Strategic Management: Tesco Ltd Analysis, Business Environment Review

This report provides a detailed analysis of strategic management principles in the context of Tesco Ltd. It begins by defining strategic management and outlining its key processes, including reviewing the current situation, environmental scanning, strategy formulation, implementation, and evaluation. The report then examines the impacts of the business environment on Tesco, employing SWOT and PESTLE analyses to scrutinize internal and external factors. Strengths, weaknesses, opportunities, and threats are identified, along with political, economic, social, technological, environmental, and legal influences. The report concludes with a review of Tesco's strategic plan, considering its articulation and alignment with current circumstances, while also suggesting potential improvements, particularly in balancing online and offline market strategies and refining target market approaches. Desklib offers a platform where students can find similar reports and solved assignments.

STRATEGIC
MANAGEMENT

Table of Contents
INTRODUCTION...........................................................................................................................3
STRATEGIC MANAGEMENT......................................................................................................3
PROCESS OF STRATEGIC MANAGEMNET.............................................................................4
(1) REVIEW CURRENT SITUATION-.....................................................................................4
(2) ENVIRONMENTAL SCANNING- .....................................................................................4
(3) STRATEGY FORMULATION- ...........................................................................................5
(4) STRATEGY IMPLEMENTATION-.....................................................................................6
(5) STRATEGY EVALUATION-...............................................................................................6
IMPACTS OF BUSINESS ENVIRONMENT................................................................................6
SWOT Analysis-..........................................................................................................................6
PESTLE Analysis-.......................................................................................................................8
REVIEW OF AN ORGANIZATION'S STRATEGIC PLAN........................................................9
CONCLUSION................................................................................................................................9
EXECUTIVE SUMMARY...........................................................................................................10
REFERENCES..............................................................................................................................10
APPENDIX....................................................................................................................................12

INTRODUCTION
Strategic Management is all about identification and description of the strategies that
managers can carry to achieve better performance and a competitive advantage for their
organization (Stretton, 2021.) The report will be broadly elaborating the definition of strategic
management and its various dimensions. In context of TESCO Ltd the strategic management
process will be evaluated. Latter the factors of business environment will also be analysed
critically. At the end of the report a review of organization's strategic plan will be done and
action plan will also be discussed which will pay its attention to the external and internal factors
of business environment in order to make the plan more realistic for the taken company.
STRATEGIC MANAGEMENT
Strategic management is the management of an organization's resources to achieve its
goals and objectives. It involves setting objectives, analysing the competitive environment,
analysing the internal organization, evaluating strategies and ensuring that management rolls out
the strategies. It has been divided in several schools of thought (Suferi and Rahman, 2018. ) A
prescriptive approach to strategic management outlines how strategies should be developed,
while a descriptive approach focuses on how strategies should be put into practice. Strategy is
nothing but well-articulated planning which aims long term goals of the organization. That's why
while drafting or formulating it an immense amount of efforts deployed. For such planning the
top or upper management is ultimately responsible for it because such work needs deep
knowledge of management and entity so in majority of time the top management solely makes it
without help of second line or last line management.
It can be defined in another way too. It is a systematic process of planning, monitoring,
analysis, and assessment of all necessities an organization needs to meet its goals and objectives.
It is an ongoing or continuous process. At once the management framed the strategy then it will
be timely evaluated in case of any discrepancy the top management will go for further
improvement in it. Strategy word is derived from the plans for war in ancient time. Modern
business and management is actually as tough nut as was has been. That's why all elements like
the strengths, weaknesses, opportunities and threats of the company are considered while
formulating strategy. Only drafting it is not sufficed on regular interval it is also rigorously

needed to look over and trace the deviations in attempt to encounter them. It paves the way of
achieving the mission of future.
PROCESS OF STRATEGIC MANAGEMNET
As it is above discussed that strategic management is a systematic process. Here in
context of TESCO Ltd the process is critically evaluated. Where all stages and their implications
are broadly discussed.
(1) REVIEW CURRENT SITUATION-
Before drafting such important strategy it is unavoidable to consider all the current
aspects which are impacting the entity. In case of TESCO the mission, objectives, strategies are
taken into consideration (Taqatqa, 2021. )
 Mission- the mission of TESCO is “to be the champion for customers”.
 Objectives- The aim of TESCO is to provide groceries, electronics and clothing goods as
well as a number of their services online. On the other side it also aims to serve it
customers, communities and planet a little better way so can keep the customers at the
heart.
 Strategies- Currently it is having believe in expanding into a combination of acquisition
of new stores, retail services and adapting to the needs of consumers. For growth, it also
follows the strategy to purchase an existing retail chain, or important share of one and
transform it to subsidiary of TESCO.
(2) ENVIRONMENTAL SCANNING-
In this stage a process of collecting, scrutinizing and providing information for strategic
purpose is carried out. It helps in analysing the internal and external factors influencing an
organization. It helps management evaluate the business environment so can go for strategy
making which can suit to the prevailing circumstances.
Organizational resources and capabilities-
 It is a big retail chain organization which possesses a great amount of assets both
physical, intellectual. It is geographically well-diversified.

