Strategic Analysis of Tesco: Corporate Strategies and Recommendations

This report offers a comprehensive analysis of Tesco's strategic management, focusing on its corporate strategies and market positioning within the global retail industry. The introduction sets the stage by highlighting the importance of strategic management in achieving organizational goals and competitive advantage. The main body delves into Tesco's corporate strategies, including its global expansion strategy, technological innovations, and the VRIO framework. It also provides an in-depth examination of Tesco's internal and external environments using SWOT and PESTLE analyses, identifying key strengths, weaknesses, opportunities, and threats. Furthermore, the report explores the strategic tools and techniques employed by Tesco, such as the PESTLE model, Porter's Five Forces, SWOT analysis, value chain analysis, and core competencies. The analysis also covers Tesco's strategic planning process, emphasizing how the company determines its strategic position, sets objectives, and implements its plans. Finally, the report offers recommendations for future improvements, aiming to help Tesco maintain its leading position in the retail sector. The conclusion summarizes the key findings and emphasizes the significance of strategic management for Tesco's continued success.

Global strategic
management

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Determining the corporate strategies used by Tesco...................................................................3
Examining the internal and external analysis of the Tesco:........................................................4
Presenting strategic tools that are used by the Tesco:..................................................................6
Examining how the Tesco was created, develop and designed...................................................7
Discussing the contemporary strategic issues that are faced by the quoted firm in the strategy. 8
Justification of the strategy through corporate examples............................................................9
Discussing further recommendation to Tesco for improvement................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Strategic management helps the companies in setting various organizational goals and
objectives so that better policies and strategies could be developed in the future. The present
report is based on TESCO that will help to analyse various corporate strategies that is adopted by
the firm for better operations and also to gain competitive advantage in the long run that is only
possible through closely analysing other competitors strategies that are being used in the market.
Also, the study will analyse the macro and micro factors through SWOT and PESTLE
analysis that is essential tool in identifying the factors that are affecting the business operations
and how these can be controlled or overcome through the developed strategies of the Tesco
officials in the future. Further, strategic tools and techniques used by Tesco to enhance the
overall organizational performance will also be analysed in detail so that global expansion
strategy could prove to be success for the firm. Moreover, the study will identify the strategic
planning that is designed by the quoted firm through the use of appropriate strategic planing
process which is crucial for any organization success as it ensures that there is minimum wastage
of resources and goals are achieved in systematic manner. Lastly, different levels of strategy that
is used by the CEO of Tesco through applying various theories and models will also be covered
under this report in detail. Moreover, certain recommendations that will help the firm in future
improvement in achieving the desired goals will also be discussed so that it could maintain the
leading position in retail sector in UK through selling its innovative goods and services that are
different from the competitors that are also striving to maintain competitive advantage in this
industry.
MAIN BODY.
Determining the corporate strategies used by Tesco.
Tesco is the largest company that is actively involved in selling variety of goods to all the
customers around the world. Moreover, the company is constantly developing various policies so
that competitive advantage could be gained in the long run. Further, corporate strategy are made
so that firm could survive in the market and is able to fulfil certain promises that are made to all
its stakeholders.
One of the major strategy that this company is working is global strategy that aims in
expanding in various regions and local market so that number of customer could be increased
and more sources of revenue generation could be created in the existing channels of Tesco

(Strategies adopted by Tesco and supermarket industry, 2021). Further, the expansion strategy
was made with the motive of introducing new products in the product lines that sales could be
increased in comparison to other competitors in the market. This strategy would be adopted by
the Tesco both through online and offline medium.
Another corporate strategy that was adopted by the quoted firm was innovative use of the
technology so that better marketing could be done and also stability could be ensured in the
company through ease in the daily routine work. To gain successful competitive advantage the
firm launch self-service check out points so that time of the customers could be saved that was
waste while standing in the long queues (Duhaime , Hitt and Lyles, 2021). Thus, with developing
the technological strategies the company was able to introduce innovative products and invest in
new areas due to saving in time and costs.
Thus, the above two strategies allowed the firm in better decision-making that led to
increase in the profitability of the business over a period. Moreover, by applying these two
strategies Tesco had helped in optimizing the business operations through creating new
opportunities of the business. Further, Tesco had minimized risk through building strategies that
would help in overcoming all the challenges in the best possible manner. Moreover, such
strategies adopted by quoted firm can be linked to the VRIO framework that helps in analysing
the firm competitive advantage based on the identifying the five elements described under this
model of strategic planning. In the first element of value the Tesco had identified the resources
that are providing some value to the customers (Godiwalla, 2018). Next in the rarity Tesco has
been able to sells goods that are not easily substitutes with others available in the market thus
making the goods rare. In the imitability stage Tesco has adopted the low cost strategy in the
market and thus goods could be easily differentiated with others. And in last in organization
with the effective payment systems, processes and structures the firm has able to easily adopt the
strategy that is devised for the overall organization.
Examining the internal and external analysis of the Tesco:
It is seen that the quoted firm is affected by number of factors that are present within and
outside the business organizations. Moreover, to analyses these factors in detail it can be
understood through SWOT and PESTLE analysis that are as follows :
SWOT analysis :
STRENGTHS WEAKNESS

