Business Strategy and Entrepreneurship: Tesco Case Study Report

This report provides a comprehensive analysis of business strategy and entrepreneurship, using Tesco as a case study. It begins with an assessment of business missions, visions, objectives, goals, and core competencies in strategy formulation, followed by a discussion of factors to consider in strategic planning and monitoring. The report then delves into brainstorming techniques for new product/service ideas, evaluating their strengths and weaknesses, and conducting market research. It includes an analysis of the business environment, selection of a target market, and application of Porter's 5 forces. Furthermore, it covers business proposal construction, effective communication, and evaluation of pitch success. The report concludes with an evaluation of Tesco's strategic position, an environmental audit, stakeholder analysis, and the construction of a new strategy for the company, including implementation roles, responsibilities, and the use of SMART targets.

Business Strategy & Entrepreneurship

Table of Contents
INTRODCUTION...........................................................................................................................1
Task1................................................................................................................................................1
1.1Assessment of business missions, visions, objectives, goals and core competencies in
strategy formulation................................................................................................................1
1.2 Factors to be considered in formulate of strategic planning and monitoring...................2
TASK 2............................................................................................................................................4
1.1 Brainstorming techniques to generate new product/service ideas....................................4
1.2 Evaluation of strengths and weaknesses of proposed new products................................4
1.3 Market research for the proposed new product................................................................5
TASK 3............................................................................................................................................6
2.1 & 2.2 Analysation of environment and selection of target market...................................6
2.3 Application of Porter’s 5 forces.......................................................................................7
2.4 Construction a sound business proposal...........................................................................8
3.1 Business Pitch for products and services..........................................................................9
3.2 Communicate effectively................................................................................................10
3.3 Evaluate success of Pitch in meeting business objectives..............................................10
TASK 4 ..........................................................................................................................11
2.1 Evaluation of Tesco's strategic position.........................................................................11
2.2 An environment audit for Tesco company.....................................................................12
2.3 The significance of stakeholder analysis in case of formulating new strategy..............14
2.4 Construct the new strategy for Tesco company.............................................................15
Task5..............................................................................................................................................17
3.1 The roles and responsibilities of personnel needed to implement the strategy .............17
3.2 Evaluate the contribution of SMART target to the achievement of strategy implementation
in a Tesco company..............................................................................................................18
CONCLUSION..............................................................................................................................19
REFERENCES..............................................................................................................................21
.......................................................................................................................................................22

INTRODCUTION
Every organisation make some strategies so they can achieve their long term objectives.
It is basically a science and art which management can use in formation and implementation of
plans. Normally these programmes are made for 3-5 years but they companies can formulate
them for more or less years, it depends on size and structure of an enterprise. Their are two types
of strategies, one is general other is competitive. Tesco is a leading company in retail industry.
Currently they are operating their business in more than 13 countries. They hold top spot in UK
market and they are also expanding their business in Asian and European region. This report will
include brainstorming techniques so a firm can generate new product or service. It will also
discuss about strengths and weaknesses of fresh commodities which an organisation can develop
in upcoming time. Important points like company's strategic position, environment audit will
also become part of this assignment. Stake-holder's analyses will get cover at the end of this
project.
Entrepreneurship is a skill of developing and managing a business so owner can earn
profit by manufacturing products or providing services to end users. Entrepreneurs have ability
to take risks and analyse future needs of society. They keep their focus on doing innovation in
industry. Most of the organisations believe that in forthcoming time invention and creativity will
become key factor in success and failure of an enterprise (Aarikka-Stenroos and Sandberg,
2012). This file will discuss about target market by analysing business environment. It will also
include Porter's 5 forces in order to evaluate proposed products/services. Business proposal for a
commodity will also become part of this file. At the end this assignment will also include market
segmentation and positing.
Task1
1.1Assessment of business missions, visions, objectives, goals and core competencies in strategy
formulation.
Mission: It is a set of goals and objectives that an company want to meet the customer need and
wants. The mission of company states the how the business get profits, how they provide the
better products and services. The mission statement of Tesco company is that they generate the
worth for their customer, their main aim is to get to earn loyalty and honesty from the customers
and they want to increase their market shares of organisation. If a company has many permanent
1

