Strategic Management Report: Tesco's Strategy and Environment

This report provides a comprehensive analysis of Tesco's strategic management, exploring the interplay of internal and external environmental factors. It begins with an introduction to strategic management, reviewing various definitions and perspectives, and then delves into the strategic processes employed by organizations, differentiating between prescriptive and emergent approaches. The report conducts a detailed SWOT analysis of Tesco, evaluating its strengths, weaknesses, opportunities, and threats, and also performs a PESTEL analysis to assess the political, economic, social, technological, environmental, and legal factors influencing the company. Furthermore, the report outlines an action plan for Tesco, focusing on adapting to changes in both internal and external environments, emphasizing the importance of diversification while maintaining focus on core business areas, proper communication of strategic plans, and the implementation of both short-term and long-term goals. The report concludes by highlighting the importance of stakeholder management and the need for continuous adaptation in a dynamic market.

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Strategic management

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Contents
Introduction.................................................................................................................................................2
Two main perspectives used by the organization.........................................................................................2
An internal and external environmental variation on organizational strategy..............................................4
Action plan..................................................................................................................................................6
Conclusion...................................................................................................................................................8
Reference....................................................................................................................................................9

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Introduction
In every organization, the management and structure are required to be managed for achieving
the goals of the business. Strategic management in the organization is required for the resources
which helps in achieving the goals and objectives. Strategic management includes the setting of
goals, examining the competitive environment, analysis of internal organizations, strategies
evaluation, and ensures that the management promotes the strategy throughout the organization.
It is stated by James Higgins that strategic management includes the process to manage the
mission of the organization and managing it through relationship with environment.
According to Lester Digman, strategic management is considered as a continuous process which
includes to attempt of managing the change in environment for the maximum benefits.
According to Glueck, strategic management includes the streaming of decisions and actions
which helps in developing the strategies for achieving the objectives. It also includes the
combination of formulating, implementing, evaluating the decisions for making the management
to achieving objectives.
Strategic management is mainly to identify and describe the strategies which supervisor helps in
executing for achieving better performance and competitive advantage for the organization. In an
organization, the competitive advantages can be achieved when the profitability of the company
is higher than the other in the whole industry.
Strategic management is considered as planning for predicting and unfeasiblility contingencies.
It is suitable for small as well large organizations, and also the small organizations face
competitions, and by developing and implementing the effective strategies, the competitive
advantages can be achieved. This report includes the strategic management of Tesco.
Two main perspectives used by the organization
Tesco PLC has a competitive edge which includes the internal strength as well as the external
opportunities. In determining the strategies, Tesco adopts the process of strategic management
which includes the PESTEL analysis, Porter’s five forces analysis, SWOT, Value chain and core

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competencies. The two processes are considered by the organizations in determining the strategy
is the emergent strategic process and prescriptive strategic process. All these activities are called
prescriptive strategic processes. In illustrative strategies, there are many strategy theory that
includes the elements of this process (Lowe, et al., 2012).
The prescriptive process helps in determining the strategy as it helps in providing clear
objectives by focusing on the strategy. With this process, the organization can translate the
objectives into targets for monitoring and measuring the performances. It helps in allocating the
resources for achieving the specific objectives. It helps in effectively structuring the information
for establishing the control and setting the targets (Gallus and Frey, 2016).
The emergent process includes that the objectives of the organizations are not decided in advance
and these are developed during the operations and strategies are formed.
Therefore, in case of early stages in emergency situation may include the similar to prescriptive
strategy and analysis of resources. However, the process has become more comprehensive,
knowledgeable and experiment. Similarly, many strategic theories belong to emerging strategies.
Some of them are emphasized in the emergency strategy process model shown at the top
(Bordum, 2010).
Strategic management includes the three core areas which are strategic analysis, strategic
development, and strategy implementation. This disagreement leads to two differences in
regulations for strategic management; prescriptive and emergency methods. Researchers and
strategists have different views on these three core approach the various areas of strategic
management are linked (Fadun, 2014).
Strategic management includes the process which is ongoing for optimizing an organization to
achieve its goals. It includes the company's goals and development of policies and the
environment that will enable the organization to achieve the goals. Often companies are required
to adjust the resource allocation and gradually adjust for meeting the new and different needs of
consumers in order to remain competitive.
According to Mints burg (1985), the strategy is the process of action. Description of Ansoff
included the process which was comprehensive and included the steps to achieve the goals.