 TESCO has notched up its presence with more than 6,800 stores in 14 countries (bin
Mohd Shah, 2018.)
 Having a well diversifies product and service line.
 Vast amount of regular customers opens ways for new product.
 Good market image with great amount of Goodwill.
Threats and risks-
 After COVID-19 slow response from the market.
 Facing severe competition from the opponents.
 Poor performance of Supply Chain and after pandemic it is facing horrific crisis.
 Tough regimes and policy of government toward retail products.
 Over attentiveness of customers while purchasing retail products due to health issues.
(3) STRATEGY FORMULATION-
It is the stage in which the proper strategy is framed considering the previous two stages.
It includes designing the organization's structure, distributing resources, developing decision-
making process and managing human resources.
The strategy for TESCO are made for three levels-
 Corporate Strategy- the first level of strategy in the business is corporate strategy.
TESCO Ltd has decided to lead the retail market in UK and other countries as well. It
wants to expand its business in the markets of developing countries. TESCO has planned
to enter the market with price leadership model (Niñerola,2020.)
 Business Strategy- Here considering the corporate strategy specific tactics for each
market are decided. TESCO Ltd has decided to handle its operations with diversified
strategy. In EU and UK where it is already well-established penetration is not needed so
for expansion it will go for more collaborations with the competitors.
 Functional Strategy- It is day to day strategy which guides in operating daily actions.
How those functions will be done and monitored. TESCO decided to adopt a well-
structured hierarchy for conducting its operations.

(4) STRATEGY IMPLEMENTATION-
In this stage the strategy will be put into action. In includes designing the structure,
distributing resources, developing decision-making process, and managing human resources.
With this regard TESCO has decided to allocate resources as per market span.
The decision-making power will be decentralized in the local market and centralized in
new markets. For HR management highly skilled managers with specialization in the field will
be deployed. The grievance dissolution mechanism will be prevailing to reduce the conflicts.
(5) STRATEGY EVALUATION-
The strategies of TESCO will be timely re-evaluated. On regular intervals the deviations
will be figured out and appropriate actions will be taken to encounter it. For this purpose models
like “SIX SIGMA” (Irsan,andBudiman,2020.) and other statistical methods would also be taken
into focus.
On the basis of evaluation the functional strategies of TESCO will also get reshuffled. So
can eliminate the possible hindrances.
IMPACTS OF BUSINESS ENVIRONMENT
For critical analysis of internal and external factors which impact the organizational
strategies of TESCO Ltd. SWOT and PESTLE analysis are carried out.
SWOT Analysis-
SWOT analysis scrutinize internal and external factors which impacts the organization. This
analysis deeply discusses all four components which disclose various relative factors to the
entity.
Strengths  Financial Turnaround- The entity has recovered from annual losses
from operating profit at present.
 Market share- The market share of TESCO is growing with a greater
rate.
 Strong Performance during the pandemic- It has been among those
few retailers who made profit even in COVID-19 (Liu, 2020)
 Innovation- It has been always an innovative organization which keep

changing its techniques in order to make the goals achievable.
Weaknesses  Leadership change- It has changed its CEO whose performance was
not arguable it may bring different consequences in the future
 Quality control- In past it got a disturbing complaint from a customer
indicates room for improvement.
 Shortage of product- To prevent shortages due to panic buying. It
assured its customers (Achinas, 2019.)
 Inventory management- The entity also faced the challenge of
inventory management. The shortage of product is somehow a threat
to it.
Opportunities  Growth of the grocery sales- in post pandemic recovery the grocery
market is experiencing boom time which is good symbol.
 Cheap Labour market- After pandemics the labour market is also
down which can provide cheap labour.
 Internet exploration- Post pandemic people started being rely on
internet market. It is a good opportunity since the company is already
having its great presence on internet and such gesture of people will
open up a new way (Zhang, 2021)
Threats  Global relationship- UK has already implemented Brexit. So
relationship with EU are in strong threat.
 Economic slow down- UK is experiencing economic slow down
which can restrict its alternative of expansion.
 SCM crisis- Entire world in now copping up the issue of supply chain
crisis. It is hindering the supply of row material.
 Growing competition- As market has shown its resilience new entities
and other entrepreneurs are also making their entry to take share in the
demand surplus (Dalirazar,2020.)

