Strategic Planning in Tesco: A Critical Assessment of Internal and External Environment

This report evaluates the internal and external analysis of environment on Tesco company with using relevant models. It includes a review of an organisation’s strategic plan (Business Plan), providing an action plan for the organisation on the basis of a change in either the internal OR external environment.

Business Management
BMP6002 Strategic Management
Strategic Planning
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Contents
Introduction 3
Definition of strategic management 3
A critical assessment of the process used by organisations to
determine their strategy 4
A critical evaluation of the impact of internal and external
environmental variation on organisational strategy 5
A review of an organisation’s strategic plan (Business Plan),
providing an action plan for the organisation on the basis of a
change in either the internal OR external environment. (The
Business Plan is included as an Appendix) 9
Conclusion 11
References 12
Appendix 13
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Introduction
Strategic management involves the formation and execution of objectives and
achieves the goals on behalf of stakeholders or owners (Afanasieva and et. al.,
2020). This includes the process of achieving objectives which makes the company
more competitive in nature. It includes the use of human resources and strategies in
efficient manner to achieve organisational goals. Strategic planning provides the
proper guidance and regulations for implementing decisions such as hiring process,
developing new techniques for development of company in market. Tesco is t he
chosen company for this report (Ansoff and et. al., 2018). Tesco company was
founded in the year 1919, 103 years ago by Jack Cohen. Company has its main
office in Welwyn Garden City, Hertfordshire, England, UK. Tesco is British
multinational company with general merchandiser in London. This report includes the
proper meaning of strategic management and have process of assessment in Tesco
company to determine strategic management. This report also evaluates the internal
and external analysis of environment on Tesco company with using relevant models.
At last, it includes the business plan that will help company to implement the change
detected during external environment analysis.
Definition of strategic management
Strategic management is the ongoing functions of company such as planning,
analysing, evaluating and assessing all decisions that organisation needs to fulfil
their objectives (Cui, Allan and Lin, 2019). Strategic management was developed to
achieve the organisational goals in competitive and dynamic market. It includes the
process or developing plans and strategies to become more efficient and effective in
market full of competition. The term strategic management is based on the
companies structure, culture, operations and skills of human resources. Tesco's
strategic management help them in better understanding the concept of companies
formation and their goals and missions. These strategic planning in Tesco company
help them in making decisions and initiates new goals according to the external
environment needs (Henry, 2021). It includes the proper evaluation of the internal as
well as external environment which help in building strategies according to the future
requirement in business. Strategic management is necessary for all types of
companies despite of their sizes, roles and profit generation. With the help of this
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term strategic management is beneficial for companies to work in direction to
achieve their goals. It defines the each step involved in the process of achieving
success in competitive market with full of rivalries. Tesco has used the various
strategies to sustain position in the market with strong brand value. Tesco provides
the customers to shop at one stop, which gives them advantage of company to
generate more revenue . Tesco also offers the advantage of good pricing strategy to
its customers over its competitors in market with same product serving. Tesco also
have many more strategies for sustainable growth and also provides the awareness
about the companies scope and future. Strategies has been implemented by the
managers of Tesco after analysing the external as well as internal environment to
get prepared for the future challenges and growth opportunities. Strategic
management plays important role in accomplishing the objectives set by higher
authorities. Tesco is now planning to develop their technological software's to secure
data regarding customers and investors in efficient way.
A critical assessment of the process used by
organisations to determine their strategy
Strategic management process plays vital role in the success of any company
(Hitt, Ireland and Hoskisson, 2019). Every company needs to form an effective
strategies in order to achieve the desired goals set by management authority. Tesco
also need the proper strategic management process to function smoothly and work
effectively in direction to gain profit in competitive market. Tesco has analysed the
external environment in market and after that implemented the strategies
accordingly. Some of the factors that has been discussed while determining the
strategies for Tesco are -
Organisational goals – This step involves the purpose behind companies
existence. Tesco has objective to serve customers, communities and planet a better
every day. Tesco works in a direction which provides the fulfilment of these
objectives in long terms as well for short terms also.
