. Tesco is affected by the labour rate as

Tesco mainly operated in the UK and the labour rate of the country is too high which eventually
has risen the cost of the organization (Breugelmans and Campo, 2016.)..
Social factor
Social factor includes the factor related to the society trend, culture and population Analytics.
Tesco has successfully defended this factor as trend of the consumer in the UK is shifting toward
one stop shopping which has helped the business in growing as Tesco has increased variety of
the product which was offered by the organization in the past.
Technology factor
It is the factor which was successfully defended and applied by the organization in their
operation which has helped the business in growing as it has increased the efficiency of work in
the organization. The changes which has been brought by the Tesco are launching the online sale
of the product with the help of the website and home delivery service. Self service checkout
point is the second change which has been brought by the organization with the help of a
technology (Breugelmans and Campo, 2016).
Environmental factor
Factor related to the environment nature of the country are included in it includes tourism,
farming, agriculture types of factor. Tesco is also trying to defend the same by taking into the
motive or goal that the Tesco will be reducing the carbon footprint with the extent of 50% till the
end of the 2020. Tesco also uses the environment friendly packaging material in the packaging of
their product.
Legal Factor
Factor related to the government policies and legislation has impacted the business as they have
to follow the code of conduct in producing the good which eventually hampers the work, but at
the same time good relationship with the government has helped the organization in defending
the legal factor comfortably (PESTLE, 2016).
Q3 Explain the Company industry and the Competitive Advantage of the company
The retail industry of the UK is known as a back born of the UK economy as this is the
industry which generated 395 billion pound sales at the end of the year 2018 and not only that
the retail industry of the UK is the largest sector of the UK which employee maximum number
of the employee. Retail industry includes the encompasses shops, department stores,
supermarkets, market stalls, door-to-door sales people and internet retailers services. Retail

industry has seen a goof growth in the UK market in the past and continuing the growth in the
current market also as This is the industry which is had attracted larger number of a business.
Retail industry in UK has seen a good growth but it will be wrong to say that all the product has
contributed same in the growth as the non-food product of the retail store is not able to attract the
customer toward the store and the same is seen in the Tesco also has more than 60% of their
product which are sold are the food product. Retail industry is the industry in the UK which need
to be flexible in their working as the product which are sold by the industry always see a change
in trend and demand of the consumer (Rastogi and Trivedi, 2016.).
As already explained in the above para that the number of the business in the retail
industry is high company dealing in the retail industry has to survive the good amount of the
competition as a result company has to have a good strategy to have a competitive advantage.
TESCO, ASDA, Walmart and Sainsbury are the company who rules the retail market in the UK
and offers a good competition for new entrant in the markets.
Q4 Explain the Critical Success Factor, Opportunities And Threat Of The Market
Critical success factor and the of the market can be studied well with the understanding of the
Porters Five model.
Competition in the Industry: Competition in the industry is the factor which is impacting the
organization in the Industry but at the same time it is the very critical success point for the
organization in the industry any innovative or new product which was not brought by anyone in
the industry can help in attracting the customer.
New entrant in the industry: New entrant always bring the new and innovative thought to the
industry which helps the market to grow but at the same it hampers the growth of the other
company in the industry which eventually affect the business (Hill, 2017).
Power of customer: It is one of the biggest success factor for the business to understand and
satisfy need of the customer but at the same time as number of competitor is high it proves
difficult for the organization to attract customer.
Power of Supplier: It is not that big success factor for the market as the Supplier used to supply
the raw material to more than one company in the industry at some price but some big leader
purchase the good in bulk which help them in getting discount.
Threat of Substitute product: This is the factor which is not affect the market as there is no fix
product line.

When we analysed the market on basis of opportunity and threat it can be said that the
market offers a good opportunity for the organization if they are having innovative idea to bring
in the market otherwise threat of the market always proves difficult for the business to survive
some threats are High competition, Less profit margin, regular changing technology (Mathooko
and Ogutu, 2015).
CONCLUSION
After going through it has been summarized retail sector is a very good and mature sector in the
UK as offers a good opportunity to the business to grow but at the same time it offers a variety of
the challenges to the new entrant in the market which makes difficult for the new entrant to
survive as there are some market leaders who rule the market and proves as a tough competitor
to beat.

REFERENCES
Books and journals
Ansoff, H.I. And et.al., 2018. Implanting strategic management. Springer.
Breugelmans, E. and Campo, K., 2016. Cross-channel effects of price promotions: An empirical
analysis of the multi-channel grocery retail sector. Journal of Retailing. 92(3). pp.333-351.
Carraher, S.M., 2018. An examination of an instrument to measure Porter’s Five Forces Model.
In International Journal of Arts & Sciences Conference at Harvard University.
Hill, T., 2017. Manufacturing strategy: the strategic management of the manufacturing function.
Macmillan International Higher Education.
Mathooko, F.M. and Ogutu, M., 2015. Porter’s five competitive forces framework and other
factors that influence the choice of response strategies adopted by public universities in
Kenya. International Journal of Educational Management.29(3). pp.334-354.
Rastogi, N.I.T.A.N.K. and Trivedi, M.K., 2016. PESTLE technique–a tool to identify external
risks in construction projects. International Research Journal of Engineering and
Technology (IRJET). 3(1). pp.384-388.
Online
PESTLE, 2016 [ONLINE] Available through <https://pestleanalysis.com/what-is-pestle-
analysis/>