Strategic Analysis of Tesco: Mission, Goals, and Implementation

This report provides a comprehensive analysis of Tesco's business strategy, covering aspects such as its mission, vision, goals, and core competencies. It examines factors considered in formulating strategic plans and evaluates the effectiveness of techniques like BCG and SPACE analysis used by Tesco. The report also assesses Tesco's strategic position through SWOT and Porter's Five Forces analysis, conducts an environmental audit using PESTLE, and emphasizes the significance of stakeholder analysis. A new off-matrix strategy focusing on market and product development is proposed. Furthermore, the report discusses alternative market entry strategies, justifies the chosen substantive growth strategy, and outlines the roles and responsibilities of personnel involved in strategy implementation, resource requirements, and the contribution of SMART targets to achieving strategic objectives. The document highlights Tesco's commitment to providing high-quality products and enhancing customer loyalty, and emphasizes the importance of CSR and sustainability.

BUSINESS STRATEGY

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1...........................................................................................................................................1
1.1 Mission, vision, goal and core competencies of Tesco....................................................1
1.2 Factors that need to be considered while formulating strategic plans..............................2
1.3 Effectiveness of techniques used by Tesco in developing strategic plans.......................2
TASK 2............................................................................................................................................3
2.1 Strategic position of Tesco...............................................................................................3
2.2 Environmental audit.........................................................................................................4
2.3 Significance of stakeholder analysis................................................................................6
2.4 New strategy.....................................................................................................................7
TASK 3............................................................................................................................................7
3.1 Alternative strategies........................................................................................................7
3.2 Justification for chosen strategy.......................................................................................8
TASK 4............................................................................................................................................8
4.1 Role and responsibility of personnel................................................................................8
4.2 Resource requirement in implementing new strategy......................................................9
4.3 Contribution of SMART targets in achieving strategies................................................10
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................12

INTRODUCTION
Each firm has to make high-level plan to accomplish their goals. Business strategies
support the entities in gaining competitive advantages and strengthening financial performance
of it (Fulford, 2013). Present study is based on TESCO which is an international retail brand and
a global market leader. It has recently expanded its operations in 12 countries. It treats its
employees as assets of the business and develops strong relationship with them so that they
retain them for longer duration.
Current assignment discusses mission, vision, goal of Tesco. Furthermore, it will carry
out environmental audit and explain significance of stakeholder analysis. It also assess role and
responsibilities of personnel charged with strategy implementation.
TASK 1
1.1 Mission, vision, goal and core competencies of Tesco
Tesco is an international brand; more than 60% profit of the business is generated from
UK and has many stores across the world. In the year 2013, Tesco has employed 530000
employees (Galpin and Whittington, 2012). It always prefers to meet the standards and gain
competitive advantage in the market.
Mission and Vision
Tesco pays attention on making effective business strategies to enjoy long-term success
in the market. Vision is to remain constant and adopt new technologies to gain competitive
advantage in the market (Harrison and John, 2013).
Mission is to provide satisfactory services and products to the consumers and make them
loyal. Its statement is to expand business and enhance its revenues.
Objectives
Its objective is to enhance its sales revenues and increase customer loyalty. Also to
improve quality of products so that satisfaction level of consumers can be increased (Hill, Jones
and Schilling, 2014).
Core values
Values of the firm play a significant role in the overall success. Corporate Social
Responsibility (CSR) is an effective element of the business. Cited firm fulfils its corporate
responsibility towards society and environment. It helps organization in creating positive image
in the mind of clients and sustaining in market for longer duration. By fulfilling its CSR, Tesco
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complete its commitment towards society. Overall success of corporation is highly depended
upon its core values (Omar and Sawy, 2013). It is working as responsible retailer in the market
and was awarded for Green Retailer Of 2012.
1.2 Factors to consider for formulating strategic plans
There are various factors that considers by the higher authorities while formulating
strategies:
 Analysis business environment: It is the most essential element that need to be
considered.. Tesco needs to look upon its strengths, weaknesses, and financial resources
of the firm before making any strategy. This helps entity in performing well in market
and making effective strategies (Shavarini and et. al, 2013).
 Cultural and management aspects: It is another major factor that needs to be
considered by Tesco, Cited firm has to look upon existing culture and has to improve its
cultural in the organization so that new strategy can be implemented in the corporation in
efficient manner. . Thus, this is another major factor that needs to be considered in order
to make effective strategies (Smith, 2013).
 Political and economic conditions: If Tesco look at the economic condition then it will
be able to identify consumers buying capacity. it will help in making strategy inorder to
manage its cost well. Furthermore, changes in law and regulation impact on the business
unit greatly (Stonehouse and Houston, 2013).
1.3 Effectiveness of techniques used by Tesco in developing strategic business plans
There are various techniques that can help Tesco in developing strategic business plans.
Two effective techniques as described below:
BCG planning technique
It is strategic planning tool that concentrates more on product life cycle. It analysis the
product which can create value for the business. It focuses on market share and market growth.
The major four elements of this strategy are Star, dog, cash cows and question mark.
