SIM336 - Strategic Analysis of Crisis Management in Tesco Company

This essay provides a strategic analysis of Tesco's crisis management strategies, focusing on various challenges the company has faced, including economic downturns, the horse-meat scandal, and the Covid-19 pandemic. It examines the strategies employed by Tesco to mitigate these crises, such as implementing customer-based supply chain management systems, adopting focused differentiation strategies, and utilizing democratic leadership. The essay also discusses the importance of decision-making strategies and leadership in regaining the company's position in the competitive marketplace. The analysis covers the four phases of crisis management: mitigation, preparedness, response, and recovery, highlighting Tesco's actions during each phase to maintain profitability and brand reputation. Desklib offers similar essays and study resources for students.

STRATEGIC
MANAGEMENT

TABLE OF CONTENTS
ESSAY.............................................................................................................................................3
REFERENCES................................................................................................................................1

ESSAY
Strategic management is the management of company resources to achieve the goals and
objectives. It helps in provide the direction by developing the policies and plans designed to
achieve the goals and objectives. It is the process build the action plans to ensure the company
performance targets and business continuous growth. Strategic management for firm to gain
profitability and competitive side over their company competitors. strategic management also
helps in assist the better performance of company as well as helps in enhance the probability of
organization (Drobyazko, 2019). The strategic management helps in planning the for unfeasible
contingencies and predictable as well as company can attain the competitive advantages with the
help of strategic management.
Strategic management is consisted the continues process that appraises the industry and
business as well as helps in fix goals and objectives to meet all the future and present
competitors of company. There are four process of strategic management such as environmental
scanning, strategy formulation, strategy implementation and strategy evaluation. The
environmental scanning is referring as the process of gathering and proving the information for
the strategic purpose, this process helps in analysis the external and internal factors which
influencing the business. In the context of strategy formulation, this process helps in deciding the
best action for accomplish the organizational goals and objectives (Kombate and Kouadio,
2022). The strategy implementation is process implies the strategy in organization into action
and the implementation of strategy also includes the decision-making process, distributing
process, managing human resources, etc. In terms of strategy evaluation, this process helps in
measure the performance of strategy and also take corrective action for meet the organizational
goals and objectives. There are various benefits of strategic management because it helps in set
the strategic direction for company and its employees.
Objective: To determine the strategies for the management of crisis in effective manner: A
case study on Tesco company.
Tesco Plc company is the largest retailing company in United Kingdom. the company
operates in the multiple area such as electrical appliances, clothing, banking, retailing,
customer’s financial services etc. Tesco company has its headquarters in the London, United
Kingdom. company conducted its business in four formats of store such as superstores, metro,
express and extra that all are based on the external factors of company. The chosen strategy of

strategic management is crisis management strategy. The crisis management’s strategy is
referred as strategies of management. It is the collective framework of choice and decision that a
business makes to respond to a crisis (Coombs and Laufer, 2018). The crisis management are
most important for business to gain the competitive advantages and also reduce the is take in
financial loss and also helps in build the damage reputation. If the company not have the crisis
management strategies, then the business strategy is at risk. The crisis strategic management
analysis the both external and internal environments of business. The crisis management can
build through the review the mission of organization and assess the organization weaknesses.
The essay reviews the case study on Tesco company crisis management. Tesco company
operate in retail industry at United Kingdom. The study focus on the supply chain of Tesco
company in the aspects of profitability which resolving the economic crisis affecting the market
segments of grocery chain. The Tesco crisis management is consisted the implementation of
customers based supply chain crisis management systems that helps in increase the current
profits and revenues of company as well as helps in retain the sustainability of firm. The crisis
management of Tesco company helps in maintain and enhance the profitability & revenues of
company. Tesco company implements the crisis management strategies effectiveness.
There are four methods of crisis management such as mitigation, preparedness, response
and recovery. this phase helps in develop the right move to recover the crisis management and it
is essential for analysis the business crisis and manage them carefully. in the context of
mitigation phase, that helps on create the risk management teams and financial team of company
and analysis the crisis as well as create the strategy to access the impacts on business (Wut, Xu
and Wong, 2021). in the preparedness phase, the company review the policies, rules and
regulations as well as hold the board meetings to discuss the crisis. In the context of response, to
access the response for benefits and get advantages and get response form the company
stakeholders, employees and board members regarding the crisis recovery. in the crisis
management, recovery is the last phase where the company adopted the strategic plan to recover
the crisis as well as access the recovery funding and that strategies helps in manage the trauma of
business.
There is various crisis which are faced by the Tesco company such as covid-19 situation,
financial problems, horsemeat, accounting scandals that all crisis will discussed below as per the
study of crisis management of company.

