Strategic Management Report: Analyzing Tesco's Competitive Advantage

This report provides a strategic analysis of Tesco, a major retail company, examining its internal and external environments. It begins with an introduction to strategic management and its application to Tesco, followed by a PESTLE analysis to identify political, economic, social, technological, legal, and environmental factors affecting its competitive advantage. The report then evaluates Tesco's strategies, including the SAFE criteria (Sustainability, Acceptability, Feasibility) and the balance scorecard. It offers recommendations for improving Tesco's strategies, such as adopting new technologies, focusing on environmentally friendly products, and understanding customer needs. The conclusion summarizes the importance of strategic tools and sustainable development for gaining a competitive edge in the retail market. The report is aimed at students who wish to gain a deeper understanding of strategic management principles and their application in a real-world business context. The report's analysis is based on past events and experiences to implement in future strategic management.

Strategic management

Table of Contents
Introduction......................................................................................................................................3
A.)................................................................................................................................................3
b...................................................................................................................................................5
Recommendation.............................................................................................................................6
Conclusion.......................................................................................................................................7
References........................................................................................................................................8

Introduction
Strategic management is the formulation and implementation of different goal and
initiative by organization based on analysing of internal and external environment in which
organization carry out its business activities. The present report is based on Tesco organization
which is third largest retail company in retail industry. It face problem related to implementation
of new technology and in relation to gain competitive advantage. In present report PESTLE
analysis is conducted for analysing the factor with regard to the competitive advantage of the
organization.
A.)
Tesco company is a grocery retailer company which is situated in England. Tesco
obtained 35% stake in Grocery stake then it expand its internet grocery retailing in the USA.
There are many competitor of Tesco company who are giving tough competition by selling same
type of product and services (Farkas, 2016). Moreover there are different tool which company
can used for analyzing the external market. Through PESTLE firm can easily identify the macro
factors which are impacting the competitive advantage of company. Along with this with the
help of PESTLE their are many polcies as well as laws and regulation governing monopolies
which can bee easily identified from through Pestle analysis which is discussed below:
Political factor: There are some political factor which is impacting the performance of Tesco
this include the act of legislation , tax rate etc (Ethiraj, Gambardella and Helfat, 2017). For
example government set high tax rate then it impact the profitability of company because it need
to pay high tax rate.
Economic factor: The economic factor which impact the organization such as inflation taxation
etc. Therefore Tesco need to be aware of changes in policies which are taxation or any other
factor this all negatively impact the accessibility of finance (Bettis, Helfat and Mitchell, 2016).
For Example at the time of recession company suffer a lot because consumer avoid purchasing
and spend less on product and services. This impact the sale and profit of company, so firm need
to sale its product and services at discount price.

Social factor: Social factor are those which include the taste and preference of consumer. in
Modern Era taste and preference of consumer changes with the changes of time this impact the
sale. For this purpose company need to modify its product and services so that it can satisfy its
customer by selling them product according to their requirement.
Technological factor: There are many new technology which is introduce in market and this also
impact the profitability and sale of company (Ethiraj, Gambardella and Helfat, 2016). Along
with this, if Tesco not introduce new technology then it cannot make product and services
according to the needs and wants of customer or increase sale. for Example if company use
information technology then it can easily track its regular customer and send them regular
updates of its new product and services.
Legal factor: Government policy and legislation also impact the sale and profit of company
because it need to sale product and services (Schmidt and Farkas, 2016). There are many laws
and legislation which Tesco need to apply on its organization such as health and safety act,
equality act etc. Apart from this restriction on merger also impact the growth and expansion
strategy of Tesco.
Environmental factor: People are now more aware of their surrounding environment they want
environment neat and clean (Zhao, Fisher and Miller, 2017.). For this purpose, Tesco need to
make environmental friendly product. Along with this company can recycle the waste produce
at the time of production.
Hence from the above Pestle analysis it show that their are many factor which impact the
competitive advantage. This factor help company in indentifying changes which take place in
external environment and impact organization strategy (Keyes, 2016). Along with this political
factor have great impact on organization. for this purpose company need to increase the price of
its product so that it can easily pay high tax without facing any loss. Along with this Tesco not
use advance technology which impact company because its many competitor use high advance
technology for making innovative product and services. This analysis is relate to past event and
experiences which implement in future strategic management. The competitive advantage is
sustainable if it cannot eroded by action. It is necessary for the organization to adopt the
sustainable development strategy because it is not only environmentally friendly but also

