Management Strategies Adopted by Tesco: An Analysis

This report analyses the management strategies adopted by the CEO of Tesco. It covers business and corporate strategies, internal and external environmental analysis, techniques and models used by the organization, strategic planning, and more.

Individual report

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
TASK...............................................................................................................................................3
Business and corporate strategies in organization.......................................................................3
Internal and external environmental analysis..............................................................................5
Techniques and model used by the organization.........................................................................6
Strategic planning of organisation...............................................................................................7
Different level of strategies and technology used by the company.............................................8
Corporate example to justify stand..............................................................................................9
Recommendations........................................................................................................................9
CONCLUSION..............................................................................................................................10
References......................................................................................................................................12
Books and journals:...................................................................................................................12

INTRODUCTION
The report aims to analyse the management strategies adopted by the CEO of Tesco. In the
dynamic business environment, there is requirement of many strategies which are going to make
a positive influence on the company. The strategic frameworks help the business managers to
take vital decision about risk and uncertainty as which may arrive at any e situation. It is
necessary to enhance organisational performance in terms of productivity and profitability.
Covid-19 pandemic has impact drastically on various business operations and their profitability
within the market. It leads to result in various issues and challenges in terms of customer
satisfaction, adopting dynamic environment, risks and uncertainties and low economic growth.
The rate of demand and supply goes decline into the economy which shows people does not have
high purchasing power that influence on the sales of company (Wood, Wrigley, and Coe, 2017).
Therefore, the managers of organisations need to prepare more effective policies and strategies
which will eliminate any unnecessary consequences and runs are smooth functioning. Strategies
play an important role in this competitive environment to be a market leader and attract
customers globally. The reporter going to present and understanding on Tesco, it is the largest
and widely scattered Supermarket of UK. It sells all the varieties in consumer goods which
include health and beauty, food packages, daily Essentials, home furnishing and many more
services in Tesco Store. Due to the situation of covid-19 pandemic the company has decline its
market share due to various issues and challenges arrived in to market. Therefore, the Tesco is
also facing these crises which promote strategic tools and research of market. The report is going
to AIM at providing what strategies the CEO use. It will be done through analysing internal and
external market, strategic Tools and techniques, strategic planning and technological
innovations.

MAIN BODY
TASK
Business and corporate strategies in organization.
Business and corporate strategies play a vital role in organisation. These strategies help in
taking competitive advantage and utilise effective resources. There are important strategies
created by the CEO of Tesco which is described below:
Focus strategy: as per this strategy, the organisation to mainly focus on their priority areas. The
main focus of Tesco is on customer demand and their satisfaction so that they as to provide
products as per market trend in the personalized needs. This helps in providing valuable products
in market and avoids unnecessary resources.
Cost leadership: the strategy is most effective for every business organisation. The purpose
behind this study is to produce low cost products and services to charge an affordable price from
the customer. Tesco is known as one of the reasonable price supermarket which provides quality
products in all over their stores (Lončar, 2017). A low cost price strategy gives high return as
there will be involvement of large customer base. The CEO of has maintained this strategy from
many years which leads to gain success in Tesco operation.
Differentiation: this strategy focus on differentiate the products as per customer personalize
needs and unique demands. It is quite effective as the customer is able to pay a high price for
their personalized and differentiated products. The CEO of Tesco provide these services to
giving discount offers royalty cards schemes in order to gain advantage of customer satisfaction.
Price skimming strategy: this strategy is also vital for organisation as price is the most
considered factor by customers. It helps in preparing cost budgets and focus on charging prices
which will give high revenue. The Tesco use this strategy to gain profit margins without
sacrificing quality of products. These decisions taken by finance managers who put efforts to
recover from losses by taking vital decisions.
Strategy to allocate resources: organisation is required to organise engage and utilise the
resources effectively. For which, to put focus on inventory and operations management so that it
each and every function will be under supervision and resources will not be get scared. The CEO

