Strategic Planning for Tesco: Impact of Internal and External Environment on Organisational Strategy

This report provides a critical assessment of the process used by organisations to determine their strategy, evaluation of the impact of internal and external environmental variation on organisational strategy, and a review of Tesco's strategic plan. It also includes an action plan for the organisation on the basis of a change in either the internal OR external environment.

Strategic planning

Table of Content.
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Definition of strategic management.............................................................................................1
A critical assessment of the process used by organisations to determine their strategy..............1
A critical evaluation of the impact of internal and external environmental variation on
organisational strategy.................................................................................................................3
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)..................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
APPENDIX....................................................................................................................................10

INTRODUCTION
In the modern world, business environment is become very innovative and competitive
that in order to gain success, it needs strategic planning. Strategic planning refers to the
procedure in which the mission and vision is ascertained for the future and it identifies the
organisational goals. Here, the strategic management refers to the procedure of accomplish the
competition by making effective decisions and plans (Mariina and Tjahjadi, 2020). The main aim
of the strategic management is to make correct utilization of the accessible resources effectively
and efficiently in order to remain for the long term in the market. Along with this strategic
management also assist the organisation to cut down the risk by selecting different action. The
particular report deals with TESCO which is a British multinational groceries and general
merchandiser. It is head quartered in London, England. It was developed by Jack Cohen in 1919.
This report deals with process used by organisations to determine their strategy. Along with this
impact of internal and external environmental variation on organisational strategy. This also
includes a business plan which is mentioned in detailed.
MAIN BODY
Definition of strategic management
Strategic management can be defined as a process that helps organisation to monitor,
prepare, analyse, identify and evaluate the requirement of company that help them to meet the
goals and objectives. Here the organisation needs to give more concentration while evaluating
the plan of action when business environment is changing. This will lead business to utilise the
available resources in a productive manner (Fenwick, Vermeulen and Corrales, 2018). The
strategic management procedure helps the business organisation to measure and evaluate their
current business situation and assist them to make strategies accordingly. By putting those
strategies into action, the business enterprise can measure the efficiency of the management's
plan of action which they have implemented in order to gain success. Strategic management
strategy includes 5 primary strategies which may differ depending on the environment of the
surrounding. It is applicable in both the mobile platforms and on premises.
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Critical assessment of the process used by organisations to determine their strategy
The critical assessment administration of the TESCO employs the SWOT and PESTLE
models to identify and evaluate the internal and external environments that facilitates the
business organisation to select the various strategies. Companies are assisted towards developing
and implementing a variety of plan of action for both internal and external factors with the help
of these methods (Atherton, 2019). Tesco's development is aided by these strategies, which also
ensure their long-term market viability and helps in maximising the profit.
The process of strategic planning is very essential for the organisation to gain successful
achievement for the short- and long-term goals. In context to TESCO, it has been observed that
the company makes use of the PESTLE and SWOT models through the strategic planning
process. This leads the company to gain competitive advantage in the target market and identify
the risk and opportunities available for the business. Through this, respective company has
ascertained the various internal and external causes that have an effect on the business
organization's operations with the help of these factors. These models are used by the company
to develop a competitive strategy and those strategies are adopted by them in the changing
business environment. The business enterprise uses SWOT analysis to identify the strength and
opportunities in the business environment. This leads them to make the plan of action
accordingly. With the help of this tool, TESCO can build good brand image in the eyes of
customers. The Firms also make use of PESTLE analysis to identify the various external factors
that have a negative or positive impact on business operations (Zorpas, 2020). This framework
also helps the firm to evaluate the macro environment properly and make strategy accordingly.
In the context of TESCO, the model not only helps the company decide on its various strategies,
but it also boosts productivity and profits across the administration. These both framework helps
the business organisation to enhance their sales if the strategies are made appropriately. The
company must measure and evaluate the competition in the market if they want to remain in the
market for the long term. These framework also allows the company to utilise the resources in an
appropriate manner as the main purpose of the company is work in favour of customers. With the
proper utilisation of resources the company can provide the customers with the innovative and
dynamic products.