The United Kingdom face currently economic depression after the Covid-19. company
crisis management work to take innovative strategies plans to enhance the decline revenues of
company and its economic. The main targets of company crisis management to prevent the
company profit and generate its revenues. The company also face the challenges in demands of
company products and services. It is the economic crisis for business because company sold its
products to the United States. Company sold its products to united states clients and it creates the
decline in the demand of products and services for United Kingdom (Pündrich, Delgado and
Barin-Cruz, 2021). The company focus on the crisis management for resolve the profits decline
crisis related the economic and finance and other profits are related with the analytical data.
As per the crisis, the company acquire the business strategy to focus on the demand of
products and services as well as the company focused on the strategic segments and target
customers as well as offer products in demographic areas which helps in improve the economic
condition and depression. The company decided to acquire the business strategy to know about
the customer’s expectation and perception then they provide them products according to the
demand of customers and that really helps in regain the economic condition (Taqatqa, 2021). In
other word, the business strategy also helps in generate the revenues and profitability of
organization. With the help of business strategy, the company adopted the different approached
to create new market in the competitive market place. Tesco company set the goals, plans and
action to compete in the particular market for the economic stability.
In the business strategy, company mostly adopt the focused differentiation strategy to
increase the demands of products and services in the competitive market place and also increase
the demand in the demographical and geographical areas. Company also gain a competitive
advantage because of the focused strategy and able to generate the revenues and profitability of
organization. The democratic leadership also used in this crisis because the company needs to
focus on the demographic areas so, with the help of democratic leadership company able to
focused on the demands of products and services in demographic areas as well as it helps in
generate the profitability of economic situation and condition.
Tesco company also contain the frozen burger which are found in horse-meat and brand
checked by Irish food inspectors but with the help of crisis management Tesco company take
quickly action against the crisis and said those who purchase products got full refund on those
products and the retail industry also said that the company needs to pay refund to all the

customer (Smith and McElwee, 2021). Company admit its mistakes and apology regarding these
mistakes as well as company also face the bad effects on the brand and company reputation. But
company gain it reputation and brand image in market with the help of crisis management and
get recover in the United Kingdom competitive marketplace. Company face huge changes in the
profitability and its directly impact on the sale of company.
As per the crisis the company acquire the decision-making strategy to admit its mistake
effectively with the help of decision-making strategies. The company management takes the
quick decision regarding the crisis that faced by them in critical situation and condition.
Company takes the advantages of decision-making strategies to make decision quickly about
admit its mistake and apology regarding the horse-meat. This is the biggest crisis for the
company because it affects the brand and reputation of company and the company also loss its
customers and damage its suppliers chain which are most important for the business. The
decision-making strategy is approach which can use for the important decision in business and
every strategic of decision-making helps in provide the different framework to company to
address the requirements and needs. The strategic decision-making process helps in reduce the
long term risk of company and also recover the future developments possibilities of company.
The decision-making process is most important for gain the competitive advantages and also it
also helps in reduce the strategic competition and probability failure of company. The company
abled to improve its performance and also regain its position in the competitive market place.
With the help of decision-making strategy in crisis the company able to regain the competition
and survive in market and it also minimizes the company long term risk and the company also
able to gain the long term result after the recovery from crisis.
Tesco implemented the decision-making strategies to regain the profitability and position
to achieve the success and objectives of company. The decision-making strategies helps in save
times and money as well as logical decision helps in reduce the impact on bad reputation on
business and the company face the bead reputation and brand image damages at the time of crisis
as well as company also loss it customers. But due to the decision-making strategy, organization
gave reputation in market after some times and it really effective for the business. If company
not take decision for admit its mistake, then the company world face loss and not able to regain
their place and position in the competitive marketplace of United Kingdom.

Company also adopt the leadership strategy within the organization to gain the position in the
marketplace. The leadership strategy helps in motivate employees to perform well and improve
the productivity of organization as well as it helps in motivate them to offer the better quality
services which satisfied the customers of company. Leadership strategy provide the direction,
visionary, affiliation to employees and company to regain the competitive marketplace and also
rebuild the image & reputation of business organization in the United Kingdom market
(Bhattacharya, 2021). It also helps in focus on the qualities of products and services which are
most important for business after the crisis.
The Covid pandemic that started in 2019 and it became the latest history for the human
civilization because the Covid directly affects the whole world economy and business that is
never happen before. the pandemic situation holds the various rules which are enforcement by
governments like lockdown and social distancing throughout the global world and it’s also
influenced the retail industry. the pandemic affects the retail sectors such as product demand,
consumer’s behaviours, logistics and factory services and retail store because all also get closed
because of the lockdown in whole world. company faces many challenges during the pandemic.
the Covid -19 led less communication between the peoples because they spend their time at
home. the ecommerce business also started rapidly during the pandemic situation and it conduct
the commerce in the good and services (Al-Omoush, Simón-Moya and Sendra-García, 2020).
during the pandemic, ecommerce reduced the face to face interaction with the customers and
consumer’s changes in the consumer behaviours. it also its access the global market in the world.
the company adopted the marketing strategy for the ecommerce platform in stores and online
because company focus that everyone must be safe.
The finding of this study shows that Tesco face challenges in covid-19 and its was effects
on the revenue of company as well as also decrease the customers’ demands and sells of good
and services. Tesco face various changes in the operational of business and also affects the
financial team of company. it’s also was effect son the employees of business because of the
lockdown. all the employees get unemployed so, it affects the employments status. this is the
biggest crisis which are faced by business in the critical situation and also get many lost during
pandemic.
As per the crisis, company used the decision making strategy to make decision regarding
the employees. the company shift the working mode from offline to online. Tesco deal with its

