Business and Strategic Management: Tesco Case, Strategic Management in the face of the 2014 crisis

Running head: BUSINESS AND STRATEGIC MANAGEMENT
Business and Strategic Management: Tesco Case, Srategic Management in the face of the 2014
crisis
Name of Student: Claudia Rada
Name of College: CCT
Authors Note: Charly
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BUSINESS AND STRATEGIC MANAGEMENT
Executive Summary
Strategy is long term direction that is followed by firms based on decisions that offer scope
of activities, gives leverage of competitive edge, helps business to adapt to changes in
environment, enables optimum utilisation of resources and capabilities and helps to deliver
better value and meet expectations. Strategies are driven by strategic directions which are
integrated approach to bring considerable changes. This report is based on strategic
capabilities of Tesco with help of which it built its re-back approach to recover the losses
that it faced in earlier years (2014) so as to extend their resources and capacities to promote
better business growth and sustenance. Also the strategic drivers used by Tesco helped to
win back their stakeholder’s confidence and improve their position in market to strengthen
their financial capabilities and profitability.
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BUSINESS AND STRATEGIC MANAGEMENT
Contents
Executive Summary............................................................................................................................2
Introduction.......................................................................................................................................4
Evaluation of TESCOs Recent Strategic Decisions...............................................................................5
Strategic HRM..................................................................................................................................11
Conclusion........................................................................................................................................13
References.......................................................................................................................................14
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BUSINESS AND STRATEGIC MANAGEMENT
Introduction
Tesco, one of the largest retailers of UK founded in 1919 in East London. It is considered
the first British supermarket with a market share of 29.1% and second in the world by
turnover (Digital Economy, 2015). Tesco,underwent a sharp loss of 6.4 billion pounds that
was reported the worst ever results due to slumps in values of its property portfolio and
stocks. To add to this big loss Tesco also faced huge pressure from new stores like Aldi,
Lidl which were discounter’s retailers and created competition over low prices of products.
To cope with losses, Tesco announced cutting of nearly 5.000 head office and UK store
management jobs, around 4.000 jobs in offshore roles and in Tesco’s banking division.
Moreover with closing of around 43 Tesco stores in early 2015 resulted to cutting of
another 2.500 jobs. According to analysts, Tesco faced such crisis as it launched several
large stores which led to cost additions with poor shop floor standards. And with discounter
stores around, customers as a result had option to switch their shopping either to online
platforms or small shops, discounters store like Aldi/ Lidl, which ultimately made Tesco,
face the large scale hit due to unplanned expansion, according to the press article of April
22 of the same year (Butler Sarah & Farrell Sean, 2015).
Faced with this harsh panorama, Tesco presents a new board headed by Dave Lewis, which
carries out the implementation of a new management strategy. In the "2018 financial
reports" Lewis notes that an attributed net profit of 1,206 million pounds (1,381 million
euros) was recorded at the end of the fiscal year on February 24, 2018. (Lewis Dave, 2018).
The question that arises in front of these two scenarios is: How Tesco is managing to
reverse these results? In the present work, it is about answering. For this purpose, the
present work will be divided into two parts. In the first, we will analyze: 1. Administrative
strategies were used to solve this problem in three years of restructuring. We will develop
this last point in two complementary ways: a. Carrying out a critical evaluation of the
model of actions implemented by Tesco, and b. This model of actions will be presented in
an exemplified manner.
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