Strategic Management and Leadership Report for Tesco Analysis

This report provides a comprehensive analysis of Tesco's strategic management and leadership. It begins by examining the importance of external factors, including globalization and market analysis using the PESTLE model, and how they impact the business. The report then delves into the needs and expectations of stakeholders, such as shareholders, customers, and employees, and how these influence the company's decisions. It assesses the current competitive landscape, including the rise of competitors like Aldi and Lidl, and uses tools like SWOT and Porter's Five Forces to evaluate Tesco's strengths and weaknesses. The report explores various strategic options, including the Ansoff Matrix and Mintzberg's strategies, and compares Tesco's actions with those of Sainsbury's. It also discusses the development of future strategies, the importance of a suitable strategy plan structure, and the criteria for reviewing potential options. The report further examines Tesco's core values, current business objectives, mission, vision, and future management objectives, along with measures for evaluating a strategy plan, including the implementation schedule, dissemination process, and monitoring and evaluation systems.

STRATEGIC MANAGEMENT
AND LEADERSHIP

Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
1.1 Importance of external factors affecting the business...........................................................3
1.2 Needs and expectations of shareholders................................................................................4
1.3 Major changes in the external environment...........................................................................4
2.1 Tools to analyze the effects of business plan.........................................................................4
2.2 Analyze and review the current position of the company and evaluate the competitive
strength and weakness of the company.......................................................................................5
2. 3 Competitive strength and weakness-....................................................................................5
3.1 Tools to develop strategic options for the company..............................................................6
3.2 Comparative actions between Tesco and Sainsbury and the future strategy of the company
.....................................................................................................................................................7
3.3 Options to form the basis of future strategy..........................................................................7
4.1 suitable structure for the strategy plan...................................................................................7
4.2 Criteria for reviewing potential options for strategy plan.....................................................7
4.3 the key factors you would consider while constructing a strategy plan................................7
5.1 Core values of Tesco with its current business objectives....................................................8
5.2 Mission, vision objectives of Tesco and future management objectives of the company.....9
5.3 Future management objectives of Tesco-..............................................................................9
5.4 measures for evaluating a strategy plan.................................................................................9
6.1Schedule for implementing strategy plan.............................................................................10
6.2 dissemination process to gain commitment from stakeholders...........................................10
6.3 Monitoring and evaluation system of Tesco........................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Strategic leadership refers to a manager's potential to express a strategic vision for the
organization, or a part of the organization, so that they can motivate the employees and work up
to the vision set by the leaders of the business. Strategic leadership can also be defined as
utilizing strategy in the management of employees. This report covers issues such as Importance
of external factors affecting the business. Needs and expectations of shareholders. current
position of the company and evaluate the competitive strength and weakness of the company.
Tools to develop strategic options for the company. Comparative actions between Tesco and
Sainsbury and the future strategy of the company. key factors you would consider while
constructing a strategy plan. Core values of Tesco with its current business objectives. Mission,
vision objectives of Tesco and future management objectives of the company and Monitoring
and evaluation system of Tesco.
MAIN BODY
1.1 Importance of external factors affecting the business
Factors which are external immediately affects the planning of a company. Other than this
managers of the companies such as Tesco has to work on new strategies so that they can
satisfy the needs and wants of their consumers. Globalization is another factor which the
companies need to take care at the time of expansion or diversification and for that managers
of the company does a thorough investigation in order to determine the needs of new markets
and the demand made by people there so that the company can work on formulating the
strategy and bring innovation so that they can reduce the impact of external factors in the
market and achieve growth (Jumaa and Alleyne, 2017). In order to assess the requirements
and changes of the environment they need to do the analysis of market with Pestle model so
that they can make decisions on the basis of that.
1.2 Needs and expectations of shareholders
Each of the stakeholder of the company has different needs and concerns and Tesco identifies
them all. For instance owners of the company expects that their venture must be profitable
whereas bodies of government expect from the company that they pay their taxes on time.
The importance of this course helps the company to plan their actions so that they can