Tesco is required to invest in such product that gives good return and has high market
share. By this way, more people will buy this product and entity will be able to enhance its
revenues to great extent (Galpin and Whittington, 2012). This technique is impressive in
measuring market share and growth rate of the firm. Thus, Tesco will be able to invest in the
products which have high demand in the market.
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Strategic position and action evaluation (SPACE)
It is another model that helps in determining internal and external strategic action of the
business. This is the tool that looks upon external environmental factor that can impact on
business and its stability. This is beneficial tool to build future strategic plan to attain objectives
of the firm. In the absence of internal and external environmental analysis Tesco cannot be able
to formulating good strategies (Harrison and John, 2013).
TASK 2
2.1 Strategic position of Tesco
SWOT analysis based on Porter's five forces are the major theories that help the
organization in analysing its strategic position of Tesco. This is the model that helps in
identifying strength, weakness, opportunity and threats to the business unit.
Strength
 Tesco is the global brand which has won many awards in the retail industry for its
amazing work and fulfilling commitment towards the society.
 Its financial strength is very strong which helps firmin sustaining in the market for longer
duration. Tesco takes support of advance technologies that aids entity in improving efficiency level
of the operation and enhancing customer services (Omar and Sawy, 2013).
Weakness
 However, Tesco is the global brand but some of its subsidiaries are not performing well
in the market which decreases satisfaction level of consumers.
 Tesco is depended on the UK market; more than 60% profit is generated from this market
which creates difficulty for the business.
 Due to high competition now corporation has made changes in its pricing strategy which
affected its revenues to great extent (Shavarini and et. al, 2013).
Opportunities
 It has opportunity to expand its operations in many more countries.
 Tesco can take support of digital entertainment sources and can provide online services to
the consumers.
 It can enter into emerging market that can help in increasing its number of consumers
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Threats
 High competition is threat to the Tesco.
 Changes in government laws create pressure on the business.
2.2 Environmental audit
PESTLE analysis is a technique to identifying a firm’s external environmental conditions.
(Fulford, 2013).
Illustration 1: PESTLE analysis
(SourceTesco Supermarket: SWOT, PESTEL, Porter’s Five Forces
and Value Chain, 2017)
 Political condition: It is the element that defines the political condition and its impact on
the business unit. Tesco and entire retail industry get affected by the political conditions.
Changes in tax rates, legislation affect the business unit because it affects its operational
working. Tesco always follows rules and regulation that help cited firm in managing
operations effectively (Galpin and Whittington, 2012).
 Economic factor: It affects consumers buying capabilities to great extent. In such
condition, sales of company may get affected. Whereas if there is good employment rate
and people have adequate income sources then it will help in raising financial capabilities
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by this way they will spend more in the retail products. Thus, this component affects the
operational functioning of business (Hill, Jones and Schilling, 2014).
 Legal factor: It impacts on operations of Tesco. Cited firm needs to concentrate on
laws . Changes in any law force the company to make changes in operational process. If
government makes modification in employment laws then workers will feel happy and
they will work in the organization with satisfaction.
 Social factor: Tesco always concentrate on test and requirement of the consumers and
accordingly provide those goods and services (Harrison and John, 2013). Thus, it started
increasing the amount of non-food items that helped the firm in increasing sales
significantly.
 Technological factor: Retail stores of Tesco have intelligent scale techniques; self-
checkout machines, POS machines, and wireless devices (Smith, 2013).
 Environmental factor: Company fulfil its responsibility towards environment. It mainly
deals with green operations and work in a manner that reduces carbon emission. It
implemented recycling process in order to minimize wastage.
2.3 Significance of stakeholder analysis
Tesco has many stakeholders, these stakeholders are: employees, customers,
government, managers, suppliers etc. they all have high impact on the business unit (Hill, Jones
and Schilling, 2014).
Stakeholder analysis
Stakeholders Interest Influence Information needed to give
Customers High High New products, benefits for them
Employees High High Dividend policy, product feature,
reward system
Government High Low Tax paid, annual revenue report
Suppliers Medium Medium Credit policy, dividend, profitability
Significance of stakeholder analysis is as described below:
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 By identifying importance of supplier in the business, entity can get to know how they
can impact the Tesco. That helps them in making effective strategy in order to develop
relationship with them. So they can provide quality raw materials to the business and
company can offer quality goods to the consumers (Stonehouse and Houston, 2013).
 Stakeholder analysis helps the organization in developing healthy relationship with the
employees. By this way, they feel valued and perform well in the firm. These satisfied
employees concentrate on needs of consumers and provide them products and services as
per their requirements.
 Stakeholder analysis helps Tesco in minimizing conflicts and increasing revenues of the
firm.
2.4 New strategy
Aim of Tesco is to provide high quality products to consumers so they feel satisfied and
become loyal. Tesco needs to adopt an off matrix strategy. This will help the firm in gaining
competitive advantage and identifying position of the firm in the external market. In this
strategy, Organization is required to take support of market development and product
development strategy (Fulford, 2013). This will help in fulfilling needs of the consumers and
providing them high quality products. By this way they will be satisfied and will become
frequent buyers of company.
