Analysis of TESCO's Business Strategies and Competitive Positioning

This report provides a comprehensive analysis of TESCO's business strategy, examining its competitive positioning within the market. The analysis begins with an introduction to business strategy, followed by an application of relevant frameworks to assess TESCO's macro environment, internal capabilities, and competitive forces. Task 1 applies appropriate frameworks to analyze the impact and influence of the macro environment on TESCO. Task 2 analyzes the internal environment and capabilities using frameworks like SWOT and VRIO. Task 3 applies Porter's Five Forces model to evaluate the competitive forces in the market sector. Finally, Task 4 interprets strategic planning for businesses using models like Porter's Generic Strategies and Bowman's Strategic Clock. The report explores the company's mission, vision, objectives, and strategies, concluding with a discussion of key findings and implications for TESCO's future.

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
P1. Applying appropriate framework in analysing the impact and influence of macro
environment on TESCO for its strategies....................................................................................1
TASK 2............................................................................................................................................2
P2. Analysing the internal environment and capability using framework for an organisation...2
TASK 3............................................................................................................................................4
P3. Applying the Porter's Five forces model in evaluating the competitive forces of market
sector for an organisation.............................................................................................................4
TASK 4............................................................................................................................................5
P4. Applying theories, concepts and models in interpreting its strategic planing for businesses5
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Business strategy is described as the competitive set of actions used to attract consumers
for their satisfaction level which results in achievement of organisation goals and objectives for
its stability (Awino and Mutua, 2014). In this project, TESCO is selected to identify its
competitive strategies in competing with its rivalries which results in its sustainability and
growth. The mission, vision, objective, strategies and tactics applied by TESCO for its
positioning in competitive market. The organisation business strategy is described on the basis of
Porter's five forces, SWOT analysis, Porter's generic strategies, VRIO model to identify its
competitive advantage as compared to its competitors.
TASK 1
P1. Applying appropriate framework in analysing the impact and influence of macro
environment on TESCO for its strategies
Business strategy is defined as the process to compete with its rivalries through
competitive strategies which leads to achieve organisational goal.
Mission:- The organisation aims to “make what matters better together” by helping
youngsters with their employment.
Vision:- This targets to be “the most highly valuable business” through with competitive
advantage of consumer loyalty.
Objectives:- The main objective of organisation is to provide online shopping for
groceries, electronics, clothings which helps to capture large number of consumers in global
market (Bashouri and Duncan, 2014).
Strategy helps TESCO to achieve its goal and objectives through fully utilisation of
scarce resources from their competitive advantage which results in competing from their rivals.
The strategic planing technique implied on Stakeholder analysis is further described as:-
Stakeholder analysis:- It is the process to identify and determine people according to
their work and their level of interest while performing in the business. Managers of TESCO
implement this analysis for conducting several strategic decision regarding the achievement of
goal. This analysis is described as under:-
 High power, highly interested people:- In this decision, people with high power to
accomplish the project are highly interested for the business to achieve success. TESCO
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managers are fully engaged, eager, keen and motivated for making great efforts to
achieve goals with consumer satisfaction (Bolisani and Bratianu, 2017) These people are
Board of Directors, Chief Executive officers, top and middle level managers, etc.
 High power, less interested people:- This decision focus on keeping satisfied
stakeholder with high power as it don't bored them while performing with low interest.
TESCO faces them in government, legal authorities, political parties, etc.
 Low power, highly interested people:- In this decision people are adequately informed,
ensured about major arising issues with low power and are very helpful in their
supporting roles for TESCO. These are consumers, society, etc.
 Low power, less interested people:- In this decision people are monitored for their low
power and less interest as they feels bored in performing their task in TESCO. These
people are employees, housekeeping staff, etc.
TASK 2
P2. Analysing the internal environment and capability using framework for an organisation
Internal environment is the sub-category of business surroundings, which defines the
intrinsic atmosphere of business. It includes climate, culture, members, etc. To analyse internal
environment TESCO implement SWOT analysis and VRIO model which are as follows:-
SWOT Analysis:- This is strategic planning technique to determine strength over
weakness and opportunities over threats. Managers of TESCO implement this analysis to
evaluate their competitive advantage for its stability in market. This is described as under:-
Strength (S) Weakness (W)
 Large number of stores available in the
market to remove the hindrance of
place for TESCO to achieve success.
 Diversified markets and varieties of
product range are produced to meet the
diversified needs of consumers for their
satisfaction.
 Decrease in operating profits through
decrease in market sharing prices which
reflects its worst performance.
 Fraud trial and accounting scandal
results in charging the fine or penalty
by TESCO for its misrepresentation of
profits.
Opportunities (O) Threats (T)
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 Strategic alliances with other firms to
expand its brand through partnership,
joint venture which attracts more
consumers with diversified products.
 Emerging online shopping for its
growth and expansion in global market
with brand awareness.
 Increasing competition from its
rivalries impacts the positioning of
TESCO for its stability in competitive
market.
