Strategic Management Report: Analysis of Tesco Organisation

This report provides a comprehensive analysis of Tesco's strategic management, examining the processes used to determine its strategy, evaluating critical models and tools such as SWOT and PESTLE, and applying these tools to the real-world context of Tesco. It assesses the importance of change management in light of the complexity, costs, risks, and sustainability of transformation processes within the organization. The report covers Tesco's strategies, market forces affecting its growth, and the political, economic, social, technological, legal, and environmental factors influencing its performance. The analysis includes strengths, weaknesses, opportunities, and threats, offering insights into how Tesco can leverage its position in the market. Desklib provides access to this and other solved assignments for students.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................3
A critical assessment of the process used by organisations to determine their strategy..................3
An evaluation of the critical models and tools used by organisations to determine their strategy..3
An application of these tools to a real organisation.........................................................................4
Critically appraise the importance of change management based on the complexity of the
transformation process, its costs, risks and sustainability................................................................5
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Strategic management is a tool which is designed to provide a direction to Organisation by
creating policies and plans. The Plans and policies are developed in order to accomplish the
goals and objective of Business. With the help of strategic management, the companies can gain
competitive advantage due to its proactive nature as this toll helps in providing awareness of
changing market. Strategic management process starts form Identification of goals and strategic
direction of Organisation, then an analysis is conducted to understand the current process, an
action plan is created to reach the goal then the manager execute and evaluate the plan
(Mwakisaghu, 2019). The project covers the process, evaluation of critical models and tools,
application of the tools and importance of change management. The Chosen Organisation for
accomplishing this project is Tesco; it is a general merchandise retailer and groceries provider
Organisation located in Welwyn Garden City, UK. The Company deals in varieties of areas such
as electronics, financial services, clothing, internet services, furniture, toys, telecoms and
retailing of books. The main of the Organisation is to provide the goods and services to customer
at reasonable price. Due to its price and quality, Tesco becomes largest retailer in Country.
A critical assessment of the process used by organisations to determine their
strategy
The process used by Organisation to determine their strategy includes Company strategy,
Market forces and implement the tools and techniques to grow in business. The strategy of Tesco
is to become the leading supermarket by providing the products and services \at low price which
attracts customers to buy the products. The Organisation is also focusing on identifying the needs
and requirements of customers in order to fulfil them and gain loyalty of people towards the
brand (Ansoff and et. al., 2019). The benefits of this strategy is that company can create a strong
customer base whereas drawback of the strategy is that organisation pay more attention on
providing products at low price to customers rather than increasing the performance and
efficiency of business. After defining the business strategy, Tesco must focus on market forces
which can affect the growth of the Company. In market there are negative as well as positive
forces that can help in increasing the performance of Organisation. The market forces are caused
by short term fluctuations and long term trends. The benefit for addressing the market forces is
that company can increase their productivity by identifying the latest trend and adopting it to

attract large number of customers. The drawback of market forces is that organisation has to
focus more on fulfilling the needs and requirement of consumers in order to satisfy them. There
are various tools and techniques which can help in retaining the customers and attract more
people towards the Supermarket. Tesco must conduct swot and pestle to identify the
opportunities through which they can grow in the Market. The tools and techniques helps in
providing the direction to business.
An evaluation of the critical models and tools used by organisations to
determine their strategy
The Tools and methods which are used by Tesco to determine their strategy are SWOT and
PESTLE analysis. These two tools are the essential method for strategy analysis which helps in
determining the internal and external environment factors that could influence the productivity
and performance of Organisation. Through SWOT analysis, Tesco can find its strength,
weakness, threats and opportunities that helps to know in which area company can do well, in
which area they are lacking, grow to reduce the risk and what are the opportunities they can grab
in order to get success in Market (Bandarian, 2018). The main purpose of analysis is to know the
internal and external environment of a firm through Strength, weakness, opportunities and
threats. The SWOT Analysis helps in strategic management by building strength of Tesco
through which they can lead in market, reverse its weakness, identifying core competencies,
setting objectives of strategic planning, maximising opportunities and Overcoming the threats
faced by Organisation. The Drawback of SWOT analysis is that it doesn’t provide any solution
and offer other alternative decision, the analysis also not prioritise the issues, sometimes the
information are not useful and SWOT analysis generates too many ideas it becomes difficult for
the company to choose which one is best.
Pestle analysis is another tool of strategic management which helps in analysing the strategy
of Organisation. Pestle analysis is conducted to identify the factors that could affect the business
from outside the Firm. These factors create a huge impact on the profitability, growth, sales and
productivity of business. Tesco conducts Pestle analysis in order to find out the external factors
that could influence the performance of Company. The Elements which are included in pestle
analysis are political factor, social, economical, legal, technological and environmental factors.
These factors are not in the control of businesses they have to develop a strategy and conduct the
market analysis to overcome the impact of external environment (Karpenko and et. al., 2019).