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These steps usually includes the mission statement of the company, the establishing goals and
objectives, and a standardized strategy ( allocation of resources), the company has scanned its
environment for determining which opportunities are most appropriate match its function
(Fadun, 2014).
An illustrative approach to strategy development is derived from a "rational" economic
perspective is to make a decision. The prescriptive approach holds that a reasonable analysis of
the organization should be based on the facts and then the best course of action should be
selected.
Emerging strategic management includes the strategies with an unclear final goal, and its
elements will continue to evolve throughout its life cycle, as the strategy will make a
fundamental difference between intentional (perspective) strategy and emergency strategy,
intentionally focus on direction and control to do things right, and emergencies open up the
concept of strategic learning (Gallus and Frey, 2016).
The theory based on uncertainty shows The strategy process is unpredictable, unstable and easy
to implement, so the strategy cannot be developed in advance The chaotic results of these theory
suggests that predicating the future is almost impossible and all the strategies consist of feedback
mechanisms and involves uncertainty and pointed out the environment is a major source of
uncertainty (Rothaermel, 2016).
An internal and external environmental variation on organizational strategy
Internal Environment (SWOT)
Strength: The Company Tesco is the biggest retailer in the market of UK which has the highest
supermarket chain in Britain and resulted in higher revenues. The company earned a higher level
of profitability and has risen 28% of the operating profits from the previous years. This has a
great impact on the strategic management of the company as it helps in creating more
supermarket chains as the company is generating higher revenues (Nwagbara, 2010).
Weakness: The Company has done several scandals in its financial statements to mislead the
people regarding the profitability so it has charged the fines on the company. The operating
profit of the company has also declined as the share prices of the company have fallen. This has

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an adverse impact on strategic management decisions. The company has now taken the decisions
to not make more scandals and should not affect profitability due to the higher debts.
Opportunity: The company has provided online shopping and also has the strategic alliances
with the many other brands which result in offering more products to the customers. The
company has made the strategic decision that the home delivery services have enhanced the
market share so they will promote more products on the online shopping market.
Threat: The Company Tesco has the threat of higher competition in the market as the growth
and the performance of the company are getting affected by that. Due to this threat, the company
has taken the strategic decision of increasing the market share so that no other retailer company
can beat them. The company also has the threat of the economic crisis and the credit crunches so
they had made the strategic decision of the regulations the government rules and follow them so
that their operational efficiency does not get affected (Mirabeau and Maguire, 2014).
Example: For Example, the company Tesco includes a great market position in the market so
they have the opportunities to expand their market at the other countries also to attain more
profitability. So the company has made the strategic decision of the emerging their market in the
other country so that they can expand their growth (Al-Shammari and Hussein, 2017).
External Environment (PESTEL)
Political: The government is not financially stable so they are imposing the tax rates and
encourage the retailers to create jobs in the country so that the workforce can be diversified. This
has a great influence on strategic decisions as it increases the demands of the products by
creating employment opportunities (Ambrosini, et al., 2015).
Economical: The taxation policies have changed in the UK which has impacted the UK market
share. The company's Tesco market share has declined so it has an adverse impact on them. The
strategic management of the company is that they should be aware of the changes in the policies,
leverage cost, demand, and supply so that they can evaluate the accessibility of finance.
Social: People are very much trendy so the major trend has been seen in the food items. The
company has a strategic strategy to offer food items more so that people could buy more and