Scanning of environment – This term includes the collecting process of
relevant information and resources for the purpose of strategy implementation in
business. Tesco with the help of their effective managers will help them in analysing
the external and internal factors which had impact on the function of business
operations (Kozhevina and et. al., 2020). With the help of evaluating external factors,
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Tesco can identify the need of improvement and make further changes in its
operation accordingly and make them more productive in changing business
environment.
Strategy formulation – This factor contains action to be taken regarding the
change identified with help of analysing external factors. Tesco's managers after
collecting the all relevant information and analysing them, they develop the
necessary actions to be taken against the change. Tesco has developed the
effective strategy and the process to achieve goals in short span time.
Implementation of Strategy – After formation of strategies, Tesco needs to
execute them effectively in organisation to achieve certain objectives. It includes the
formation of organisation structure, gathering resources available, developing
decision making skills and to manage the human resource in order to implement
change in business (Makadok and et. al., 2018).
Evaluation of strategy – This is the final step in strategic management
process which help in measuring the performance of employees against the change
in operation or method. Tesco ensures the performance of their employees by
comparing their actual with the standard performance. After comparing the data,
Tesco should take the necessary steps to enhance the productivity in employees
and achieve growth in market.
A critical evaluation of the impact of internal and external
environmental variation on organisational strategy
To evaluate the internal and external environment of business organisation, SWOT
and PESTLE analysis method will be used in this report. These models will help
Tesco company to identify opportunities and threats available internally, while
PESTLE will help them in analysing the external factors affecting business from out
side.
SWOT analysis
SWOT analysis is technique used to find out the organisation's strengths,
weaknesses, opp and threats related to business and its future planning for growth.
It includes the factors which help management to develop awareness about the
decision making process (Potyshniak and et. al., 2019). This method help
organisation to achieve their goals and visions despite of dynamic business
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environment. SWOT analysis has been done with the relevance of Tesco company
is mentioned below -
Strengths
 Financial stability – Tesco now
working as leader among its
competitors (Stephens and Martin,
2019). They have sound and
efficient number no investors
which can be considered as
strength of company. These
availability of financial resources
will help them in their future
projects to invest in and earn more
profit.
 Adaptability – Tesco is company
with more flexibility in nature and
adopting the new strategies to
increase their profit ratio and
position in competitive market.
Weaknesses
 Food safety laws – UK has many
government policies and laws
which ensures the safety
measures of the food products
and items sold in country. Tesco
as a bulk merchandiser in food
products which make them more
responsible to maintain the quality
of their products. With the help of
customers feedback, Tesco
identifies the requirement of
further improvement in their
policies.
 Competitors – Availability of
competitors in market is major
concern for the company. Tesco
has many competitors such as
Sainsbury's, ASDA and
Morrison's. Tesco can use the
proper strategies and tactics to
overcome the competition factor.
They can use the cost leadership
strategy, market development and
many more.
Opportunities
 Innovation – Tesco has effective
team of managers which will
ensure them to analyse future
technological changes and make
Threats
 COVID 19 – Time of pandemic
during COVID 19 situation is
major threat to many companies.
It affect the whole operations of
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necessary changes. Innovative
and creative human resources will
help Tesco to grow at fast pace
despite of changing business
environment.
 Online purchasing – Tesco at
the time of COVID 19 situation
over come the impact of this crisis.
Tesco come with solution of
opening online stores for
purchasing during lock down
session. This will increase the
opportunity of generating more
profit in tough time such as
pandemic. Technological factor
always have solutions to the
problem in organisation related to
the future possibility.
company and its profit making.
 Substitute products – Tesco has
many products which are easily
available in the market through its
competitors. Availability of
substitute product in market is
huge threat to Tesco company
and can be over come with the
help of product development
strategy.
