Organisational Strategy for TESCO: Current Positioning and Future Options

This report analyzes the current strategic positioning of TESCO, a retail organization, considering both external and internal factors. It also explores future strategic options for the business, including cost leadership, differentiation, and focus strategies.

BMA6104
ORGANISATIONAL
STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Explaining current strategies positioning of business.................................................................1
Explaining future strategies option for the businesses................................................................5
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................9
APPENDIX....................................................................................................................................10

INTRODUCTION
Organizational strategy is concerned with formulating an effective set of actions which
are taken into consideration by firm to gain higher stability. In the current era, competition has
increased which indicates there s is requirement to form significant strategy in turn higher level
of competitive advantages can be derived. The current report is based on TESCO which operates
in retail sector. The company is concerned with offering groceries, other types of products to
attract larger number of customers. Current report will comprise information regarding current
strategic positioning of business considering both external and internal factors. The recent study
will emphasize on having future strategic options for the business.
MAIN BODY
Explaining current strategies positioning of business
TESCO as being international organization has number of objectives which are required to be
accomplished in order to gain sustainability in retail sector. There are number of external and
internal factors which has influence on operational activities (PESTLE analysis, 2021). Current
strategic position can be assessed by paying attention on having relevant insights about its ability
to manage internal and external components.
PESTLE analysis
There are several factors which can be controlled and needs higher attention to obtain significant
processing. There are several factors which are need to be taken int consideration for having
depths insights to make improvement (Perera, 2017). It involves political, economic, social,
technology, legal and environmental.
Political factors
There are several factors which are needed to be taken into practice which involve
political stability, tax & tariff, labor law, trade restrictions, etc. TESCO operates in international
environment which faces number of barrier like political stability, trade level, etc. Company
currently facing positive impact from the prevailing political situation. In order to achieve better
working environment firm focuses on having compliance with political rules & regulations.
Economic factors
TESCO highly concentrate on adopting economic changes prevailing in the situation in turn
correct impact on revenue, sales, distribution and profit can be derived. Any changes in the
economic policy of specified country can majorly affect the functioning of firm. It ensures that
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exchange, inflation, saving, interest, purchasing power, GDP rate, etc will highly influence its
pricing strategy which highly affect processing of organization. There is much focus is given
on gaining higher profitability.
Social factors
It involves changing pattern of taste and preferences, cultural norms, attitude, demographic
etc kind of components has impact on revenue generating capacity of firm (Abdel-Basset,
Mohamed and Smarandache, 2018). TESCO offers wide variety of products which has enough
efficiency of meeting requirements of targeted audience. There is proper market analysis is
executed by TESCO which contribute in understanding relevant information about the targeted
clients so that relevant course of action can become possible.
Technology factor
For staying relevant in today's time it is essential for the organization to cope up with
fast pace by using advanced technology. Technological aspects like shopping online, emergence
of social media, etc for providing technical benefits of company. TESCO as being international
organization has effective innovation and technical aspect so that better ability to coordinating in
working environment can become possible.
Legal factor
The recent business environment comprises number of rules, regulations, legislation, laws, etc
which are imposed by government on business practices. To become successful in the present
situation TESCO follows employment, labor law, rules & regulations, food & safety, e quality
standards, etc. It is helpful for the enterprise to increase profitability by gaining trustworthiness
among stakeholders (Thomas and et.al., 2021). For this purpose company focuses on
conducting corporate social responsibilities via adhering significant compliance with ethical
actions.
Environment factor
For providing positive impact on environment TESCO largely pay attention on having
relevant implementation of strategy in turn sustainable society can be derived. It focuses on
technique of remove, reduce, reuse and recycle action. These methods are permitting enterprise
to gain ability to decline rate of carbon foot print, pollution, etc which have negative impact on
firm.
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On the basis of this, it can be identified that TESCO get affected from these factors in both
positive and negative factors. Firm focuses on having appropriate application of mentioned
course of action in turn better compliance with prevailing environment can become possible.