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increased their sales. Their strategic decisions are getting impacted by the accommodating
changes in the demand of the food items (Ambrosini, et al., 2015).
Technological: The change in technology has brought much new innovation in the product and
services and has offered the company new opportunities too (Choi, 2008). Online shopping has
introduced which has a great impact on strategic decisions as the company has enhanced its sales
more and capture more customers who are not ready to come to stores.
Environmental: The Company Tesco has put the major concerns on reducing the carbon
footprints and they have increased the social conscience and minimized the stores. By reducing
the carbon footprints the company has maintained sustainability in the environment which has a
great impact on providing social awareness (Bovaird, 2018).
Legal: There are many policies and legislations of the government which they have to follow so
it has a great influence on the company’s performance. The company has made the strategic
decision of reducing the prices of the fuel they purchase to the amount spent on the grocery
stores so that the prices can be lower down in the market.
Example: The Company Tesco uses technologically oriented tools like online shopping to gather
the customers more so this has a great impact on the organizational strategy as it helps in
accessing the more customers and increasing the growth of the company (Choi, 2008).
Action plan
Tesco adopted the prescriptive approach. For the change in the internal environment, the
prescriptive approach is beneficial for the organization. Strategies are developed and designed
primarily by senior managers for the entire organization. Therefore, the management strategy
required to start from top to bottom. Effective strategy includes the discussion and
communications. Strategic management focus to integrate the capabilities of management and
technologies, such as; marketing, finance/accounting, human resource management, production
management, research, and development to achieving success of the organization (Brannen, et
al., 2013).
Tesco researched the market, its product, and required to understand consumer buying behaviors
and implemented them into the main agenda markets of its development. For example, the

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Japanese country pushed its electronic products to the world market and gained a world-
renowned advantage (Men and Hung, 2012).
Action plan for the change in the internal environment of the Tesco will include the process. The
new strategies which the tesco must choose and implement is that they must ensures that they
will diversify, but also it is necessary for them to focus on the core of the business. The effective
balance is required in the existing and new business (Brannen, et al., 2013). There is no doubt
that Tesco has performed quite well in the market. It only needs to maintain the same pace and
enter new and existing markets.
It ensures that similar messages are delivered to the company's stakeholders, it is important that
they are delivered in the best way possible. When the strategic plan is completed, it should
always have some short-term and long-term goals. Both long-term and short-term goals should
be properly communicated to stakeholders. As mentioned earlier, Tesco Plc has many
stakeholders, so the plan should be delivered in an appropriate way. It should be used as
company information so that it can be understood by every type of stakeholder. To this end,
stakeholder mapping is underway for ensuring that all stakeholders must manage the message
correctly (Wood, et al., 2016).
After planning, the implementation strategy is the next most significant factor. The properly
implemented strategy is a key factor in the success of any organization. Implementation is a
process in which all available resources are combined in a way that succeeds. Management plays
the most important role in the successful implementation of the strategy. It is the responsibility of
management to allocate all resources appropriately (Wheelen and Hunger, 2011). Management
also needs to ensure that adequate human resources are available to implement these strategies.
The different types of resources needed to implement Tesco Plc's new strategy are financial
resources, tangible resources, human resources, and technical resources. As mentioned earlier in
this article, the company will focus on product development and diversification strategies. To get
new products, the R & D department is required to be very strong. Therefore, most resources
(such as investment, human resources, etc.) must use research and development. Employ
employees who are capable of bringing positive change to the product. Sometimes, packaging
and labeling changes can make a miracle happen (Oliver, 2018).

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The action plan requires to involve the team, after the SWOT analysis which is done. The actions
are required to be listed down for making the change in the internal environment of the
organization. In order to make the change in the policies, the management is required to make
the changes for achieving the objectives. The timeline is required to be set up by the team. The
timeframe will be set for achieving the results on each change. The organization is required to
establish the follow-up and measurement process of the change in the internal environment. The
next step is to communicate the plan to the employees in which changes are made in the policies
and business strategy is required to be communicated for effectively implementing the change
(Shah, et al., 2015).
Conclusion
In conclusion, it is analyzed that strategic management is essential for the organization. The
organizations are required to adopt the process for determining the strategies. The changes in the
external and internal environment directly impact on the change in the organizational strategy.
The action plan of the Tesco is included which is required for the change in the internal
environment. It is essential for the business plan to keep the plan alive for the organization which
includes the monitor the activities and areas where the change is done and feedback is required to
be collected by the employees.

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Appendix
Action Plan
Strategy Action Plan Responsibility
Change in policies of
operations
Update on website Operation Manager
Training Customer service training HR manager
Improving cash flows for
reducing costs
Easy payment options to
customers
Finance manager