Strategic Planning and Business Strategy Report for Tesco

This report provides a comprehensive analysis of Tesco's business strategy, focusing on its strategic planning context, factors involved in developing strategic plans, and the strategic planning techniques employed. It assesses Tesco's vision, mission, objectives, goals, and core competencies, highlighting their contribution to strategic planning. The report examines the roles of stakeholders, long-term and short-term targets, and the importance of time-bound planning. Strategic techniques like the BCG Matrix and PIMS are analyzed to understand their impact on Tesco's market positioning. Furthermore, the report includes an organizational and environmental audit, evaluating Tesco's strategic positioning and identifying key environmental factors. It also addresses the roles and responsibilities of staff, resource requirements for strategy implementation, and the significance of SMART objectives. The report concludes with references and an illustration index, offering a detailed and insightful overview of Tesco's strategic approach.

BUSINESS
STRATEGY
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TABLE OF CONTENTS
TASK 1............................................................................................................................................4
A. Assessment of strategic planning context of Tesco...........................................................4
B. Factors involved in developing strategic plans..................................................................7
C. Strategic planning techniques for Tesco............................................................................9
TASK 3..........................................................................................................................................11
A. Analysis of strategic positioning of organization by organizational audit......................11
B. Environmental audit of Tesco..........................................................................................13
TASK 4..........................................................................................................................................17
A. Roles and responsibilities of the staff at Tesco...............................................................17
B. Analysis of resources required for implementing the proposed strategy.........................18
C. Importance and implementation of SMART objectives for the proposed strategy.........20
REFERENCES..............................................................................................................................22
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ILLUSTRATION INDEX
Illustration 1: Strategic planning context.........................................................................................6
Illustration 2: Contribution of various components of strategic planning.......................................8
Illustration 3: Strategic model.........................................................................................................9
Illustration 4: BCG Matrix.............................................................................................................11
Illustration 5: value chain analysis................................................................................................14
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TASK 1
A. Assessment of strategic planning context of Tesco
Strategic planning is the very crucial part of the business operation. It is the process of
defining the strategy and making decision for allocating resources to enhance the mechanism of
the company and thus delivering high results for the organizational success (Eigenhuis and Dijk,
2007). The given case scenario provides effective information about visions, missions,
objectives, goals and core competencies of the company. This effectively helps in delivering
high value to the strategic planning of the company.
Illustration 1: Strategic planning context
(Source : Franz and Petersen, 2012) Vision: The vision statement of the company provides a futuristic plan about where it
wants to be in the coming future. It plays a significant role in attaining long term success
of the business. Tesco has developed an effective vision for the growth and development
of the entity which provides an aspiration view of where it wants to be in the future
(Fernando, 2012). It sets a benchmark for the company which assists it in developing
effective growth strategies. It creates a foundation for the company and directs it towards
the core business objective. Mission: Mission statement of a company helps in developing an effective impact on the
overall growth of the company by expressing overall purpose of business. The mission
statement of Tesco is simple and expressive which has helped in communicating the
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goals of business to all its stakeholders. It creates an effective impact on external
stakeholders and consumers as well. It helps in developing Key performance indicators
which inturn helps in monitoring the overall performance of the company. Objectives: It defines the core purpose of the company to develop effective impact on
growth and development within current market situation. Objectives of Tesco defines
long term goals which are in alignment with vision and mission statement of the
organization. It clearly defines the major purpose of the company for specific time frame
(Fulford, 2013). The objective helps the company in developing growth plans for the
organization to enhance its market share and establish brand image within the economy. Goals: These are specific and time-bound goals which helps in defining specific actions
that a company must undertake for attaining success within the market. Goals are short
term plans of the company which are based on the objective of the company. Goals of
Tesco simplifies the objectives to develop attainable plan of actions which helps in
communicating the business objectives to employees in simpler way.
 Core competencies: These are the functional areas that have been effectively developed
and mastered by the organizational units and are the source of the highest sale generation.
The core competencies of Tesco are the retailing goods and services. The organization
has created a well established position for the same in the global economy (Galbreath,
2009). This helps Tesco in creating an effective impact on the consumers d competitors
as well. Core competency helps in analyzing the major strength of the company which
helps in creating maximum sales.