SWOT analysis
In order to analyze internal factors there is requirement of application technique like this in
order to derive significant details for implementing strategy. SWOT evaluation identifies
strength, weaknesses, opportunities and threats. TESCO internal analysis can be done through
applying SWOT analysis.
Strengths
TESCO has number of strength which is making organization capable of achieving
competitive advantages in turn leading position can be derived.
Financial turnover is high of the organization due to effective ability to reduce cost and having
operating profits.
 TESCO has good market share as compare to other organization which is enabling
company to achieve higher level of revenue.
 It has higher adaptability and innovation method which is making organization to receive
ability to comply with prevailing circumstances (Irfan and et.al., 2020).
 In the current working environment of pandemic firm has enough ability to coordinate
with restrictions imposed by government that has helped to receive good financial & non
monetary outcomes.
Weaknesses
From the evaluation of internal working environment it can be interpreted that there are few
lacking area which are contributing in hindering overall organization performance. These are
referred as weakness of TESCO.
 It does not have effective leadership change which is not allowing firm to gain higher
level of efficiency to overcome pertaining threats.
 There is absence of quality control measure which is not allowing organization to have
proper indication of customer experience (Vlados, 2019). This is one of the negative
component which is needed to be modified by firm for having competitive edge.
 TESCO does not have appropriate level of inventory management which is lacking firm
to meet market forces in effective manner. In addition to this, it can be specified that
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there is both over and under stocking situation possessing in TESCO that has adverse
influence on firm.
 There is no proper adherence to food & safety rules that is creating issue due to improper
food safety guidelines. It is leading to negative consequences which need to be
improved.
Opportunities
For the evaluation of retail industry, there are several opportunities which can be helpful in
gaining relevant ability to achieve leading position in sector. TESCO has following
opportunities which can contribute in making enterprise successful (Attached in appendix image
1).
 The one of the significant opportunity that is available for TESCO is having presence on
online. It is possible for TESCO to sale higher sales through utilizing digital based
business. It has website, social media presence, etc which is allowing firm to cover
higher market share.
 There is presence of high unemployment rate that is helpful for company to attain low
labor cost. It can be useful in declining cost of goods sold which aids in having higher
price margin.
 There is opportunity to increase utilization of business and artificial intelligence that can
assist firm in gathering relevant source of information which is helpful in having proper
decision-making to offer sound decision.
Threats
There are few risks and threats which are needed to be focus by TESCO for gaining detailed
information. In addition to this, these few risks which can adversely affect the processing of
TESCO are as follows:
 Entry in retail sector has become easy which is inclining the threat of cut-throat
competition. There as well presence of similar organization who possessing enough
competitive benefits that are contributing as risk in the overall processing of specified
organization (Islami, Mustafa and Latkovikj, 2020).
 In the current working environment there is pandemic situation prevailing which has
highly affected the retail sector. There is increase in rules, regulations, etc which are
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inclining restrictions in free trade and ultimately enhancing barrier in achieving smooth
functioning.
 On the basis of this it can be articulated that these are the internal factors which has
impact on business current positioning.
Explaining future strategies option for the businesses
There are several factors which has impact on the business processing and required to be
managed by applying relevant course of action to have competitive benefits. Porter generic
strategies are largely taken into consideration by organization for building effectual strategy in
turn positive outcome can be achieved. Generic strategies contain cost, differentiation and focus.
Cost leadership strategy
It is one of the porters generic strategy that is related wit gaining competitive advantages
through giving emphasis on cost structure of organization. In retail sector there are several
expenses which are incurred by n organization for having proper ability to meet requirements of
business, to become successful in the current competitive environment concentrating on
achieving relevant processing is important as competitive edge to deal with prevailing
challenges can become possible (What Are The Benefits Of Cost Leadership Strategy?2021).
