Strategic Management: Porter's Model, Case Study, Recovery Plan, Risk Management

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK ..............................................................................................................................................3
Explain M.E. Porter’s model of competition supports the experience of practitioners..............3
Case study approach....................................................................................................................5
Recovery plan..............................................................................................................................6
A risk management strategy........................................................................................................8
CONCLUSION .............................................................................................................................10
REFERENCES..............................................................................................................................10
Books and Journals...................................................................................................................10

INTRODUCTION
Strategic management basically means managing the resources on organisation to achieve
the goals and objectives of the same. Strategic management provides direction to the
organisation and gain a competitive edge in the industry (Venkateswaran and Ojha, 2017). It
includes making strategies by analysing the internal environment and then implementing those
strategies in the organisation. In this report TESCO is taken and its strategies are discussed.
TESCO is a British multinational grocery and general merchandise retailer which has
headquarters in England, UK. TESCO retains its customers by successfully implementation of
strategies. Porter's five force model is used to analyse the competitors in the industry. Afterwards
a case study is used to identify the problem related to strategic management. There is a recovery
plan associated with TESCO which is developed by CEO. In the last there are strategies through
which the risk in the organisation can be reduced and will lead to increase the profitability
position of the company.
TASK
M.E. Porter’s model of competition that supports the experience of practitioners
Porter's five forces model
This model is used by organisations to identify and analyse competition in the industry
and how they can help the particular organisation to grow. TESCO operated in international
market and it is important for them to identify the strategies followed by the competitors and
then make strategies which are beneficial for them and help them to achieve the competitive
edge. The five factors in relation to TESCO are discussed below:
 Threat of substitute products: This factor of Porter's five forces model tells about the
competitors that are offering related products and if the price rises or for any reason the
customers are unable to get the product offered by the company they can switch, so if the
customers easily switch there is high threat of competitors. TESCO has established a
brand image in the market and offers a variety of products in the market, being in retail
industry there are many competitors that offer the same product. As the organisation has
already established a name customers normally don't switch to others. But there are direct
competitors so there is moderate threat of substitute products.

 Threat of new entrants: The company that is gaining profit and has less barriers to entry
, new entrant try to come in that industry and gain profit. As already mentioned TESCO
has established such a big name in the market that can not be established by these new
entrants (Hitt, Arregle and Holmes, 2020) . Also the capital requirement to make such a
big name in the market is also high. TESCO has global presence which comers with time
and those new entrants will take time to build this presence in the market.
 Competitive rivalry: this is the era of competition and normally there is competition in
every industry. TESCO is in retail business and grocery store so the completion present is
large. There are direct competitors of the company which offer same type or little
different products in the market. The major competitor is ASDA who has global presence
and also sell the products cheaper than TESCO. This leads to price war and TESCO
should make strategies to gain the competitive advantage and offer some discounts and
give offers to attract the customers. As this is having negative impact on the customers
and to retain the loyal customers the company should make policies and strategies which
are beneficial for the organisation.
 Bargaining power of buyers: This factor shows the power of customers in relation to
competitors. No doubt there are many competitors of TESCO in the industry but the
name they have gained due to providing effective services and quality food to the
customers (Sancino, Garavaglia, Sicilia, and Braga, 2020) . TESCO has a loyal customer
base and they customers are satisfied by the services of the organisation. So normally
loyal customers don't switch as they have habit of good services and quality food. So
from this point it can be said that there is low bargaining power of buyers in TESCO
which will lead to increase in sales as well as profitability of the organisation and gain the
competitive advantage in the market.
 Bargaining power of suppliers: There are large number of suppliers for retail industry
and TESCO also has many small suppliers that serve them. These suppliers feel privilege
to serve TESCO as it is such a big organisation and serving it is a good thing for them.
Also there are many suppliers in the industry so if they will not provide the products on
time then the organisation can easily switch among the suppliers. So the bargaining
power of suppliers is low in context of TESCO.