Strategic Management Report: Tesco's Challenges and Strategies

This report provides a comprehensive analysis of Tesco's strategic management, focusing on the external environment and organizational change. The report begins with an introduction to strategic management and its importance for organizations like Tesco. The main body of the report delves into the analysis of Tesco's external environment, utilizing the PESTEL framework to assess political, economic, social, technological, environmental, and legal factors. Furthermore, the report examines change management within Tesco, specifically addressing a scenario where the company plans to implement a new performance measurement system using KPIs and benchmarking. The report applies Lewin's change management model to this scenario, detailing the unfreeze, change, and refreeze stages, and discusses potential setbacks during the change process, such as lack of employee cooperation, limited understanding of change impact, poor communication, inadequate resources, and resistance to organizational culture. The report concludes by summarizing the key findings and implications for Tesco's strategic planning and management practices.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Analysis of external environment................................................................................................1
Change in the organizations.........................................................................................................3
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
Strategic Management is a process through which the different types of organizations are
able to execute their strategies in a highly effective manner which can help them to be able to
attain the desired goals and objectives in the future (Aguinis, Edwards and Bradley, 2017). For
the managers its use becomes crucial because it helps them to be able to determine the strategy to
be used very clearly for ensuring the application in the overall processes without problems and
issues. For this assignment, Tesco has been considered. It is a British Company which deals in
groceries and various other related products. In this report, there will be specific focus on
analysis of the external environment. Additionally, change management in the organizations will
also be considered as a part of this particular project.
MAIN BODY
Analysis of external environment
External environment refers to a sum total of different types of macro factors which can
create an impact on the level of operations of the organization in a highly effective manner (Al
Shobaki, Abu Amuna and Abu-Naser, 2016). For Tesco it is quite important to assess its external
environment which will help it in ensuring that a proper strategy can be framed by it for the
purpose of achieving its different goals and objectives in the future.
A particular process can be used by the organizations so that they are able to determine
their strategy. This process can be explained as follows-
 Identification of goals and objectives- It is crucial for the firms to be able to identify the
goals and objectives in the right manner (Baumgartner and Rauter, 2017). Therefore in
this way they make sure that they are able to identify the appropriate strategy which can
be used for achieving them in the right manner. In the context of Tesco, it is quite crucial
that it is able to identify its goals and objectives clearly. This will not only help it in
ensuring that it is able to effectively and efficiently ensure that the goals and objectives
are set for the short-term, medium-term and long-term.
 Assessment of the competitors- It is important for the organizations that they assess
their competitors which are present in the market. Thus in this way they are able to
ensure that they can prepare a right strategy for them. Therefore Tesco has to ensure that
it can assess its competitors clearly. This will help a lot in making sure that through the
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assessment of the competitors in the market the company is able to frame a strategy
which will help it a lot in the future to target the maximization of the overall level of
profits.
 Assessment of the skills of employees- It is crucial for the firms that they are able to
assess the skills of the employees in a highly effective manner. Thus in this manner they
can ensure that they are able to set goals and objectives for them according to their skills.
Tesco therefore needs to assess the skills of workers so that it can set goals and objectives
for them to achieve. This will be helpful in ensuring that the skills are developed in an
appropriate manner. For the company it offers an opportunity to ensure that the level of
skills of the workers is assessed and the desired actions are taken.
 Application of the strategy- The organizations should consider their different types of
factors and frame their strategy accordingly. They should also ensure the right application
of the strategy. Therefore for Tesco it is crucial that the strategy can be applied
effectively and efficiently. The application of the strategy can be done by the company in
a manner which ensures that the short-term, medium-term and long-term goals and
objectives of the company are attained quite effectively and efficiently. For this it is
required that the identification of the specific goals and objectives are made in the
company and thus it is able to ensure that it can work in the right manner for ensuring
that the strategy application is done in a proper manner. This will make the strategic
management of the company successful.
For the purpose of analysing the external environment, the use of PESTEL analysis can
be made. The explanation of this model is done as follows-
Political factors- The political situations are quite dynamic and ever-changing in nature
(Bettis and et.al., 2016). Therefore it is crucial for Tesco to consider them as they can create an
impact on its level of profits. Thus the factors like Government Policy, Political Stability etc. can
be analysed by the organization.
Economic factors- The economic situation of a country is also dynamic and ever-
changing in nature (Bondarenko and et.al., 2017). It can create an impact on the way in which
the companies operate and therefore it ensures that they are able to enhance their level of profits
effectively and efficiently. Therefore the factors like Economic Growth, Disposable Income etc.
are required to be considered by the firms like Tesco.