There are two ways which can be executed by firm that involve increasing profit by declining
expenses to match with h industry average prices. In addition to this, the second method which
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can be executed by enterprise is inclining market share by charging fewer prices through
ensuring reasonable profit.
It is basically leading in the terms of cost in the industry by enabling cost to be low
which can be referred as significant trait distinct from other. This is helpful in inclining
efficiency to gain greater amount of distinctness to overcome prevailing challenges. For gaining
successful cost leadership company need to possess access to capital for investing in technology
to decline cost of labor & material (Mita, Ochie’ng and Mwebi, 2017). There is as well
requirement of availability of very efficient logistics and low cost base for having sustainability
to cut cost to mitigate risk. Company can derive number of benefits by pursuing cost leadership
technique so that continuous way to cope up working situation can become possible. There are
various benefits which can be attained by TESCO through applying cost leadership strategy into
consideration. It involves increased market size, inclined business sustainability, profit margin
and reduced competition, etc. It can be useful in having relevant margin of profit for
accomplishing objective of business. This can contribute in achieving success through grabbing
larger attention of customers.
Differentiation strategy
it is concerned with obtaining different characteristics in business which can incline
attractiveness of products as compared to other. To become successful in today's working
environment and overcoming prevailing competition there is need of implementing innovative
strategy so that achieving differentiation can become possible. To make successful
differentiation TESCO can apply this course of action. The one of the significant processing
which can be useful in achieving differentiation (Memon, Afshan and Memon, 2021). It refers to
have good research, development and innovation in turn proper ability to offer such commodity
which is completely new and have higher efficiency to attract customer can become possible.
Another method which is useful in having ability to deliver high quality products or services. In
addition to this, effective sales and marketing so that market understands the benefit offered by
differentiated. TESCO is one of the larger organization is helpful for staying agile with their new
product development.
It is useful in developing approach by providing customers with unique, different and distinct
from items offered by competitors. The main objective of applying differentiation strategy for
positioning is to increase competitive advantages. With help of this technique TESCO will
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become able to get significant position in the working scenarios so that having appropriate
working culture can become possible (Viltard, 2017). It as well contribute in making firm
capable of coordinating with prevailing situations in turn higher progress with maintaining
characteristics like unique experience, emotional response, innovation, brand presentations,
pricing, etc. On the basis of this, it can be identified that firm can properly use proper drive to
achieve brand differentiation. From the evaluation it can be identified that achieving proper
differentiation can be helpful in having effective competitive advantages.
Cost focus strategy
It is one of the widely used method for gaining ability to attract higher customers. It focuses on
h developing lower cost advantage within small market segment. It focuses on believing in
concentrating on small segment defined in terms of customers segment or geographical territory
so that narrowing the competitive scope can be exerted. In the retail sector there are several
expenses which are required to be executed by organization for improving financial efficiency
and offering temptingly low prices for widening the markup prices of their products.
There is cost focus strategy so that achieving higher profitability by giving emphasis on
particulate segment so that having relevant processing can be possible. TESCO as being retail
organization need focus increasing margin of the highly demanded products it can lead firm
towards achieving grater amount of profitability by inclining its focus on having relevant
functioning in turn greater amount of progress can be derived.
Differentiation focus
It is another way of conducting focus strategy by paying attention on having relevant
functioning through applying differentiation on particular segment. With help of this strategy
company can get identified small consumer group to focus on so that appealing to needs and
wants of this group through attempting differentiation for a wide population (Lee,, Hoehn‐Weiss
and Karim, 2021). For this purpose TESCO need to give attention on identification of consumer
group which has need of differ set of requirements. It can allow firm to overcome the prevailing
competition in appealing to specific and unique needs.
TESCO can utilize this specific strategy for having niche market strategy. There are larger
number of benefits which can be derived by implementing differentiation strategy that comprises
reduced price competition, unique products, better profitability margin, consumer brand loyalty
and no perceived substitute(Knezović and Hamur, 2021). On the basis of this, it can be
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identified that applying this significant course of action can be helpful in having proper ability to
coordinate with prevailing situation.