determine and fulfill the needs of their stakeholders. Stakeholders of the company influence
their decisions (Belias and et.al., 2017).
Customers-
They are the ones who leaves a drastic effect on the decisions making strategy of the
company. If the company do not have support from their loyal customers then they won’t be
able to survive in the market. Managers of Tesco gets influenced by this subject and
considers them in most of their decisions.
Employees-
Managers of the company maintains the relationship with their employees so that they
can get loyalty from them. Apart from this they also work on establishing the policies of
HR in order to handle the diversity of growing workforce.
If the needs of stakeholders of the company are satisfied then they will invest in the company
and company will get repeated business from them.
1.3 Major changes in the external environment
Tesco is loosing their share in the market because of high level of competition form Aldi,
Lidi and Sainsbury. The products that they are offering at low prices is better than Tesco also
because of the scams that the company has been trust of the consumers is also affected on the
brand.
2.1 Tools to analyze the effects of business plan
In order to analyze the effectiveness of the current business plan implemented by Tesco it is
necessary that company conducts a SWOT analysis to gain the knowledge.
2.2 Analyze and review the current position of the company and evaluate the competitive
strength and weakness of the company
Porter’s five forces of Tesco
Threat of new entrants-
Companies which are entering newly into the market is bringing innovation, new
measures such as low prices of products, offering new prepositions to the customers which is
increasing the pressure on the company. In order to reduce the impact of these barriers Tesco has

to come up with strategies so that it does not affect their competitive edge (Ginter, Duncan and
Swayne, 2018).
Bargaining power of suppliers-
Companies operating in the sector of retail buys raw materials from various suppliers. If
the suppliers of the company are dominant then it will affect the profitability of the company as
they will get reduced margin on their products.
Bargaining power of Buyers-
Consumers demands a lot from the company and if it is not fulfilled by the company then
it will affect the company in the long run. If the base of the customers of the company is smaller
then they will have the advantage of high bargaining power.
Threat of substitute products-
This aspect states that when a same new products fulfils the needs of their people then it
affects the profitability of the company.
Rivalry among competitors-
Currently Tesco is facing an immense competition from its competitors such as Sainsbury
and Aldi which is forcing the company to reduce their level of margins and affecting the
company in achieving growth.
2. 3 Competitive strength and weakness-
Strength-
Competitive strength of the company is that they have established their market which
covers a large area. Apart from that they deal in almost every consumer goods such as clothing,
groceries, electronics, furniture, software etc. which helps them to have advantage over their
competitors (Graham, 2016).
Weakness-
Tesco established its market in UK so well that it forced the company to enter into new
markets. After that company stopped investing in the stores of UK as they had their focus on

other ventures and this gave their competitors a chance to offer a better in store experience to
their customers.
3.1 Tools to develop strategic options for the company.
Ansoff Matrix-
Market Penetration-
With the help of this strategy the company sells existing products to existing markets and
this has helped the company to increase their share of market.
Market Development-
With this strategy the company sells existing products to new markets and it has helped
the company to tap various markets in different countries.
Product Development-
Tesco offers many products which they sells it with their own labeling in the existing
markets and these different products help the company to satisfy the needs of different markets
segments
Diversification-
This strategy has not been successful for the company as they have failed in formulating
the strategy to diversify their market. It is not easy to sell new products to new people. Company
faced a lot of losses in its Giraffe restaurant which is why it is necessary for the company to plan
strategically.
Mintzberg strategy
Deliberate Strategy helps the companies such as Tesco to get a direction of sense and purpose.
On the other hand emergent strategy helps the company to observe and assess the needs of the
market and make the strategic plan according to that.

