Strategic Management Case Study: Tesco's Internal and External Factors

This case study provides a comprehensive analysis of Tesco's strategic management, encompassing its historical background, mission, vision, and core values. The report delves into the company's internal and external environments, utilizing PESTEL and SWOT analyses to identify key factors influencing its performance. It examines political, economic, social, technological, legal, and environmental factors, along with Tesco's strengths, weaknesses, opportunities, and threats. Furthermore, the study incorporates Porter's Five Forces model to assess the competitive landscape. Finally, the case study highlights the importance of change management within Tesco, considering the complexities of transformation processes, associated costs, risks, and the need for sustainability. The report provides valuable insights into Tesco's strategic decision-making and its ability to navigate the challenges and opportunities within the dynamic retail industry.

Strategic management
Case study

Table of Contents
INTRODUCTION...........................................................................................................................3
Overview of the company............................................................................................................3
External Environment :................................................................................................................4
Internal factors:............................................................................................................................5
Competitors Analysis...................................................................................................................6
Importance of change management based on the complexity of the transformation process, its
cost, risks and sustainability........................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10
Books and Journal......................................................................................................................10

INTRODUCTION
Strategic management is the concept or ongoing planning and monitoring the requirement
of the organization in order to accomplish their goals and objectives in a very appropriate
manner. Modification in the business environment bill needed a company to continuously a
complete strategy for gaining success and growth (Barbosa, Castañeda-Ayarza, and Ferreira,
2020). This report going to considered TESCO Organization which is very popular and amended
brand. The organization is founded in 1919 by jack Cohen. This report is going to describe about
the internal and external factors which create impact on the organization. Also so going to
explain about the importance of Change management in the organization which is rely on the
complexity of the transformation process on sustainability risk and cost.
MAIN BODY
Overview of the company
Tesco is a British retail multinational organization which trade variety of the products in
order to game opportunity and success in the market place. The organization Tesco is situated in
welwyn Garden City United Kingdom and founded by jack Cohen in 1919(Bryson and George,
2020). This is the Clove third largest organization which is evaluated by the gross revenue of the
organization. The organization has adopted several strategies in order to identify the internal and
external factors which create impact on the company in order to get success and opportunities.
Mission: The mission statement of the organization is to provide amended services to their
customer in order to build loyal relation with them and become innovative company e in the
globe.
Vision: Vision statement of the organization is to get more customers in order to to increase their
efficiency and effectiveness of the organization.
Core Values: According to the organization every single step and activity make a big
differences in order to get success. Trust and respect for their colleagues is very important for the
company.
Tesco organization are focusing on their product promotion in order to increase their
productivity by using advertisement digital marketing and online communication in order to

increase their productivity and efficiency. The biggest benefits of the organization are their low
price. the organization are provide variety of the products according to the requirements of the
consumers so that they can provide a mended variety of the products which are affordable for
every consumers. The organization are introduced to Royal teak card which was introduced in
1995. This card is provided to the consumer who have discount so that the consumer can
opportunity to get discount on the product full stop the another strategy of the organization is to
expansion to foreign market in order to increase their efficiency(Rabetino, Kohtamäki, and
Federico, 2021). The Tesco main advertising slogan is “every little helps”. These are the
strategies that help the organization to overcome the challenges and get opportunities. In order to
identify the external and internal factors which create impact on the performance of the
organization there is little analysis that helps the organization to identify the impacts and
overcome the challenges.
External Environment :
To identify the impacts of external environment the organization is conducted pestel
analysis that help the organization to identify the external environment factors which create
impact on the performance of the management and also scan the Macro environment factors and
the situations for the current and past time in context of the selected organization.
Political factors: these are the factors which can be described as the rules and principles that are
formulated by the government of the United Kingdom and have to be followed by the
organization in order to maintain their performance (Cheng, 2020). It engage those factors which
are associated to the norms and policies of the government in which the organization are
operating. The major issues which are facing by the organization is related to the brexit and
covid-19 pandemic. Due to brexit it creates impact on the organization because they have to
modify every rules and policies so it is very difficult for them to adopt new policies and work
accordingly.
Economic factors due to covid-19 pandemic create huge impact on the economy of the United
Kingdom and on the many countries bus stops because of covid-19 pandemic the government
has to Applied some restrictions and lockdown so due to most of factories in stores of the
company are shut so it create impact on their productivity. But also it create positive impact on

