Strategic Analysis of Tesco: Innovation, Technologies, and Business

This report offers a comprehensive strategic analysis of Tesco, a leading multinational retailer. It begins with an overview of Tesco's history, focusing on its expansion and challenges in the UK and US markets. The report then applies various strategic frameworks, including Porter's Five Forces model, to assess the competitive landscape and identify key factors influencing Tesco's profitability and growth. A stakeholder analysis examines both internal and external stakeholders, highlighting their influence on the organization. The Porter's Value Chain model is used to analyze primary and support activities, while a PESTLE analysis evaluates the political, economic, social, technological, environmental, and legal factors impacting Tesco. The report also incorporates a SWOT analysis to identify Tesco's strengths, weaknesses, opportunities, and threats. Furthermore, it explores the technology cycle, innovation model, and McKinsey 7-S Model to provide a holistic view of Tesco's strategic positioning and operational effectiveness. The analysis provides insights into Tesco's business strategies, market dynamics, and future prospects.

Innovation and technologies
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Contents
INTRODUCTION...........................................................................................................................3
TASKS.............................................................................................................................................3
CONCLUSION..............................................................................................................................11
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INTRODUCTION
Technological innovation is a process whereas organization embarks in the journey and
consider the importance of technology as a source of innovation. It is based on the extended
concept of innovation which providing the opportunities for organization who will struggle to
survive in marketplace. In another way, it also provides chance of existing enterprise that is
being beaten by other challenger in business market. The report will describe the current
condition of enterprise by using strategic analysis frameworks such as porter’s five forces, value
chain, SWOT analysis, innovation model, Mckinsey 7-s Model. These framework will explain
the current situation or condition of organization.
TASKS
Company overview
TESCO is a British Multinational groceries and general merchandise retailer. It is the
largest retailer in global world that would be measured by its gross revenue. The organization
was founded in 1919 by Jack Cohen as a group of market stalls. In various countries, Tesco has
already opened their physical stores such as Asia, Europe. According to report, it has found that
Tesco struggling supermarket into Britain since mid-2000s (Ichino, 2020). In 2007, Tesco
opened their first store in Los Angeles. Afterwards, physical stores were rolled out across
California. It provides better quality of product and service but they have faced problem and
struggle due to customer satisfactory. In this way, organization was forced to expand business
within unsatisfactory retail side. Furthermore, it also declaring US market entry strategy but it
completely failure in Britain marketplace.
Porter’s Five forces Model
It is based on the strategic management tool to analyse the organization and understand
the various levels of profitability. Tesco can use Porter’s Five force to understand that how
competitive force influence growth and development. Furthermore, it is developing an effective
strategy to enhance the Tesco competitive advantage in long term growth.
Threat of new Entrant
In Tesco, New entrants which will bring innovation, new way to doing things in US
supermarket but the pressure and strategy fails (Popp, 2019). Tesco consider low pricing
strategy, reducing cost and providing new value proposition to the consumers. Tesco has to
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manage the challenges and build an effective barriers in competitive edge. Threat of new entrant
is high.
Bargaining Power of Supplier
Tesco buy their raw materials from various suppliers. These suppliers in dominant
position that will reduce margin in Britain markets. The most powerful suppliers in consumer
sector use their own negotiating power to extract high price from US marketplace. In this way,
bargaining power of supplier is low.
Bargaining Power of buyer
In US supermarket, buyers are demanding a lot. They want to buy available offers that
available in minimum price. In this way, it put more pressure on Tesco profitability in long term
running enterprise in Britain markets. The bargaining power of buyer is higher.
Threat of Substitute
When new product and service meet the similar consumer expectation in different
manner. In this way, Tesco has suffered within Britain marketplace. The threat of substitute
provide and service is high.
Stakeholder analysis
A stakeholder analysis is based on the process of identifying people before starting
project. It is consider as group of people to their level of participation, interest and influence in
the Tesco (Paiola and Gebauer, 2020). In order to determine that how involve and communicate
with each other. In Tesco, it can identify both internal as well as external stakeholders. In order
to explore their influence on the organization in US super markets.
External stakeholder
 Managers, committee, employees and executives
Internal stakeholders
 Supplier, creditors, competitors, customers, government, creditors and local governments.
These are considerations of various stakeholder that perform significant task within organization.
The primary aim to explore their business project while implementing new innovative in
business processes.
Strategic stakeholder analysis
In Tesco, Strategic stakeholder analysis the process of meeting particular expectation and
objective of stakeholder of Tesco. In accordance with internal and external environment of retail
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business. In order to create positive relationship with stakeholder of Tesco. The strategic
stakeholders are considered as manager, directors and leaders. They are always trying to make an
effective strategy which help for increasing overall business capabilities and abilities in global
marketplace.