 Focus is in technology as differentiator.
 Involved in continuous innovative
practices to gain competitive
advantage.
 The Largest market share in retail
industry in UK.
 It sometimes faces shortage of products
due to which it is unable to fulfil
demand of the customers.
 In some cases there are food safety
issues that are faced that has impacted
the total sales of the company.
 Frequent controversies that affect the
brand image.
OPPORTUNITIES
 Mergers and acquisitions.
 Use of artificial intelligence
 Entry into new markets.
THREATS
 Security and privacy issues.
 Increase in the competition in retail
industries.
 Rapidly changing the customers
demands.
PESTLE analysis:
Political:
Various factors such as tax rate, inflation and trade restrictions also affect the selling of
the goods by the quoted firm. Moreover, it is seen that such factors might create negative impact
on the overall firms efficiency (Bianchi , Mingo and Fernandez, 2019). For instance increased in
the tax rate might affect the sales of goods as prices would be kept higher that might drive people
to other options. Also, if trade restrictions are higher than goods of Tesco could not be easily
travel form one place to another.
Economical :
Factors such as unemployment level, demands, income level also impact the working of
the quoted firm. Further, such economic factors need to be taken into consideration before
making any changes in the organization. For example: During the recent times of Covid the
quoted firm was benefited from employing large number of people at lower salaries and thus also
created job opportunities for large group of people.
Social:

In today economy where there is growing concern of UK people to consume variety of
goods that are environment friendly and cause less harm to the planet. Tesco has been
developing sustainable products and is introducing more organic foods in product lines so that
more customers are attracted towards the brand and thus this factor would turn out positive for
the firm as best of the products could be offered by the firm in the best manner.
Technological:
With the advancement in technologies all the firms are focused on utilizing the best of
products and methods that would save the time and costs. Tesco has also implemented has
recently implemented self-service checkout points that has provided the customers better
convenience so that goods could be bought easily.
Legal:
Certain government policies, laws, rules and regulations need to be strictly followed by
the company so that there are no problems in the future operations of the business. Also, Tesco
has implemented business policies that are according to current laws made by the government.
Environmental:
These are based on the protecting the natural environment and resources and thus Tesco
aims at using the technologies that does the least harm to the natural resources and avoid
wastage of any resources.
Presenting strategic tools that are used by the Tesco:
Tesco has implemented various techniques and tools in its routine work so that better
growth and development could be achieved by the firm in long run. Below is the list of tools that
are used by the firm in analysing strength, weakness and also growth prospects.
Pestle analysis :
Through this model the quoted firm is able to identify various factors that are present
outside the business culture and affects the efficiency (Thams, Chacar and Wiersema, 2020).
Moreover, such factors cannot be eliminated completely but the firm can overcome such
challenges through implementing better policies so that there are no problems in carrying out any
activities.
Porter 5 forces model :

