Evaluating Tesco's Strategic Management and Competitive Edge

This report provides a comprehensive analysis of Tesco's business strategy, beginning with an introduction to the company and its operations. Part A delves into an external analysis using PESTLE to examine political, economic, social, technological, legal, and environmental factors impacting Tesco. It also conducts an internal analysis using SWOT to identify the company's strengths, weaknesses, opportunities, and threats. Furthermore, the report critically evaluates Tesco's competitive environment through Porter's Five Forces, assessing industry competition, the threat of new entrants, supplier power, customer power, and the threat of substitute products. The report identifies and justifies Tesco's competitive advantages and devises valid strategies with tactical objectives, referencing the 7-S model. Part B outlines a strategic management plan, including an executive summary, vision, mission, Ansoff Matrix, and Bowman clock model, evaluating the strategy for monitoring and control. The report concludes with a summary of findings and recommendations.

BUSINESS STRATEGY

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................3
PART A ..........................................................................................................................................3
1 Analysing PESTLE and SWOT for Tesco...............................................................................3
2 Critical evaluation of competitive environment with Porter five forces..................................5
3 Identifying and justifying of Tesco and competitive advantage..............................................6
4 Devising valid strategies with tactical objectives....................................................................6
PART B............................................................................................................................................8
Executive summary.....................................................................................................................8
Vision..........................................................................................................................................8
Mission........................................................................................................................................8
Ansoff Matrix..............................................................................................................................8
Bowman clock model..................................................................................................................9
Evaluating the strategy for monitoring.....................................................................................11
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Strategic management plan is refers as the document which are used for communication
in order to completion of organizational goals, focus energy, configure resources, set priorities,
strengthen options for ensuring about the different stakeholder who are working for achieving
the common goal for establishing agreement (Liu and Kong, 2021). The report is based on Tesco
which is refers as British multinational groceries, that is founded in 1919 by Jack Cohen in
London. There are wide variety of products offered by the company in order to satisfy the need
of consumer. It is UK's biggest retailer by sales and biggest private employer of nations on the
basis of 3,30,000 staff that are working in 3146 stores. The product provides by Tesco are
clothing, furniture, petrol, toys, telecom and internet etc. services. All the product are sell at the
supermarket and convenience store as well as online. The report will discuss the external and
internal factors of chosen firm on the basis of relevant framework such as SWOT and PESTLE.
Also, analysis the competitive environment for using the Porter five forces model. Further,
evaluate the strategic management plan.
PART A
1 Analysing PESTLE and SWOT for Tesco
PESTLE analysis for Tesco in order to find the external factors which are influence the
organization.
Political factors- When the company started operating its business worldwide there are
several global factors which area influences the performance of organization (Hestiningrum and
Prawiraatmadja, 2021). These elements are related to tax rate which are continuously fluctuated
and the act of legislation and stability of country. Also, financial instability of the country
influence the domestic population for encouraging them and create job for them.
Economic factors- In this factor it is the main concern of Tesco because there are some
cost which are most likely to change the demand, leverage costs, prices and profit of the
organization. The income level of the household affect the grocery market as well as it is
important to advertise the product rather than luxurious items. Organization have to bear heavy
loss while the adoption of new technology and it can be affected by the government policy.
Social factors- On the basis of variety of changes there are different trends which are
changed the perception of customer in order to but the clothes. Social media help to influence the

customer in the positive way and that is why it helps to increase the sale of the product. People
are like to follow social media for corporate with the change of new trend. Also, people are more
depended on the social media for adopting new policies.
Technological factor- The technology is changed according to the opportunities related
to advancement (Malla and Delhi, 2021). Due to trend of digital technology Tesco enhance its
operation as well as provide home delivery services to customer by providing them discount and
other rewards. It attracts the customer and increases in efficiency of project.
Legal factors- It has been seen that there are different government policies are need to
adopt again and again it impacts bad on the performance of organization. According to FRC of
2004 (food retailing commission) there are so many food practices which are banned. Also, it
affected the price of the product and it influences to change in the demand of suppliers.
Environment factors- The increased pressure on organization are need to address the
environmental issues and adopt the operation which are benefit for the society. Tesco starts
committed for reducing the carbon footprint for 60% by 2020. Tesco has minimized the waste
that is produced the stores with increasing customer conscience.
SWOT analysis of TESCO for identifying the internal factor that are influence the
organizations and get the information related to the capabilities and resource of the company.
Strength Weakness
 Tesco is the biggest grocery retailer in
UK
 It leads market share
 This is geographical diversified
because there are more than 8,000
stores all over the world (Castañeda-
Ayarza and Godoi, 2021).
 It has efficient supply chain network.
 Organization was failed due to
operation of Japan and US.
 Club card controversy affect the brand
image of the company.
 There are poor operational performance
in specific areas.
Threat Opportunities
 The biggest threat is related to national
economic crises such as credit,
government rules and regulations,
 It can more expand the business.
 Also, can make the strategic alliance
with other brand.