Normative stakeholder analysis
Normative is based on theory which is mainly distinguish the basic stakeholder claims. In
order to identify the principle that likely to come into Tesco development in other countries.
Normative is generally used for stakeholder analysis for dividing the significant task of multiple
stakeholder in Tesco (Jarmooka, Fulford and Barratt-Pugh, 2020). It mainly involves the various
goal and objective of organization. Afterwards, it also analysis the connection between
stakeholder management and achievement of enterprise objective. Normative stakeholders, those
are generally defined valid normative claim on Tesco.
Porter’s Value Chain Model
It is highly popular in the business world whereas Tesco is not take it as rigid and
framework by assigning the importance of different activities. Value chain model always support
for Tesco and realise that all activities, function do not require similar level (Nevzorova and
Karakaya, 2020). In this way, Tesco is primarily adopting the value chain model to identify the
significant or activities. in order to maintain and control delivery processes.
Primary activities
The primary value chain is that when it directly involves process of selling and
producing. In this way, Tesco is directly targeting potential customer. As per analysis primary
value chain activities that help for improving entire performance and efficiency of Tesco.
Inbound logistics
It is necessary to develop a strong relationship with multiple suppliers as receive, store
and distribute items. Without analysing in-bound logistics, Tesco face the challenges in the new
product development. So as require to focus on the in-bound logistics and transform raw
materials into finished items.
Outbound Logistics
It is mainly include activities that deliver the better quality of product to potential
customer by passing various intermediaries. Some type of outbound logistics activities such as
order processing, material handling, transporting. Warehousing and delivering. In this way, teach
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can easily optimise the outbound activities to explore competitive advantage. The outbound
logistic activities are properly managed with appropriate cost, item delivery process.
Support activities
It also plays an important role for building an effective coordination and facilities
primary value chain activities. Tesco also providing the benefits to identify the various business
operation and function.
Human resource management
In Tesco, it can be analysing the HRM by evaluating different aspects of HR. it is mainly
include recruitment, selection, training, rewarding and performance management. An effective
HRM practices always support for Tesco to minimise competitive pressure (Madry, 2020). The
organization can achieve its price minimisation objective through analysing training as well as
hiring costs.
Technology development
Value chain activities are mainly depending on the technology which integrated with
distribution, production, human resource and marketing activities. In Tesco, It will require to
realise the significance of technology development (Jarmooka, Fulford and Barratt-Pugh, 2020).
For Example- Tesco use automation software and technology supported by customer services.
Procurement
In Tesco, It is based on the value chain that denotes the process which mainly involved in
purchasing inputs of wide range from raw materials, suppliers, equipment and other machinery.
It is necessary for producing the finished output.
Pestle analysis
A pestle analysis is based on the framework or tool used by potential marketers to
analyse or monitor the environment factors.
Political
In UK government, it has recently adopted a tax measure which directly affects on the
Tesco. It will be increasing the rate from 17.5% to 23%. Therefore, it is negatively affected the
overall sales revenue by Tesco.
Economic
In UK, economy is showing the positive sign in term of recovery during financial crisis.
It has rapidly increasing the high economic growth in marketplace. As per estimation. 2.7% of
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higher than pre-crises peak. On the other hand, economic recession is negatively affects for
increasing rate of unemployment. As a result, the lower disposable income in the British people.
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Social
It is increasingly number of elderly people in UK due to baby boom generation. This led
to shift in taste of individuals which should be taken into account by Tesco (Jarmooka, Fulford
and Barratt-Pugh, 2020).
Technology
It is consider as critical for supply chain management by Tesco. It can be developed the
supply chain management in order to attain competitive advantage. The Advancement of
technology is increasing the productivity and profitability in global marketplace. It is helping to
improve the distribution service through advance technology.
Environmental
In Tesco, it has been increased the pressure due to society and act as maintain overall
business performance. The major social issue threatening food retailer that have been
environmental issues. With increasing the pressure on Tesco to address environmental issues and
adopt the business operations.
Legal
Government legislation and policies which directly impact on the overall performance of
Tesco. The organization has introduced the current practices such as changing price without
demanding payment from suppliers.
SWOT Analysis
It is the simplest process that mainly useful framework for analysing the organization’s
strength, weakness, threats and opportunities (Jarmooka, Fulford and Barratt-Pugh, 2020). It is
helping to build on address for minimising risks and take greatest possible advantage of chances
for success within competitive markets.
Strength
 Tesco has various awards for its retail excellence, shopping experience and other
customer service.
 It is consider one of largest and most profitable supermarket which may tried to emulate
with other competitors.
 Tesco has significant cash reserves and maintain wide range of property in its portfolio.
