Analyzing Business Strategy of Tesco: Impact of Macro and Internal Environment, Competitive Forces and Growth Strategies

BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
P1 Analyse the impact and influence of the macro environment on a given organisation
and its strategies...................................................................................................................1
Political Factors:-..................................................................................................................1
Economic Factors:-...............................................................................................................2
Social Factors:-.....................................................................................................................2
Technological Factors:-........................................................................................................2
Legal Factors:-......................................................................................................................2
Environmental Factors:-......................................................................................................2
P2 Analyse the internal environment and capabilities of a given organisation using
appropriate frameworks......................................................................................................3
McKinsey 7S Framework of Tesco:-...................................................................................4
P3 Applying Porter’s Five Forces model evaluate the competitive forces of a given
market sector for an organisation.......................................................................................5
Identification and justification of the organisation’s existing and/or potential competitive
advantage:-............................................................................................................................7
Strategies and tactical objectives to achieve overall strategic objectives........................7
Critical evaluation of the different types of strategic directions available to the
organisation:.........................................................................................................................8
Justification and recommendation of growth platform and strategies :.......................10
Evaluation of different ways and means for purpose of monitoring strategies to get
success..................................................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................13

INTRODUCTION
Business strategy is path for any company seeking to grow its business in a strategic
manner in the market. Business strategy is a clear bunch of plans, actions and goals that an
organisation has to achieve to compete in a particular strategic market. The company which is
taken to perform this study is Tesco, It is one of the biggest retailer and supermarket chain that is
working in different parts of the world, including UK, China, India, Hungary etc. This company
has diversified products assortments and varieties and provide greater customer service which
gives the company a competitive advantage for this reason this is the leading retailer in U.K.
This study is going to analyse the impact and influence of the macro environment along with the
internal environment and capabilities of Tesco using PESTLE and SWOT Analysis. The
following study also cover's the Porter’s Five Forces model to evaluate the competitive forces of
a given market sector for Tesco with Identification and justification of Tesco's existing and
potential competitive advantage along with the strategies and tactical objectives to achieve
overall strategic objectives. This report also includes the Critical evaluation of the different types
of strategic directions available for Tesco and also includes the Justification and recommendation
of the most appropriate growth platform and strategies with ways by which the chosen strategies
can be monitored in order to ensure success of the firm.
MAIN BODY
P1 Analyse the impact and influence of the macro environment on a given organisation and
its strategies.
PESTLE Analysis:- The PESTLE Analysis highlights the different extrinsic scenarios
which impact the business of the brand. The PESTLE Analysis of Tesco are as follows:-
Political Factors:-
Tesco operates worldwide so global political factors affect directly on the performance of Tesco.
These include, tax rates, acts of legislation and the stability of the country it operates in. As
Tesco plays its part in creating employment opportunities, it also, in turn, increases the demand
for its products and diversifies its workforce.
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Economic Factors:-
The company should be aware of the various taxation policies, in order to leverage the same, for
its own benefits. Any changes in the policies in UK may lead to a major change in the delivery
model of the company, and additional cost associated with redesigning the company may be
massive(Farrukh and et.al., 2020). Tesco also needs to keep in mind that pricing of the product
will influence the sale.
Social Factors:-
With the attitude of customers, shifting towards, organic products, and Tesco has managed to
capture its consumer base by shifting its attitude towards promoting organic, to satisfy its
customers. Tesco believes in benefiting the society, by local hiring, and thus has generated
employment in various countries.
Technological Factors:-
The trends are changing on daily basis so to cope up with the new trends company needs to
update themselves according to the new technologies. Recently Tesco announced, that its going
to pair-up with Amazon Go to provide customers an additional benefit of saving their time.
Tesco uses online shopping, the social media promotions etc. and other various technical benefits
to influence customers.
Legal Factors:-
The functioning of the company directly get affected by the change in government policies and
legislation impact, in order to continue with smooth operations company needs to follow both the
local as well as the international market laws. Government policies regarding monopoly control
can limit entry into the sector by implementing controls such as license requirements.
Environmental Factors:-
Recently Tesco has launched its phase 2 of Remove, Reduce, Reuse and Recycle plan. The
company has undertaken different programs to remove and reduce all the non-recyclable plastic
to the minimal level and explore new opportunities to use the residual plastic that is still being
used(Hristov and Appolloni, 2022). Their has been a change of 800 products by the company to
help in reducing the 4000 tons of plastic waste.
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