support Tesco in gaining competitive advantage. Further it is necceary to find out way for
controlling the pollution and be innovative so that it can reduce the environmental impact. It can
also increase social value which help in going beyond its competitor. In addition to this, Tesco is
facing issues because of gap between what they want to do and what is right thing. It need to
focus in fulfilling the needs and wants of customer, for increasing their satisfaction level it is a
important part of competitive advantage.
b
Critically evaluating the strategy of the Tesco
Tesco can use different strategy for gaining competitive advantage and for achieving success.
SAFE criteria strategy used by Tesco for analysing the sustainability, accpetability and
feasibility. Three of them are success criteria which are discussed below
Sustainability: The sustainability is related with measuring which proposed strategy address the
key opportunities. It also deal with the overall rationale of the strategy (Cooper, Ezzamel and
Qu, 2016). It help in identifying the macro factor which impact the overall organization
performance. It is one of the most effective in term of environment and capabilities. Through
PESTLE it is easy to identify the factor which impact the organization performance. Along with
this it can be stated that sustainability policy has great impact on the activity in organization.
Acceptability : acceptability is concern with the expectation of different stakeholders that are
customer, employee ,shareholder etc. With the best performance which result in reducing the risk
and increase in return for Tesco (Lin, Tseng and Lin, 2016). Further return can be financial of
non financial. While risk involve the failure of strategy which is implemented by Tesco.
Feasibility: Feasibility is related to the resources which is used for implementation of strategy it
can be obtained or developed (Agrawal, Singh and Murtaza, 2016.). In resources it include
people, information, time and fund. Along with this there are some tool which can be used for
feasibility that are cash flow analysing and forecasting break even analysis etc.
Balance scorecard

It is a strategy which Tesco can used for measuring its performance, it not only measure the
financial performance but also business and customer. further it translate the company strategy
into four perspective that is as follows:
Financial perspective: Tesco can measure it financial performace with the help of financial
perspective such measures include return on capital, economic value added etc.
Customer perspective: it help Tesco company in measuring the satisfaction level of customer. it
can be measured by seeing market share and repeatable customer.
Business process perspective: there are some business process measure such as cost and quality.
It help in identifying the process for increasing the production and sale of company.
Learning and growth perspective: it includes some measure such as retention of employee and
satisfaction level of customer.
This all perspective of balance care include the measure objective, target value. The one of the
important objective of Tesco company is to achieve profitable growth. Along with this measure
include the measurement of progress of Tesco company for reaching its objective (Ethiraj,
Gambardella and Helfat, 2016). Apart from this target set by the firm such as target of Tesco is
to increase 2% market share. At last it came initiatives which include all the action program
which need to initiated in order to achieve all objective on time.
Recommendation
It is recommended that Tesco can used new technology for making innovative product
and services for its customer. along with this firm can focus on making envirometal friendly
product so that it can easily increase the satisfaction level of customer. further company can
focus on making product according to the needs and demand of its customer so that it increase
sale and gain competitive advantage,
PESTLE analysis help in identifying the factor which impact business and its activity for
this purpose Tesco can used different strategy such as Balance score and SAFE criteria for
achieving success.

Conclusion
From the above report it is conclude that for gaining competitive advantage company
need to conduct PESTLE analysis so that it can easily find out macro factor which become
barrier in gaining competitive advantage. There are different type of strategy which company can
used for survive in competitive market.

References
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Bettis, R.A., Ethiraj, S., Gambardella, A., Helfat, C. and Mitchell, W., 2016. Creating repeatable
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Ethiraj, S.K., Gambardella, A. and Helfat, C.E., 2016. Replication in strategic management.
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