Business Strategy Report: BTEC Level 5, CECOS COLLEGE LONDON, Unit 32

This report presents a comprehensive analysis of Tesco's business strategy, encompassing the macro and internal environments. It begins with a PESTLE analysis to assess the external factors influencing Tesco, followed by an evaluation of its internal capabilities using McKinsey's 7S framework and the VRIO model to identify strengths and weaknesses. The report then applies Porter's Five Forces model to analyze the competitive landscape and devise tactics for improving Tesco's market position. Finally, it culminates in a strategic management plan that outlines tangible strategic objectives, priorities, and tactical actions. The report interprets data from environmental and competitive analyses to propose strategic directions, tactical actions, and objectives, ultimately aiming to enhance Tesco's competitive edge and achieve its strategic goals. The report includes references to academic sources supporting the analysis.

BUSINESS STRATEGY

Table of Contents
M1- Critically analyse macro environment to identify and inform strategic management
decision.......................................................................................................................................3
M2- Critically evaluate internal environment to assess strengths and weaknesses of company
internal capabilities, skill set and structure.................................................................................3
M3- Devising right tactics to improve competitive benefit and market position based on
results..........................................................................................................................................4
M4- Producing a strategic management plan that has tangible and tactical strategic objectives
as well as priorities......................................................................................................................5
D1- Interpretate data and information applying competitive and environmental analysis to
produce set of relevant strategic directions, tactical actions and objectives...............................6
REFERENCES................................................................................................................................7

M1- Critically analyse macro environment to identify and inform strategic management decision
In the context of analysing macro-environment, PESTLE model is used, which help to
determine varied factors such as political, social, economic, technological, environmental and
legal. By using this model, it is quite easy to identify these elements that may impact positively
and negatively (Repnikova and et.al., 2020). It enables manager to take better action and inform
in regard to develop effective plan which help occurrence of those factors that may put negative
impact on productivity and profitability of TESCO. This model encompasses key six elements
that affect directly to current management practices and inform strategic management decision in
term of determining current market threats and opportunities that are available in retail sector
where organization is operating its venture in effective manner from longer period. Furthermore,
through analysing and using PESTLE concept, management has been analysed the existing
growth opportunities in market, which they may grab by taking appropriate decision. It informs
strategic management judgement, in term of helping company to determine those factors that
may affect negatively, and awaking them to take better action in context of so, which reduce risk
of complexities and challenges.
It helps in term of making management able to forecast possible trends, threats and other
aspects based on what firm currently known about its business environment (Chege and Wang,
2020). PESTLE analysis in form of macro environment analysis, enable TESCO and its
management to study environment in sector and formulate tactics accordingly that help to obtain
desire outcomes and bring benefits as well.
While it bring challenges as well, because this kind of analysis only inform about
external factors instead of internal, which may also put negative impact on strategic planning and
other practices of management. It just gives an outside perspective about TESCO not insider.
M2- Critically evaluate internal environment to assess strengths and weaknesses of company
internal capabilities, skill set and structure
In the world of business, there are varied forms of models and concepts available that has
been used by many marketers to identify the strengths and weaknesses of their companies
structure, skill set and internal abilities. By using McKinsey’s 7s framework, marketer may asses
the strength of TESCO capabilities, organizational structure and other resources or competences
(Widiantoro and et.al., 2020). Furthermore, along with these, it enables marketer to determine
weaknesses in the context of same things that has been discussed above. The model is quite

effective and useful in term of assessing strengths and weaknesses as well related to
organizational structure. This concept is much effective than other traditional approaches that
only concentrated on structure and strategy of companies.
By using, VRIO model internal environment analysis in the context of TESCO has been
conducted that help to define the key strength and drawback of organizational structure, when it
had. It has been identified and assessed that the structure of company is quite effective as it
enables individual person to work productively and productively, which is quite beneficial for
organization in term of improving their performance.
In regard to internal environmental analysis, above model is used that help assess
strengths & weaknesses of existing resources of TESCO for example its structure, etc. For
example, it has been assessed that organized management system is the key resource of
company, its strength is that it help to manage the productivity of workers and contribute to
increase the profits' margin, which is quite beneficial. Along that this, it has been identified that
weakness of organized management system create issues. Its weaknesses may define as lack of
flexibility that affect negatively upon staff behaviour and their performance as well.
M3- Devising right tactics to improve competitive benefit and market position based on results
TESCO may improve its market position and competitive edge by using the most
effective and beneficial strategies. Here, porter five forces model is utilized in the context of
company, which provide information about extend in the context of forces that impacts current
practices and productivity of company in negative manner, and driven the attention of
management towards taking initiatives to improve their competitive edge and marketing position,
which is quite important to do. From overall analysis, it has been identified that threat of
substitute products or services is high, for which TESCO may use specific strategy such as its
management may take initiative to improve the quality of their items and start offering new one
which added more value for consumers and allow them to gain competitive benefits in term of
increasing customers, profitability, productivity and performance level.
Brand may adopt several approaches and develop strategies as well which made it able to
improve their marketing position even better than rivals, who are operating in retail sector from
longer period. For example, competition in industry has increased that has put a lot of pressure
on management to do something unique and different that grab the attention of more people
towards purchase. They may improve market position by innovating some new product or

