Comprehensive Company Strategy Report: Tesco Plc. Analysis

This report provides a comprehensive analysis of Tesco Plc.'s company strategy, focusing on its strategic capabilities, resources, and competitive advantages within the UK retail industry. The introduction provides an overview of Tesco's market position, competitors, and global presence. Task 1 delves into Tesco's strategic capabilities, including its strengths, weaknesses, and resources, and utilizes the VRIO model to evaluate its competitive advantages. Task 2 examines the TOWS analysis, identifying threats, opportunities, weaknesses, and strengths, and assesses the strategic suitability of Tesco's approaches. The report analyzes Tesco's market share, financial performance, and its ability to adapt to market changes. The report covers topics such as the company's growth, its subsidiaries, and its overall economic contribution, including discussions of strategic capabilities and resources. The report concludes with a summary of the findings and implications for Tesco's future strategies.

Company Strategy
Report

Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Discussing strategic capabilities including resources and competence.......................................1
Strength, weakness and resources................................................................................................2
TASK 2............................................................................................................................................3
TOWS and strategic suitability....................................................................................................3
Feasibility acceptability...............................................................................................................5
CONCLUSION................................................................................................................................6
REFERNCES...................................................................................................................................7

INTRODUCTION
TESCO Plc. is one of the biggest supermarkets of UK operating within the retail industry
of country and having many competitors like that of Sainsbury, ASDA, Morrison’s and many
more. This retailing industry under which company is been operating and functioning is having
oligopoly market structure as all of them are forming collusion and then operating within
markets so that no one could be making higher profits. Tesco Plc. Is British multinational
company which is selling and promoting about all types of products like that of groceries and
general merchandise retail. In the world Tesco is third largest in terms of profits of retail industry
and 9th largest in terms of revenue. The company at present is having about 6000+ shops in all
around world like that of Europe and Asia and is leader in UK.
The current report will be covering discussion of strategic capabilities with resources and
competence with use of strategic tools and value chain and comparing it with key competitors of
firm. Further report will be covering SWOT1 analysis will be covering from 2017-2022 with
given justification and feasibility acceptability as well.
TASK 1
Discussing strategic capabilities including resources and competence
Tesco Plc. is the most profitable firm in retail industry which is forming major market
share of UK with having about 28.4% of total market share. The company was founded in year
1919 by Jack Cohen which he rapidly expanded the business in 1939 and having about 100+
supermarkets in UK (Quirke, 2017). So at the starting stage company was only operating as
grocers which they both geographically and operationally expanded their markets in various
fields like that of books, clothing, furniture, petrol, software, financial service, telecoms and
many more. Then after this company started to restructure itself which included to bring about
various products at very low cost and in more quantity of products which was in 1990. Then in
1993 company started launching or offering good quality of products which was according to
range of their brand value. This made firm to be included within most successful and increasing
chain growing from 500+ stores 1990 to 2500+ in 2005. After this company also was listed on
Stock Exchange of London2 which is at present constituent of FTSE 100 index. In year 2015 the
1 Strength, Weakness, Opportunities and Threats analysis
2 It is the stock exhange which is located in London with having market capitalisation of US$ 6.06 trillion and is the
third largest stock exchange in world.
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market capitalisation of worth £18.1 billion and this made company 28th largest with the primary
listing of stock exchange.
Tesco is having its subsidiaries like that of including stores, banks, mobile, family dining
and booker group. The overall economic contribution of company is around £37.3 million which
indicate performance of Tesco Plc. for the year 2016-17 with having employment to about
74300+ which is full time job supported and UK supply chain. Tesco Plc. Paid about £1.2 billion
tax for the same year which shows that they are doing very good for including to as revenue of
company.
Strategic capabilities-
The organisation is having stakeholders who are been considered to as most important
factor for company so they Tesco should be including viewpoints of stakeholders. It is essential
for company that they are been able to grow their production level, increasing base of customers,
marketing for sponsor development and thus making progress into markets (Lyon, and Toffel,
2018). So there are many strategic capabilities of company like that of having long and short
term HR strategies or policies which would be helping company in growing within markets.
Strength, weakness and resources
Tesco is having many strength and weakness which is making company grow within
markets and then finding a way to involve into best companies of retailing industry. The strength
and weakness of company will be as follows:
Strength-
Tesco is very much powerful company on global retailing brand with having 100 most
valuable brand of world. They are known to as offering value to their customers in form of
quality, convenience and money to all its customers as they company is having wide range of
products and services (Lakshmi and Rao, 2017). At present company is having about 6784 stores
which shows that company is been utilising their innovative models of business like that of
Tesco Express and Metro. Other than this strength of Tesco will be including like that of increase
in global operations3 which includes like that of online operations and joint partnership in
country like that of China.
Weakness-
3 Global operations would be meaning any company when they are been operating outside the host country in terms
of dealing with clients and earning foreign exchange.
