Strategic Analysis and Decision Making: Tesco Business Report

This report provides a comprehensive strategic analysis of Tesco, a leading global food retailer. It begins with an introduction and an abstract summarizing the key findings. The analysis includes an examination of Tesco's internal and external environments, utilizing PESTLE analysis to assess political, economic, social, technological, legal, and environmental factors. Competitive industry analysis is conducted using Porter's Five Forces to evaluate the competitive landscape. The report also explores Tesco's strategic capabilities and employs a SWOT analysis to identify strengths, weaknesses, opportunities, and threats. Furthermore, it discusses the development and evaluation of appropriate strategic choices, including cost leadership and differentiation strategies. The report concludes with a justification of the optimum strategy, highlighting Tesco's expansion efforts and market position. The analysis emphasizes Tesco's focus on customer satisfaction, competitive advantages, and its ability to adapt to the evolving business environment. The report offers valuable insights into Tesco's strategic decision-making processes and its approach to maintaining a strong market presence.

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Strategic Decision Making
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Strategic Decision Making
Contents
Introduction.......................................................................................................................................3
External environment analysis...........................................................................................................4
Competitive industry analysis............................................................................................................5
Strategic Capability analysis..............................................................................................................6
SWOT analysis..................................................................................................................................7
c)...........................................................................................................................................................8
d) Selection and justification of the optimum strategy...........................................................................9
References......................................................................................................................................10
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Strategic Decision Making
Abstract
The market of business is changing day by day. At this up growing market every organisation
has to put their strategies at the organisation for surviving in the business market. The
organisations are trying to introduce many other wings where they can produce more
publicity for their existing products. Every organisation has its different marketing
development strategies through which they are developing their business at the international
market. Different strategies, different frameworks provide higher range of business in the
existing market. The organisations have to make so many analyses which are internal and
external both type of analysis to make a huge banner and successful business. Always there
will be competition in the market but the organisations have to identify their faults and make
effective products which will put an impact on consumers’ mind. The strategies of the
organisation will be profoundly justified through SWOT analysis, Porter’s five Forces,
generic strategies, applied strategies and many more. These will help the organisations to be
enlarged and expanded in the market. Developing the strategies will make the organisation to
get an up rise in the business market. The environment of business is changing day by day so
that the strategies must have to develop at the growing period. These all factors are much
important to make a successful organisation in the world business.
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Strategic Decision Making
a) Internal and external analysis of the organization
Introduction
Tesco is one of the greatest sector on food retailing around the world. Tesco has a large
banner on this section of retailing food. It is a heavy organisation containing many sections. It
has many internal and external factors surrounded by the organisation. Environment of the
working place of Tesco is very friendly, which motivates workers for doing their job
efficiently (Carlson, 2010). Tesco has set many strategies or surviving in the market of the
world loudly. There are self-labelled products which are value, norm and finest. There are
many more retailing services provided by Tesco.
External environment analysis
PESTLE analysis
Political factors
Tesco is specifically an UK based organization; it works influentially by the mean of political
and legislative factors of the countries at where Tesco has opened their organisational wings,
also with European Union (West and Lee, 2014).
Economical factors
Tesco has one of the most effective factors which is high employment level; the organisation
has large economic responsibility towards marketing mix as well as performance of the
organization (THE MARKETING MIX: A REVIEW, 2014). Tesco works very minutely on
their jobs of price, cost and profits.
Social factors
As it is the new trend of customers to get every aspiring products in one market, Tesco has
developed its many other wings to provide the customers one-stop market(Threlfall, 2014).
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Strategic Decision Making
These different sectors are insurance policies, banking and many more. It has also developed
a section of organic materials as customers’ needs towards these are rising day by day.
Technological factors
It lies on macro environmental factors for an organization. Tesco has developed its
technological factors for influence their benefits from the aspect of both customer and the
organisation. Various technologies used by Tesco are:
 Scale of intelligence
 Wireless devices
 Identification through Radio Frequency
Legal factors
There are many government policies and legislation which directly affect the business of
Tesco. As Tesco is a large food retailer, Food Retailing Commission has put much legislation
on this section of Tesco. Monopoly control policies of government also leave an impact on
Tesco (Toshimitsu, 2011). On other wings of this organization there are so many policies,
rules and code of conduct which have to be followed by the organisation.