PESTLE Analysis-
PESTLE analysis discusses all those external factors which affects business operations with
greater impact.
Political Factors After making presence in the worldwide market the global political factors
greatly influence the performance of TESCO. At the same time raising Tax
Rates are also an issue for it. The financial policies of the government are also
not much favourable (Fozer, 2019)
Economic
Factors
The economic situation of the world is now facing instability. It could affect
the performance of TESCO. Company is depended on UK market where it
has a market share of around 30% (Pestle, 2021) The instability of economy
is preventing from making predictions about anticipated demand, supply,
growth, profits, prices and many more dimensions.
Social Factors Trends indicate that customers in UK have moved towards bulk shopping
after pandemic people are prone to stock up such retail products so can ensure
their safety. The goods and services demanded by consumers is mostly
influenced by their beliefs and attitudes which, in turn, are influenced by
social conditioning.
Technological
Factors
The advancement in technology have brought various new opportunities for
TESCO. The global presence of online shopping opened new alternative for it
at the same time it has also invested a lot to build a good online presence of
the entity and the products it offers to the customers. Brand is being
developed on the online platforms so can get more attention of online
customers (Ewart, 2021)
Environmental
Factors
It has over burdened the entity since after pandemic people and various
organizations are more focused about the contribution of organization in
improvement of environmental situation. Along with corporate social
responsibility further efforts are also anticipated (Fard, 2021)
Legal Factors The policies of the governments is getting tougher over the time. In 2004

when Food Retailing Commission came into existence it surged the legal
requirements of the entity (Ma,2022.)
REVIEW OF AN ORGANIZATION'S STRATEGIC PLAN
The strategic plan of the organization is well-articulated and also formed as per current
circumstances since offering customized services will be giving it more grab in the market. The
policy to recover losses from developed market may also be a good move since the developing
markets can not turn out big amount of profit in the beginning phase. Providing products on only
online platforms would be a little risky factor since in the market there is a huge bunch of
customers who are still not having access to digital market in such predicaments not providing
products on ground will be a severe things and may also reduce its ability of attracting more
customers.
The discounting policy will be proven a strong tool since in the developing market the company
is still fining ground to survive or being positioned and this move would be bringing more
customers to it along with better positioning. As the entity is planning to just target certain set of
market would be a difficult thing since it can not allow other forces to get that big left share.
As the entity is planning that for positioning purpose it will be only targeting those customers
who don't want to compromise their choice of dressing but this would be hardly working in such
nations where people are still earning middle level income since they generally go with available
clothes and make their choice out of those.
The company is gonna to spend a huge amount of money but it can also think about other
available alternatives since in new markets with such a dynamic plan the consequences may go
in any direction.
CONCLUSION
From the report above it can be summarized it has discussed strategic management and
its various dimensions with regard to TESCO Ltd. And how strategic management is an essential
element to ace the aims of an organization. The report vastly discussed the process of strategic
management and critically presented views on its components. Further the external and internal
elements of business environment in context to the chosen company are also presented in order

to perceive potential impacts on the strategy making of the entity. At the end it had presented a
full size review of the organization's strategic plan along with an action plan for the organization
on the basis of a change in the external environment which presents views on how changing
environment had been encountered by the organization taking appropriate actions to counter it.
EXECUTIVE SUMMARY
In the report above various sides of strategic management have been deeply evaluated
and for TESCO Ltd tools like SWOT and PESTLE have been carried out in order to draft a new
business plan which can turn out better to it. At the end the strategic plan of the entity also
reviewed to make it receptive in brief.
REFERENCES
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Fard, I.A., 2021. Interaction of the Zagros Fold–Thrust Belt and the Arabian-type, deep-seated
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APPENDIX
Description of business- TESCO Ltd is an online retailer who is being operated in more than
14 countries. Having a huge amount of retail stores and wants to go for expansion.
Marketing 4Ps- 1) Product- TESCO Ltd is planning to provide a new service to its customers.