customers then they can run their business in effective manner specially in unfavourable
condition.
Vision: This is the roadmap of any organisation. This statement states the future prospect of
organisation, This also helps to identify the factors which are the sources of organisation growth
and success. This cited company vision statement states that this is to be valued by the
customers, shareholders and staff, they mainly works to provide their services in international
level, they apply their all efforts in order to achieve goals and objectives of company (Bagchi-
Sen, 2007). This firm want to remain on the top spot and making strong connections with
stake4holder is important for them.
Goals and objectives: These are the road map that an organisation want to achieve their purposes
within a specific time. Objectives means steps to achieve their goal and worked to short term
plans whereas the goals means work in order to accomplish long term plan of organisation. This
cited company goals and objectives are they mainly works to achieve growth of core business
and improve and develop their retailing services. They want to capture the market of non food
segment. This is necessary for their long term growth.
Core competencies : The organisation has made their special skills and knowledge that helps to
achieve their business goals and objectives. They also worked to establish their goodwill in front
of customers so they achieve trust on the business. This tesco core competencies states that they
spread their network all over country which would achieve their core purposes. High number of
skilled workers provide some extra edge to the company over their competitors.
1.2 Factors to be considered in formulate of strategic planning and monitoring.
Some factors that must be considered in formulate the strategic plans are as follows:
The industry: In case of strategy planning, to evaluate the industry are important. When the
assessment of industry some factors are considered such as new market entrance, competitive
profitability, and their future threats and weakness. If these factors are changes over time then
they impact the operation of company.
The competition: The formulation of strategic planning, the industry analyse their competitor
position in market. Any organisation can not achieve profits without the knowledge of their
competitor strategies.
Strength and weakness: The company analysis the strengths and weakness in order to formulate
strategic planning. Organisation identify their internal strengths and largely works on them. They
2

also analyse their weakness and concentrated to work for remove this weakness which exist in
organisation.
The company made their planning system in term of top down planning and bottom down
planning;
Top down planning: In this planning, a senior level of mangers made better decision making
process (Bogers and West, 2010). All the gaols and objectives of company are formed by top
mangers so they are not show their interest to take any suggestions from low level of managers.
Bottom up planning: IN this planning, the company focus the deeply in their projects. because
many employees are involved with each are expertise in different field.
Evaluation of the effectiveness of techniques used in developing strategic plan for tesco
There are two techniques are suggested for company:
BCG growth share matrix:In this matrix, it includes four situations which the TESCO
Company faces are as follows:
Stars: It states the high growth and high market share. Company want to large funds in order to
make decision about how to company continuously success.
Cash cows: It states the low growth and high market. Company achieve the low growth but at
same time they increase their market share.
Dog: It states the low growth and low market share. The company remove the unnecessary cost
which are exist in product.
Questionnaire: IT sates the high growth but low market share. The company have earn losses in
this situation.
This matrix helps to company to understand their current portfolio, and focus to new business.
The Tesco company has too adopt the strategy options for next five years:
Market development:This helps to company to enter into new market with existing product. This
strategy helps to this cited company to enhance their market share at international level and to
increase their goodwill across all nations (Bogers and West, 2012).
Product development:This helps to company to offer their new products in the existing market.
The company has to maintain rand technologies and their professional team.
Threats to the company – This company is failing to expand their business in emerging markets
like India. The local competitors are getting strong in these market and they are creating more
3

challenges for Tesco. Their financial condition is getting weak and they may see some critical
problems relating to finance in upcoming time.
Resources – The have deep pockets and they company has large number of skilled and talented
workers.
Capabilities – This firm is capable of making major changes in retail industry of UK. But they
cannot make an effective impact on the global market.
TASK 2
1.1 Brainstorming techniques to generate new product/service ideas
Every organisation want to launch fresh goods in regular interval of time because taste
and preference of customers are changing swiftly. Most of the companies adopt brainstorming
techniques so they can introduce new commodities in market. Below is the process of
brainstorming:
Idea screening – An enterprise can ask their employees to share their thoughts about an
idea. They have better understanding about the task which they are doing on daily basis so their
advice will provide great assistance in development of new product. They can also take help of
some experts, this will involve some cost but at the end company may get good ideas. In process
of screening, firm has to check whether new thoughts will support in achieving organisational
objectives. If notion can not be converted into reality than they should eliminate it in the first
step. Company should take views of external sources like customers, suppliers etc. because they
have better knowledge of market and potential customers. Tesco is going to launch new cold
drink in their organic food section (Ettlie and Rosenthal, 2012). Before introducing it in market,
they should consult with their employees and other people who are related to this product either
directly or indirectly.
Development of concept and its testing – They have to develop a formula in order to
make it tasty and healthy. They have to do various kind of searches so they can deliver better
commodity in market. After formation of right formula, they should shift their focus on testing .
After getting approval from experts they an start its mass production.
1.2 Evaluation of strengths and weaknesses of proposed new products
Strengths – Nowadays people want to eat healthy food because they are getting health
conscious. A cold drink which is chemical free will get attention from all the people who are
4