their grocery because of lockdown the demand of grocery material has been increased so it
creates positive impact on the organization in the grocery factor.
Social factors are those factors that are associated to the society in which the organization are
operating. It engage several factors like modification in the behaviour of the person and the
background of the person and taste of the person. The organization are using effective strategy in
order to provide amended quality of the products at low prices in order to attract the consumer
towards the organization.
Technological factor it includes those factors in which adopted by the organization in order to
create their performance in the Marketplace. The organization I using online platform in order to
communicate with their customers and identify the requirement (Hughes and Hodgkinson, 2020).
Also the organization are using online shopping so that the people can order their mandatory
things from using online application so it will help the organization to provide amended facility
to their consumer.
Legal factors these are the factors which are associated to the rules and norms which are
formulated for the safety and security of the company and employees in order to work in the the
ethical form. It is very important for the organization to follow the rules and regulations which
are developed by the government because of safety and security of their consumer and employee
so that we can feel more safe and valuable in the organization.
Environmental factor the organization is also working on environmental factors in order to
increase the sustainability of the environment and provide amended services towards the
environment.
These are the factors which are adopted by the organization in order to identify the external
factors which create impact on the performance of the organization and also beneficial for the
organization.
Internal factors:
these are the factors which helped the organization to identify about the internal factors of
the business like their strength weaknesses opportunities and many more. In order to identify the
internal factors there is the discussion about the swot analysis which stands for strength

weakness opportunity and threat. SWOT analysis of the Tesco organization is the mentioned
below:
Strength: The organization have a large market share in Great Britain and the dominance of the
company Tesco is an challenge so it is effective strength of the organization. The another
strength of the organization is a strong performance during the covid-19 pandemic. The
organization Tesco registered a 10.5% growth in last here to online sales and demand of the
grocery(Köseoğlu, and Parnell, 2020). From the investigation it has been analyzed at Tesco
hiring sixteen thousand people in order provide growth in demand. The another strength of the
organization is financial turn around and their adaptability in order to respond to the pandemic
triggered restrictions full stop this is the company which are able to double their capacity of
deliver their product 21.5 millions lots.
Weakness: Quality control shortage of the product is the weakness of the organization. In order
to prevent the shortage of their products because of panic buying the organization are rationing
there some items. However the organization and short their consumers are adequately stock in
order to provide buying patterns (Svatosova, 2020). Leadership changes are another weakness
for the organization in order to work effectively and get positive outcomes. Food safety issue is
another weakness due to covid-19 pandemic it is become very instance for the organization to
discover about the safety issue and affects the endangered consumers.
Opportunities: Opportunity of the organization and higher unemployment rates and growth of
online grocery pills. From the investigation it has been analysed that in order to prevent the
spread of covid-19 pandemic prevent their consumer from stepping out as much as they used to
so in order to provide facilities this starting providing groceries by using online platform. The
another factors in order to gain opportunities is artificial intelligence and machine learning that
support the organization to create opportunities and become effective.
Threat the major threat of the organization is brexit and supply chain. the brexit will create
impact 80% of the imported food of the supermarket and negatively impact on the Tesco supply
chain. Covid-19 pandemic also become threat for the organization due to several restrictions and
fear among the consumers. The thread of the organization is associated to the competition as the
organization has several competitions like Walmart as the Sainsbury and many more.

These are the internal factors which help the organization to identify their weak point and
strength in order to deal with any challenges which are facing by them.
Competitors Analysis
In order to formulate an effective strategy it is essential for an organization to analyze the
competition in the market as it will help the company to take competitive advantage in the
market. The model which helps the organization in competition analysis is photos five Force
model. Porter's five Force model of competitor’s analysis is given below:
Threat of New Entrants:Low regulations for new entrants in the market creates a threat of new
entrants for the Tesco PLC. But in order to manage the threat of new entrants the company can
maintain their reducing cost low pricing strategy and value proposition to their customers and
can gain competitive advantage in the market (Michaud and Tello‐Rozas, 2020). New entrants
came with new products and services but being a large organization Tesco can provide their
customers low prices strategy which cannot be provided by a new entrants. Tesco PLC can adopt
the new and innovative techniques in their business in order to provide better services to their
customers.
Bargaining Power of Suppliers: Being a large organization having their operations in
approximately 11 countries and works with almost 2,500 of suppliers all over United kingdom.
The company also have thousands of suppliers in abroad countries which provide a significant
power to Tesco to exert their suppliers for their prices. It depicts that bargaining power of
suppliers is low for Tesco and it is well known for its high negotiation with their suppliers which
help them to increase their profit margins. The company has negotiate very hard for the prices
from their suppliers in order to have cost effective products and good profit margin in the
organisation.
Bargaining Power of Buyers:Being a global organization the several stories of Tesco
organization serves millions of their customers every week. This has decrease the bargaining
power of buyers as it is already low in the UK market because the wires of United Kingdom was
not that much organized. In order to be profitable and managed by gaining power of buyers the
company should build a large base of customer so that they can reduce the bargaining power of
their buyers and get more sales and enhanced production process.

