Waltham International College: Business Strategy Report on Tesco PLC

This report provides a comprehensive analysis of Tesco PLC's business strategy, covering various aspects of strategic planning and implementation. The report begins with an introduction to business strategy, emphasizing the importance of aligning objectives with market realities. It then delves into Tesco PLC's strategic position through organizational audits, including SWOT and value chain analyses, and environmental audits using Porter's Five Forces model. The report also explores the formulation of a new expansion strategy, assessing the roles and responsibilities of personnel involved in implementation, and analyzing resource requirements. Furthermore, it evaluates the contribution of SMART targets to strategy implementation. The conclusion summarizes the findings, highlighting the significance of strategic planning for business success. The report references several academic sources, including books and journal articles, to support its analysis.

Business Strategy
1

Table of Contents
INTRODUCTION ...............................................................................................................................3
TASK 1.................................................................................................................................................3
TASK 2 ................................................................................................................................................3
TASK 3 ................................................................................................................................................3
(a and b) 2.1 Analysis of strategic position by carrying out organizational audit of Tesco PLC.....3
TASK 4.................................................................................................................................................4
(a) 2.2 Environmental audit for Tesco PLC ....................................................................................5
TASK 5.................................................................................................................................................5
TASK 6.................................................................................................................................................5
TASK 7.................................................................................................................................................5
(a) Complete a spread sheet template that outlines a basic implementation plan for your new
strategy from Task 5(b) above.........................................................................................................5
(b) 4.1 Assessment of roles and responsibilities of personal charged with implementing new
strategy ............................................................................................................................................5
(d) Evaluate the contribution made by the setting and applying of SMART targets to the
achievement of strategy implementation for Tesco.........................................................................6
CONCLUSION ...................................................................................................................................6
References............................................................................................................................................8
2

INTRODUCTION
There are various methods to meet the success in business world but the fact is that the
objectives should be realistic. For this, it is important for the organization to focus on maximizing
strengths and minimizing weaknesses to survive in competitive market. These all will only be
achieved with the help of business strategy (Calof, 2016). It denotes long term business planning
which sets out to accomplish objectives of a business. Without clearly defining it, it is impossible to
attain growth and development in the market place. The following study is relating to business
objectives and to understand its importance within the industries, various cases have taken into the
consideration. Process of strategic planning, formulation of new strategy, approaches to strategy
evaluation and implementation of strategy are major objectives that will be covered during the
research.
TASK 1
Attached in PPT
TASK 2
Attached in PPT
TASK 3
Attached in PPT
(a and b) 2.1 Analysis of strategic position by carrying out organizational audit of Tesco PLC
Organizational audit is a method of determining the nature of environment in which a
company is operating its business. For Tesco PLC, it can be conducted by using various methods
which are following.
SWOT analysis:
Strength
 Opt multi format strategy to increase
customer base every decade.
 Global recognition
 Good leadership style International presence
Weaknesses
 Highly depended on domestic markets
 Poor inventory turnover
 Finance profit level is adversely
impacted because of recent credit crisis
Opportunities
 Growing trends of online shopping
 Opening business in emerging market
Threats
 Increase minimum wages population in
UK
3

such as Asian nations. Strategic alliances with other brands
 Increase competition level
 Economic recessions and credit crunches
 Increase prices of food products across
the world.
Value chain analysis:
Primary activities
Inbound logistic  Get supplies from suppliers at low cost.
 Leading market position and good economic conditions.
 Using vendor rating system.
Operation management  Strong supply chain management process
 Able to decrease handling and carrying charges of the
goods.
Outbound logistic Develop and maintain online and offline relationship with
different business partners.
Marketing and sales Adopting both traditional and digital marketing and sales
techniques to increase sales.
Services Following cost leadership and product differentiation strategies to
increase consumer base
Supportive activities
Procurement  Existing supply chain management system assists in
purchasing various goods from fixed suppliers.
 Automated warehouses
Human resource management Followed structured process of recruitment and selection process
(Makos, 2015).
Technological development Adopting different technologies to improved operational
activities and business process.
Infrastructure Use collaborative working system, administrative coordination
and various support system for taking business decisions.
4

TASK 4
Attached in PPT
(a) 2.2 Environmental audit for Tesco PLC
Porter's Five Force model:
Threat of new entrance For Tesco, the following threat is high because UK grocery
market has been converted into hypermarkets. It has increased
competition level and given huge opportunities to new
companies to enter into the market.
Threat of new substitutes Low because stores of Tesco are near to residential and working
areas which provide convenience to the customers for shopping.
Bargaining power of buyers High because consumer want to buy good quality products at
low prices.
Bargaining power of suppliers Low because suppliers of Tesco belong to food and grocery
industry and they do not want to lose the contracts with biggest
retail company.
Intensity of competitive rivalry High because Tesco has faced direct competition from its strong
rivals in terms of prices, product, promotion etc.
TASK 5
Attached in PPT
TASK 6
Attached in PPT
TASK 7
(a) Complete a spread sheet template that outlines a basic implementation plan for your new
strategy from Task 5(b) above
(b) 4.1 Assessment of roles and responsibilities of personal charged with implementing new strategy
As per the expansion strategy that has been selected for Tesco, the need is to decide the roles
and responsibilities of personnel for implementing the strategy in best possible manner. Role of top level management – This part of managerial team in Tesco will play a key role to
decide over the place where the expansion is to be carried out. They will decide over the
resources to be needed, and formulate aim and objective for the same. A proper time line
5