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Social factors- The social customs and traditions affect the way a company operates
(Certo and et.al., 2016). Thus it is crucial for the organizations to consider them and the impact
which they can create. In the context of Tesco, these factors become quite crucial to be
considered. Therefore the factors like Population Growth Rate, Lifestyle Attitudes etc. have to be
considered by the management of the organizations.
Technological factors- It is important for the firms to ensure that the technology is
considered as a factor effectively and efficiently (Demir, Wennberg and McKelvie, 2017). It is
so because technology is quite dynamic and ever-changing in nature which ensures that the
organizations have to adjust accordingly which ensures that they are able to achieve their goals
and objectives. Thus in the context of Tesco it becomes important that they are considered for
the purpose of targeting enhancement in the level of profits. Thus the factors like technology
incentives, level of innovation and technological awareness should be considered by the firms.
Environmental factors- Nowadays the customers are quite conscious towards the
environment (Durand, Grant and Madsen, 2017). Thus it is very important for the organizations
to make sure that the environment is given appropriate attention. Tesco should therefore consider
these factors as they are important for it to attain the desired level of success. Therefore the
factors like Environmental policies and Climate change etc. should be considered by the firms.
Legal factors- Every organization has to consider the different types of legal rules and
regulations which are present in the country in which they are operating (Engert, Rauter and
Baumgartner, 2016). Therefore it is important for the firms that they are able to consider them.
Thus Tesco needs to take these factors into consideration. Thus the factors like Discrimination
Laws, Employment Laws etc. must be considered by the company.
Change in the organizations
Organizational change is quite important from the point of view of the firms because it
ensures that a significant change has to be brought in the overall processes and functioning to
help the organization to function in a proper manner to achieve its goals and objectives in the
future.
Scenario- In Tesco, the management is planning to introduce a new system of
performance measurement in which the use of KPIs and Benchmarking technique will be used so
that a proper assessment of the performance level of the workers can be made highly effectively
and efficiently. For the purpose of introducing this change the use of change management model
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has to be made by the firms so that they are able to introduce the change effectively and
efficiently. Tesco will make the use of Lewin's change management model for implementing this
change in the right manner.
Lewin's change management model-
This model ensures that the change can be implemented systematically by the
organizations effectively and efficiently. It is quite useful for the firms to ensure that the
implementation of the change is done in the correct manner. This model has different stages.
These stages are explained as follows-
Unfreeze- This is the first stage of the model. Here, the organizations have to ensure that
they can break the status quo. This refers to the existing way of doing different things. Thus, In
the context of Tesco is is crucial that its managers break the existing status quo of the Barriers in
change implementation measurement of performance of employees and can bring the use of
KPIs and Benchmarking technique for measuring the performance of employees.
Change- This is the second stage of the model. Here the management is required to make
the use of certain techniques and methods through which the employees can be made
comfortable about the change which has to be implemented in the organizations. Tesco has to
ensure that appropriate time is given to the employees before they can accept the new ways of
measurement of performance of the workers. In this way their overall level of performance can
be enhanced effectively and efficiently.
Refreeze- This is the third stage of the model. The management of the firms are required
to make sure that they can return back to stability once the change has been accepted in the
organization. Thus, In the context of Tesco it becomes quite crucial that it can return back to
stability once the way of proper assessment of the performance level of the workers has been
implemented effectively and efficiently. In this way the organization will be able to make sure
that it can return back to the old way of working and normalcy can come back in the functioning
of the firm.
In the process of bringing change an organization can also face certain setbacks. These
setbacks are explained as follows-
 Lack of cooperation from the employees- When the change is implemented in the
organizations there can be a problem related to lack of cooperation from the workers
(Kliuchnikova and Pobegaylov, 2016). Therefore in this manner this can create an issue
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for the firm related to proper implementation of change. Tesco can also face this setback
when it wants to introduce the change related to assessment of the performance level of
the workers. The workers may not cooperate with it and this can create difficulties for it
in achieving its different types of goals and objectives.
 Limited understanding of change and its impact- The implementation of change can
face a setback in the firms because there can be a limited understanding of the change and
the impact which is created by it in them. Thus, In this way Tesco can face this setback
when it wants to introduce the change related to the measurement of the performance
level of the workers. The assessment of the change can be affected in such a case and
therefore the impact of this type of change can be created on the level of operations of the
company.
 Poor communication- Due to poor communication within an organization it becomes
quite difficult for the organizations to properly implement the change in the right manner.