 Economic crisis and credit crunches
also impact the deficiency for goal
achievement.
VRIO Model:- This method identifies the significant portion of workforce is trained for
production of organisation. Managers of TESCO implement this model for determining
employee loyalty in achievement of organisation goal.
Capabilities Valuable Rare Inimitable Organised
Financial resources ✔ ✗ ✗ ✗
Adaptability ✔ ✔ ✗ ✗
Brand Marketing/
positioning
✔ ✔ ✔ ✗
Dependency on
technology
✔ ✔ ✔ ✔
Valuable:- Full utilisation of financial resources, adaptability, brand marketing/
positioning, dependency of technology are the following capabilities which are highly valuable
for TESCO. These aspects are precious for organisation to generate more of operating profits
with consumer satisfaction (Morris, 2016). These helps to position the brand in mind of
consumers through its reputation which leads to achieve success.
Rare:- Financial resources of TESCO are not rare because the same resources are also
available for the substitute competitors which impacts its stability. Adaptability of TESCO is rare
because it already determines the competitive strategies adopted by its rivalries. The brand
marketing/ positioning is also rare because the strategy adopted by TESCO is highly specialised
for its target market. The dependency of technology is rare because it is selected with innovative
idea which is very difficult to replicate easily.
Inimitable:- The adaptability of TESCO is not inimitable because any organisation can
easily identify after easy research on organisation which impacts unstability in competitive
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market. The brand positioning is inimitable because its creates an positive image in mind of
consumers with its products specific features. The dependency of technology is inimitable
because its difficult to capture the idea applied by organisation for its success (Ostos, Hinderer
and Bravo, 2017).
Organised:- The brand positioning of TESCO is not organised because this method can
easily be stole by the competitors for their product or brand positioning. The dependency of
technology of TESCO is organised because adoption of technology don't lead to be occupied by
rivalries as they may be costlier which creates stability for the organisation.
TASK 3
P3. Applying the Porter's Five forces model in evaluating the competitive forces of market
sector for an organisation
Porter's Five Forces Model:- This model is described as the method to identify and
analyse the strategies to remain stable in competitive market (Patz, 2014). The Porter's five
forces model is implement by TESCO to determine the competitive advantages in competing
with its rivalries. These competitory forces are described as under:-
 Supplier power:- This force explains that suppliers have the power to increase their
product price after evaluating the prices of their substitutes and product quality.
Managers of TESCO can use this to determine their rivals strategy to implement their
prices which attracts large number of consumers.
 Buyer power:- It is explained as the buyers are king for every organisation and they have
the right to consume product at least price with more satisfaction level. The managers of
TESCO can use this to enlarge consumers by maintain their best quality products at least
possible price which leads consumer loyalty.
 Competitive rivalry:- This force focus on the number and strength of competitors
available in the market. There are many rivalries available in the market which affects the
position of organisation. Managers of TESCO use this force to compete with their
differentiated innovative product with attraction of target market. This competitive
advantage leads in expansion and growth of organisation.
 Threat of substitution:- This force is described as the competitive strategy adopted by
the substitute organisation which attracts consumers with their least cost-effectiveness
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and product quality (Reeves and Haanaes, 2015). Managers of TESCO can use this force
to produce least cost product with best quality to compete with their substitutes through
best image positioning in mind of consumers.
 Threats of new entry:- In this force the company face the challenge of new entrance of
organisation with innovative product in competitive market. The managers of TESCO
can use this force to establish more diversified product which attracts consumers with
their brand specialisation. This leads to increase in sale with maximisation of profits for
its stability and expansion.
TASK 4
P4. Applying theories, concepts and models in interpreting its strategic planing for businesses
Introduction:- The strategic management planing is the process for determining the
goals and objectives for the sustainability. In this project, TESCO is selected for the
determination of its competitive strategies to compete with its rivalries. The theories, models
applied for organisation are Porter's generic strategies and Bowman's strategic clock which are
explained below:-
Porter's Generic Strategies:- This model is used as business strategy to compete with
its competitors through their competitive strategies. Managers of TESCO apply this strategy to
determine proper direction to achieve success. The Porter's four competitive generic strategies
are as follows:-
 Cost Leadership:- This strategy focus on the least cost-effectiveness of an organisation
which attracts consumers to consume more of products. Managers of TESCO can use this
to keep very low cost of products as compared to its competitors ensures large number of
consumers.
 Differentiation:- It is the strategy which is referred with the competitive advantage of
specialised and unique product produced for their target market. Managers of TESCO can
use this strategy in charging high premium prices for their specialised extra featured
product (Rumble and Minto, 2017).
 Cost Focus:- This strategy focus on low cost for segmented market. Managers of TESCO
can use this to produce high qualitative products at least price which ensure consumers to
purchase more products.