employee on digital mode with providing work from home to employees and the employees also
get more relaxed and it is more beneficial for employees to get work from home during the
pandemic situation. with the decision making strategy, company decide the sell products and
services to customers online. online groceries help Tesco to generate the sales and also increase
the demands of customers. fiancé team of company also helps in drive the business in the online
groceries during the pandemic condition and also helped company to make decision for
customers shopping (Netz, Svensson and Brundin, 2020). during the crisis days, finance team
also helped in shift to remote works. Tesco company take an open approach by decision making
strategy with finance team to provide flexible working hours to employees as well as promote
the good work life balance.
This study provide strategy that used by Tesco company which also used the leadership style
while shifting work on remote mode because employees not know about that how to work
remotely so, company used the leadership style to managed the rapidly changing environments
which are most important for business to smoothly run business. autocratic leadership style
helped business to adopted the remote working because the leader make decision regarding the
working environments and inform to all employees as well as the company also adopted the
training and developments strategy during the crisis because the company adopted the remote
working and employees required the training while how to work remotely that are essential for
every employee within organization (Panwar, Pinkse and De Marchi, 2022). training and
developments strategy helped in provide the knowledge of technology that how to used. they
develop the employee’s online capability to support company customers and they also transform
the company stores through the social distancing so, that helps customers to shop easily and
safely.
The demand of customers is shifted from brick and mortar to ecommerce. the restriction
about the social distancing to avoid the physical interaction with people so, the company needs to
adopt the ecommerce strategy to run business in pandemic situations. company has been
rewarded by adapting the customers online shopping during the pandemic and company increase
its online delivery with the helps of ecommerce strategy which are most essential for run the
business in pandemic (Tse, Ding and Zhang, 2018). crisis is most emotionally challenging for all
the people and special for the employees and it changing the life of employees and workers in
unpredictable ways. employees and employers play an important role in to protect each other’s.

the employers of Tesco company protected their employees with the help of shift in working
mode. leaders and employers of organization also show empathy towards each other’s and
communicate well with employees. leaders also focused on daily online meeting with employees
regarding the task and it is responsive decision of company. The employees were also performed
well and they also helped in satisfied customers in effective and better manners (Thakur and
Hale, 2022). Tesco also decide to get helps from safer shopping campaign and they done the
right things for the customers because customers safety and their satisfaction are most important
for business.
Tesco adopted the safety rules and protected the customers and employee because they both
are most important for the company to survive in competitive marketplace. during the Covid-19,
shifting to remote work are most effective and secure for employee as well as its is more
productive for company. company also promote its business on social channels because
customers spend their times on social channels to maintain social distancing. the business
adopted the marketing strategy in the crisis situation with the help of crisis management to
promote the products and services on social media platforms because it helps in generate the
demand of customers and also helps inn generate the revenues of company because Tesco is the
third largest company in United Kingdom so, many customers follows the channels of company
and Tesco got many advantages of marketing strategies during the pandemic situations.
Tesco company also faced the accountings scandal from 2014 and its received by the United
Kingdom fraud watchdogs. Tesco company has incorrectly booked the suppliers income in
accounting and the shareholders of company has been looking for the payment for the share price
decrease. its claiming that their losses are leaded from the Tesco company inaccurate reporting in
business (Mohapatra and MV, 2021). company suspended its directors from company who did
scandals after the fraud and black hole was discovered. the company reached the agreements
with the authorities and decide to pay compensation to investors. the company face many crises
in 2014 because of frauds by directors of company. the numbers suppliers and investors ale
decrease after that scandals.
As per the crisis company adopted the collaboration strategies, the collaboration
strategies are agreements where company documents the rems and condition of projects between
the two person and its consist the rules and regulations which are most important for the business
to follow them for build the business reputation and brand image in the competitive marketplace.

company also used to collaborative strategies during the 2014 scandals for regain the business
reputation in retailing market place. this strategy also helped business to increase the suppliers
and investors within the organization (Ordonez-Ponce, Clarke and Colbert, 2021). the company
adopted the collaborative strategies to build agreements with authorities to repay the
compensation of investor. this strategy helps in regain the marketplace and also increase the
market shares of business as well as suppliers of business. it also helped in manage the crisis
through the strategic management.
As per the study, There are various strategies in strategic management which are used by the
business to manage the crisis during the challenges that faced by business to solves the critical
problems in business. Tesco company adopted the decision making strategy, leadership strategy,
marketing strategy, business strategy and collaborative strategy to manage the crisis of business.

REFERENCES
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