of Tesco use many measures and control to get optimum utilisation of resources as they have
diversified operations which require proper control of inventory.
It has shown that all these strategies which are formed by the CEO of Tesco are vital and
significant for getting better performance. These strategies will give competitive edge over
Rivals.
Internal and external environmental analysis
Swot analysis is vital tool to analyse internal framework of organization. The internal
positions and functions of Tesco will be derived below:
STRENGTH
 Tesco is the reputed brand name which
sets its market good will in the
worldwide location (Ahmed,. and
Moosafintavida, 2020)
 . The company known for its valuable
products which satisfy each customer
demand.
 Tesco has its own manufactured
products as well as collaborations
which give high profit margin.
WEAKNESS
 Tesco has some improper strategies which
eliminate its potential from many
international countries like India, US and
Japan market.
 The company has its weakness as they
fails in fulfilling loans and financial issues
which impact on their growth and
reputation.
OPPORTUNITIES
 Tesco has great market share through
which they could more engage in
diversified operations. They need to
more focus on Omni channel markets
to provide better customer experiences.
 Technologies and social media is also
opportunity for Tesco to entre in more
emerging markets.
THREATS
 The major threat for Tesco is the impact of
Brexit in the trade of European Union. It
impact on the competitive edge of the
company and Tesco needs to cut down
their operations.
 Market competition is also threatened for
the Tesco. It becomes hurdles for company
as there are a lot of trends prevailing in

market which creates changes in
operations of company.
External factor
Pestle analysis is an effective framework which is necessary for analysing macro
environment of business. It has the company to get inside about various market factor which
causes direct or indirect impact on Tesco.
 Political: this factor consist all the political interference is towards organisation. It
includes taxation policies on terrorism and corruption trade policies and many more
(SPARKS, 2018). The Tesco has impact of brexit and trade policies which stop their
operation in European countries and charged high taxation rates.
 Economy factors Economic factor create impact on all the interest rate for foreign
exchange, demand and supply and inflation of the country. The UK has well in economic
position which it is ascertained by contribution of Tesco. As the retail sector has positive
impact on the GDP of economy.
 Social factor- These factors great impact on market demand consumer trends and their
preferences. An Organisation needs to look at customer satisfaction and produce goods
accordingly. Tesco has positive impact of this factor due to having a large variety of
products to meet with customer demands.
 Technological factors: these factors include use of Digital Services, internet , social
media and software. It becomes by the need for business to run their functions effectively
and easiest possible way. The Tesco is impacted with this factor as they need to enhance
more technological improvements to deliver online services.
 Legal factor: the Spectre mainly consist all the legal laws and countries provision in
order to secure employment and labour laws consumer exploitation and equality and
diversity. The Tesco follows all these provisions which have maintained a good
reputation of company in market.
 Environmental factor: this factor shows how company undertaking their functions and
process which is beneficial for environment and its people. Tesco has positive impact of

this factor as they have a large control on resource Optimisation avoiding plastic believe
in recycling and reusing.
Techniques and model used by the organization
Techniques and models play and effective role for organization to secure better position
and performance in market. The so mainly depends on porter's five forces model with provide a
competitive industry analysis. The main factors are described below:
Threat of new players: The Retail Industry is highly known for growing business market. This
industry lead to arrive many new players as there are a lot of opportunities for entrepreneurs. So
that, the retail sector has threat of new entries which will lead to create competition. The Tesco
has low threat due to having reputed brand name. any new player will require good financial
stability to beat Tesco.
Threat of bargaining power of suppliers: In Retail Industry, the suppliers have mainly low-
power as they could not charge a high price from companies due to having large competition in
their area (Sparks, 2019). Suppliers bargaining power main impact on the cost and price of
company's product. Therefore, Tesco has growth rate of this factor due to having a large number
of suppliers if tries to exploit the organization.
Threat of bargaining power of buyers: The customer is the most potential element of
organization who contributes in the profits of company. These customers have much marking
power on Retail Industry due to having similar kinds, varieties and design of the products. The
customer will not be ready to buy similar products at higher prices. Tesco has moderate thread
due to not focusing on their own manufactured products and collaborate with brands which may
impact on customer satisfaction.
Threat of substitute: The Retail Industry is affecting due to having similar kinds of products
and availability of substitute goods. This provides so many choices to customers to shift their
demand to the next best of substitute. there for Tesco has thread of this factor that needs to be
overcome as their products are likely to get into other super market as well.