PESTLE Analysis
PESTLE analysis is the framework which is been used by the organisation.
They can focus on the effective sources which will help them to get the desired
results in the future. The organisation can improve their overall functionality in a
strategic manner. In relation to Tesco the pestle analysis is been focused (Achinas,
and et.al 2019). There are multiple aspects which is been described below:
 Political – This is the factor in which there are new variations which is been
evolving with the changing market scenario. The government policies, rules
and regulations is been different in various countries. Tesco main focus is to
identify new challenges which could help them to become more prominent.
The organisation is bringing the new change by implementing new
technological tools which will help them to function in a better way. The new
technological tools will help them to follow the rules and regulations and they
can expand their business in different regions.
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 Economic – The economic factors may relate to the employment laws and
different interest and exchange rates. This is different in other countries which
is major focus for their growth. Tesco is bringing the new change by following
different structure which will help to diversify their business operations. With
the help of technology they can focus on taking the new advantages in the
market.
 Social – The social factors is the shift in the evolution and includes multiple
demographic trends, lifestyle trends and consumer buying patterns etc. With
the help of new technology Tesco can focus on carrying out the services in a
better way and attain more growth (Shtal, and et.al 2018). They can
understand the market competencies and offer better services to the
customers.
 Technological – This is one of the most important stage in which the
organisation can become better with the help of technological tools. In relation
to Tesco the organisation is heavily investing in making the infrastructure
more digital to create the trend in the society. This will help them to become
more prominent in the activities. There are better products and services which
can be provided to the customers.
 Legal – The legal factors includes the changes which can affect the
regulatory conditions of the market. It includes the licensing of activities and
industry regulations etc. Tesco is becoming more prominent they can
enhance their packing of the products with the help of technological tools and
the operations could also been enhanced with the strategic resources.
 Environmental – Most of the organisations which are working in the market is
adopting to multiple Corporate social responsibility which can help them to
enhance different functions and make the organisation more competitive in
the market scenario. There is the positive brand awareness which can be
implement in the mindset of the customers. In relation to Tesco, they can
reduce the carbon emissions with the help of new technology and machinery
(Hans, 2018). They can focus on attaining the advantage situation in the
market. The corporate social responsibility will also help them to use various
techniques in order to preserve the environment.
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A review of an organisation’s strategic plan (Business
Plan), providing an action plan for the organisation on the
basis of a change in either the internal OR external
environment.
Strategic plan evaluates the current environment of business internally as well
as externally (Teoli, Sanvictores and An, 2019). It reflects the future goals and
targets to be achieved by company and describes the various strategies to execute
these. With the help of business plan in business organisation managers can
explains the objectives of implementing plan to its employee with relevant
information and orders to motivate. Business strategic plan in business organisation
is required to over come the need of further improvement in company. Strategies
are the most important part of the company which reflects the direction to
achievement of organizational goals. This includes the basic objective of company
on which whole organisation functions and strategies connected. Tesco with the help
of business plan provides the frame work which help company to make decisions
and approvals based on objectives. With the help of SWOT and PESTLE methods,
Tesco company has evaluated their internal and external environment effectively to
lead business more smoothly in competitive market (Tereshchenko and et. al.,
2019). They can also expand their business with the opportunities available in
market as well as globally. This provides the common future opportunity to all
companies in market but some of them are capable of adopting and implementing
the strategic plan accordingly. This make them more advance and fast to implement
the change analysed by PESTLE model and this will help them in growing more in
market with customer satisfaction. Tesco company has analysed their strengths and
weaknesses through SWOT analysis which clear outs that financial capability of
company is good with their adaptability. These both term was considered as their
strengths because of their strong investors and employees of Tesco have more
productivity level in them which is beneficial for the company. Competitors and
substitute products was explained as Tesco weakness. They both term is major
problem issue for the Tesco company have to be over come for the future growth
possibilities (Valeri, 2021). It also explains the threat of pandemic occurs in COVID
19 situation, that affects the functionality of company and its revenue generating
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factors. Further it explains the PESTLE model to analyse the external environment
such as social, economical and environmental factors. Tesco has skill managers with
sufficient knowledge and capabilities to ensure the proper evaluation of factors
involved in this frame work. It has both negative and positive impact upon the
organisation and its strategies.