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Company is been growing as large organisation which is having wider variety and range
of products into market like that of books, food, clothing, insurance, financial service and petrol.
But profits of company is also been impacted due to bad debts which is due to increase in credit
facilities like that of credit cards and insurance as well (Youn, Kim and Jang, 2017). Other than
this company is also having very less amount of experience in its range of products like that of
smartphone and tablets which it is now entered.
Resource-
Tesco is having about 476000 employees all over the world, revenue of £55.9 million,
operating income of £1.2 million, net income of £54 million and about 6553 shops as well.
VRIO model:
This model will be including or evaluating all capabilities and resources of company over
the competitive advantage which is having elements like that of Value, Rareness, Imitability and
Organisation. So this model will be helping in linking with the strategic capabilities of Tesco
including all 4 parts and discussing strength of company with use of this model
Value- Tesco is having strategic capabilities in order to attain the aim including both long and
short term they will be able to exploit all opportunities and markets which they want to.
Rareness- as company is having rare quality of incorporating revenue and profits with use of
their best technical and management staff (Lyon and Toffel, 2018). This is the only supermarket
of UK which is having metro and Tesco Express operating within country.
Imitability- this quality will be that which will not be imitable by any other company of same
industry likes that of its metro and express other than this they are also having qualified staff
members.
Organisation- Company is organised and ready to be able to take or exploit all resources and
capabilities so that they are been able to make profits.
In the above part there are been mentioned all strength and weakness which is been
related to VRIO model including strategic capabilities and ability as well.
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TASK 2
TOWS and strategic suitability
Figure 1: TOWS analysis
[Source: Park, 2017]
Threats-
Company is also having many threats within staying into same markets like they are
having top position in the market of retail sector of UK but also having many competitors like
that of LIDL, ASDA, Sainsbury and many more. Unique danger that Tesco lasts to battle is the
overthrow of Asda by Wal-Mart4 (Zentes, Morschett and Schramm-Klein, 2017). Marking of
supplies as Asda Wal-Mart takes remained cumulative in the UK, representative a flagging in the
customer scorn for Wal-Mart. The 9th most-valued product in the sphere, Wal-Mart is Tesco's
main international opponent and consequently has the required assistances, capitals, knowledge
and coffers to reason Tesco glitches. This is the external factor of company which is not enabling
them to survive or cope up with their capabilities like that of competitive advantage within
markets.
Opportunity-
Here are numerous chances aimed at Tesco, counting growth into marketplaces such as
digital performing, finished their 80% asset in Blink box. The change by Tesco to proposal own-
4 Walmart is the American multinational retail corporation which is operating within chain of hypermarkets and
supermarkets with having discounted departmental stores.
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brand tablets and smartphones can cross with this venture, mainly in distant souks such as South
Korea, Malaysia, China, and Thailand. Connected spending can application superior suppleness
to clienteles who are foremost full domestic exists or consume flexibility matters; Tesco is
annoying to encounter the wants of the clienteles through increasing jobs in this segment. The
ongoing effects of the recession, where families and individuals may be struggling financially, or
too busy working to cook can be accommodated through wider value and Tesco's Finest
branding (Park, 2017). In addition, further overseas expansion could occur in markets such as
Australia, where the grocery retail market faces relatively limited competition yet is fiercely
price-sensitive. This is also external factor which is not in control of firm and they could be just
identifying and exploiting these opportunities from markets.
Strength-
Tesco is very much powerful company on global retailing brand with having 100 most
valuable brand of world. They are known to as offering value to their customers in form of
quality, convenience and money to all its customers as they company is having wide range of
products and services (Misani, 2017). At present company is having about 6784 stores which
shows that company is been utilising their innovative models of business like that of Tesco
Express and Metro. Other than this strength of Tesco will be including like that of increase in
global operations which includes like that of online operations and joint partnership in country
like that of China. The size of company is very huge which is been able to facilitate all customers
of company throughout the world so this will be helpful for company. The company will also be
having facility of gaining economies of scale which is meant to buy products at lower price and
included into bulk as well. Tesco will be having reduction of price if they are been buying the
products then it should be more attractive than that of others. Strength is regarded to as internal
factor which is under control of Tesco and helping them to cope up within the markets with
having their strategic capabilities and completive advantages as well.
Weakness-
Company is been growing as large organisation which is having wider variety and range
of products into market like that of books, food, clothing, insurance, financial service and petrol.
But profits of company is also been impacted due to bad debts which is due to increase in credit
facilities like that of credit cards and insurance as well (Balmer, 2017). Other than this company
is also having very less amount of experience in its range of products like that of smartphone and
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tablets which it is now entered. Company also need to make more investment so that they are
been able to include like that of IT and technologies. Other than this it will also be making
restructure of company with introducing more money so that they are been able to reduce the
price which is been incurred in implementing strategies. All these above stated points or factors
will be impacting sales that too in adverse stages which need to be overcome by company by
implementing more strategic plans. This weakness factor is the internal factor which is not
allowing company to rule out into their industry or market.