Environmental factors
It is the duty of every organisation that they can be able to maintain their society by not
harming the environment. Tesco has put a sharp eye on that if their organisation is not
damaging the environment; it has minimised its consumption of resources (Leismann et al.,
2013). For fatty foods there are specific legislation mentioned as fat tax which is adapted by
Tesco.
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Strategic Decision Making
Competitive industry analysis
Porter’s five Forces
 Threat of new entrances
As Tesco is one of the largest grocery brand of UK there are so many other high level
organisations in the market followed by, Sainsbury and Asda. Other than these there are so
many other organisations which can be the threat for Tesco. Resolving these threats is the
challenge for an organisation.
 Bargaining power of Suppliers
Tesco represents grocery market so that a large chain of grocery suppliers are influenced in
the market. Tesco deals with bargaining them on the products and for this specialization
Tesco has put a specific wing in the organisation.
 Bargaining power of customers
In this force the organisations have set a strategy of retention with the customers (Younge
and Marx, 2015). Tesco has to maintain its market as well as their business strategies, price,
profits and costs. Fair trade policies are also maintained by the organisation.
 Threat of substitutes
Substitute products in the market also put an impact on the business of the organisation.
When others substitute products come in the market, it is the psychology of the customers
that consuming new products which are perfectly dominated by Tesco (Schmitt and Van
Zutphen, 2012).
 Bargaining power of competitors
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Strategic Decision Making
Where there are other competitors in the market of grocery, Tesco has set specific business
strategies for these cases. Monopolistic strategies in the market are completely taken over by
the legislation of UK government.
Strategic Capability analysis
Every organization has got its own specific assets at their organisation which are called
resources. Tesco uses their resources to influence the business of the organisation. Basically
these resources can be internal or external as well as these are organisation specific too.
When these organisational resources make a distinctive competitive upper hand than other
organisations’ it termed as distinctive capabilities (Robins, Roberts and Sarris, 2015). Tesco
has got these by the mean of differentiation.
SWOT analysis
SWOT analysis of an organisation departs on four parts which are strength, weakness,
opportunities and threats; among these Strength and Weakness are lied on internal analysis of
an organisation as well as Opportunities and Threats are the external analysis (Smith, 2011).
 Strength- Tesco has its internal strengths which influences its business in
the market that can be high range of employment or proper working
environment.
 Weakness- Tesco’s weaknesses are identified by their organisation’s
authority and they resolve them soon as it does not harm the organisation.
 Opportunities- this is an external factor which lies on marketing areas and
other competition in business.
 Threats- Rivalry companies, substitute products can be the threats
externally towards the organisation.
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Strategic Decision Making
b) Development of appropriate strategic choices
There are three generic strategies implemented by Porter on the aspect of an organisation.
Cost leadership is the primary or first strategy implemented by the organisation. At this stage
Tesco has a minimum grade of price offered towards customers, they have given the
minimum level of price on their products or it may be the lowest one. As Tesco does it not by
lowering the quality of the products but reducing the production cost. Tesco has implemented
many strategies which reduce the production cost.
Next strategy comes in front which is offering new services and facilities. As it is the new
trend of marketing in one shop and getting every facility at there, Tesco has opened so many
other sectors which provide services like banking sectors, insurance policy, electronic
equipment and also organic products (Yoo and Jeong, 2015).
Last among the strategies is to pursue strategy of cost leadership in a narrow range of market.
Tesco maintains a communication with government to find out the rules and legislation how
these do not affect their business but make it smoother.
c) Development of appropriate evaluation criteria and evaluation of strategic choices
There are so many criteria followed by Tesco. Tesco has improved its marketing mix
strategies profoundly which have developed its business area in the market o UK. The
strategic choices are there which have found by the organisation and maintained by Tesco as
well as. Tesco follows the legislation of the UK government as well as it regulates the
development of their business in the competitive market field. Tesco has organized so many
other wings to follow the needs of customers according to their psychology of shopping in on
stop. Tesco is one of the biggest grocery shop in the UK market; beside that the other wings
they have introduced in the market are insurance policy section, banking sector, electronic
equipment and organic foods too as it is being trend of the growing customers. There are
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Strategic Decision Making
several other competitive organisations which are the threats externally of the organisation
(Prajogo and McDermott, 2011). Tesco has maintained this level of competition profoundly.
The grocery service of the organisation is the prime and the market is uprising day by day.