Competitive rivalry: It is the main thread of Retail Industry. There is much competition in UK
which exploits the organization in terms of resources; cost and pricing strategy stop the Tesco
has impact of these competitive rivalry due to which there enables new strategies much often.
Strategic planning of organization
Every organization is in need of best appropriate strategies Tu to perform business
functions smoothly and effectively. Strategic planning needs to be great yet quick which give
desired results in achieving goals and objectives. These strategies will lead to carry out functions
in a systematic manner which has shown in Tesco’s strategic planning.
Mission: an organization’s mission provides an insight about the motive behind its existence. It
shows how the company will get success into market and who the potential people are. Tesco has
its mission to be a leading supermarket in future through enabling sustainable production process
and provide a better experience every time people buy their products.
Vision: it is the crucial part of strategic planning in which organization set revision which is
based on long term purpose and motive (Alexander, 2020). It shows how company sees itself in
the next coming years and how the objectives will be achieved. The vision of Tesco is to
maintain a reputed brand name and supply chain management in different parts of the world to
secure growth and development.
Goals: strategic planning is ineffective without creating company's goal which could be for both
short and long term purpose. The Tesco create goals as per new market demands and customer
preferences. The company achieves goals within Limited period of time which is to maintain a
good connection and relationship with customers.
Core competencies: organization requires competent strategies which is necessary to complete
with many market forces. Tesco has discounted Strategies and attractive schemes which become
competitive for the Rivals as attract customers. The frequent Strategies for promotions make
them competitive into market.
Different level of strategies and technology used by the company
There are different levels of Strategies and technologies used by the Tesco which are
described below:

Functional level strategy: in this level of strategy, the company focuses on all the departments
to boost its effectiveness. There are separate departments in Tesco which is supervised by their
manager such as human resource, marketing, finance and others. This maintains smooth
functions and achieving organizational objectives.
Business level strategy: as per this level of strategy, the Tesco focus on maintaining their
business entity, reputation and goodwill into market. The company being unique and rare from
others to get a top brand name in market.
The CEO of Tesco utilizes Innovation and Technology in a broad manner. Every time a
new occasion or season will become Tesco get Eveready to attract customer’s attention through
launching campaigns, will boards and many other themes through online channels (Fitzgerald,
and Kang, 2021). The company brings innovation in their promotional tactics by loyalty card
schemes, discounts on purchase through website and many other benefits to loyal customers.
Corporate example to justify stand
There are many e big players like Tesco exploiting the market of UK at a broad can text.
As UK is known for the most developed country which provide resources and technological
integration for the business owners. Therefore every business get success through to effective
strategic development as it shows a clear path and ways to perform vital functions. Strategic
directions play a vital role for Tesco it will keep control over necessary activities like product
quality control and resources management and Looks for employee development and training.
All these essential departments and functions required for strategic planning to be competitive
and cope up with the uncertainty and challenges (Kim, Hallsworth, and Kim, 2019). Tesco is
facing the challenge of covid-19 in this recent years which lead to change the whole strategic
planning to get the best talent and regain the brand name into market. As they have adopted
online selling and shift to organic product deliveries which contribute in the success of company.
Recommendations
From the above presented report, it has observed that Tesco is facing various business issues
and challenges in terms of competition, covid-19 pandemic, economic crisis and strategic failure.
The company is facing challenges regarding political issues and economic crisis which require
effective Strategies and ideas that could synthesise the economy and regulate effective demand

and supply (Awadari, and Kanwal, 2019). As the company has opposition brand name and
Goodwill into market, it will not take many efforts to regain the market share but require some
effective and competitive solutions which are recommended below:
 The Tesco needs to look for more sustainable practices in the organisation. They need to
provide a range of Organic products as the state of covid-19 is not properly faded from
the society. It may impact on the business functioning so that Tesco needs to provide
healthy and organic food items that will boost immunity.
 The company needs to prepare an innovative and digital culture within organisation and
functioning (Woohyoung, Kim, and Hwang, 2020). Due to the dynamic environment, the
company may need to shift fully upon digital platforms which require the training and
guidance for the same.
 The Tesco could improve its performance in the future through launching their own app
and Omni Channel Marketing which will be more attractive and convenient services for
customer.
 The company needs to mainly focus on internal functioning of organisation. There is
need for more talented employees which could adopt the complex business crisis in the
future market.
 They need to look at the consumer demand and preferences at more frequent instances.
This will grow profit and sales of Tesco and keep the customer retain for longer time.
The company needs to bring more of innovative products like in technology and telecom
services. As the world is going digital so these services will exploit the future market and
create many opportunities for Tesco (Brannen, and Mughan, 2018). It is required to
create continuous Innovation and Technology through adopting artificial intelligence,
cloud computing software.
 All the recommendations provided are effective and necessary for Tesco while looking
forward for the future. It will helps in gaining competitive advantage and runs smooth
functioning in the era of risk and uncertainty.