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 Differentiation Focus:- In this strategy producers concentrates on specified target
market and produce specialised products meeting the needs, desires and wants of
consumers with high premium charges. Managers of TESCO can use this as they have
unique products of consumers wish on which they are ready to pay high prices resulting
in maximisation of profits.
From the above discussed competitive strategies managers of TESCO must adopt the cost
leadership strategy, which leads to reduce cost at least price. This leads to attract large number of
consumers to consume more products to satisfy their needs and desire in achievement of
organisation goal.
Bowman's Strategy Clock:- This strategy was introduced by Cliff Bowman and David
Faulkner for competitive and corporate strategy in 1996. It's main purpose is to aware about
business position from its rivalries in competing market. Managers of TESCO implement this for
competitory advantage in least cost with strategic positioning in market. These strategies are
described as under:-
 Low Price and Low value:- This strategy refers to maintain low price of product to
compete with rivals as it provide low value to consumers. Managers of TESCO can use
this strategy for low cost product which leads consumer to perceive little value (Poulios,
2014).
 Low price:- This strategy explains that large produced quantities are to be sold at low
price to target market which provides low-profit margin. Managers of TESCO can use
this for maximisation of high volume profits at low margin.
 Hybrid:- It is the strategy which focus on qualitative products with low price on
segmented market which improve consumer loyalty. Managers of TESCO can use this
for competing from their rivalries on qualitative products with low cost which increase
consumer loyalty and ability to gain market share.
 Differentiation:- This focus on differentiated products with high quality on average price
in new market. Managers of TESCO can use this to improve product quality, branding
which makes consumers loyal and ready to pay any cost of the product.
 Focussed Differentiation:- In this strategy the main focus is on brands which provide
consumer luxurious and exclusive products with high quality on high price. Managers of
TESCO can use it to for segmented market for maximisation of profits and its stability.
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 Risky high Margins:- This strategy states that charging high prices from consumers may
be risky for its stability. Managers of TESCO can use it for increased pricing on standard
products which improve consumer loyalty.
 Monopoly pricing:- This strategy explains the company as being in monopolistic market
with high price of product by providing low value to consumers. Managers of TESCO
use this as they are least number of sellers and consumers are bound to consumer their
basic needs product which ensures stability.
 Loss of market share:- This strategy signifies that high price for poor quality products,
minimise the sale and effects the stability with loss of market share. Managers of TESCO
can use this to identify competitive strategies of their rivals and may look for
opportunities to move on.
From the above discussed strategy the managers of TESCO should adopt the hybrid
strategy of Bowman's strategy clock. This leads to produce high qualitative products with low
price on segmented market which improve consumer loyalty. This leads to achievement of
organisational goals and objectives for its success as compared to its competitors.
Justification:- Cost Leadership and Hybrid strategy should be used by TESCO, because
by adopting these strategies it will provide least cost-effectiveness for producers to attract more
consumers for their good quality.
Strategic Management Planing:- It is referred as the formal document used to
communicate on organisational goals, objectives, methods for management to direct and control,
etc., which provides stability. Managers of TESCO implement this planing to achieve success for
competing from its rivalries. The organisation strategic management plan is described as under:-
Mission:- The TESCO mission for cost leadership and hybrid strategy is to minimise cost
with qualitative products which results in maximisation of profits.
Vision:- The vision of TESCO is for least cost-effectiveness with improved quality
through hybrid strategy for its competitive stability.
Objectives:- The main objective of TESCO from cost leadership and hybrid strategy is to
capture large number of consumers for its consumption of products.
Strategies:- The following strategies adopted by TESCO for the development of its
competitive position in market are as described under:-
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 Awareness:- The marketing strategy of TESCO is to create awareness of brand in their
target market. The organisation inform customers about their product through print
media,TV commercials, etc.
 Brand positioning:- This strategy of TESCO is to position the brand in the mind of
segmented market which leads to increase in consumption of products with consumer
loyalty.
Tactics:-This is referred as the process to achieve its long-term objectives for its long run
stability of TESCO. These are as follows:-
 Consumer Acquisition:- The TESCO identifies and determines the need, desire and
wants of consumer to produce product for their satisfaction with increasing loyalty.
 Diversification:- TESCO focus on diversification through diversifying its brand into
various FMCG segments to compete with its rivalries (Danso and et.al., 2019).
Conclusion:- From the above discussion it has been concluded that strategic decision-
making is very essential for organisation to compete with its rivalries to acquire competitive
position in the market. These strategies are described on the basis of Porter generic and Bowman
clock to achieve success.
CONCLUSION
From the above discussion it has been concluded that business strategy plays very
efficient role for its competitive strategies in competing with its rivalries. This leads in the
achievement of mission, vision, objectives of an organisation with stakeholder analysis. The
internal environment and capabilities of organisation are determined on the basis of SWOT
analysis and VRIO model to achieve success. Porter's five forces model interprets in strategic
planing for its stability in competitive market. Strategic management planing is further described
on the basis of Porter generic and Bowman strategic clock for its stability.
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REFERENCES
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