By applying this model at the workplace Tesco has been able to identify the level of
competition that is currently prevailing in the target market, what are the chances of the new
entrants in the industry, what is bargaining power of suppliers and customers along with the
threat of substitutes (Berisha Qehaja, Kutllovci and Shiroka Pula, 2017). Thus, by analysing all
these factors the quoted firm is able to easily enter new markets and also identify the market
position that would be helpful in introducing new policies in the firm.
SWOT analysis:
These tool is applied by the firm to identify strengths, weakness, opportunities and threats
so that accordingly new projects could be taken by the firm. Further, through this tool the
company is able to analyse the risk and returns that are associated with particular aspect of the
company. Moreover, such type of analysis also helps Tesco in saving unnecessary costs and also
help in developing business goals and strategies for success.
Value chain analysis:
Through using this technique Tesco is able to evaluate each activity that is performed in
the firm and identify whether it is adding value to the existing value chain or not (Sherifi and
et.al., 2020). Also, through using this technique the firm is able to develop competitive
advantage either through reducing the costs on various products or through making the product
different form its competitors. Furthermore, this analysis is conducted through identifying the
value chain activities,determining the total cost that is associated while conducting all these
activities and lastly identifying the opportunities to gain competitive advantage. Thus, Tesco
identify all the ineffective activities in the chain so that corrective actions could be taken or these
could be eliminated.
Defining Core competencies:
This is also used by the quoted firm so that special characteristics could be identified by
the firm so that business would be able to easily stand out in the competition. Further, these core
competencies are different and are thus unique from its competitors that help in success of the
firm.
Examining how the Tesco was created, develop and designed.
Strategic planning is developed by the firm so that company could provide better
direction to overall company. Also, this helps the company in tracking the overall progress
towards certain goals and objectives. Further, through clearly defining the company strategy the

Tesco is able to develop KPI that would measure the performance of the employees and work in
specific time in the future (Akyuz and Gursoy, 2020). Moreover, creation, development and
designed could be understood through the strategic planning process that the quoted firm follows
and is described as below:
Determine the strategic position:
Here in this step Tesco identifies the position through various analysis such as swot and
pestle and also determine the key strategic issues that the company is facing currently so that
clear objectives could be established (5 steps in strategic planning process, 2021). Also, this is
done through collecting the market data and customer insights so that issues could be addressed
in the efficient manner. Further, this allowed the Tesco to make necessary changes in the firm.
Prioritizing the objectives:
Once the issues are identified than next step that Tesco uses is to determine certain
objectives that will help in achieving the goals. Also, the main motive of the firm is to set those
goals that are measurable and unique from that of competitors. For this purpose Tesco uses the
SMART objectives so that timeline could be determined and better analyse the resources could
be done so that goals could be achieved.
Develop the plan:
Tesco is very much concern in achieving the goals in right manner and for this purpose
the company uses strategy mapping tool so that all the business processes and gaps could be
identified as whole so that areas of improvement could be identified before the implementation.
Also, various tactics that are essential for achieving these goals are also identified under this
stage by the quoted firm.
Executed and managing the plan:
Management develops the strategic plan for the overall firm and once plan is developed
than it is ready for implementation (Bogers and et.al., 2019). Thus, supervisors communicate
strategy through sharing the important documents and disclosing the responsibilities that each
member would be performing.
Review of the plan:
This is the last stage in the strategic planning process and it is done through reviewing the
KPI. Further, the quoted firm develop the KPI on the quarterly basis so that changes in the plan
can be made accordingly (Regent and et.al., 2019). Moreover, use of balance scorecard is also

done by the firm so that business performance could be analysed on the large level. Also, there
are cases where the firm need to change the vision and mission statements so that new plan could
be prepared and implemented.
Discussing the contemporary strategic issues that are faced by the quoted firm in the strategy.
There are three types of strategies that are incorporated in any business organization such
as corporate, business and functional strategies. All these levels exist within the quoted firm so
that competitive advantage could be gain on vast level. Further, all the strategies are made in
accordance with goals and objectives that the firm need to achieve. Also, the strategy of
expanding into new markets and utilizing the best of technology at the workplace quoted firm
would face some strategic issues such as there might be resource limitations as there is growing
demands of raw materials almost by every firm in retail industry. Further, there are chances of
culture modifications that might impact the global strategy aim that is developed by the firm.
Thus, such uncertainties about the future might cause Tesco either to make modifications in the
existing strategy or to completely eliminate it (Molnar, 2018). Moreover, firm might also face
difficulties in recruiting the best talent so that they are able to utilize best of technology at the
workplace so that there is optimum utilization of resources.
Furthermore, the above two strategies that are developed by Tesco could be linked to the
blue ocean strategy in which the firm continuously aims at keeping the low costs and
differentiation of the products to remove the market competition. Moreover, through using this
model the firm is able to create new demand in the market. Further, make the competition in the
target market irrelevant as other competitors are unable to introduce products at that level. Also,
through using this strategy Tesco is able to align the whole activities of firm on the same level so
that better coordination could be done.
In Tesco strategies can be further linked to technology innovation strategies that helps
in developing best of technology to carry out the work in smoother manner by investing more in
research and development activities. Further, it is been used effectively by the quoted firm as it
wants to gain competitive advantage in the short run. Also, management team of Tesco
continuously aims at developing a product or service that is completely unique and different
from the competitors so that all class of people could have it easily. Moreover, quoted firm
introduce the common mission statement of innovation so that new value could be created for the
overall company.