3.2 Comparative actions between Tesco and Sainsbury and the future strategy of the
company
Currently between both the companies Sainsbury is ahead of Tesco in the supermarket chain. In
comparison with Tesco prices of Sainsbury has been high but it is because the quality offered by
Sainsbury is better than Tesco. Other than this consumers feel that even the store experience and
quality of food is not better of Tesco which has created the gap in the performance of the
company. On the other hand Tesco has invested more of their efforts into hyper and international
markets than Sainsbury.
3.3 Options to form the basis of future strategy
The future strategy of the company is to take steps which are necessary so that they can achieve
and restore growth in the market of UK and make the market of UK as a base for all of their
international markets. Other than this they want to be the best in all of their alternatives
businesses such as finance services, telecom industries etc. Also to improve the quality of food
as well as non food products (Morden, 2017).
4.1 suitable structure for the strategy plan
The plan must assess and analyze the resources that are major so that they can meet their set
goals. With the help of right structure they will be able to work on the goal.
4.2 Criteria for reviewing potential options for strategy plan.
It is necessary that company sets mechanisms for control and monitoring so that they can assess
the potential of the plan. If the plan has strategies for the development of products then the
criteria for reviewing the plan will be assessed.
4.3 the key factors you would consider while constructing a strategy plan
Vision and Mission- Tesco needs to work according to the mission and vision of the company so
that they can achieve long term growth in the market.
Stakeholders- Company needs to work according to the needs of their stakeholders so that they
must not influence or affect the strategic plan made by the managers of the company.

Internal environment- Company needs to assess their strength and weakness so that they can use
them in order to bring changes into their internal environment and update the culture of the
company.
External Environment- They need to form the strategy according to the political, economical,
social so that these factors does not affect the growth of the company.
Competitive advantage- In order to make the strategic plan effective they need to work on
finding out the unique factors about the brand so that they can attract the target audience.
5.1 Core values of Tesco with its current business objectives
Value of Tesco is to understand the thought process of customers and work on achieving their
needs. Other than that they want to take responsible actions for the betterment of the
communities they serve in. company listens to them and engage in a conversation with them with
the help of tools of social media by which they take necessary steps to bring innovation into the
market in order to satisfy them. Cultural value of company is to look after their employees by
trusting and respecting their decisions for the company. Other than that leaders of the company
also reward and appreciate them for their achievements so that they can invest more of their
efforts and achieve growth for the company. Social value of company is to reduce the amount of
food that is being wasted on a global level so that they can help those people who are
underprivileged and whose basic needs cannot be fulfilled. Also they want to contribute in a
positive way for the operations of the community. They also aim to offer healthy products so that
people live a easy and healthy life (Solomon, Costea and Nita, 2016).
The current objectives of the company is to expand the manufacturing of organic
products and reach the mark of 1 billion pounds in 5 years. Other than this company now wants
to focus in the line of non food products rather than food products and according to their value of
offering healthy products to community they wont be able to do it as the main area of focus of
the company will be on non food products which will no help people to maintain a healthy
lifestyle. Other than this they want to offer their employees a chance to prove themselves so that
they can help and motivate them to increase their strength. This objectives meets with the value
of the company as they appreciate their employees and treat them with respect.

5.2 Mission, vision objectives of Tesco and future management objectives of the
company
Mission and Vision
Tesco's core purpose or mission is to “We make what matters better, together.” Its
values, mission and vision are interrelated and operate as a whole shaping the identity of the
company. Together with Tesco's strategy, they have a key role in achieving success
Objectives-
Tesco wants to sell more of their products as compared to their competitors.
They want to improve their profitability by 20 per cent next year (Muller and Turner, 2017).
They also want to increase their share in the market by 10 per cent so that they can have a
competitive edge over their competitors.
5.3 Future management objectives of Tesco-
Company wants to offer better quality of products at the least price possible in the market.
They want to improve their level of supply so that consumer never go without a product they
wanted as it leaves a bad impression on them.
They want to expand profitably so the company is ensuring that they take secure steps and avoid
those which are not necessary as it will help in growth and development of the business.
Company ensures that they are going to invest more in the department of research and
development so that they can work with the latest level of technology available in the market
(Doyle and Brady, 2018).
5.4 measures for evaluating a strategy plan
In order to evaluate the strategy plan it is necessary that managers of the company make
sure that vision and mission is in the same path set for the goals and strategies.

