Strategic Marketing Report: Sustainable Competitive Advantage at Tesco

This report provides a detailed analysis of strategic marketing principles, with a focus on how Tesco, a major UK supermarket chain, can achieve a sustainable competitive advantage. It explores the differences between strategic and tactical marketing, emphasizing the importance of aligning products with customer needs, attacking new markets, expanding distribution channels, and prioritizing customer service. The report also includes an external analysis of the Australian supermarket industry using PESTLE and Porter's Five Forces frameworks, alongside an internal value chain analysis. Furthermore, it discusses Michael Porter's generic strategies, including cost leadership, differentiation, and focus strategies, highlighting their value and limitations in the context of strategic marketing. The analysis aims to provide recommendations for Tesco to enhance its market position and ensure long-term success through effective strategic implementation.

Running head: STRATEGIC MARKETING
STRATEGIC MARKETING
Name of the Student
Name of the University
Author Note

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Table of Contents
Task 1...............................................................................................................................................3
Introduction..................................................................................................................................3
Strategic and Tactical Marketing.................................................................................................3
Sustainable competitive advantage..............................................................................................6
Use of Strategic and Tactical Marketing for Tesco.....................................................................7
Conclusion and Recommendations..............................................................................................8
Task 2...............................................................................................................................................9
Introduction..................................................................................................................................9
External Analysis of the Australian Supermarket Industry.........................................................9
PESTEL Analysis........................................................................................................................9
Internal Analysis........................................................................................................................11
Porter Five Forces......................................................................................................................11
Value Chain Analysis................................................................................................................12
Conclusion.................................................................................................................................13
Task 3.............................................................................................................................................14
Generic Strategies- Michael Porters..........................................................................................14
The Cost Leadership Strategy....................................................................................................15
The Differentiation Strategy......................................................................................................16
The Focus Strategy....................................................................................................................17

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Value..........................................................................................................................................17
Limitations.................................................................................................................................18
References......................................................................................................................................19
Bibliography..................................................................................................................................21

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Task 1
Introduction
The strategic management aspect plays a major role in any business organization as the
different strategies form an essential aspect in the firm and its success in the long run. The key to
success in the current business environment is achieving sustainable competitive advantage as it
will go a long way in ensuring that the company is able to perform well (Abushova, Burova and
Suloeva 2016). Hence, it can be stated that Strategic and Tactical Marketing play a major role in
heling an organization to attain sustainable advantage and this will be discussed effectively with
respect to the UK supermarket Tesco.
Strategic and Tactical Marketing
Strategic Marketing can be described as the manner in which a firm will be effectively
able to able to differentiate itself from that of its competitors and be able to emphasize on their
strengths in order to provide better services to the different customers. The company in such a
scenario needs to get more creative than the existing marketing mix.
The companies need to understand the capabilities and the aspiration, the competition
under looming and the consumer market in order to maximize the differentiation of the firm in
the eyes of the competitors (Moutinho and Vargas-Sanchez 2018). The main zest of Strategic
Marketing lies in understanding the three essential question which refer to the manner how,
when and where the business needs to compete. For this purpose, the business needs to lay down
a proper marketing plan to pave a way for the firm and determine the effectiveness.
To put into simple terms, Strategic Marketing concentrates on deciding the following
aspects:

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 The markets which the firm is required to compete in
 The basis of the firm`s competitive advantage
 The manner in which a company shall enter into a new market is also a huge factor.
Tactical Marketing
The tactical marketing strategy largely concentrates on how the different strategies which
have been formulated will be carried out. If the tactical marketing strategy looks after the long
term vision of the organization, the tactical marketing looks after the execution of vision and the
appropriate planning and steps which need to be taken effectively for that purpose.
The major difference between strategic marketing and tactical marketing is that where
strategic looks after the planning aspect, tactical looks after the execution.
However there is a major gap between the strategic marketing and the tactical marketing.
Before tactical marketing needs to be executed it is important for the firm to indulge in proper
market research, competitive intelligence and focus groups to ensure that the strategic marketing
is successful (Rothaermel 2015). It is crucial in determining the requirements of the customers
and what they are looking out for.