trying to find substitute of unhealthy drinks. Cited company can launch this product in two
segments, one is cold drinks and other is juice section. Taste of this item will be its USP,
consumers have never tasted this kind of beverage in their lifetime. It unique taste and packaging
will convince people to buy this commodity in bulk. Chemical free cold drink can will be
beneficial for the health of public so its sale will grow with a pace in short period of time.
Weakness – This product contain fruits and vegetables, people who do not like juices
may not buy this item. Although it taste of this beverage is different but customers may relate it
with other cold drinks like Pepsi or coca-cola. Initially user may find taste of this product weird
but after sometime they will love it for its uniqueness. This commodity is chemical free, there is
large number of people who do not like to use organic goods because they so not like its taste.
Price of this drink will be more than normal the price of cold drinks. Some people may not buy it
because they may feel that its is bit expensive.
Opportunities – This kind of product has a great growth opportunity and if company
reduces its price then it can capture significant amount of share in beverage industry.
Threats – Youth do not think much about their heath, for them taste is above their heath.
They may not buy chemical free drink because its taste will be bit weird for them in starting
period.
1.3 Market research for the proposed new product
In beverage industry there are two types of products, one is alcoholic and other is non-
alcoholic. The cold drink that cited company is going to launch with be introduced in non-
alcoholic section. In this sector Pepsi and Coca cola are two main players who are holding
almost 60% of the market (Gambardella and McGahan, 2010). They are growing with a decent
rate because people are not getting bore of the products they are serving. In initial time period,
Tesco should focus on domestic market because they have strong presence in this region. They
do not need to invest huge amount on its marketing and promotion because they have very good
brand value in UK. Customers are looking for substitutes of old items, they want to taste new
cold drinks. This is a perfect time for cited organisation to launch their commodity in market so
they can exploit the favourable conditions.
Major player of this industry (Pepsi and coca-cola) will not allow entry of new
competition. If they feel that newly introduced commodity has potential to reduce their market
share than they will introduce new product in short period of time. They may also launch new
5

item which can be chemical free. Fresh commodity which cited company is going to sell in
public can capture significant share in market in short period of time because unique taste will
get attention of lot of people. As the CEO of Tesco, these are some crucial finding at the time of
conducting market research:
Market – Beverage industry
Market leaders – Pepsi and Coca Cola (Hold 60 % market share)
Segment by age – Youth are significant part of this industry.
Beverage industry market value – 30 billion pounds
TASK 3
2.1 & 2.2 Analysation of environment and selection of target market
Business environment has potential to influence decision taken by an organisation.
Before introducing a product in market, cited company has to focus on three key issues, first is
the segmentation, second is targetting and last one is positioning.
Segmenting – Tesco is launching this commodity for middle and upper class people. This
item will be will get introduced at decent market price so it can cover majority of population.
Customer are ready to pay more amount but they want better quality and different taste. Initially
this product should be available in UK but after couple of years it can be introduced in other
countries like North America, China, Australia etc. Chemical free cold drink will be launched in
Beverage industry.
Targeting – This item will be launched for young generation but there is no hard and fast
rule, people of all generation can drink this cold drink because it is healthy and it has unique
taste. It is a chemical free drink so small children as well as sick people can consume it. It's main
target will be young generation.
Positioning – In this point cited enterprise has to focus on presentation of product. They
should get clear picture about how they want to their item to be perceived by consumers. There
are many cases when an organisation try to sell new commodity in market but they fail to adopt
correct marketing mix (Godin, 2012). People who could use that product did not give any
attention because they do not perceive it in right manner. Chemical free cold drink will be
projected as a healthy drink.
6

Food and beverage is a growing industry. This sector do not see too much fluctuation
because it serve goods which has direct relation to the basic need of customers. Most of the
companies like to replace the product which they are offering in short period of time so they can
relaunch it with proper up-gradation. After Brexit, demand in every sector is going down, Tesco
is highly dependent on market of UK so in initial stage new item may not get needed attention.
But it gradually it can get popular in industry because of its unique taste. It will introduced in
organic section, in starting youth may not prefer it but once they consume this cold drink they
may start buying it frequently.
2.3 Application of Porter’s 5 forces
Porter's 5 forces will be appropriate technique for analysing extent of competition which
is present in an industry. 5 points where cited company need to focus are as follows:
Competitive rivalry – Every organisation has their competitor who make same type so
product or sell similar kind of service. Tesco need to count their rivals so they can make
appropriate marketing strategies for this new product. They need to determine strengths of
opponents so they can fight with them in this highly competitive market. Pespsico and coca cola
will are key player of this industry (Huizingh, 2011). Their products can be considered as main
rival of this product. They are occupying majority of share so instead of stealing current
customers of opponents enterprise they should target compete beverage sector. The drink
launched by Tesco will face severe competition from Pepsi and Coca-cola.
Supplier power – Raw material are necessary ingredient in production of an item. The
product that company is going to launch is chemical free. In this point enterprise has to
determine about potential of supplier. They have to analyse their capacity to increase price, it
will help them in changing their current supplier by a better one who is ready to provide raw
material at low price. They have to be careful about quality of ingredients because if they are not
up to par that final product will have bad taste. Cited company can change their supplier if they
find cheaper alternative, it will make positive impact on profit in long run. They do not have
much power because it Tesco do not find appropriate supplier for production of cold drink then
they can easily switch to other one.
Buyer power – In this point, cited company need to determine number of buyers and how
much they buy in one lot. Generally people will purchase one or two bottle at a time but
sometime they give order in bulk. Tesco need to evaluate the the additional or less cost which
7