will also be set by them so as to ensure that strategy has been implemented in the best
possible manner (Hamilton and Webster, 2015).
 Middle level management – There role is to act as a link between top and bottom level
management. They thus analyse the organizational climate as per the strategy to be
formulated. Further the management then informs the top level managers regarding the loop
holes (Stevens and et.al., 2013). They further take meetings with lower level managers to
identify the existing resources and skill set so as to ensure that Tesco’s expansion plan is set
in best possible manner. They can further be involved in discussion circles where ideas can
be suggested by them regarding expansion strategy of Tesco.
(c) Analyse the estimated resource requirements for implementing your new strategy Financial Resources – Finance are a required with respect to Tesco’s expansion strategy.
This is as company will be investing in new products as per the changed market. It will
further require adhering with new channels of distribution channels and setting an enhanced
production capacity. The need here will be to make use of financial resources such as
working capital, bank loans as well as other sources of finance. Human Resources – The Company will further need a set of skilled Human Resources so as
to implement the strategy in best possible manner. The need here is to get a check over
Existing staffing resources and then recruit external employees (Ferrell and Hartline, 2012).
Tesco in terms of its expansion plan will need employees who are well trained, ready to
move abroad as well as good in multi-language.
 Physical Resources – This include varied kinds of operational resources that may assist in
ensuring that expansion plan of Tesco is well in place. Hence the management team of the
company will require resources in form of IT systems, softwares, production facilities etc
(Abraham, 2012).
(d) Evaluate the contribution made by the setting and applying of SMART targets to the
achievement of strategy implementation for Tesco
Application of SMART targets by Tesco is likely to aid in ensuring that the planned strategy
is properly implemented by the company. The SMART criteria is likely to assist in assessing the
overall suitability of objectives that have been set to ensure towards a worthy expansion plan.
Adhering with the criteria is likely to generate a more structured approach that can aid in planning
out for more realistic targets (Piercy and Morgan, 2015).
6

CONCLUSION
It can be concluded from the report that any company including Tesco is required to
formulate proper strategies and make planning in such a way that they can be attained in the best
possible manner. The need here is to maximize strengths as well as reduce the weaknesses of
strategic formulation as well as implementation so as to survive in competitive market.
7

REFERENCES
Books and Journals
Abraham, S.C. 2012. Strategic planning: A practical guide for competitive success. Emerald Group
Publishing.
Allison, M. and Kaye, J., 2011. Strategic planning for non-profit organizations: A practical guide
and workbook. John Wiley and Sons.
Calof, J., 2006. The quest for competitive, business and marketing intelligence: A country
comparison of current practices. European Journal of Marketing. 40(5/6). pp.453 – 465.
Carlson, S.L., Harris, M. and McLeskey, N., 2013. Strategic planning for organizational
effectiveness during dynamic change. Geriatric Nursing, 34(4). pp.335-338.
Conduit, J. and Mavondo, F. T., 2015. Internal Customer Orientation: Antecedents and
Consequences. Springer International Publishing. pp. 208-213.
Coulter, M., 2005. Strategic Management: In Action. 3rd ed. Pearson Prentice Hall.
Dameron, S. and Durand, T., 2013. Strategies for business schools in a multi-polar world.
Education + Training. 55(4/5).pp. 323-335.
Ferrell, C. O. and Hartline, M., 2012. Marketing Strategy. 6th ed. Cengage Learning.
Hamilton, L. and Webster, P., 2015. The international business environment. Oxford University
Press.
Kapferer, J. N., 2012. The new strategic planning: Advanced insights and strategic thinking. Kogan
page publishers.
Mueller, C.B. and Naffziger, D.W., 2015. Strategic planning in small firms: Activity and process
realities. Journal of Small Business Strategy. 10(1). pp.78-85.
Needle, D., 2010. Business in context: An introduction to business and its environment. Cengage
Learning EMEA.
Piercy, N. F. and Morgan, N. A., 2015. Strategic and operational Market segmentation. In
Proceedings of the 1993 Academy of Marketing Science (AMS) Annual Conference.(pp. 676-
676). Springer International Publishing.
Price, A. D. and Chahal, K., 2006. A strategic framework for change management. Construction
Management and Economics. 24(3). pp. 237-251
Stevens, R.E. and et.al., 2013. Strategic planning for private higher education. Routledge
Online
ABOUT PLAN A. 2016. [Online]. Available through: <http://corporate.marksandspencer.com/plan-
a/our-stories/about-plan-a>. [Accessed on: 18th February, 2016].
Core Purpose and Values. 2016. [Online]. Available through: <http://www.tescoplc.com/index.asp?
pageid=10>. [Accessed on: 18th February, 2016].
Farzan, 2008. Internal environment of MARKS AND SPENCER. [Online]. Available through:
<http://farzanalibaloch.blogspot.in/2008/08/internal-environment-of-marks-and.html>.
[Accessed on: 18th February, 2016].
8