Analyzing Strategic Management Models for Tesco's Advantage

This report analyses strategic management models, specifically VRIO framework and Porter's Five Forces, and their application to Tesco, a major international retailer. It examines how these models can support achieving a sustained competitive advantage. The VRIO framework assesses Tesco's resources (brand, global presence, digital strategy, project execution) based on value, rarity, imitability, and organization to determine their competitive advantage. Porter's Five Forces analysis evaluates competitive rivalry, threat of substitutes, threat of new entrants, bargaining power of buyers, and bargaining power of suppliers in the retail sector. The report concludes that strategic management is crucial for planning, strategy formulation, and execution, and that VRIO and Porter's Five Forces are essential tools for achieving sustainable competitive advantage.

Strategic Management

Table of Contents
INTRODUCTION ..........................................................................................................................4
MAIN BODY...................................................................................................................................4
Analyse about management models related to strategic nature that can support in terms of
achieving sustained competitive advantage into critical manner................................................4
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................8

INTRODUCTION
Strategic management is the process of setting objectives, procedures and goals in order
to make an organisation or company more competitive. Strategic management often includes
internal organisation analysis, strategy execution, strategy evaluation throughout the company.
Strategic management importance lies at the intersection of company's internal and external
environments(Karlik and et.al., 2017). It is important because it provides a strong incentive to
employees and management in terms of achieving company's objectives at organisational level.
In the present report, TESCO is taken into consideration. TESCO is a general British
merchandise retailer and it is headquartered in Welwyn garden city, England(About us). It is the
ninth largest retailer in the world according to revenues and third largest retailer in the world
which is measured by gross revenues. The present report covers discussion about management
models related to strategic nature that can support in the achievement of competitive advantage
into sustained manner for an international retailer company.
MAIN BODY
Analyse about management models related to strategic nature that can support in terms of
achieving sustained competitive advantage into critical manner
There are two strategic management models that can support in terms of achieving
sustained competitive advantage which includes Porter's five forces analysis and VRIO
Framework.
VRIO Framework: It is a strategy which helps an organisation in identifying the resources and
capabilities that give them a sustained competitive advantage.
Valuable: Under this head, resources must be valuable and these are valuable in those
conditions when they enable a firm to achieve sustainable competitive advantage. Resources are
the parameters that enables strategies, mitigate threats and exploit opportunities(VRIO/VRIN
Analysis & Solution). TESCO'S intangible resources are valuable for the company and these can
be wide customer information, good brand awareness and reputation for promoting big
brand(Meresa., 2019). Sometimes these intangible resources are not beneficial in terms of
achieving sustainable competitive advantage because these are inconsistent in terms of nature
and need consistent efforts towards it.

Rare: Under this head, resources should be rare so that company can stand strongly in this
competitive environment. If every company has access towards these resources then it is
difficult for maintaining resources into effective manner. Price and promotion factor are rare for
TESCO company. This factor can't be rare for longer period of time due to changes in
economical and financial conditions.
Inimitable: There are some resources which gives a company a first mover advantage and
competitors sometimes try to imitate these resources. Resources can be imitable due to unique
historical conditions, casual ambiguity and social complexity(Tanc and Gokoglan., 2015). The
track record of TESCO's leadership can't be imitated by competitors. Due to changing strategies
and customer and staff demand can somewhere weakens the roots of TESCO company.
Organisation: This factor measures about how much the company has able to harness the
valuable, rare and difficult to imitate resource in the market place. Leading branding position and
project execution are the parameters which act as strong point in terms of organising things into
effective manner.
Resources Value Rare Imitation Organisation Competitive
advantage
Brand
Awareness
Yes Yes No The company
has utilised
leading brand
position in
various
segments
Sustainable
competitive
advantage
Global and
local presence
Yes Yes Can be
imitated from
competitors
Yes Provides
strong
competitive
advantage
Implementatio
n of digital
strategy
Yes No Can be
imitated from
competitors
Leading player
in the industry
It can't provide
sustainable
competitive
advantage

Project
Execution
Yes Yes No Yes Provides
strong
competitive
advantage
Illustration : VRIO framework
Source : VRIO framework explained with examples I B2U
Porter's five forces analysis: It examines the impact of five forces which includes competitive
rivalry, supplier power, buyer power, threat of substitutes and threat of new entrants.

Competitive rivalry: It is high in the retail sector due to increased community's demand
and supply of commodities to meet their basic goals. There are major competitors of TESCO
company which includes Sainsburry, Asda, Morrisons etc(Varelas and Apostolopoulos., 2020).
If TESCO does not come with new strategies and planning then it is difficult for the company to
compete with their competitors in this international market.
Threat related to substitutes: It is low in the retail sector because it supports in terms of
meeting out demand and supply, retailers are considered as key players. The influence of online
shopping and use of advanced technology have changed the way of doing business(Porter’s five
forces analysis of TESCO)If company is not ready with their substitutes then it is difficult for
company to sustain in terms of longer period of time.
Threat of new entrants: It is usually high in this industry because the emerging store
businesses and presence of retail giants can simply enter the market. If TESCO company is not
ready with their new ideas and opinions then it is challenging to compete with new competitors.
Bargaining power of buyers: It is high in this market because there are various kinds of
vendors in the market and people can purchase from wherever they want(Venkat and et.al.,
2015). TESCO has to work on their price factor as well as providing unique services so that
customers do not switch to another option. Otherwise, it is difficult to retain their customers.
Bargaining power of suppliers: It is considered to be low to moderate because there is
presence of large number of suppliers in the industry and also have low impact on firms.
Individual suppliers have reduced effect on large retail firms. If company does not maintain good
relationship with their suppliers then it is difficult to sustain into the market.
CONCLUSION
The above stated report concludes that strategic management is very important at organisational
level. It is important for purpose of proper planning, strategy, formulation and execution as well.
It has been concluded that in terms of achieving sustainable competitive advantage there are two
models which are very essential for this purpose. It includes VRIO framework and porter's five
forces analysis. These two models act as support system in terms of achieving sustainable
competitive advantage. In these two models every factor is considered in a serious manner for
achieving this parameter. So strategic management is required in terms of performing into
effective manner at organisational level.

REFERENCES
Books and Journals
Karlik and et.al., 2017, May. Developing a strategic management system of Russia's economy.
In 2017 XX IEEE International Conference on Soft Computing and Measurements
(SCM) (pp. 689-691). IEEE.
Meresa, M., 2019. The Effect of Strategic Management Practices on the institutional
Performance; the case of Dedebit credit and saving institution in Eastern Tigray.
Tanc, A. and Gokoglan, K., 2015. The impact of environmental accounting on strategic
management accounting: A research on manufacturing companies. International
Journal of Economics and Financial Issues, 5(2).
Varelas, S. and Apostolopoulos, N., 2020. The Implementation of Strategic Management in
Greek Hospitality Businesses in Times of Crisis. Sustainability, 12(17), p.7211.
Venkat and et.al., 2015. Strategic management of operations in the emergency
department. Production and Operations Management, 24(11), pp.1706-1723.
Online
About us,2021[Online]Available through:< https://www.tescoplc.com/about/>
VRIO/VRIN Analysis & Solution,2021[Online]Available through:<
https://embapro.com/frontpage/vrioanalysis/4011-fdi-tesco/>
Porter’s five forces analysis of TESCO,2021[Online]Available through:<
https://howandwhat.net/porters-five-forces-analysis-tesco/>