Weakness
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 The competitive pressure have increased to price wars that have eroded of retail profit
margin.
 Tesco is highly dependent on Europe and UK for its sales. It may not spent time and
resource on developing.
Opportunities
 In countries, Tesco may be underperforming, there could be increased the opportunities
for joint venture in US supermarket.
 It has rapidly increasingly opportunities for certain format while Tesco offers but they
can provide better access to western goods.
Threat
 The economic recession will continue to threaten global marketplace which directly
impact on the overall profitability and productivity.
 It also increasing the raw materials costs and threatening overall profitability of Tesco.
Technology cycle
 Era of Ferment: In Tesco, it is important phase that represent the S-curve pattern of
innovation. As a result, it can analyse dominant design pattern and identify suitable
resources, equipment’s.
 Era of incremental change: As per life cycle model, it is to be consider the technological
evolution. In Tesco, It also emerging the domain design to improve quality of product
and service in global marketplace.
Innovation Model
An innovation model provide the conceptual framework for identifying and advancing
the change ideas. It is likely to generate the more value that needed to create sustainable growth
and development.
 Fluid phase: Initially, It is first phase whereas consider technological and market
uncertainties. In Tesco, It is a great deals with changes take place continuously.
Sometimes, it may vary significantly. In this phase, TESCO can follow the different
strategies (Jarmooka, Fulford and Barratt-Pugh, 2020). Alternatively, TESCO can try to
take control the complementary assets and also want for appearance of dominate the
design pattern. In order to secure the most profits basing its competitive advantage on the
basis of supplier contracts and other distribution channel.
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 Transitional phase: It is mainly starts with technology application and understand the
specific customer needs to maintain the standardization in proper manner. Innovation
starts to increase and growing the enterprise in global marketplace. It is to be considered
last stage when produced an effective design of product and service.
The Mckinsey 7-S Model
For ensuring that Tesco is working for analysing how it can be maintained positioned. In
order to achieve the significant goal and objective (Jarmooka, Fulford and Barratt-Pugh, 2020).
The McKinsey 7-S framework is the most approach tool to analyse the current position of Tesco.
It can be divided into two types: Hard and Soft elements.
Hard elements
 Strategy: In Tesco, it is useful for marketing communication that pursue along with cost
leadership and enterprise strategy. This type of strategy is being sustained by
supermarket. Tesco has applied the various strategies such as Scoreboard and Balance
method.
 Structure: Tesco is basically used hierarchical structure which includes multiple layers. It
also simplifying the hierarchical structure, manager perform significant role to assign
particular task of various executes.
 System: Tesco is basically relies on wide range of system, approached the sustainable
operation on regular basis. To achieve its pre-determined strategies by Tesco and helping
for future growth or development.
Soft element
 Shared value: Tesco has its own belief, assumption that will be increasing the proper
sophisticated management techniques.
 Staff: Each and every employees are performing significant task within organization. In
order to achieve significant goal and objective.
 Style: the working style of Tesco which always support for organization to achieve
significant goal. Sometimes, it can be measured the employee performance, customer and
operations.
 Skill: The overall capabilities of organization depending on the employee performance.
Tesco administer complete the knowledge to their employees.
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CONCLUSION
From above discussion, it concluded that Technological innovation is a kind of process that
always support for organization in term of innovation. In order to increase the productivity and
profitability in global marketplace. In above analysis, it has identified the importance of
technology in term of innovation. It has summarised about the extended concept of innovation
which providing the opportunities for organization to survive in marketplace. it provides chance
of existing enterprise that is being beaten by other challenger in business market. It can be
analysed the current condition or situation of enterprise by using strategic analysis frameworks
such as porter’s five forces, value chain, SWOT analysis, innovation model, Mckinsey 7-s
Model.
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REFERENCES
Book and Journals
Ichino, Y., 2020. Economic Rationale for National Treatment in Intellectual Property Protection
When Countries Have Different Innovation Technologies. The International Trade
Journal. pp.1-20.
Jarmooka, Q., Fulford, R.G. and Barratt-Pugh, L., 2020. The mapping of information and
communication technologies, and knowledge management processes, with company
innovation. Journal of Knowledge Management.
Madry, S., 2020. Disruptive Space Technologies and Innovations. Springer International
Publishing.
Nevzorova, T. and Karakaya, E., 2020. Explaining the drivers of technological innovation
systems: The case of biogas technologies in mature markets. Journal of Cleaner
Production. p.120819.
Paiola, M. and Gebauer, H., 2020. Internet of things technologies, digital servitization and
business model innovation in BtoB manufacturing firms. Industrial Marketing
Management.
Popp, D., 2019. Promoting Innovation for Low-Carbon Technologies. Policy Proposal, 14.
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