From the evaluation of provided information it can be specified that there are four types of
Porters generic strategy which can be useful for TESCO. On the basis of this, it can be identified
that TESCO can apply cost leadership strategy for having appropriate ability to gain competitive
advantages. The main reason behind applying this particular strategy is to become able to
decrease cost which can permit inclining higher efficiency. In addition to this, it can be
articulated that specified organization can derived number of competitive advantages to
coordinate with changing requirement. The specified strategy can be useful in having
appropriate process to attract larger customer by obtaining higher profitability and sustainability.
This type of organizational strategy can contribute in attaining proper functioning and
sustainability to grab all potential opportunities in effective pattern.
CONCLUSION
From the above report it can be concluded that organization strategy play significant role in
influencing overall functioning of enterprise. The current report has involved PESTLE analysis
which has evaluated political, economical, social, technological, legal, etc. It has comprised
SWOT evaluation which indicates that there is need to overcome few lacking areas by taking
suitable course of action. Present study has given emphasis on porters generic strategies like cost
leadership, differentiation and focus. TESCO can apply cost leadership strategy for gaining
higher competitive advantages like inclined market share, profitability margin, business
sustainability, etc. These can contribute in achieving success by overcoming prevailing
competition in effective manner.
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REFERENCES
Books and Journals
Abdel-Basset, M., Mohamed, M. and Smarandache, F., 2018. An extension of neutrosophic
AHP–SWOT analysis for strategic planning and decision-making. Symmetry. 10(4).
p.116.
Irfan, M. and et.al., 2020. Competitive assessment of South Asia's wind power industry: SWOT
analysis and value chain combined model. Energy Strategy Reviews. 32. p.100540.
Islami, X., Mustafa, N. and Latkovikj, M. T., 2020. Linking Porter’s generic strategies to firm
performance. Future Business Journal. 6(1). pp.1-15.
Knezović, E. and Hamur, A., 2021 Porter’s Business Strategies and Business Performance in
SMEs. In Entrepreneurial Innovation (pp. 7-23). Springer, Singapore.
Lee, C. H., Hoehn‐Weiss, M. N. and Karim, S., 2021. Competing both ways: How combining
Porter's low‐cost and focus strategies hurts firm performance. Strategic Management
Journal.
Memon, A. A., Afshan, G. and Memon, A. A., 2021. War for Competitive Advantage–‘Porter’s
Generic Strategies Past–Present–Future’–A Review. Available at SSRN 3846056.
Mita, G. O., Ochie’ng, I. and Mwebi, R., 2017. Influence of generic strategies on performance of
metal works SME businesses in Naivasha town. International Academic Journal of
Human Resource and Business Administration . 2(3). pp.477-500.
Perera, R., 2017. The PESTLE analysis. Nerdynaut..
Thomas, P. J. M. And et.al., 2021. A PESTLE analysis of solar home systems in refugee camps
in Rwanda. Renewable and Sustainable Energy Reviews. 143. p.110872
Viltard, L. A., 2017. Strategic mistakes (AVOIDABLE): the topicality of Michel Porter’s
generic strategies. Independent Journal of Management & Production. 8(2). pp.474-497.
Vlados, C., 2019. On a correlative and evolutionary SWOT analysis. Journal of Strategy and
Management.
Online
PESTLE analysis. 2021. [Online]. Available through:
<https://www.cipd.co.uk/knowledge/strategy/organisational-development/pestle-analysis-
factsheet#gref>
What Are The Benefits Of Cost Leadership Strategy? 2021. [Online]. Available through: <
https://www.consultantsreview.com/news/what-are-the-benefits-of-cost-leadership-
strategy-nwid-1138.html>.
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APPENDIX
Image 1:(Opportunity)
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