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Figure 1
Tactical marketing broadly looks at placing media, creating marketing tools and
advertising techniques to ensure that the planned brand image is portrayed and the target market
is attracted successfully and informed about the product and offerings. For effectiveness, the
tactical marketing needs to be based on strategic marketing. This makes them cost effective and
profitable. The tactical marketing can be described as a onetime process which can help in
creation of the profiles of the customers and identify the exact target market which will be
required to ensure success in the long run.

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Sustainable competitive advantage
The Sustainable Competitive Advantage can be described as an efficient prospect which
can be utilized effectively in order to help a company to achieve success in today`s competitive
global environment. It is crucial for a firm to possess sustainable competitive advantage or the
company may not be able to recover from loss and be stuck in the previous activities at large
(Slack 2015). Sustainable competitive advantage can be in the form of the assets of the company,
attributes or the abilities which may be difficult to duplicate and copy. A sustainable competitive
advantage tends to provide a favorable long term position over the different competitors.
A competitive advantage may come in the form of the following:
Low cost provider- The firm may get sustainable advantage by becoming a low cost provider.
This way they will be a suitable option for the different consumers which will then serve as a
good option for the company and this tends to differentiate it from the consumer perspective.
Pricing Power-The company may gain a sustainable advantage by gaining price power. Pricing
power may be present in case the company has the authority to change the different pricing
strategies and the pricing of the particular product as present in the market.
Brand Power-the brand image may also serve as a competitive advantage for the company
Unique Product Line- A unique product line also goes a long way in assisting the organization
to ensure that its products are quite different from that of its competitors (Tesco.com. 2018).
Unique Management- Very often a unique management also assists in the success of the firm.
The unique management goes a long way in ensuring that the firm is successful.

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Strong Marketing- A strong marketing plan also assists the firm in achieving a strong position in
the competitive environment.
Use of Strategic and Tactical Marketing for Tesco
As stated earlier, the Strategic and Marketing can be used as an efficient tool in order to
achieve sustainable competitive advantage for a company like Tesco. The main purpose of a
strategic marketing and tactical marketing is to provide overall value to the different consumers
and the different competitors (Stead and Stead 2013). Tesco PLC is one of the largest
supermarket brands present in the business in UK. The following marketing strategies can be
used by them to achieve a competitive advantage
1. Align Products with Customer Needs
Tesco sells basic grocery products. However, the needs of the different customers have
been changing considerably and the company needs to ensure that it is able to keep up with the
needs of the customers. For this purpose, using strategic and tactical market, the company needs
to employ suitable marketing strategies of market research and brand image to ensure that Tesco
is able to gain competitive advantage in the business domain.
2. Attack New Markets
Using strategic marketing technique, Tesco can look out to enter into new markets.
Broadly stating, the company has its operations only in UK and hence, it should be ensuring that
it reaches out to the new emerging countries and thereby create a first to market advantage
(Martinsuo 2013). If Tesco is able to successfully do that, it will be able to successfully ensure it
increases its market base and is able to increase the revenue. The emerging countries lag foreign

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competition in the given segment and thus, Tesco can take advantage of its strong brand name
and technological innovations to have an access to the emerging markets.
3. Expand Distribution Channels
Tesco can also utilize its resources and target the customers thereby increase the
opportunities for the different customers in the long run. This means the different distribution
channels need to be expanded. In this manner, Tesco can thereby expand into mobile commerce
or e-commerce avenues to be successfully able to meet the changing needs of the different
consumers Using tactical marketing, exclusive advertisements can be made for the target market
and the channel increase can be tapped accordingly.
4. Emphasize Customer Service
The Tesco Supermarket can also indulge in suitable strategies for the different target
market and customers to keep them satisfied. This can com e in the form of providing efficient
after sale services, promotional strategies, addressing their concerns, proper marking and
improving the products and service offering.
Conclusion and Recommendations
Therefore, from the given analysis it can be stated that the company Tesco Supermarkets
needs to take into consideration suitable plans and strategies that will go a long way in helping
the firm to achieve long term success and being able to create sustainable advantage
(Jarzabkowski and Kaplan 2015). The given report discussed the different tactical and strategic
marketing techniques which can be used by Tesco to gain sustainable competitive Advantage. It
is recommended, that it monitors its activities continuously to ensure assured performance and
success.