6.1Schedule for implementing strategy plan
In order to make a schedule for implementing the plan it is necessary that the company has a list
for all the measures that are required. Other than this managers needs to make sure that resources
are allocated in the right manner. This way they will be able to schedule for the plan.
6.2 dissemination process to gain commitment from stakeholders
If the company post their updates about the policy, conferences and meetings to the association
and present the program to the community then they will be able to gain commitment of the
stakeholders.
6.3 Monitoring and evaluation system of Tesco
KPI-
It stands for key performance indicator which helps to measure the performance of the company
on a long term basis. In detail it help the company to identify the achievements they have made
in the operational, financial area in comparison with those companies which are dealing in the
same sector. According to the strategic plan of the company there are six KPI’s
Sales- KPI helps the company to evaluate and increase the sales. With the help of this model the
company has been able to increase the value. More and more customers are getting their products
delivered faster in order to increase the sales.
Profit- Tesco believes that if they continuously improve the experience of their buyers and
deliver them a better service and value in their products then they will be able to improve their
position in terms of financial aspects.
Cash flow- In order to invest in other areas and maintain the flow of business company needs
this and KPI helps them to evaluate their flow so that there are no problems in maintaining the
operations.
Customers- KPI helps them to collect feedback on regular basis which helps the company to
determine which areas needs their attention. It saves their time and effort and helps them to make
changes in the right area.

Colleagues- KPI helps the company to judge the performance of employees and check that if or
not they are meeting the goals and objectives of the company.
Partnerships- KPI helps the company to maintain the relationship with their suppliers with
transparency so that their relationship with them is open.
Overall KPI of the company must be linked with the mission, vision and objectives so that it can
be more effective (Rothaermel, 2016) .
CONCLUSION
From the above studies it has been concluded that Tesco needs to come up with better and
effective strategies so that they can achieve their goals and objectives and take their old position
back from their competitors such as Sainsbury. They need to improve the experience of in store
for their consumers and offer them quality products so that they can improve their image in the
market. Core values of the company has been highlighted and it matches with future
management objectives of the company. Also the strategic made by the company matches the
need of stakeholders of the company. This report concludes that Tesco is taking all the necessary
steps and investing in the department of R&D so that they can make changes according to the
trends.

REFERENCES
Books and Journal
Rothaermel, F.T., 2016. Strategic management: concepts (Vol. 2). McGraw-Hill Education.
Doyle, T. and Brady, M., 2018. Reframing the university as an emergent organisation:
implications for strategic management and leadership in higher education. Journal of Higher
Education Policy and Management, 40(4), pp.305-320.
Solomon, I.G., Costea, C. and Nita, A.M., 2016. Leadership versus management in public
organizations. Economics, Management and Financial Markets, 11(1), p.143.
Morden, T., 2017. Principles of management. Routledge.
Graham, C. ed., 2016. Strategic management and leadership for systems development in virtual
spaces. Igi Global.
Belias, D., and et.al., 2017. Human resource management, strategic leadership development and
the Greek tourism sector. In Tourism, Culture and Heritage in a Smart Economy (pp. 189-205).
Springer, Cham.
Jumaa, M.O. and Alleyne, J., 2017. Strategic Leadership in Health Care in Challenging
Times. Organisation Development in Health Care: Strategic Issues in Health Care Management.
Ginter, P.M., Duncan, W.J. and Swayne, L.E., 2018. The strategic management of health care
organizations. John Wiley & Sons.
Muller, R. and Turner, J.R., 2017. Project-oriented leadership. Routledge.