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The above strategic planning context of Tesco reflects the efficiency of the organization
in developing an effective impact on the growth of the organization. Strategic planning seeks to
develop the short-term goals to achieve long term success. The process of strategic planning of
Tesco helps the company in the same. All the mentioned components contributes highly in
developing the strategic planning for Tesco. The vision and mission statements are the crucial
components of communicating organizational purpose to major stakeholders of the organization
who have high level of contribution in growth and development of the business. These
components provide direction for business plans. Strategies are developed to enhance the
competitiveness of the units and helps in developing a winning edge for Tesco. This helps in
determining how the company must process to attain vision and mission. Goals and objectives of
the company are developed on the basis of strategy and it highly contributes in defining the
measures to gain success within the market. Thus the above discussed components helps in
delivering high level of growth for business.
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Illustration 2: Contribution of various components of strategic planning
(Source: Ghezzi, 2013)

B. Factors involved in developing strategic plans
Strategic plans are the very crucial part of the organizational success and development.
Tesco has developed efficient system of planning and developing the system of working. Various
factors considered in developing the plans include:
1. Who should be involved in planning:
Strategic plans are not superficially generated planned. These plans are developed and
executed by the human resource of the organization. The employees and management mutually
develop the plans and implement them to attain the goal. Stakeholders plays a leading role in
determining and developing organizational objectives and strategies. They contributes in the
development of foundation of the business and creates effective impact on the overall growth of
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Illustration 3: Strategic model
(Source:Business strategy. 2014)

the company. Tesco must involve its stakeholders in developing effective plans for the
organization (López, 2005). This will help the company in developing an effective
understanding of both internal and external sources in developing long term plans. The
contribution of stakeholders in planning and development of the company is high and significant.
Top management and strategic business partners helps in developing mission and vision
statement. These are formed and continued for effective business working. Employees of the
company also significantly contribute in the process by evaluating the internal business
environment and helping in developing objective and goals for attaining success. Consumers
helps in evaluating needs and demands. Tesco analysis changing needs and preferences to
analyses what does the company needs and how to attain the same. The stakeholders will help in
developing better understanding of business environment thus will assist the organization in
creating an edge in the market.
2. The company's short-term and long-term targets
Targets are the small yet specific plans of the company which helps Tesco in analyzing
the clear objectives to be attained within the organization. These helps the companies in
evaluating where the company currently is and where it want to reach. The long term targets of
the company must be developed such that, it helps in analyzing strengths and weaknesses of the
origination and developing the effective plan for the same. Tesco efficient plan and analyses the
long term targets for attaining high level of growth and development within the market. It must
evlauate long term target for developing its market share. This aid the company in accomplishing
the future prospects thus demand effective planning (Kourdi, 2010). Long term targets demand
effective alignment of business activities with the set targets. This require high level of
assessment on the basis of which short term targets are developed. The current long term target
of Tesco is to increase the global sales. The short term target deals with developing a system of
creating aggressive yet achievable targets for the employees and management. These are the time
bound target which varies from 1 day to 1 month. The short term plans helps in achieving the
long term targets for the origination. Tesco must carefully assess and examine the time frame and
attainability of short term targets as these develops the basis of long term goal achievement.
Proper guidance, monitoring and controlling helps the company in efficiently attaining the
organizational goals. For example to enhance global sales by 2018 he company must develop
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short term plan and strategies to increase sales and demand within the market. Careful
monitoring of the same will help in achieving the set targets.
3. When the planning should be carried out
Planning must be a time bound process. It helps in creating an effective impact on the
organizational development and assist in setting the effective objectives for the same. The
strategic planning process is not effectively succeeded in the market if time factor is not
considered by the marketing and research team. This helps in developing an aggressive but
achievable targets and objectives for the company (Pitta and Pitta, 2012). Tesco must develop a
time bound system of developing the organizational plans which will help the system in creating
clear specific objectives which are to be achieved.
C. Strategic planning techniques for Tesco
Strategic planning techniques helps in developing a clear and specific overview of the
organizational performance within the market. This helps the companies in analyzing what is to
be done and its impact on the company performance. Various techniques that may helps Tesco in
developing efficient success within the economy are:
 BCG Matrix
Illustration 4: BCG Matrix
(Source: Preble, 2005)
This is one of the most effective strategy which helps in creating an effective impact on
the growth and development of the company. This is a very powerful technique for analyzing the
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market on the basis of two parameters i.e. market share and market growth. This technique helps
in effective planning within the market. The company uses this measure in creating an effective
impact on the overall organizational growth (Richardson, 2008). Tesco use this technique to
analyze the various part of its portfolio and understand the possibilities for the overall growth of
the company. Various quadrants determine various strategies for the growth of the company.