Therefore, In this way Tesco can face this setback when it wants to introduce the change
related with the measurement of the level of performance of the employees. If the
communication is not being done in a proper manner then this can affect the functioning
of the company to a large extent.
 Inadequate resources- For the change implementation process the requirement is to
ensure that the use of adequate resources is made. Thus, In the context of Tesco this can
be a setback if the company does not has adequate resources for measuring the overall
level of performance of the workers. If the resources within the company are inadequate
then this will affect the change implementation because its management will not be able
to identify the way in which the change has to be implemented.
 Resistance to organizational culture- Proper implementation of the change
management process requires the organizations to bring change in their organizational
culture (Meyer, Neck and Meeks, 2017). Therefore, In the context of Tesco this can act
as a setback in the implementation of change if the workers of the company start showing
resistance towards the organizational culture. If the resistance is provided within the
organizational culture then this affect the change implementation process because there
will be internal resistance within the organization for the same.
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 Lack of commitment to change- Implementation of the change management process
requires full commitment from the workers for the success of the process. Therefore, In
Tesco this can act like a setback in the change process if the employees of the company
do not show full commitment towards the change process. If the workers within the
company do not reflect the full commitment then this will affect its change
implementation process because there will be higher-level of resistance.
 Use of improper strategy- The implementation of change management process requires
making the use of appropriate strategies. Thus, In Tesco this can lead towards a setback if
the management of the company makes use of an improper strategy which can create an
impact on the process of implementation of change. If a wrong strategy is used by the
company then this will affect it and it will lead towards an impact on the change
implementation.
 Attitude of the employees- For implementing the change management process there has
to be a change in the attitude of the employees. Therefore, In the context of Tesco it can
create a setback if the attitude of the workers does not change. Therefore in this way this
can impact the way the change is implemented in the firm. If the workers within the
company display a wrong attitude then this will negatively affect it because it will face
problems and issues related to change implementation.
Importance of planning and executing a change management process-
This can be explained as follows-
 To help the organization adjust to dynamic business environment- The business
environment of the organizations is quite dynamic in nature. It is quite ever-changing in
nature and thus the requirement from the organizations is to adjust to it in a highly
effective manner. Thus if Tesco has to stay relevant in the market it has to make
adjustments according to the dynamic business environment. In this way it will be able to
ensure that it can achieve its goals and objectives effectively and efficiently.
 Adjustment toward external factors- There are various types of external factors which
are present in the business environment. The requirement from the organizations is that
they are able to adjust in the right manner towards them so that they are able to ensure
that they can achieve sustainable level of success in the future. In the context of Tesco, it
assumes this importance in a highly effective manner. Thus in this way the company
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needs to implement changes through a proper change management process by identifying
the external factors and the impact created by them.
 Technology upgradation- In the organization technology advancement is necessary
because without upgradation it is not running in the efficient manner,for good
performance and and for better financial report change in technology is necessary
(Rosenberg Hansen and Ferlie, 2016). Tesco was flexible in adapting the opportunity
and business model by providing a online grocery channel 'Tesco Direct”. It also provide
click and collect function, so customer placed online order and collect the grocery bag at
their choice of collection point.
 Develop morale- It is the way to take the views of the employees or worker related to
their jobs in respect to their attitude or behaviour, in Tesco it creates positive team
building and motivate employees and remain them productive in the use of new
technology.
 Change in the routine of worker- By the change in the workplace also help workers not
to follow same routine, structural change should be done so every employee is remain
motivated and do their roles productive.
 Strategy- It means plan to achieve the short term goal in short period of time. In Tesco
different types of strategy is built so they can achieve their target sales, every time there
is change in strategy related to their target.
 Assessment of worker- It is a way to check the effective level of worker their
productive level that employee is perform good or not if not then they can change their
working style. In Tesco there is monthly assessment of worker is done so they know their
working style properly.
 Productivity- It means efficiency of employees to complete the task, through this worker
productive level is determine their personality and working style is also examine. In
Tesco there is a need of productive workers only so they assess efficiency of all workers
and make change in the personality of worker.
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CONCLUSION
From the above report, it can be concluded that Strategic Management is a process of
applying specific strategies in organizational context and making sure that these particular
strategies are able to contribute towards an increase in the overall level of organizational
efficiency and effectiveness. Through its use the managers can make sure that they are able to
manage the different functions which are present within the organization in a highly smooth
manner. This can help them to not only manage the functions but also implement the strategies in
a proper manner. This report aims to define the impact which is created by the factors of external
environment on the overall processes as well as the strategies of the firm. Also, this report has an
objective of assessing the impact which the change process creates on the strategies of a
particular organization.
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REFERENCES
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