Global Business Strategy of Tesco: Challenges and Opportunities Report

This report provides a comprehensive analysis of Tesco's global business strategy. It begins with an introduction to global business strategy and then delves into a review of Tesco's strategies, encompassing both internal and external factors through SWOT and PEST analyses. The report examines the i...Read More

GLOBAL BUSINESS
STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
ACTIVITY 1....................................................................................................................................3
A) REVIW OF THE STRATEGIES...........................................................................................3
B) INTERNAL AND EXTERNAL ANALYSIS OF TESCO..................................................3
C) IMPACTS OF GLOBALISATION ON TESCO ..................................................................5
D) BENEFITS AND CHALLENGES........................................................................................6
ACTIVITY 2 ...................................................................................................................................7
MORAL AND ETHICAL ISSUES FACED BY TESCO..........................................................7
CONFLICTS BETWEEN CORPORATE SOCIAL RESOPONSIBILITY AND
CORPORATE STRATEGIES....................................................................................................7
GUIDELINES RELATING TO CORPORATE SOCIAL RESPONSIBILITY........................8
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Global business strategy is the techniques which the company adopts to compete with its
competitors by analyzing all the business factors in the external and internal environment. The
factors which are global in nature and have much risk in nature. This report have a detailed
information about the global business strategies of Tesco and what are the major factors which
the company have to analyze in making the effective strategies to increase the sales and compete
in the market as well.
ACTIVITY 1
A) REVIW OF THE STRATEGIES
Tesco have to analyze the external and internal factors of the market by appoint the marketer
which will evaluate the size of the market, behavior of the customers where the company have
to do investment. The marketer also have the proper knowledge and skills to adopt the accurate
analysis of the factors which will favor the nature of the business and also help the company by
pest and SWOT analysis as this analysis will he;p the company to understand all the major
factors which can affect the market share of the company and the marketer also have to analyze
the level of competition in the market by evaluating the financial aspects of the company. This
analysis helped Tesco to established its roots in the international market and also increase the
good of the company by providing satisfaction to their customers.
B) INTERNAL AND EXTERNAL ANALYSIS OF TESCO
The internal and external analysis is very essential as it helps the company to evaluate all the
potential factors which can increase the company's productivity and potential threats which can
decrease the productivity of Tesco (Peng, 2016).
SWOT Analysis
Strengths
 It is the largest retail supermarket chain in UK.
 The company have more than 6800 stores across the world.
 Tesco have the different stores which attract every type of customers to the stores.
 Tesco have also provided with the product differentiation across the country.
 It is the largest retailer in UK

 The company have also adopted the technology effectively which helped the company to
increase the sales.
 The company have a very effective chain o supply of its products to its stores with the
lower costs.
Weaknesses
 The company was penalized for doing an accounts' fraud in the past.
 The company Is inefficient in their operation in US and Japan and which caused the
company to decline its sales and affected the profit margins of the company.
 Because of the club card controversy the company faced downfall in its sales due to
major impact on the goodwill of the company.
Opportunities
 As Tesco is expanding its business outside UK and they have also introduced a new
brand to market to increase the sales and bring the new products to the market.
 The company have also adopted the online stores to attract the customers across the
country and also provide with the better delivery services (Johnson, 2016).
 The company have also analyzed that investing in the growing countries can increase the
profits of the company and also establish it faster.
Threats
 The company faced a very huge denial from the customer after they have launched
Christmas ad which hurt the sentiments of their customers. The company also have threat of Brexit as the investors and taxation policies which will
also impact the sales and profit margin of the company.
PEST Analysis
Political factors
 Brexit is one of the major factor which have to analyzed by the company so that they can
make effective strategies and incr5ease the sales of the company as this factor will
involve the political instability and the company have to hold the investments which they
are going to do in future.
 The company also have to analyze the supermarket suppliers which are being affected by
the governmental policies so that the company can be prepared to increase the sales or
maintain the sales.

Economical Factors
 Due to Brexit Tesco also have analyzed that the economy of the country will be affected
majorly and the population will also do not have the money to spend in the market and
which will increase the inflation rates and also increase the taxation policy to generate the
revenue to stabilize the economy to normal.
 That also forced the company to lower the prices of the products so that they can
maintain the sales and compete in the market.
 The profits of the company will also be damaged if the key competitors Asda and
Sainsbury's will merge together to form UK's largest supermarket chain and will
dominate the market of Tesco.
Social Factors
 The company have to analyze the behavior and attitudes of the customers in making the
strategies as that will help the company to attract their customers with the same beliefs
and cultural values.
 The company also have analyzed that the customers are avoiding the consumption of
sugar due to healthy lifestyle and also they are not having products which are having
additive sugars in it (Roy and Srivastava, 2017).
Technological Factors
 Tesco have adopted the advanced technological deliveries to increase the satisfaction of
the customers and also attract them to be loyal to the company.
 The company have also developed the apps which helped them to increase the sales and
also giving the company more customer base across the country. And they also tarted
using the mobile payments as their income to promote the customers to increase the
digital payments.
C) IMPACTS OF GLOBALISATION ON TESCO
After the globalization in 1970 Tesco have also increased the market share of the company and it
also helped the company in many positive and negative aspects as well to understand the market
and make the effective strategies. The international business also helped the company to compete
and grow by analyzing the potential retail competitors In the market. That also allowed the
company to analyze the potential advantages and make them increase the profits. That also help
the country to increase their knowledge which can be applied to all the markets and that help the