taxations.
 There are large number of competitors
in UK.
 It has emerging market and also has the
opportunity for expand the online
business (JATMIKO and et.al, 2021).
2 Critical evaluation of competitive environment with Porter five forces
Porter five forces model is related to analysing the competitive environment of the
company there are same factors which are as follows:
Competition in industry (low)- There are large number of competitors are there in UK
as well as in the world and the main competitors are such as Sainsbury, Mark and Spencers etc.
Supplier has various option which can create the product at lower price with the big deal (Kun,
Yuenan and Yingxue, 2021). On other hand, it is impacted positive when the company adopts
new services for achieving the target of increasing customers.
Threat of new entrants (medium)- It affected the power of the company when new
entrants are come into the market. There are less money and time costs when competitors enter
into markets. Beside this, there are strong barriers which help to increase the competition as well
as it will diversify the stakeholder of the company. There are so many start-up which are like to
copy the organization but at some point of time.
Power of suppliers (low)- Suppliers are played main role in order to driven up the cost
of products also they can switch to other company. There are very company which are depended
on the supplier because there are many options that can choose by the Tesco. Brand reputation of
the organization is already good in the market that it why it attracts the supplier for creating new
supply chain with it.
Power of customer (low)- This is the force which examine the power of the consumer
and it is directly affect the quality and price of the product. There are large number of option on
which consumer can choose the right product at best price. Tesco has the advantages for offering
the product or service at good price that is why it has large number of customers.
Threat of substitute products(high)- The demand for apparel and footwear are
increasing in the market because of the changing in trend or fashion. Sometimes customer shift
to other brand of unavailability of product, high price of product etc. It helps company to make
the product according to the demand with all category (Fiorenita and Dwianika, 2021). So,
customer will not go to choose other product.

3 Identifying and justifying of Tesco and competitive advantage
There are several points identified which can justify the competitive advantages of Tesco.
 The customer services provided by the Tesco is comparatively and that is why the
competition in industry affected low the organization. Also improve the quality of
services according to the need of the customer and it is very necessary to provide
excellent service to the customer (Dubinsky, 2021). That is why it is justified that it is the
biggest competitive advantage that make the company different.
 The quality offered by Tesco is highest and it helps to create the brand image of the
company. There are wide range of products offered by the company and it is important to
provide good quality of products that is why there is low threat of substitute product
because customer always attract with the quality.
 Tesco has the power of supplier as low because there are large number of supplier who
are like to supply their product to Tesco. Low supplier power is more creates the industry
attractive and it increases the profit potentials. On other hand, the high power of supplier
are creating the industry less attractive and that is why it decreases the profit.
 There are both online and offline strategy of marketing used by the company, there are
large number of customer get the update regarding discounts, offers etc. The
advertisement strategy used by the company by sharing regular update to the audience it
increases the customer reach. Also, there are offline strategy used by the company such
as hoarding at airports, roads etc. People who are cross from that place attract with the
advertisement.
 The power of buyers is low for Tesco because all the power is in organization, large
number of customer are attracted for buying the product online as well as offline.
Customer has the power to buy the product online as well as offline because there are
both the option given by the company (Rabetino, Kohtamäki and Federico, 2021). It has
been justified that there are larger offered and discount given by the company for selling
the product and attract the customer.
4 Devising valid strategies with tactical objectives
There are some strategies which re used by the company in order to achieve the strategic
objectives. Also, the firm need for managing the factors which are contributing for competitive