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Conclusion
This report is based on the strategic management and its process in company
with can be influence with the external and internal environment of business. It also
exemplifies the role of these factors on the business strategy with the help of SWOT
and PESTLE analysis performed. These approaches will lead Tesco in implementing
strategies according to the business external environment and help them in
achieving the goals set by company. At last, this report has strategic business plan
providing actions basis on change to be made by company that is to start online
shopping stores during COVID 19 times.
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References
Achinas, and et.al 2019. A PESTLE analysis of biofuels energy industry in
Europe. Sustainability, 11(21), p.5981.
Shtal, and et.al 2018. Methods of analysis of the external environment of business
activities. Revista espacios, 39(12).
Hans, V.B., 2018. Business environment–conceptual framework and
polices. International Educational Scientific Research Journal, 4(3), pp.67-
74.
Afanasieva and et. al., 2020. Strategic management mechanism of innovative
development of industrial companies. Academy of Strategic Management
Journal, 19(4), pp.1-7.
Ansoff and et. al., 2018. Implanting strategic management. Springer.
Cui, J., Allan, A. and Lin, D., 2019. SWOT analysis and development strategies for
underground pedestrian systems. Tunnelling and Underground Space
Technology, 87, pp.127-133.
Henry, A., 2021. Understanding strategic management. Oxford University Press.
Hitt, M.A., Ireland, R.D. and Hoskisson, R.E., 2019. Strategic management:
Concepts and cases: Competitiveness and globalization. Cengage Learning.
Kozhevina and et. al., 2020. The strategic management of sustainable industrial
development in transition to Industry 4.0. In Growth Poles of the Global
Economy: Emergence, Changes and Future Perspectives (pp. 1295-1304).
Springer, Cham.
Makadok and et. al., 2018. A practical guide for making theory contributions in
strategic management. Strategic Management Journal, 39(6), pp.1530-1545.
Potyshniak and et. al., 2019. Assessment of the effectiveness of the strategic
management system of investment activities of companies. Academy of
Strategic Management Journal, 18(4), pp.1-5.
Stephens, E. and Martin, B., 2019. Business policy and strategic management.
Scientific e-Resources.
Teoli, D., Sanvictores, T. and An, J., 2019. SWOT analysis.
Tereshchenko and et. al., 2019. Combining strategic management and
transformation processes in the environment of international
companies. Academy of Strategic Management Journal, 18, pp.1-6.
Valeri, M., 2021. Organizational studies: implications for the strategic management.
Springer Nature.
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Appendix: The Business Plan
Executive summary – Tesco is leading company with retail good
merchandiser and have operation in many countries. Due to the COVID 19 situation
hits the whole world, there is huge loss occurs to many companies and affect their
operations. TO over come this issue Tesco has bring the new idea of implementation
the online store shopping application to its customer sand start a home delivery
services to them.
Back ground – Tesco was establish in the year 1919 by Jack Cohen in the
city of UK. Jack Cohen was the son of Jewish migrant and started company Tesco
with selling war surplus groceries in the streets of Hackney, London.
Market analysis – It has been defined the various factors which represents
the market with growth opportunities in profitability and productivity in business.
Objective – Tesco has objective to implement the new technology in market
which will help them in achieving profit despite of pandemic situation. They
implement the new online software which make customer to shop at and provides
the feature of home delivery.
Monitoring and Controlling – In order to implement the new strategy, Tesco
has to perform better to achieve their objective. Effective use of strategy which
ensures the growth despite of COVID 19 situation in market. To evaluate the
performance of company, Tesco should analyse the performance of employees and
provide further improvement if required.
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