company to increase the sales. Tesco have also helped the different country to increase the
efficiency of the other domestic businesses by competing with them and motivating them
(Madsen and Walker, 2015).
The growth of international business of Tesco also promoted the transfer of money through
electronic mode. Tesco have also aced many challenges in the international business as every
market has a different taxation policies which effects the profits of the company. Different
economy have different net disposable income of the population so the company have to create
the new and different products for every market which will increase the cost of the company.
D) BENEFITS AND CHALLENGES
Benefits
The company is going to make a lot of profits if they expand themselves globally because
the company is providing the products with good quality at a very low price (Noe, and et.al.,
2017). Tesco is going to make a lot of profit and get new ideas in the company for innovation
and invention of different products according to the needs and wants of people all over the
world. Innovation and invention is very important for any company because they need to expand
themselves so that they can capture a larger market all over the world. The company once started
to expand itself then they will find it easier for expanding in all the other markets in the world.
The company will be able to understand the customers globally and make a huge profit in United
Kingdom too if they get other countries ideas into there own country.
Challenges
The customers will never accept a new brand all of a sudden and the company will take
time for it to become successful in the market in the other countries (Thompson, Strickland and
Gamble, 2015). The political factors of each country will affect the company from expanding
itself in the market. Getting employees at a low wage will also become a little problem for Tesco
because country like China has a policy of paying $15 per hour to the employees because the
employees have to put in there best for the customers to like the brand. The marketing team will
have to work really hard for the brand to become a success and the competitors who have already
established themselves in the market of the other country will not let Tesco grow and the
company will have to market themselves really well.

ACTIVITY 2
MORAL AND ETHICAL ISSUES FACED BY TESCO
Employment practices
Tesco have faced many employment issues in the past years and it also includes the protest of
their employees from the trade unions and protest for the labors for the right to equality to them.
The company also faced the many challenges in some markets where the employees are not
treated well and were exploited on the basis of their race, color, sex etc. which created agitation
amount the company employees and also lost the efficiency of the company (Hamel and
Prahalad, 2017).
Environmental regulations
the company also faced the environmental issue as they were fined 8 million as the company was
not able to follow the laws to protect the environment and the operation which the company were
harming the environment for which the company have to pay fine. This created a loss to the
company and the company had to stop their projects due the loss.
Corruption
Tesco was also involved in a very big accounting scandal and the company in which the
company was fined 235 million euros. And that made the company ineffective for a long time
(Chatterjee, 2017). The financial officer of the company was involved in the corruption which
the company have also lost the goodwill in the Market and also many investors have withdrawn
their funds from the company.
CONFLICTS BETWEEN CORPORATE SOCIAL RESOPONSIBILITY AND
CORPORATE STRATEGIES
Tesco have also analyzed the importance of Corporate social responsibility and also made the
strategy to help the society by doing some activities. But the company have made the wrong
strategies which had violated the policies and regulations of the government and also have
decreased the goodwill of the company (Rugman and Verbeke, 2017).
Due to adoption of the corporate social responsibility by Tesco increased the bureaucracy in the
company which also increased the cost of doing the activities in the society. The cost of
development of the company will also rise while performing the social responsibility as it will
also lower the profit margins of the company making the company inefficient in their activities.

Tesco also have to face the challenges which are imposed by the government as they think that
Tesco is earning more profits and also performing the social responsibilities for the society.
Tesco have also initiated in the avoiding the carbon footprints to conserve the nature but it had
increased the cost of the company by lowering the profit margins.
GUIDELINES RELATING TO CORPORATE SOCIAL RESPONSIBILITY
UK's government have established the corporate social responsibility for all the company which
are having a very good profit margins and also cover the market with many activities. Tesco is
also obligated by the government policies to follow the legislation regulation to perform the
ethical business nature of the company and also and a good profits out of it. As corporate social
responsibility helps the company in many ways and one of them is increase in their goodwill and
market capture by the customers (Wood and et.al., 2015). The government have also made that
very essential for Tesco to follow to perform the CSR as it helps the whole country to grow
systematically and provide better opportunities to them.
 The company also have tom pay the rules and regulation of the government in every
activity the company does.
 Tesco also have to support government in increasing the social awareness to the
population of the country.
 The company is also obligated to help the government in proving the economic growth
of the country.
 The company also have to pay the taxes to the government at regular intervals.
CONCLUSION
In this report is has a brief information which tell about all the factors which was responsible for
the growth of Tesco and what discouraged the grow. The company also had to analyze the
positive and negative aspects of the business environment. The government of UK had made
compulsion for Tesco to perform CSR so that it could also help government in economic growth,

REFERENCES
Books and Journal
Chatterjee, J., 2017. Strategy, human capital investments, business‐domain capabilities, and
performance: a study in the global software services industry. Strategic Management
Journal. 38(3). pp.588-608.
Hamel, G. and Prahalad, C.K., 2017. Do you really have a global strategy?. In International
Business (pp. 285-294). Routledge.
Johnson, G., 2016. Exploring strategy: text and cases. Pearson Education.
Madsen, T.L. and Walker, G., 2015. Modern competitive strategy. McGraw Hill.
Noe, R.A and et.al., 2017. Human resource management: Gaining a competitive advantage. New
York, NY: McGraw-Hill Education.
Peng, M.W., 2016. Global business. Cengage Learning.
Roy, S.N. and Srivastava, S.K., 2017. Global business strategy: Multinational corporations
venturing into emerging markets. Vikalpa. 42(2). pp.125-127.
Rugman, A.M. and Verbeke, A., 2017. Global corporate strategy and trade policy. Routledge.
Thompson, A., Strickland, A.J. and Gamble, J., 2015. Crafting and executing strategy: Concepts
and readings. McGraw-Hill Education.
Wood, D.J and et.al., 2015. Global Business Citizenship: A Transformative Framework for
Ethics and Sustainable Capitalism: A Transformative Framework for Ethics and
Sustainable Capitalism. Routledge.