From above analysis it has been observed that TESCO which is one of the leading brand
and is dealing in the groceries, food products as well as in consumer goods and by the utilisation
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of these strategies respective company can gain build good brand image. These tools also assist
the firm for betterment in the market stability and also aids them in raising the image of the
brands in the consumer mind set and market. Theses framework identifies and evaluates the
impact of the element on the firm is negative or positive. These factors help the administartion of
TESCO in the effectively executing the process of decision making which heighten the growth
and business performance.
A critical evaluation of the impact of internal and external environmental variation on
organisational strategy.
PESTLE analysis
PESTLE analysis refers to the theory that assist the organisation to make strategies
related to the macro environment (Morrison, 2020). With the help of PESTLE analysis TESCO
company can expand and increase its competition and ability. To accomplish the long term goals
the PESTLE analysis of the respective company is mentioned below:
 Political factor: Political factors includes taxes, political stability, tariffs etc. As the
company deals in different variety of products. The country in which it function have
political stability. The organization don't need to frequently change its plan of action and
plan which will be advantageous to the company in the long run (Ansoff and et. al.,
2019). As the governing bodies is stable so the organisation can go into the market in low
taxation rate. The organization can take the benefit of the low tariffs also. As the
government is stabilized and doesn't make frequent changes in rules and policies that will
assist in gaining profitability.
 Economic factor: This element includes employment rate, inflation rate, interest rate etc.
As the GDP of the nation is high and most of the people are employed there. They have
good buying power which is advantageous for the organization (Kumar and et. al., 2019).
The TESCO can take the advantage of the labour productivity as people there are well-
educated and have high ability to perform the task productively. Here the skilled labour
can increase the business efficiency which will help in executing the targets and
objectives of the business.
 Social factors: It consists of cultural trends, demographics, population change etc. The
customers preference and wants are changing so rapidly that to remain for the long term
in the market, the company needs to do survey. The administration should work
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according to the taste perception and preferences. The customer's taste alters very
promptly and they can easily switch to another products easily. As TESCO company
should keep on researching about the market so that they can know about the customers
preferences and work accordingly.
 Technological factors: This component includes change in technology, disruption etc.
The technology plays an crucial role in the business organization to attain its goals (Hu
and et. al., 2021). The TESCO company keeps on changing its technology to provide the
product according to the customers needs and wants. By adopting the technological
change the respective company becomes more innovative that helps them to pull more
customers. So the respective company spend more on adopting new technologies to
increase their profits.
 Legal factors: This includes consumer laws, employment laws, safety laws, labour laws
etc. The organization should follow and work according to laws so that they can run
smoothly (Abdullah, Malek and Abd, 2019). The TESCO company has to follow legal
factor so that they can protect their intellectual properties rights that provide advantage in
maintaining competitive position. By following rules and regulation the company can
protects its patent and other valuable assets which help them to be more successful.
 Environmental factors: This factor includes change in climate, the availability of
energy, pollution. The respective company should operate its business keep in mind its
impact on environment (Liu, Zhu and Zhang, 2018). The TESCO company is a
multinational supermarket so it can make use of environmental friendly items instead of
plastics. Its very essential that company works according to the environment because
increasing pollution is making the health of human beings really bad.
SWOT Analysis
SWOT analysis is one of the strategic framework which helps in running the business
successful and to ensure effective business activity proper analysis can be done through this
framework and opportunities as well as challenges in a current business environment can be
identified and evaluated (Singh and et. al., 2018). To maintain the competition and its dominant
position in the market Tesco makes critical evaluation through SWOT analysis .
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STRENGTH
 Value of customers: As TESCO is one of leading retail brand so, it have high profit
margin and financial stability. With the help of competitive pricing and cost strategy,
respective company work towards the customer satisfaction and loyalty. Through this
there is increase in consumers brand value and gives purchaser trust to proceed with the
company's products and services (Denchev, Yordanova and Stoyanova, 2022). It also
assist the business enterprise to attracts the new consumers.