The benefits of pestle analysis are that it is easy to conduct and understand through which
Organisation can avail the better understanding of external environment. Through pestle
analysis, Tesco can anticipate future threats and minimise the impact of factors. The analysis also
helps Company to grab an opportunity and capitalise on them. The Drawback of pestle analysis
is that it works on assumption which creates a risk for a company to get being wrong. The
Change makes difficult for the Organisation to anticipate the developments which influence the
future of Company.
An application of these tools to a real organisation
SWOT Analysis of Tesco
Strength
Tesco is one of the leading Organisations in the World due to its retail excellence,
shopping experience and customer services they won several awards. The reason behind the
growth of the Company is that they offer products and services to people at affordable price
without lowering the quality which attracts more and more consumers. The Organisation use
advanced technologies that minimises the work load of employees and make them feel happy
with their work. With the help of advanced technology they retain their employees and provide
them comfortable working environment by fulfilling their needs and requirements (Heino and
Tuunainen, 2018). Tesco has a team of efficient network of suppliers as they follow simple
business model which reduces cost by having waste management system. This helps in making a
strong relationship with supplier and they deliver the products on allocated time.
Weakness
The profit of Organisation is affecting the business due to its high credit card debt. Tesco
also faced many controversies which create an impact on its growth and productivity; they have
a controversy with Weatherford and Varco for violating their patents. The legal cost of Tesco has
increased for defending the claims; if any of them get proven it impacts the image and business.
Organisation also faces a problem of shortage of products due to which the customers are
disappointed with the services. Due to panic buying the shortage of product may occur, company
give assurance to their customers that they will not face the problem again.
Opportunities
Tesco must invest more in research and development as the company is technology based
they require constant innovation in order to become competitive in Market. The New technology

helps in attracting more customers and improves its performance in Market. The Company had
also made an investment in strategic acquisition to increase their process. With the help of
strategic acquisition they get better access to technology and also save its money and time to
develop technology itself. Thus, from strategic acquisition they can look the company that can
provide new and latest technology (Wills, 2020). The Organisation can also grab an opportunity
for expanding its business in new emerging market through which they can target new customers
that increases its growth and productivity.
Threat
The threat for the Company is its competitors; there are many competitors available in the
market that can influence the performance and growth of Tesco. The Competitors are Walmart,
Aldi and Carrefour, they are the main competitors of Organisation. The Organisation must avoid
coming in any controversy and hurting the sentiments of people, for example, Tesco has
launched a Christmas ad in 2017, the ad was supposed to be funny but it offended people. The
Company may also face the problem when there is a change in political and economical situation
of the Country in which they are operating.
Pestle Analysis of Tesco
Political Factors
Tesco is operating its business in various countries each country has its own laws and
regulation which company have to follow to stay away from any conflicts and disputes. Due to
operating business across several countries, organisation must need to focus on changing
political circumstances as it could affect the profitability and growth of Company. The Brexit
also creates a huge impact on Tesco as they have to follow the new regulation which decreases
the sale of Supermarket (Wooldridge and Cowden, 2020). The trade war between US-China also
affects the profitability of Organisation. The political factor includes political instability,
economic condition of the Countries, tax rates, current and impending legislation and
unemployment rate.
Economical Factors
The economic factors create a huge impact on the profitability, revenue, distribution and
sale of the Organisation. Tesco must identify the economic changes in the Countries in which
they are operation in order to take an action if any economical changes occur. It is important for
the Organisation to know about the various taxation policies of Countries. Due to COVID 19,