Tesco maintains its internal factors which are consisted of employee relationship and a nice
working environment at the organisation. This also makes benefit because the employee who
are satisfied with their job always used to provide a perfect service to the customers. Tesco
has developed its criteria of evolution appropriately as well as its strategic choices.
d) Selection and justification of the optimum strategy
Tesco has improved its growth of work towards many other countries specifically at Japan
and China. Tesco is trying to enter at the Asian market right now so that it has to develop a
better communication at the market of Asia. Tesco has to grow its international
communication so that it con profoundly market at a large section of the. Tesco is one of the
largest grocery retailing shop around the world, beside this organisation there are several
organisations but Tesco has maintained its reputation on a daily basis. Tesco provides a large
potential of products, they have the lowest cost and price on the grocery products. but they do
not compromise with the quality of the product by lowering the cost of the product but they
use to control the production cost which means Tesco has got a much developed production
procedure which influences their working as well as business strategies (Ihász and Laza,
2016). Tesco has developed its product as well as production procedure. Business
environment at this organisation is too secured that the employees work here are providing
nice services to the customers. This uprising of the organisation leads Tesco to become the
largest grocery market around the world and international market as well as followed by
(Berry, 2014).
 Tesco has got a large market of grocery with competitions of which they have beaten
with every aspect of their marketing strategy.
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Strategic Decision Making
 Tesco maintains a perfect business environment so that the workers of the
organisation are too much satisfied and they provide a huge business.
 As employees are satisfied with their works that is why they never neglect the
customers and make them satisfied too by the services.
 Tesco has opened several other wings to expand their business around the world and
for being closer to the customers.
 Tesco is internationally acclaimed largest grocery organisation around the globe.
 Right now Tesco is trying develop their alliance in the Asian market for growing the
business.
 The marketing mix strategies of Tesco always provide benefits for uprising the
business day by day.
Conclusion
Tesco has maintained its success by the help of their servicing and product facilities as well
as. Customer satisfaction of the organisation is much higher so that the complaints against the
organisation is literally downwards. Tesco follows every legislation of the government so that
they can avoid political controversies profoundly. Today the environment of business is
changing much frequently, but Tesco has maintained its reputation and surviving in the
international market being the biggest grocery organisation. Marketing strategies of Tesco are
so precise and minute that they have developed a large scale of business margin compared to
the other organisations which can compete with Tesco. The hierarchy level of business
mentions the analysed and developed strategy of Tesco.
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References
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56(3), p.405.
Carlson, K. (2010). The power of place, the problem of time. 1st ed. Toronto [Ont.]:
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Ihász, R. and Laza, T. (2016). Determining the biogas potential of agricultural by-products in
a Hungarian subregion. Wiley Interdisciplinary Reviews: Energy and Environment.
Leismann, K., Schmitt, M., Rohn, H. and Baedeker, C. (2013). Collaborative Consumption:
Towards a Resource-Saving Consumption Culture. Resources, 2(3), pp.184-203.
Prajogo, D. and McDermott, P. (2011). Examining competitive priorities and competitive
advantage in service organisations using Importance‐Performance Analysis
matrix. Managing Service Quality: An International Journal, 21(5), pp.465-483.
Robins, T., Roberts, R. and Sarris, A. (2015). Burnout and Engagement in Health Profession
Students: The Relationships Between Study Demands, Study Resources and Personal
Resources. Australasian Journal of Organisational Psychology, 8.
Schmitt, B. and Van Zutphen, G. (2012). Happy customers everywhere. 1st ed. New York:
Palgrave Macmillan.
Smith, B. (2011). The future of pharma. 1st ed. Farnham, Surrey: Gower.
THE MARKETING MIX: A REVIEW. (2014). ELK Asia Pacific Journal of Marketing and
Retail Management.
Threlfall, K. (2014). One Stop, One Life. 1st ed. London: Icon Books.
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Toshimitsu, T. (2011). NOTE ON THE WELFARE EFFECT OF SECOND-BEST
POLICIES IN A NETWORK INDUSTRY: A MONOPOLY CASE. Metroeconomica, 63(3),
pp.429-442.
West, K. and Lee, H. (2014). Veto Players Revisited: Internal and External Factors
Influencing Policy Production. Legislative Studies Quarterly, 39(2), pp.227-260.
Yoo, C. and Jeong, H. (2015). Case Study on TONYMOLY’s Marketing Strategy to
Differentiate in One Brand Shop Market. Korea Business Review, 19(4), p.49.
Younge, K. and Marx, M. (2015). The Value of Employee Retention: Evidence From a
Natural Experiment. Journal of Economics & Management Strategy, 25(3), pp.652-677.
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