 Technology development: TESCO keeps on providing customers with the innovative
and dynamic products with the help of technology. They adapt the latest technology with
the purpose to satisfy the customers needs and wants. By making use of new innovation
and technologies, respective company is able to sustain in wise geographic area.
Moreover, this help enterprise to sustain for the long term in the competitive market.
WEAKNESS
 Financial Error: Respective company is facing accounting frauds and errors because of
high credit card and debt. Due to this the company's share market price have fallen down
which has the affected the company's financial stability (Babbar, Sharma and Singh,
2022). This also affected the brand value as they are unable to attract the new customers
towards their products. TESCO is not giving much emphasis on marketing which
affected the sales also.
 Global Presence: The TESCO have been unsuccessful in few of the big countries even
after having so much experience in the retail business. As globalisation is increasing so
rapidly that the company is unable to sustain in JAPAN and UK due to high power of
supermarket and affected share. Because of low cost strategy of the goods and services
the company is facing low income. There are few highly populated places in the world
where the company is unable to set its business due to high competition.
OPPORTUNITIES
 New emerging market: In today's modern world, customers prefer more unique and
dynamic products. So, with the help of technologies and digital platform, investment can
be done in various field with the purpose to meet the customer needs. This can lead the
company to gain competitive advantage in the target market (Xiao and et. al., 2020). The
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firm can also give more focus on profit maximisation by providing customers with
trending products. By using latest technology it can develop platform over emerging
business environment.
 Online sales: Nowadays the customers are more interested in doing shopping online. So,
TESCO can provide the customers with online services. This can help the company to
enhance their sales. Through this the company can have high market share which leads in
increasing market stability. TESCO can also develop its own official website where it can
provide customers with different facilities. It can lead the company towards building
good brand image.
THREATS
 Rules and regulation: As TESCO operates in various countries, so its very difficult for
the management to follow the rules and regulation of every country which is
implemented by government such as taxation, credit card rules, tariffs and many more.
By adopting new regulation will lead to new tariffs, custom check, and quotas (Jukova
and et. al., 2019). So, organization needs to be very imaginative and advance to adopt and
work with different rules and regulation.
 Economic downturn: After the pandemic, every country faced the problem of
unemployment which lead to the decline of the purchasing power of the customers and it
lead to the financial instability of the firm (Gontier, Wong and Teo, 2021). Here the
TESCO also faced lot of problems due to economic downturn as everything shifted to
online. Lot of investment was done to maintain safety within the organisation and in
every physical stores.
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)
Aspects for the
evolution
Present
proficiency (Out
of the 10)
Desired
proficiency
(Out of 10)
Actions for improvement Time
duration
Use of latest and
advanced
technology
7 10 TESCO can use latest and
innovative machineries for the
developing of innovative and
6 months
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creative products. It will assist
the respective firm to put more
focus on the various
components of the product
development (Sharma and et.
al., 2022).
Efficient and
effective human
resource
5 10 Skilled and efficient staff will
help TESCO in effective
running of the business function
for accomplishing the strategic
objectives and goals. For this
aim, respective business
organisation needs to recruit
professional manpower who
have experience and knowledge.
This will lead the business
enterprise to gain more profit.
3 months
CONCLUSION
From the above report it can be concluded that it is very crucial for every business
organization to develop several plan of action and policies. This can make have impact on the
overall mission and vision of the organization. Strategy is important because if the administration
don't develop proper strategy, then the business organization will not be able to sustain for a
long time period in the target market. The report has also concludes the explanation on the
strategic management and it discusses process of the formulation of the effective and efficient
strategies for the business. The impact of internal and external environment of the business
organization helps the business to develop strategic plan of action. This also leads the business to
develop good brand image in the market and maximize the profit also.
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REFERENCES
Books and Journals:
Abdullah, I.N., Malek, J.A. and Abd Manaf, A., 2019. Formulating strategic management in
social capital within gated and guarded community to achieve social well-
being. Academy of Strategic Management Journal, 18(3), pp.1-7.
Ansoff, H.I., and et. al., 2019. From Strategic Planning to Strategic Management. In Implanting
Strategic Management (pp. 41-52). Palgrave Macmillan, Cham.