advantages for ensuring about the survival of company. The study focus on the 7's model as
follows:
Strategy- There are several strategies for helps to legacy of success, also the organization
believe in cost leadership strategy. Also, company offers product at the low price while selling
the old stock. It attracts the customer as well as customer have wide variety of options while
purchasing from Tesco according to the purchasing ability. It helps the company to leading at the
right track.
Structure- The organizational structures followed by company is hierarchical structure
and also all the executive and board members are not followed the leadership for immediate
leader.
System- This is related to technology which is already opted by the company in order to
measure the performance of the employees. All the work is controlled by the systems and all the
transaction and accounts are maintained by system only so that it help to maintain the work
easily (Farrukh and et.al, 2021). Also, the system refers to the regulation which are announced
by the company for maintain the good relation with employees and organization.
Staff- There are more than 4,60,000 employees are working at different sectors of Tesco.
All the activities are controlled by the management. All the staff are well-trained and those keep
the employees updated by providing them special attention.
Skill- All the employees are well skilled and the present position of the company is
popular as compared to others. Also, there are different types of skills seen in the employees in
order to provide best services to employees. Skills are help to enhance the performance of the
employees. Employees are very good at communication so that it can attract the customer and
increases the brand image of the organization.
Style- The style followed by Tesco is democratic leadership in order to operate the
organization and so that employees get chance to participate in group decision and it can be help
for improve the decision-making process. It is good opportunity for employees in order to
exchange the ideas, participation, having opinion and also encourage the decision of the
employees.
Shared value- Tesco believed on the value that is maintained by the all the employees
which can get benefit. Also, employees have the opportunity for sharing the ideas and also helps
to improve the process of sharing the value.

PART B
STRETEGIC MANAGEMNT PLAN
Executive summary
The aim of the report is to define the strategies of the organization, the study will
evaluate about the strategic directions which are available for the Tesco. Also, justified the
appropriate platform for growth and strategies. Moreover, evaluated the ways by which strategies
can be monitored.
Vision
The vision of Tesco '' To be most high valued of business by customers we serve and the
communities that are operated, the loyal colleagues and shareholder.
Mission
The mission of the company is ''to be champion for customer''.
Ansoff Matrix
Application of Ansoff matrix in Tesco, this examines how organisation implement
market penetration, diversification, market development and product development for expansing
the operation of the company. Chosen firm is the biggest retailers at the global level,
headquartered of Tesco is in UK.
Market penetration- When using this strategy Tesco sells the existing product in the
existing market and expand the business accordingly. This is the strategy which are helped for
increasing the market share as well as use of product for existing customers. Strategy related to
competitive pricing there are most effective for implementing the market penetration strategies.
There are different types of special offers on the products which are view for increasing the sales
of the product or services (Agha and Dixon, 2021). The special or festive offers are help to
increases the sales in order to squeeze profit margin.
Market development- This strategy is related to selling the existing product at the new
market in order to expand the business around the world. In July 2020 there are new stores were
open in the Thailand in consecutive three years. Beside this there are some cases in the market
development strategy were failed most of the cases. Such as there are many stores are closed in
Japan, China, US, South Korea.

Product development- In terms of Tesco, through focusing on determining new goods
and services to existing market place. It helps in emphasizing product growth through attracting
more and more customers towards business. This helps in raising organization productivity and
efficiency in respective manner by innovating products. Through this by taking place in existing
market helps in conducting productive approach for business by facilitating product development
in effective manner. By this boost organization performance and emphasize development of
organization in desired manner.
Diversification- In regard to organization, by aiming at entering new sector by
establishing new goods and services. It helps in deriving diversified products to customers that
facilitates growth and expansion of business by raising productivity and efficiency in desired
manner. Through emphasizing innovating products by introducing in new manner helps in
raising organization efficiency through diversifying products and services. As this helps in
raising company profitability and determining capability in respective manner.
It has been justified that market penetrations is one of the best strategy that can be used
by the company in order to sell the existing product at new market. Also, it has been
recommended that for Tesco this strategy help to sale the product in new market such as North
Korea, it can help to enhance the brand position of the company (Naim, 2021).
Bowman clock model
The focus of this model is to make companies aware about the position ion the market as
compared to other competitors. Also, this marketing model is help the company for analysing the
position in the market. This is the distinctive element of competitive advantages with the factor
of cost advantages for overall position of the market. There are 8 types of strategies are there in
the Bowman's clock such as follows:
Low price and low added value- At this position organization tried to keep the price at
low in order to attract the customer by setting the price at low as compared to other competitive.
Competitors of Tesco are M&S, Sainsbury etc. That is why in order to attract the customer firm
use this strategy. This potion is the most competitive according to the clock.
Low price- Tesco using this strategy for producing the product at large quantity and the
value of the product are considered in the target market. There are various types of price War
conducted in between Sainsbury and Tesco. The profit margin of the company is comparatively
low because the price of the product is also low. It can generate the high volume of output so that