offering services and strengthen consumer relationship for which they may hire skilled people
who solve the queries of customers and provide appropriate information to them according to
their each query, which increase their satisfactory level and allow each customer to conduct word
of mouth promotion activity. In return improve the image and position of brand in market even
better and strengthen management and workers to grab further advantages while running venture
in retail industry.
M4- Producing a strategic management plan that has tangible and tactical strategic objectives as
well as priorities
Strategic management plan encompasses effective and beneficial strategies, concept and
models, which a company capable to grab competitive advantages and more opportunities in the
context of its business growth and unpredicted success (Pogodina, Muzhzhavleva and Udaltsova,
2020). It also covers strategies objectives of company such as TESCO and its priorities.
Objectives-
 To increase profitability and productivity upon 50% within 1 year
 To increase customer base at 40% in 9 months.
 To gain competitive advantages.
 To be competitive for longer.
Strategies and Priorities-
TESCO is the top most popular supermarket in the world, it prioritizes varied things,
which is beneficial and essential for its venture growth and excellent success. It prioritizes
product differentiation, for which they may use diversification strategy. This tactic is the main
element of Porter's generic strategies model, which help company to generate more revenue,
increase sales, profits margin and productivity. It takes initiative to differentiate items, by adding
more value in term of quality or making change in whole product. Furthermore, TESCO main
priority is its customers satisfaction, for which its management may adopt different and
beneficial approaches, strategies and techniques as well. In the context of this priority, company
may adopt cost leadership tactic under their strategic management plan, which made it much
stronger than its rival in term of increasing customer base and reaching at global level by
expanding venture all over the world. Cost leadership and diversification strategies provides
unexpected benefits to company, which help to achieve desire outcomes in form of above aim
and objectives.

D1- Interpretate data and information applying competitive and environmental analysis to
produce set of relevant strategic directions, tactical actions and objectives
In the regard to TESCO, environmental and competitive analysis has been conducted,
which help to produce set of valid and helpful strategic directions and practical actions, which in
return give several chances to company in term of improving their competitive edge and market
position within retail sector, which is actually very important. For instance, by applying
environment analysis, it has been identified that employment legislation as political factor impact
company in negative manner in term of increasing pressure on management to get higher extent
of outputs which allow them to offer range of facilities to each worker. But on the other hand, it
impacts positively in term of strengthening capability of firm to retain skilled and talented
employees for longer period.
By applying competitive analysis, it has been analysed that to overcome the negative
impact of high threat of substitute items, TESCO may innovate new product which is quite good
as it help to increase customer base and generate more revenue. It gains the attention of
international level buyers as well. On the other hand, this strategy is quite risk as well, because
majority of customer prefer to purchase those items which they trust the most on the basis of
quality and quantity as well, they less take initiative to buy new one.
By using SWOT analysis model, it has examined that company provides club card offer
to customers in order to increase their satisfactory level and retain them forever. Along with
benefit it may put negative impact on profitability of company when it make changes in club carc
offers without inform people.

REFERENCES
Books and journals
Chege, S.M. and Wang, D., 2020. The impact of entrepreneurs' environmental analysis strategy
on organizational performance. Journal of Rural Studies. 77. pp.113-125.
Pogodina, T.V., Muzhzhavleva, T.V. and Udaltsova, N.L., 2020. Strategic management of the
competitiveness of industrial companies in an unstable economy. Entrepreneurship
and Sustainability Issues. 7(3). p.1555.
Repnikova, V.M. and et.al., 2020. Improvement of approaches to the strategic development
management of enterprise. Entrepreneurship and Sustainability Issues. 8(1). p.301.
Shabbir, M.S. and Wisdom, O., 2020. The relationship between corporate social responsibility,
environmental investments and financial performance: evidence from manufacturing
companies. Environmental Science and Pollution Research. pp.1-12.
Widiantoro, D. and et.al., 2020. Analysis of the 7s Framework of McKinsey in the UKM X
Yogyakarta. PSIKODIMENSIA. 19(2). pp.232-237.