Business Analysis Strategy Tesco Plc

BUSINESS ANALYSIS STRATEGY TESCO PLC
Table of Contents
BUSINESS ANALYSIS STRATEGY TESCO PLC..................................................................1
1.0 Executive summary................................................................................................................1
1.1 Strategic Approach and Analysis...............................................................................................2
1.1.2 Resource Based View.........................................................................................................2
1.1.3 Tangible Resources.............................................................................................................2
1.1.4 Intangible Resources...........................................................................................................2
2.0 Organizational Capabilities.......................................................................................................3
2.1 Analysis of Tesco PLC with the help of Various Assessment Tools........................................3
2.1.1 The McKinsey 7-S Framework...........................................................................................3
3.0 Industry Analysis: Porter’s Five Forces....................................................................................5
3.1 Ansoff matrix.............................................................................................................................7
4.0 Conclusions and Recommendations..........................................................................................7
REFERENCES................................................................................................................................8
1.0 Executive summary
Business strategy plays a significant role in today's organizations. It is defined as the means to
which an organization attains their desired goals. To enhance successful completion of the
organizational goals and objectives, the management of the company uses corporate business
strategy to make corporate decisions. The strategy that companies adopt base their source from
its strength, competencies, the conditions in the market and the preference of the customers.
Strategic decisions applied in organizations enables it to compete in an ever dynamic business
environment.
Tesco Plc is among the world leading food retailers operating approximately 2,318 stores and
employing a vast number of employees. Tesco is incorporated as a UK company, the company
has wide network of supermarket chain for grocercies making its dominance in the online
markets through Tesco.com as its subsidiary. Moreover, tesco’s production is huge with huge
ouput sale in the food , cloth, and other commercial goods.
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Tesco initially ventured on pure grocery retail stores but since then the has diversified into other
sectors including insurance, travel agency and telecommunication. Therefore, analysis of the
business strategy of the firm shall be of great importance to understand the success factors of the
company.
1.1 Strategic Approach and Analysis
1.1.1Internal Environment Analysis
To assess the need of evaluating the internal environment of Tesco plc., the company value
creating competitive strategy using resource-based view. This model analyses the internal
capabilities that the company possesses which increases the competitive advantage of the firm.
Value chain analysis is another method used by the firm to analyse the internal company
resources and their contribution towards the company overall value.
1.1.2 Resource Based View
This model combines both the internal and external environment of the company for its analysis.
It provides a feedback of the processes of the company through measuring the contributions of
the resources that the company possesses. Tesco Plc have three key resources that enhances its
success in the industry. These resources include physical resources, intangible resources, and
organizational capabilities Madhani (2009).
1.1.3 Tangible Resources
Tesco Plc have been recording continuous improvement in their physical assets. The company
invest in huge capital expenditure to improve their business operationality. Tesco have initiated
an investment of huge initial capital outflow in a quest to refurbish UK stores, development of
new products, and repositioning, as well as delivering of better customer service (Prange, 2016).
1.1.4 Intangible Resources
Tesco has a graduate scheme which attracts fresh graduates for young graduate executives for
positive contributions to the management of the company(Sekhar, 2009). Moreover, Tesco has
achieved tremendous improvement due to continuous training on new employees before being
deployed in the organization. The aim of training programmes is geared toward improving the
customer service of the employees which is the core business of many organizations.
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According to Williamson et al. (2013), the company has invested in innovation strategy through
creativity in the retailing industry by being the first online retail company in the united kingdom.
The company furthermore, continues to invest in new technologies to reach customers and
improve the shopping experience. Customers through innovation can scan their products as they
shop and bill them.
2.0 Organizational Capabilities
The resource-based view model aims at the company’s assets which as either tangible or
intangible (Harvey and Jones, 2013). Therefore, the company core competencies that are
employed into the transformation of inputs to outputs is referred to as organizational capabilities.
Tesco entire management and its skills in the in the task job creates an innovative approach on
the services an products delivery. Moreover, employees training ensures effective branding of
products and adoption of technology in the transformation of inputs to output. The adoption of a
quality improvements program has also seen a considerable utilization of the available company
resources (Morden, 2012).
Interpretation
2.1 Tesco PLC Assessment Tools Analysis
2.1.1 The McKinsey 7-S Framework
To ensure the efficiency of the organizational processes and activities, this model is applicable. It
assists the company to analyze the extent to which the objectives and goals of the organization
have been achieved. This Assessment tool is one of the best to analyze the position of the
company in the market. The elementary model of this assessment tool have seven internal factors
that a company needs to align to enhance its business strategy (Egner, 2009). The alignment is
required to:
 Improve the performance of the company
 Examine the effect of internal factors to the management of the company
 Enhance implementation of proposed strategies
Strategy- Tesco uses marketing communication to pursues cost leadership business strategy. It
assists in the organization of the processes of the supermarket chain. The use of strategy
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