it can generate the increased profit. According to this position there are the situations where cost
is minimization and cheap for producing by using the economies of scale.
Hybrid- In this stage there are effective value added in the product which can be offered
on regular basis. This position involved by focusing on the aspect of product differentiations that
makes the product high valued for the market. This strategy attracted the customer in order to get
the good quality of product at low price which can be help to increase the brand image of the
organizations (Sriyono and et.al, 2021).
Differentiation- At this stage there are different types of product offered by the company
in order to obtained high value at average price. For focusing on maintaining the brand it strategy
is retaining the loyal customer set. Also, in this situation customer are ready to pay higher price
for attaching the customer with the high quality. Customer are ready to pay the product at this
price because it gives higher level of satisfaction.
Focus differentiation- This strategy is mainly focused on the brands which are focused
on the exclusive and luxury brands on the basis of high quality product at the higher price. The
profit margin of the organization is to target from the section such as, distribution, promotions,
marketing, segmented strategies etc. The competitors are similar to the market segment that are
keeping the product at high price.
Risky high margin- In this strategy the model is charged high price in order to perceive
the value of the product also this strategy is very risky for opt in order to maintain the position in
the market. Moreover, the customer look for better quality of products which are almost similar
range and type at lower price by cutting the cost (Mukangai and Murigi, 2021).
Monopoly pricing- In this organization offered the product by having the position of
monopoly leaders in the target market also the organization offer different types of products
which has no fear of competition as well as it helps when customer has 2 choices one is to buy
the product and another one is not buying but not have the choice related to bargaining. This is
the most effective strategy when Tesco offer luxury product of the own brand.
Loss of market share- This strategy is not desirable for company because it is basically
depended on the product and services offered by the company. Also, organization offers this
product which has not related to the customer value. The price of the product is very high and
customer not able to buy the product or services.

Evaluating the strategy for monitoring
There are different types of strategies which are help to evaluate the performance of the
organization in order to ensure about the success. It is very important to monitor all the element
related to growth of the organization as well as performance of the employees so that it can
improve the performance. Also, analysing the third party performance with the help of digital
experience with no problem (ABUBA and AHIAKWO, 2020). Moreover, monitor the situations
for taking the information about the monitoring the home page. Further, evaluating the strategy
which are need to changed and related to the product development strategy. Lastly, with the help
of KPI, organization can evaluating the performance and get the result accordingly.
CONCLUSION
From the above report it has been concluded that it is very important to follow the
strategies which are enhanced the business operation. The report concluded about the Strategies
using by Tesco. Also, analysed PESTLE and SWOT for evaluating the internal and external
factors that can be influenced the organization also identified the resources and capabilities.
There are critically evaluated the competitive environment by using the Porter five forces.
Moreover, identifies and justified the potential competitive advantages of the company with
various strategies. Further, devising the valid strategies and tactical objectives which re help to
achieve the overall objective of the company with the help of relevant model McKinsey model
with 7S. All the S has different strategies which can help to evaluated about it. In section 2 the
report briefly explain the strategic management plan which includes all the relevant element such
as vision and mission of the Tesco. Then analysing the Ansoff model in order to identify the best
strategy of marketing for the organization for the purpose of enhance the productivity of the
company. Lastly, applied Bowmen clock model in order to analyse the best strategy for
organization and evaluated different option that can help the company by monitor the
performance.

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