Tesco has faced many losses even the sale of Organisation gets down and employees also lose
their jobs. The Pandemic makes the customers to spend less and look forward for the cheaper
products having low price which influences profit and operation of Tesco.
Social Factors
The Company has taken various initiatives to sustain in the market and compete with its
competitors. For example, the organisation sells Halal meat to Muslims consumers due to their
high demand and also operates an individual store counter for providing meat to people in stores
of UK (Nataliia, Victoriia and Dmytro, 2019). The trends of the customers change constantly
over the time. The COVID 19 has made the customers more concern about their health and
safety due to which Supermarket have to pay more attention on providing the healthy foods to
their consumers and take care of their health and safety. The demand of organic products get
increased because of the pandemic, company is also adopting the changes and providing organic
products to people.
Technological Factor
The technological factors also play an important role in creating the impact on the
profitability and performance of business. Tesco has adopted an advanced technology in
pandemic they are focusing on online shopping and delivering products at home. The
Organisation has also adopted self service checkout points for making easy and convenient for
the customers to place and take orders. Tesco has also invested in different projects for example,
reducing the carbon footprints so that they can achieve their long term objectives and develop
sustainable business. The Company has also introduced their Clubcard which plays a vital role in
the success of the business.
Legal Factors
Tesco must follow the government policies and legislation as it also affects the
performance of business. There are various laws which must be addressed by the organisation in
order to stay away from any legal disputes. The Company must work under health and safety act,
equal pay act and various other acts related to employees. They have faced many criticisms due
to avoiding legal laws which affect the reputation and performance of Organisation. The
Supermarket was sued for unequal pay and discriminating men and women. So, company must
build their credibility as if they lose it become difficult to get back to the same position in
Market.

Environmental Factors
The Company is facing an enormous pressure from public and government to reduce the
negative impact on environment. Environmental impact influences the reputation and brand
image of Buisness. For maintain and managing the reputation in Market, Tesco has taken various
initiative in order to reduce the environmental impact they are also working on reducing the
plastic packaging, even they made a lot of investment in reducing the carbon footprints as it
affects environment (Bozhanova and Kononova, 2018). The Organisation is also working on
minimising waste produced in Outlet by enhancing social conscience in customers.
Critically appraise the importance of change management based on the
complexity of the transformation process, its costs, risks and sustainability
Change management is a process through which organisation implements and describes the
change in its business activities and process. The Change takes place in order to improve the
profitability and productivity of business. There are four principles of change management they
are understand, plan, implement and communicate change. To make the changes in the process,
company must prepare for the change, define a vision and plan for a change, implement the
changes, embed changes within company practices and cultures and lastly organisation must
review the progress and analyse the results. The change management process is important for the
Organisation as it helps in reducing the cost if a positive change is applied it reduces the waste.
When Company adopt effective change management process it helps in making the smart
choices.
For implementing the successful change management policies, organisation must ensure that
their employees should get convinced with change management process as they can create a
huge impact so it is important to influence them and provide detailed information regarding the
change process (Ibrahim and Abou Naem, 2019). If the change management process is effective
and develops a right path for the organisation it can help in reducing the risk that can impact its
productivity. Through change management process company can creates a smooth process and
ease the tension by obtaining the new technology in order to increase the efficiency in process. It
is important for Tesco to grab the trust of the employees and ensure them the change is taken for
the betterment of the business and workers. The benefits of change management process are that
it helps in understanding the need and impact of change. The Change management also helps in
aligning the resources within organisation to support change process. Drawbacks of change

management process are that company sometimes implement negative change process which
creates a huge impact on the profitability and productivity of business (Chletsos and Saiti, 2019).
CONCLUSION
From the above information it is being concluded that strategic management helps
organization to develop the plan and policies through which they can achieve their desire and
gain success in Market. A proper strategic planning can increase the growth and productivity of
business and also provide competitive advantage from its competitors. Through strategic
planning, company can gain competitive advantage and attract large number of customers. The
Organisation must develop an effective strategic planning in order to increase their customer
base and improve the performance of business. In today’s business environment companies are
focusing on becoming sustainable business by reducing the carbon footprint and waste materials
in order to decrease the negative effect on environment. To remain competitive in the market,
company must adopt change management policy as it helps in increasing the efficiency of
Organisation. Due to making changes in the business it helps in increasing the growth and
profitability of Company.

REFERENCES
Books and Journals
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strategic management. International Journal of Strategic Change Management. 7(2).
pp.139-159.
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System and Strategic Design on Organization's Competitiveness: A Field
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Karpenko, L and et. al., 2019. Blockchain as an Innovative Technology in the Strategic
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