Strategic Management: Tesco's Models and Decisions for Growth

Strategic management

Slide 1
Introduction
Strategic management is the process of making efforts for effective management of all
the operations that are performed by the enterprise for meeting the long-term objectives. It is
very important for all the companies to make sure that they are paying attention towards it as it
will facilitate the accomplishment of difficult tasks. In order to make sure that all the
predetermined plans are being implemented successfully it is very important for all the entities to
pay attention towards it. It will help them to analyse the steps that should be taken to meet future
goals and objectives. This presentation is based upon Tesco which is one of the largest
multinational supermarkets around the world. It is operating its business in various countries.
This presentation is mainly based upon the value of different models and decisions that were
taken by the enterprise to attain growth. For this purpose, various frameworks are discussed in
this presentation. These are porter’s five forces, SWOT analysis, mission, vision, strategic
direction of the enterprise. Apart from this, VRIO model, competitive advantage of company,
Ansoff matrix, resource implications of recommendations are also covered in it.
Slide 2
Strategic directions followed by Tesco in previous years:
Tesco is one of the largest retailers which are operating business at global level. It is very
important for the organisation to analyse all the strategic directions that are followed by it so that
their impacts could be determined. Some of them are human capital strategy, strategic planning
and technology strategy. All of them are the strategic directions that were followed by Tesco in
previous years. Human capital strategy helped Tesco to enhance the profits by 20% which
provided growth to business. With the help of strategic planning Tesco tries to analyse suitability
of the strategy which will be implemented in future. With the help of it, Tesco recorded a profit
of 3.8 billion from sales. Technology strategy is used by Tesco to make changes in the
technology which is used by it. It helps it to attain growth.
All the strategic directions are valuable for the enterprise because with the help of all of
them the managers can decide that their decisions are able to provide growth to business or not.
By analysing all of them the management can make future decisions on the basis of success of all
of them. As the human capital strategy helped to improve profits so Tesco can make specific
changes to it and follow it again for future so that profits could be increased.
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Slide 3 & 4
Porter’s five forces:
Porter’s five force analysis is used by companies to analyse the impact of five different
types of forces upon functionality of business. These are threat of new entrant, threat of
substitute, bargaining power of supplier, bargaining power of customer and competitive rivalry.
According to the analysis the threat of new entrant for Tesco is moderate and for the
purpose of dealing with it, Tesco is required to pay attention towards the quality of all the items
that are sold by it to the customers. It will help to reduce the possibility of negative impact of
new entrant on business.
The analysis of threat of substitute shows that the power of this force is very high for
Tesco as the clients are buying different items from local grocery stores. In order to deal with it
the enterprise is required to make sure that it formulates effective strategies so that it can attract
the customers.
The assessment of bargaining power of buyers demonstrates that their power of is very
high because of end number of options to them. The number of retailers in UK as well as around
the world is very high so it provides various alternatives to them to choose best from all of them.
The bargaining power of suppliers for Tesco is low because of the large number of them
in the industry. It helps the organisations to choose the supplier which is offering the goods on
lowest price so that funds could be saved for future.
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