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Task 2
Introduction
The given section discusses the strategic analysis of the supermarket industry in the
chosen country, Australia. The Australian supermarket and grocery sector has increased
considerably and the growth has been at a steady rate. There are various players present in the
external environment and these are companies like Woolworths, ALDI, Coles and Wesfarmers.
Strategic analysis forms an essential part of the organization whereby it helps in the evaluation of
the current business strategies which are adopted by the different companies in the Australian
Supermarket sector (Wright, Paroutis and Blettner 2013).
In order to be able to analyze the appropriateness and attractiveness of the Australian
Supermarket, the strategic tools which will be used are different tools used by external and
internal environment. The tools which are used by the external environment are the PESTLE
Analysis and the Michael Porters Five Forces and Value Chain will be used for the internal
environmental analysis.
External Analysis of the Australian Supermarket Industry
The given section will be analyzing the external environment of the Australian
Supermarket using the Pestle Analysis
PESTEL Analysis
The PESTEL analysis is a useful tool which is used in the analysis of the external
environmental factors which are prevalent in the industry. They tend to help in determination of

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in what way will the company get affected in case there are certain problems existing in the
external organization.
Political: The political conditions which tend to affect the supermarket industry in Australia are
the competition policy which tends to prevent the major powers like Woolworths and Coles and
helps in eliminating competition (Merat and Bo 2013). There has been an increase in the
competition in the given domain and this has led to the smaller retailers struggling for the
performance.
Economic: There has been a decline in the economic market conditions across the country and
this has bought about a huge impact in the given scenario (Team 2013). The different economic
indicators like the fluctuations in the currency and exchange rate along with the weakening of the
Australian Dollar have affected the performance of the difference retail operations.
Social: The different social factors which tend to take place in the Australian Supermarket
comprise of the different factors which affect the industry and the different companies who
operate in the given industry. The different organizations operating tend to achieve higher
development as the customers like to deal with organizations which tend to be socially more
responsible.
Technological: With the advent of technology, he dimensions of the supermarket industry have
changed considerably and the application for the green refrigeration which can store perishable
products for a longer time frame (Johnson 2016).
Environmental: The environmental factors also tend to have a huge impact on the performance
of the retail industry and the wine making business and the use of harmful gases in the storage of

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the products tends to pose considerable threats which then tend to affect the performance of the
company and tend to affect the different business operations.
Legal: The different legal factors which tend to have an impact on the business of the
supermarket industries (Lasserre 2017). The operations of the chosen supermarket industry tend
to be regulated by the Australian Competition and the Consumer Commission. Hence, the
different supermarket companies need to perform adequately.
Therefore, from the external market analysis it could be stated that when an organization
is forming an adequate strategy they need to ensure that they take care of such factors which
exist in the market. Innovation is a necessity which needs to be adapted to and the different
social trends need to plan accordingly.
Internal Analysis
The internal environment analysis can be described as the factors which tend to have an
impact on the performance of the different companies and lie within the control of the different
companies present in the supermarket industry. The internal environment analysis is primarily
done through the Porter`s Five Forces Analysis and the Value Chain Analysis.
Porter Five Forces
The Porters Five forces analysis tends to determine and assess the different position of
the competitive industry and determine the performance conditions for the same. The analysis
has been done as follows:
Bargaining Power of Buyers: The power is significantly high in Australia because the number
of retail stores is quite high and the consumers have wider options available.