costumer have to pay at the time of switching products. They also need to find position of buyer
so they can know about influence of purchasers on their commodity. They have high power and
if they will not accept new product then company may face huge loss.
Threat of substitution – Pepsico and Coca cola are leading player of beverage industry.
They will try to find a remedy of the this newly launched product (Kim, And et.al., 2011). This
commodity will be introduced in organic sector so competitors firm may start production of new
beverage by using fruit and vegetables. New organic drink from other firm may substitute this
new chemical free cold drink. Although their power is low.
Threat of new entry – Cited company will be considered as a new entry in this beverage
section because they do not make any cold drink currently. They are selling various kind of
drinking items but this will the first chances that they are going to introduce their own product.
In upcoming time new companies can enter in this section with better product and low price.
Cited organisation need to focus on cost and regulation which are present in this industry. Threat
from new entry is high, there are many players who are trying to enter in this industry by
offering variety of drinks.
2.4 Construction a sound business proposal
Business idea:
8
Illustration 1: Porter's 5 forces

To launch a chemical free cold drink which has unique taste. It will have different taste so the
people who are looking for substitute can find a better product.
Business name:
Tesco Beverage
Target market and demographics:
It main target will be youth but it can be consumed by small children and old age people
because it is beneficial for their health. Initially it will launched in UK but in upcoming time it
will be available on all retail store of Tesco.
Marketing:
Online and television advertisement will be best source of marketing because it will cover
majority of the population. Tesco can also organise various kind of events in different part of
the country so they can aware people are special feature of the chemical free drink.
Pricing:
Initially the price of new cold drink will be low but if its demand increases according to the
expectation of organisation than they can enhance price gradually.
Profit:
Cited company will target 30% profit on total sale of chemical free drink.
SMART objectives – Capture 5% market in beverage sector. This target is attainable because
Tesco has many store and if they do aggressive promotions then they can easily achieve this
target. Performance of drink can be measure with new drinks launched by other firms. This
target will be attained in one year.
3.1 Business Pitch for products and services
Business pitch is a forming of delivering business plan verbally. This presentation
include cover page, logo, tag-line. Following are some important steps which have to be
followed at the time of launching a new products:
Start early – Employee of company should get initial and complete information about new
product.
Brief analysis of industry – Different tools and techniques can be used for achieving set
objectives. This step should be given proper time in order to make effective presentation.
9

Provide right space with leaks – Interesting facts about industry and product can be given so
customers can get attracted toward commodity (Lindič and et.al. 2011).
Limit expectation – Initially time will be hard so main focus should be kept on execution of
plans.
Keep release rolling – Employees and important people in organisation should get necessary
information about new item on regular interval of time.
Do something unusual – Surprising elements always get appreciation from everyone.
3.2 Communicate effectively
An effective presentation include two ways of communication, one is verbal and other is
visual. Message should deliver in set time, proper allocation of time to every segment is
necessary in order to make other person understand all the information about new product.
Presentor should use a language which is all people can understand so he/she can communicate
their message effectively. Team work is essential for successful presentation because one person
can not perform all the tasks.
Visual communication – Graphs, videos, charts, etc. made a huge impact on people. They
deliver more message in less period of time. Body language is another key element of a
successful presentation.
3.3 Evaluate success of Pitch in meeting business objectives
It is important to evaluate success of business pitch so cited company can make necessary
changes. It is important to communicate with people who were present in presentation so they
can give information about the mistake which team has done. They can also send them email and
find get knowledge about strength and weakness of product (Rafinejad, 2007). Their were will
some areas which may need some improvements. They can get solved by day to day
communication because most the organisation face variety of problems at the time of launching
of new item. Public speaking is another way of getting reviews from larger number of people.
Most of the manager prefer one to one conversation because it is effective way of
communication.
10