Threat of Substitute Products:Tesco is a retail organization which deals in large variety of
products and generally sell substitute of their majority of the products. Taking an example that
the Tesco Company deals with both marketing as well as butter whereas the company also sells
fresh milk as well as contest milk and powder milk to their customers. Hence, the threat of
substitute products is irrelevant to be discussed for Tesco organization.
Competition Rivalry:Tesco operates in several countries and deals inner market having huge
number of powerful competitors especially in the most celebrated revenue country of Tesco that
is United Kingdom. The competitors of Tesco spend too much on their advertising and
marketing activities that it creates a large competition for the company(Mikhno, Koval, and
Ternavskyi, 2020). In order to tackle this competition rivalry in existing competitors in retail
industry that Tesco Company can build their sustainable differentiation in the market which can
help the company to build some scales in the market to compete in better manner.
Importance of change management based on the complexity of the transformation process, its
cost, risks and sustainability
Change management is a strategic approach which helps the company to define various
methods to implement changes in the organization. Changes can be either in the internal process
or external process depends on the strategy and requirement of an organization transformation of
change is a positive change in the functions of an organization which provide significant change
for the organization in the culture and work processes. This transformation changes produces
important enhancement in the performance of the organization. Bringing transformation is a
complex process as it requires various aspects to be considered by the organization who wants to
introduce changes in their organization. When Tesco wants to manage change in their
organization that needs to deal with three complex elements that are explained below:
Cost: To implement the changes it requires a suitable cost for the organization which needs to be
considered before implementing the changes in the organization. Business strategy of Tesco will
help them to analyze and create a proper action plan before the implementation of any changes in
the organization. This strategic management of Tesco will help them to create an effective
budget which includes the cost of changes implemented in the organization. In order to get
effective results of the changes the organization should make the plan in cost-effective manner.

Risk: As Tesco is a large organization a little change in the organization is can be proven to be
risky for the profitability of the organization. In order to introduce any changes in the
organization it is essential for the organization to follow risk management in the strategic
management plan (PHORNLAPHATRACHAKORN, and PEEMANEE, 2020).
Sustainability:To complete the change in cost effective manner it is essential for Tesco
organization maintain sustainability in their dues processes in the process so that there is also can
be used in efficient manner.
CONCLUSION
From the above discussion it has been concluded that business strategy is very essential
for an organization in order to have a proper direction or an action plan develop a business in
effective manner. In order to develop an effective strategy various models are used to analyze the
internal and as well as external environment of the organization. Tesco organization use SWOT
analysis,Pestle analysis and photos five Force model in order to analyze their internal as well as
external environment. All these models will help the organization to develop and strategy to
manage various changes in the organization which is a complex process and requires a cost risk
and sustainability.

REFERENCES
Books and Journal
Barbosa, M., Castañeda-Ayarza, J.A. and Ferreira, D.H.L., 2020. Sustainable strategic
management (GES): Sustainability in small business. Journal of Cleaner
Production, 258, p.120880.
Bryson, J. and George, B., 2020. Strategic management in public administration. In Oxford
Research Encyclopedia of Politics.
Cheng, E.C., 2020. Knowledge management for improving school strategic
planning. Educational Management Administration & Leadership, p.1741143220918255.
Hughes, P. and Hodgkinson, I., 2020. Knowledge management activities and strategic planning
capability development. European Business Review.
Köseoğlu, M.A. and Parnell, J., 2020. The evolution of the intellectual structure of strategic
management between 1980 and 2019. Journal of Strategy and Management.
Michaud, V. and Tello‐Rozas, S., 2020. Integrating normative values and/in value creation: A
strategic management decision aid tool for social enterprises' values practices. Nonprofit
Management and Leadership, 30(3), pp.377-398.
Mikhno, I., Koval, V. and Ternavskyi, A., 2020. Strategic management of healthcare institution
development of the national medical services market. Access Journal, 1(2), pp.157-170.
PHORNLAPHATRACHAKORN, K. and PEEMANEE, J., 2020. Integrated performance
measurement as a strategic management accounting approach: A case of beverage
businesses in Thailand. The Journal of Asian Finance, Economics, and Business, 7(8),
pp.247-257.
Rabetino, R., Kohtamäki, M. and Federico, J.S., 2021. A (re) view of the philosophical
foundations of strategic management. International Journal of Management
Reviews, 23(2), pp.151-190.
Svatosova, V., 2020. The Importance of Online Shopping Behavior in the Strategic Management
of E-Commerce Competitiveness. Journal of Competitiveness, 12(4), p.143.