Strategic Analysis: Tesco's Business Strategies & Market Positioning

This report provides an in-depth analysis of Tesco's business strategies, encompassing its mission, vision, objectives, and core competencies, along with a strategic positioning analysis through an organizational audit. It compares Tesco's mission, vision, and core competencies with Walmart's, explores strategic planning issues, and evaluates techniques like the directional policy matrix and BCG matrix. The report conducts a SWOT analysis, Porter's Five Forces analysis, and competitor analysis to assess Tesco's strategic positioning. Furthermore, it includes a PESTLE analysis for environmental auditing and discusses the significance of stakeholder analysis. The report concludes with recommended strategies for Tesco, covering market entry, substantive growth, and retrenchment, and predicts an appropriate future strategy for the company, emphasizing retrenchment to cope with competition and enhance sales through product innovation. Desklib offers similar solved assignments and study resources for students.

BUSINESS STRATEGIES

INTRODUCTION
 Business strategy is the direction and scope by means of which an organisation
is able to achieve the desired goals and objectives. .
 Tesco is the multinational retail company headquartered in Welwyn Garden
City, Hertfordshire. It is a public limited company started in the year1919 by
Jack Cohen.
 In the following report, mission, vision, goals and core competencies of Tesco
are identified.
 Along with this, strategic positioning have been done in order to carry out
the organisational audit. On the basis of this, alternative strategies are prepared
related to market entry, substantive growth and retrenchment.

TASK 1
1.1 {a}Mission, vision, objective and core competencies
Mission, vision, objective and core competencies of Tesco
Mission, vision and objectives of the company are interrelated
with each other and indicates what the company is planning to
achieve in the future.
Mission of Tesco is “to prepare the things that creates much value
together.”
Vision of Tesco is “to become highly valued business organisation
by serving best to the shareholders, community, customers” .

CONTD...
 SMART objectives of Tesco is to create value for the
customers and at the same time gain lifetime customers
loyalty.
 Goals of Tesco is to achieve the long term goal of the
organisation.
 Core competencies of Tesco is to focus on customers
strategy.

CONTD..
{b}Mission, vision, objective and core competencies of
Walmart
 Mission:- To give people better life by saving their
money
 Vision:- To become one of the best retailer among
employee and the customers.
 Objective:- Objective of Walmart is to produce new and
innovative product and at the same time reduce the cost
of its production

CONTD...
 Aim:- To serve the best products that satisfy
the needs and wants of customers.
 Core competencies :- Use latest technology
and availability of hard working, efficient
and process oriented employees.

2.3 Significance of stakeholder analysis when formulating
new
strategy
 Stakeholders analysis help the Tesco to identify the attitudes of
the stakeholders towards the company.
 This analysis is done by the Company at the time of potential
change.
 The evaluation is done by the Tesco by using two basic
techniques i.e. stakeholders mapping and Stakeholder
significance grid.
 Stakeholders analysis assist the company to identify the
characteristic that are going to satisfy its stakeholder.
 Some of the stakeholder of Tesco are employees, investors,
suppliers, customers and many more.

1.2 Describe three issues involved in strategic planning in your
chosen organization
Some of the factors that can be considered by the
organisation to formulate the strategic plans are as
follows:-
 Proper Communication
 Project management
 Culture
 Innovation

CONTD..
 Strategic planning should be started from the beginning of
business to achieve its short term and long term goals.
 For the development of these strategies company should
involve the ideas and view points of all the staff members.
 This in turn will help the organization to generate creative
ideas.
 If all the staff members thoughts are taken into
consideration than in that case manager will easily develop
the strategic plan to achieve various set targets.
 Formulation of strategies by using new and innovative idea
will help the Tesco to increase its sales, market share and to
earn more profit.

1.3 Effectiveness of two techniques the time of developing
strategic plans
Directional policy matrix:-
 This matrix was developed to measure the effectiveness of the segment and
the ability of the organisation to reinforce that segment.
 By using this matrix, Tesco will be able to identify what are the alternative
segments where they can operate its business.
 In addition to this, it will also help the company to identify the area where
they should invest and in which direction organisation is moving.
 Along with this, it also help the organization to identify whether the day to
day decision taken are correct or not.
 Therefore, after identifying various factors company will be able to easily to
develop its strategic plan

CONTD...
BCG matrix:-
 BCG matrix was developed to attain long term aim of
preparing strategic plans and to help the company to
analyse its growth opportunity by examining the portfolio of
its products.
Stakeholder mapping:-
 Stakeholder mapping is the process of conducting
research, debate and discussion in order to draw various
perspectives with an aim to identify the stakeholder
requirement.

2.1 Analyse the strategic positioning of Tesco by carrying out
an organisational audit
 Some of the techniques that can be considered by Tesco at the
time of doing organisational audit to analyze strategic positioning
are as follows:-
 SWOT analysis provide assistance to the company to identify its
strength and weakness. This in turn will help the company to
make efforts to overcome its weakness.
 In addition to this, it also assist the Tesco to identify
opportunities which they can grab to achieve the success and try
to overcome the threats that can be faced by them in future due to
change in the business environment.

Contd...
 Strength:- Its increasing market share value and its
brand image. In addition to this moving towards online
business.
 Weakness:- Dependence on the UK market and debt
diminution is one of its major weakness.
 Opportunities:- Its heath and beauty products and its
international growth.
 Threat:- Change in UK structure and its overseas return
can fall.