CONCLUSION
The report has concluded that the companies’ manager plays a vital role in driving out
various issues and challenges from different operations. They are the best thinkers and Well
wishes for the organisation which try and find out effective strategies to overcome with the
challenges of complex business environment. The report has identified various business
corporate strategies which has use by John Lewis in order to make the positive impact of the
organisation into the society. This is strategies include sustainable business practices, ethical
consideration and many more. Afterwards, the report has presented both internal and external
analysis through applying relevant models like swot and pestle analysis. This has shown that the
companies affecting with many external practices within the political social and economical
circumstances. Therefore, it has also presented various frameworks and strategic tools that
describe how the CEO had handled various challenges of covid-19 pandemic in terms of losing
market share and what makes them a true leader through Blue Ocean Strategy. It applies
different levels of strategies in planning to get the best results in organisation. This impact in
attracting use customer base and market share through developing many competitive strategies in
terms of product pricing, promotion decisions. It has also concluded that strategic planning must
be done effectively after analysing all the market factors that may influence in current and future
practices of organisation. The CEO has traits and leadership qualities that leads to maintain
coordination and communication within the organisation. Also, there is provided some relevant
recommendations which would be helpful for the company in taking future decisions. This will
help in regaining market share and utilise the resources effectively. It combines all the
employees and managers to work collaboratively in making the strategy successful. It includes
all the levels of roles and responsibilities so that no work would get delay and create any
confusion at workplace.

References
Books and journals:
Wood, S., Wrigley, N. and Coe, N.M., 2017. Capital discipline and financial market relations in
retail globalization: insights from the case of Tesco plc. Journal of Economic
Geography, 17(1), pp.31-57.
Lončar, M., 2017. The impact of strategic management and strategic thinking approaches on
business performance of companies operating in the retail industry. European Project
Management Journal, 7(1), pp.85-98.
Ahmed, J.M. and Moosafintavida, S., 2020. Why nabors industries (NBR) Acquired Tesco
Corporation (TESO) in an all-stock transaction: A case study. International Journal of
Applied Science and Engineering, 8(2), pp.147-154.
SPARKS, L., 2018. Tesco’s chain management supply 07. Logistics and Retail Management:
Emerging Issues and New Challenges in the Retail Supply Chain, p.183.
Sparks, L., 2019. Tesco: how supply chain strategy supports retail success. The Business &
Management Collection.
Alexander, I.N., 2020. The influence of technological innovations on organization's competitive
advantage: Case study on Irish food retail company (Tesco) (Doctoral dissertation,
Dublin, National College of Ireland).
Fitzgerald, R. and Kang, J.W., 2021. Transforming Korean business? Foreign acquisition,
governance and management after the 1997 Asian crisis. Asia Pacific Business
Review, pp.1-19.
Kim, W., Hallsworth, A. and Kim, H., 2019. On being local and being successful in Korea:
Tesco and E‐mart. Area, 51(3), pp.461-469.
Awadari, A.C. and Kanwal, S., 2019. Employee participation in organizational change: A case of
Tesco PLC. International Journal of Financial, Accounting, and Management, 1(2),
pp.91-99.
Brannen, M.Y. and Mughan, T., 2018. Strategic agility: the critical role of language. Agility. X.
How Organizations Thrive in Unpredictable Times. Cambridge University Press.
DOI: https://doi. org/10.1017/9781108545884.005.
Woohyoung, K., Kim, H. and Hwang, J., 2020. Transnational corporation’s failure in China:
Focus on Tesco. Sustainability, 12(17), p.7170.