Tesco can evaluate growth prospects of various segments of business by implementing BCG
matrix for the company. This will helps the company in analyzing what is the current state of the
business and what possible strategies may help for improving the same. This tool is very
effective for strategic planning process as it reflects the alignment between current market share
and growth prospects. It will help the company in guiding where to invest in order to attain high
profitability of business.
Star Quadrant is the most effective one which represents the high market share and high
growth prospects. Thus this quadrant is the strong part of the organization. Tesco food is the star
quadrant for the company thus needs the least investment in terms of prod\motion and
development. On contrary to this the dog quadrant represents the low market share and low
growth prospects. This poses the major challenge for the development of the company and thus
the company must liquidate the products lying in this quadrant (Teece, 2010). Thus BCG matrix
helps the company in determining its current position on the market and act accordingly. This
suggests various strategies to develop the portfolio of the company and gain success within the
market.
 PIMS
Profit Impact of Market Share is another planning technique that helps the organization in
evaluating key decisions that may help in improving the results of the business operations. This
long term strategy helps in analyzing the key performance of every SBU and its impact on the
overall performance of the company. Tesco may implement this strategy to understand what kind
of strategies will help it in attaining the major market share to create the difference within the
economy (Business strategy. 2014). This provides the key resource for such critical management
tasks as evaluating business performance, analyzing new business opportunities, evaluating and
reality testing new strategies, and screening business portfolios. This strategy will help the
company in gaining deep understanding about how is the organization performing in the current
market and what measures it must take in order to overcome the possible barriers. This method
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will provide empirical evidence about which strategy will help Tesco in gaining success within
the competitive market.
However, it is found that cited firm is working in the dynamic environment and firm has
lot of competitors who actually has same amount of capital and market share. Moreover, firm is
also facing stiff competition from their major competitors like Walmart, Marks and Spencer, etc.
If these firms comes with new discount offers and promotional coupons, then Tesco productivity
and efficiency will get affected because their competitors will be giving best of the product at an
affordable price to the cited business venture.
Moreover, there are also some weakness which cited firm has to overcome within
specific time frame. If proper precautions are not taken into consideration, then competitors will
have competitive advantage over them and they will not be able to secure the image which is
maintained by them.
TASK 3
A. Analysis of strategic positioning of organization by organizational audit
The environmental audit helps in developing the effective impact on the growth and
development of the organizational strategies. This helps the companies in develop the effective
understanding if the environment it is working in and its impact of various business activities.
The strategies implemented by Tesco to analyze the same are:
 SWOT analysis: This is the most effective measure to analyze the internal environment
of the company (Galbreath, 2006). The SWOT analysis helps in analyzing the strengthens
weaknesses, threatens and opportunities in the market. Tesco has been well established in
the economy.
STRENGTHS
 Market share
 Brand image
 Quality and price
 scope of growth
 Business portfolio
WEAKNESSES
 market ignorance
 low level of innovation
 ineffective adaption of market changes
 Low services
OPPORTUNITIES THREATS
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 Market expansion
 Business integration
 untapped market growth
 Fierce competition
 New business attraction (Aldi and Lidl)
 integration of services
 innovation
 Value chain analysis: Value chain is the link that helps the company in adding value to
the major business activities and its impact on the supporting activities.
(Source: Ghezzi, 2013)
Value chain analysis is a key tool used to increase the overall value of the organization
considering its strengths and weakness. It helps in linking the primary activities with the
supportive activities in order to gain maximum value for the company. This is an effective
measures for internal analysis of the company to gain high profitability. Tesco has developed an
effective image in the market. It continues to hold a market leadership in the retail business. The
companies have aligned its core competencies with the business environment. This has helped
the company n creating effective value to the employees and consumer. The well integrated
system of working within the market has helped the company in creating a cost advantage and
differentiation in the economy (Haley and Haley, 2006). This has helped Tesco in developing
high market position thus has raised the level of competition in the market. Tesco has developed
effective inbound logistic by developing strong bargaining power with supplier. It has helped it
in offering high quality products at comparatively low price. Strong supply chain and effective
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Illustration 5: value chain analysis