Porter's five force analysis
 Rivalry among competitor (high):- There are large number of
competitors of Tesco which are affecting the sales and growth
of the company. Some of the competitors like ASDA,
Sainsbury, M&S and many more.
 The threat of new entrants (high):- Threat of new entrants
occur due to change in the economic of scale, government
actions and policies.
 The power of buyers :- As Tesco is a retail firm and large
number of competitors are present in that case buyers have the
variety of options to purchase one thing.

CONTD..
 The power of suppliers :- Power of suppliers is less because at present
variety of options are present with the company to purchase the raw
material.
 The threat of substitutes:- In retail company, threat of substitute product
is high because large number of retail companies has been established
which are providing similar products.
Competitor analysis:- Competitor analysis help the Tesco to find
out the number of competitors which are available and what are the
strategies that are used by them in order to expand its market share. This
in turn will assist the company to develop various strategies to beat the
competitors and to introduce the new product in the market before their
competitor.

2.2 Environmental audit of Tesco by using various
environment auditing techniques
PESTLE analysis:- Pestle analysis will help the Tesco to analyse its
external business environment. By conducting PESTLE analysis,
company will be able to examine the areas where they can grow and the
area where they need to take care. Pestle analysis of Tesco is described
below:-
 Political:- Availability of global political factors affects the
performance of the Tesco. Change in tax rates, acts of legislation can
affects the functioning of the company .

CONTD...
 Economic:- Change in economic policy affects the demand, profit and
price of the company. Thus, in regard to which Tesco should keep a
constant look on the change in policies like change in Taxation rate,
accessibility of finance and so on.
 Social:- Continuous change in the social factors like change in trend,
fashion and taste of the customers can affect the functioning of Tesco.
 Technological:- By using latest technology in planning strategies will
help the company to easily achieve its set targets and goals.

CONTD...
 Environmental:- Tesco helps in reducing the carbon footprints which
will lead the company towards a high growth rate.
 Legal:- Imposition of policies like Food Retailing Commission has
created a direct impact on profitability margin of the company.
 Ecological:- Government influence on the development of the society
has forced the company to develop healthy and high quality product
keeping in mind the safety of the nature.
This in turn has reduced the profitability margin of Tesco.
 Competition:- Constant increase in the number of competitors in the
market has affected the working of the Tesco.

2.3 Significance of stakeholder analysis when formulating
new
strategy
 Stakeholders analysis help the Tesco to identify the attitudes of the
stakeholders towards the company. This analysis is done by the
Company at the time of potential change.
 The evaluation is done by the Tesco by using two basic techniques i.e.
stakeholders mapping and Stakeholder significance grid.
 Stakeholders analysis assist the company to identify the characteristic
that are going to satisfy its stakeholder.
 Some of the stakeholder of Tesco are employees, investors, suppliers,
customers and many more.
 In addition to this, it also aid the company to properly manage the
relationship with its stakeholder, develop various strategic and decision
in order to satisfy the customers and most importantly help to identify
the risk.

CONTD..
Stakeholder significance grid is another method that is used by the firm to analyze
the wants of its stakeholder and than afterwards make an effort to satisfy them by
providing what they want.
Product positioning:- It is another technique that can be used by the organisation at
the time of conducting audit. This method help the company to identify areas were
they can easily sell out its products.
In addition to this, it will also assist the firm to cope up with the changes that
take place in the market and to make the whole organisation market oriented. Along
with this, it will also aid the company to develop various strategies to promote the
customer goodwill and loyalty and to achieve the organisation goal.
Therefore, after using all the above techniques Tesco will able to position its
products in the market.

CONTD...
2.4 Recommended strategy for Tesco
Some of the recommended strategy that can be used by Tesco in order to
flourish its business and to achieve high market growth are:
Tesco should start producing product that are healthy because now
days people have became more health conscious. They prefer to consume
low fat and cholesterol products.
In addition to this quality of the products that are provided by Tesco
Should be improved as compared to its competitors.
They should sell out its products at low price in respect to its
competitors.

CONTD...
Tesco should use various attractive promotion methods that
attract the customer.
In addition to which design of the products should be so
impressive that it attract the mind of the customers in first look
only.
Tesco should also introduce new and innovate features in its
products.
Along with this the firm should conduct a research and then
present the customers what they want.

3.1 Alternative strategies relating to market
entry, substantive growth, limited growth or retrenchment for a
given
organisation
Some of the strategies that can be used by Tesco to achieve the success
are as follows:-
 Market Entry strategy
 Substantive growth
 Limited growth
 Retrenchment

CONTD...
3.2 Prdictimg an appropriate future strategy for Tesco
After analysing all the above business strategies and present market
situation of it, it can be suggested that in order to grow its business
Tesco should take into consideration the following strategies.
 Retrenchment:- At present, Tesco is facing tough competition with
many companies like W. Morrison, Sainsbury, Asda and many
more. Thus, in order to cope up with this situation, Tesco should
take into consideration the retrenchment strategy.
 They should start reducing the sales of those products which are
not preferred by customers and in this regard they should
introduce new product that are required by the customers. This
in turn will help the firm to increase its sales .

CONCLUSION
From the following report it can be concluded that to achieve the
success in this corporate world formation of different strategy is
very important to increase the market share and to easily accept the
changes that can occur in the future.
In addition to this, preparation of strategies will help the
company to achieve its desired vision, mission, goals and
objectives. Furthermore, it is interpreted that by retrenchment
strategy Tesco can raise its growth rate. In the following report,
various method are also interpreted which can be used by the
company to develop various strategies.

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