Justification of the strategy through corporate examples.
According to Schilling and Shankar (2019) with the changing trends and technologies in
the UK most of the companies today now are aiming at developing strategies that would allow in
better development and growth. Further, there are some examples of companies that are using
best of the strategies so that more people are attracted to the services and products that are
offered by the specific firms. For instance there is shop named Alepa in Finland that is using one
of the best smart technologies so that better service could be offered to its customers. It is type
of chatbot through which customers can stock there items to their nearest Alepa store that can be
collected later. Further, this chatbot uses digital screen to display the new products that are
arrived to the customers and thus source of increasing the sales of the company.
Moreover, Elbanna, Al Katheeri and Colak (2020) stated of BOOTS company in UK that
has been growing on large scale as beauty retail outlet. Also, the boots has focused on the
wellness of people along with providing the best customer experience through innovating the
outlets into luxury department stores and installing technology enabled elements that are not
available in other outlets.
Furthermore, the best example is of Camp outlet that is known for family experience
stores in New York. However, the store has implemented an innovative strategy to give better
experience to the customers. It although looks like ordinary store but it has amazing thing that it
has secret door that leads to the best of the interactive play area for all the kids that visits with the
family to the store thus this technique serve as revenue generation method for the firm.
Discussing further recommendation to Tesco for improvement.
Tesco is operating on large scale either through online and offline medium around
various regions. However, there are certain suggestions that would allow the firm to implement
the above strategies in the best manner that are as follows:
 It is to be suggested to the quoted firm that wishes to operate globally that firm need to
make bigger changes in the lifestyle of the people through launching new ranges of
organic food products so that healthier products would attract more potential customers
and generate revenues for the firm (Garrido-Lopez and et.al., 2018).
 Further, it is recommended that Tesco need to use more of digital technologies at the
physical stores and continuously update the online official website so that people are
aware of the latest launch and arrivals in the company.

 Also, the firm need to continuously indulge in adopting better marketing techniques
through developing business plans that focus more on marketing certain goods and
products. Further, such type of marketing efforts would allow the company to sell goods
better than that of other rivalries that are present in the market. Moreover, various
promotional techniques such as offers, discounts, coupons etc. need to be provided so that
customer loyalty could be maintained and brand awareness could be gained on larger
level.
 Better customer service need to be provided to each customer so that they think that they
are being valued and are essential part of the organization that will also lead to repeated
purchases and increase in the goodwill of the company. Further, service could be
provided in bests manner through effective use of CRM systems where all the data are
recorded in systematic manner. Further, this could be done only when Tesco hires
professional employees that would handle these systems in better manner through
providing quick respond to all the customer queries so that certain improvements could
be made accordingly.
 Moreover, quoted firm need to understand the shifting consumer habits through keeping
the suggestion boxes, reviewing the performance through metrics and KPI that would
allow to make the firm necessary changes. Also, with the help of the external agencies
the firm could also analyse the changing needs in form of survey and interviews that
would also save the time and cost of the firm.
CONCLUSION.
From the above report it can be concluded that strategic planning is an important tool for
the firm to achieve great height of the success. Moreover, the report had summarized business
strategies such as global strategy and efficient technology used by the Tesco to gain competitive
advantage in the long run. Further, external and internal environment of the Tesco through
analysing various social, political, economical, strength, weakness, opportunities and much more
is analysed in detail so that complex problems could be solved easily. Moreover, various
strategic tools are used by the company such as Swot, Pestle, core competencies, value chain so
that better policies could be developed in the future. Also, importance of such tools in gaining
the competitive advantage along with success of the current strategy had also been covered

under this report. Furthermore, strategic planning of the Tesco would be identified in detail to
achieve certain goals in the future. Lastly, strategic issues such as resource limitation, changing
trends and culture, along with emerging digital technologies in the current era had also identified
through application of theories like ocean blue strategy and innovation and technology strategy
for better understanding of the concepts. Moreover, justification of the current strategy used by
the Tesco through various corporate examples had also been identified under this report. Lastly
certain recommendations such as improvement in the current customer service, effective use of
marketing tools and developing best of the digital technologies both in online and offline stores
had also been investigated in this report so that firm would be able to increase the sales and
generate more revenues through attracting more of potential customers through continuous
efforts and measures that would lead in creating the goodwill of the company in the long run.

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