TASK 3
3.1 Alternative strategies
For market entry strategy, there are strategies like Merger and Acquisition where merger
is defined as the collaboration of two companies probably having same product line and it
happens when any company requires a effective solution for a special market whereas
acquisition is the hostile takeover which can happen when some other organisation buys the
maximum share of other companies. Franchising can also be one of the most effective strategies
for getting entry in a new market (Armstrong and et.al, 2015).
In the substantive growth, one looks for the integration which can be horizontal or
vertical and can be relatable or non-relatable diversified. These strategies are often applied
through acquisition, merger or a joint venture rather than an organic growth. Opting franchising
can provide tools for external growth production which is not applicable to every business.
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Where horizontal integration means merging of a company with a competitor and vertical
integration refers as merging with the supplier or distributors.
In limited growth, one can apply market penetration strategies where a company promotes its
existing products to the customers and can increase its revenue by promoting, repositioning or
brand changing and also market development strategies can be applied.
On the other hand, retrenchment strategies also known as disinvestment strategy, is the
one where a company cuts down or reduces its product.
3.2 Justification for chosen strategy
There is a type of strategy which TESCO can apply-substantive growth, where the
effective application of strategies like product development, market development, vertical and
horizontal integration can be utilised
Where market development leads to use their current existing product in a new market
which means that TESCO will keep their product and it but they would market it in a new way.
This type of strategy is applied in new countries where market doesn't know about the products.
There can be some issues related to it which changes to increase the attractiveness for niches, or
describing a new way to use the product (Johnson, 2016).
Product development is an essential part of this strategy where product features can be
enhanced in many ways. Innovative modification is done with the product to replace the existing
product. Here company leads to expansion and planning of new product, and replacement of all
existing products takes place and marketed to the customers. In addition, various integration can
be followed which includes collaborating with other competitors in the market or with the
suppliers and distributors so that they can get recognition ina particular market.
TASK 4
4.1 Role and responsibility of personnel
Top Management/ Board Members of TESCO
Their main responsibility is while the entrance of company into new stores in other
countries which is completely new to them, all the responsibilities comes on the shoulder of
Board members as they are required to get fund and permission from government to run their
stores in their areas.
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Employees
Their role is to accept the challenges and needs of new customers in the region (which is
new to them) and where company needs to establish IT in future. People or employees who are
experienced may share it with the new employees for effective working off their store (Vahlne
and Johanson, 2017).
Human Resource
HR department should recruit right kind of people at the right place and time for
effective working.
Sales and marketing team
They are responsible for marketing of product in new region. It analysis the market and
develop strategies that are beneficial to increase in the sales of their products. They should be
able to promote their store successfully in new countries.
Middle Management
Middle management should be able to divide the budget require for every activity
efficiently so that every activity would get proper funding for the successful implementation.
4.2 Resource requirement in implementing new strategy
Proper combination of resources leads to successful implementation of new strategies.
Resource is an important element for the organisation of processes which are operational in a
TESCO .With this regard first requirement is of financial resources. It is equally important to get
financial funding for opening up of stores at new places and even hiring of new employees and
acquiring of inputs requires funding. Funding sources are identified which can be legal as well
informal sources which would facilitate their working properly. Also the information resources
are required which keeps all the records of their customer's account through which they are able
to do successful transactions (Chkanikova and Lehner, 2015).
However the team of HRD in TESCO has an aim for the recruitment of staff members who are
perfectly eligible for their store and have proper knowledge of the operations which are
performed in their stores. They also provide rewards to their employees for their good work
which not only motivates them but also pump them up to provide quality output.
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Fulfilment of employee is making sure so that they are provided a good working environment to
work within. It also helps to achieve their task successfully with the optimum usage of available
resources.
4.3 Contribution of SMART targets for strategies
SMART targets help an organisation for better understanding of their goals and make them able
to work under deadlines. This improves the efficiency of TESCO. These can be measured easily
and helps in the maintenance of transparency while creating evaluation of the performance of
workers and company as whole.
SMART targets which TESCO shall set can be:
Gathering information
Which includes the better understanding of market and identification of proper
geographical locations for opening new stores which is very essential. It also includes raising of
funds through investors and resource requirements(Guillén and Capron, 2016).
Construction
Construction is very time consuming process. As for constructing a store there is a
requirement of high labour.
Infrastructure and finishing
When a store is conducted, all the electrical appliances should be fitted properly and
other furnitures like table, chair, washerwomen facilities and etc.
Hiring and Training
Hiring new employees and training them requires a time for about 6 months so it should
be implemented well.
Marketing and promotion
TESCO should concentrate on advertising for their new stores which can be implemented
through newspaper, televisions, radio and also through social networking websites. This process
can take about 2 months.
CONCLUSION
From the above report it can be concluded that effective business strategies help the firm
in identifying its own position in the market and improving condition of the business. An off
matrix strategy is considered as effective tool by this way Tesco can be able to enhance quality
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of the products and will be able to meet with the needs of consumers. This will increase brand
image of the business and entity will be able to gain competitive advantage.
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