Atherton, J., 2019. Social media strategy: A practical guide to social media marketing and
customer engagement. Kogan Page Publishers.
Babbar, M., Sharma, B. and Singh, S., 2022. Digital Education Amidst the Pandemic: A SWOT
Analysis. In Technology Training for Educators From Past to Present (pp. 293-312).
IGI Global.
Denchev, S., Yordanova, S. and Stoyanova, D., 2022. SWOT analysis of the educational sector
before and after the beginning of total globalization. In INTED2022 Proceedings (pp.
3433-3437). IATED.
Fenwick, M., Vermeulen, E.P. and Corrales, M., 2018. Business and regulatory responses to
artificial intelligence: dynamic regulation, innovation ecosystems and the strategic
management of disruptive technology. In Robotics, AI and the Future of Law (pp. 81-
103). Springer, Singapore.
Gontier, J.C., Wong, P.S. and Teo, P., 2021. Towards the implementation of immersive
technology in construction–A SWOT analysis. Journal of Information Technology in
Construction (ITcon), 26(20), pp.366-380.
Hu, T., and et. al., 2021. Recent advances and applications of molecularly imprinted polymers in
solid‐phase extraction for real sample analysis. Journal of Separation Science, 44(1),
pp.274-309.
Jukova, E.E., and et. al., 2019. Planning a new business: typical mistakes of a business plan in
the service sector. Journal of Environmental Management & Tourism, 10(3 (34)),
pp.441-447.
Kumar, D., and et. al., 2019. Intelligent modeling and detailed analysis of drying, hydration,
thermal, and spectral characteristics for convective drying of chicken breast
slices. Journal of Food Process Engineering, 42(5), p.e13087.
Liu, J., Zhu, J. and Zhang, J., 2018. A DEA-based approach for competitive environment
analysis in global operations strategies. International Journal of Production
Economics, 203, pp.110-123.
Mariina, E. and Tjahjadi, B., 2020. Strategic management accounting and university
performance: a critical review. Academy of Strategic Management Journal, 19(2), pp.1-
5.
Morrison, J., 2020. The Global business environment: towards sustainability?. Bloomsbury
Publishing.
Sharma, A., and et. al., 2022. SWOT Analysis of Behavioural Recognition Through Variable
Modalities. In International Conference on Ubiquitous Computing and Intelligent
Information Systems (pp. 329-342). Springer, Singapore.
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Singh, M.K., and et. al., 2018. A glimpse of sustainable electronics manufacturing for India: A
study using PEST-SWOT analysis. In Global Value Chains, Flexibility and
Sustainability (pp. 271-281). Springer, Singapore.
Xiao, H., and et. al., 2020. Waste to energy in a circular economy approach for better
sustainability: a comprehensive review and SWOT analysis. Waste-to-Energy, pp.23-
43.
Zorpas, A.A., 2020. Strategy development in the framework of waste management. Science of
the total environment, 716, p.137088.
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APPENDIX
Executive Summary:
The administration of the TESCO contain of effective team of managers who have
utilized their ability and knowledge in making the organization more competitive in the
marketplace. It is considered as one of the most necessary utility of the managers as it permit in
managing the administration and develop strong and effectual plan of action in the business
concern.
Vision: The vision of the TESCO is to focus on raising the communicating skills and create
impressive method of innovation. This will assist the organization in becoming more
competitive. The attention of the organization is on launching an effective and efficient R&D
department.
Mission: The management of the company wants to become a leading company in the world.
The founders of the enterprise concentrate on gaining a competitive advantage in the market.
Objectives:
 One of the crucial objective of the organization is to improve the satisfaction level of the
worker and consumer in an effective manner.
 To gain the revenues of the company by 10 percent in the next quarter which help in
accelerating the finances of the organization by a good number.
Strategic option of growth- TESCO is working for elaborating of the business by offering
new commodity to the consumers in the market. TESCO may utilize the product development
plan of action by which they will acquire more share in market and raise the brand image in
market.
Marketing strategy- For marketing the new commodity TESCO can use booklet distribution for
advertising and create awareness among new consumers.
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