All of them will be helping company to be included under top competitors of others in
same market which will also enabling them to grow at faster pace than the others. But apart from
this they need to form marketing team which will be impacting company to gain more share
within markets. As they are having sales up to 72 billion in year 2016 which is also affecting
profit before sales which is 3.8 billion, the revenue was about 1.6% and earning per share was
2.1% (Jones and Comfort, 2018). All of these includes that company is more into gaining
profitability and share within market which is high.
Strategic suitability
Tesco Plc. is the UK's largest retailer and the 4th in the world after Wal-Mart, Carrefour
and Metro AG. Tesco was established in 1919 by Jack Cohen (Portuese, 2017). This organisation
is improved current market sector as per the need of improvement in work place. Tesco's
commercialism plan of activity, which comprises cost leading and market penetration, has been
progressively impacted by the presence of the foreign grocery store chains Aldi and Lidl as well
as food commodity monetary value and the result of this has been day-and-night price cuts by
Tesco to just the consumer economic process for low cost merchandise offerings.
On the other hand, contemporary intense aggressiveness in the merchandising and food
industry and the beginning of non-competitively low cost foreign grocery store chains, Tesco
should foremost focus on accumulated levels of customer keeping through the consolidation of
effective consumer human relationship social control systems.
Feasibility acceptability
There are majorly two brands which are been held by company namely Every day and
Finest are having their annual sales of about 1 billion and this is regarded to as higher than Coca
Cola. So this is based on basically few elements which are governing company are:
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Service and staff- the service which company providing to their customers should be of very
good quality which is only done if company is providing good training to their staff members.
Their staff should be very well trained and qualified so that they are been able to survive within
the company for longer duration of time.
Price and value- the price of product is very good which is making quality of products also good
so that it is easy to sell into markets.
Range and quality- Company is providing wide range of products within market that too of
quality and making customer stay with company for longer duration of time.
Numerous studies have incontestable the value of customer contentment in relationship
merchandising and consumer keeping (Sreelakshmi and Rao, 2017). This organisation is to be
focus on increased number of customer. It will help to improve market share as well as future
conditions must be change for it.
 Offering a wide compass of product accumulation, from which marketplace remain the
most fashionable category, tremendously contributory to the Tesco's securities industry
leading position
 Alignment of merchandising communication, human activity and relative evaluation
 Various selling and advertising act, but the integral one leftover the trueness card.
 Simplicity and comfort with regards to buying alternate and store designing.
There could be made some of the recommendations which will be based on SWOT and
TOWS analysis that are mentioned above. Tesco Plc. will be doing their business with
overcoming their weakness and strengthening their positive points on more depth bases. The
company in coming year of 2017-2022 should be laying their stress on use of digital technology
which is regarded to as most essential part of companies (Park, 2017). This will be done based
on SAF criteria which are like that of:
Suitability- this will be key which is telling that whether strategy used is suitable or not it will be
including suitability based on environmental and capability.
Acceptability- this will be measuring results and risk to capital and stakeholders while including
strategies of company.
Feasibility- this will be including that whether company is having suitable resources like that of
liquidity, financial capital, labour and abilities to fulfil the target or not.
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CONCLUSION
It could be concluded that TESCO Plc. Should be making more stronger strategies to be
able to survive within market place and this will be making them grow and earn more profits.
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REFERNCES
Books and Journals:
Balmer, J.M., 2017. Scrutinising the British monarchy: The corporate brand that was shaken,
stirred and survived. In Foundations of Corporate Heritage (pp. 66-108). Routledge.
Jones, P. and Comfort, D., 2018. Storytelling and corporate social responsibility reporting: A
case study commentary on UK. food retailers. Journal of Public Affairs, p.e1834.
Lakshmi, S. and Rao, S., 2017. Implementation and Practicalities of Balance Scorecard: A Case
Lyon, T.P., and Toffel, M., 2018. CSR Needs CPR: Corporate Sustainability and
Politics. California Management Review, p.0008125618778854.
Misani, N., 2017. Convergent and divergent corporate social responsibility. In Innovative
CSR (pp. 62-83). Routledge.
Park, T.M.S., 2017. Transnational retailers and corporate real estate management: cases of
Wal-Mart, Carrefour, and TESCO (Doctoral dissertation, University of Reading).
Portuese, A., 2017. Fine is Only One Click Away.
Quirke, B., 2017. Making the connections: using internal communication to turn strategy into
action. Routledge.
Sreelakshmi, G. and Rao, D., 2017. Implementation and Practicalities of Balance Scorecard: A
Case Study.
Youn, C., Kim, S.Y.. and Jang, J.I., 2017. Measuring retailers' sustainable development. Business
strategy and the environment, 26(3), pp.385-398.
Zentes, J., Morschett, D. and Schramm-Klein, H., 2017. Corporate social responsibility.
In Strategic retail management(pp. 207-226). Springer Gabler, Wiesbaden.
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