Strategic Management and Development of Education: Tesco Report

This report provides a comprehensive analysis of Tesco's strategic management and organizational restructuring initiatives. It begins with an introduction to strategic management and its importance in achieving organizational goals, followed by a proposal outlining the need for restructuring within Tesco, a multinational grocery retailer. The report delves into the concept and necessity of strategic management, the requirement for organizational restructuring, and the issues and challenges associated with the process, such as stakeholder involvement and financial investment. It examines the impact of restructuring on enhancing business competitiveness, including cost reduction, improved communication, and the introduction of new technologies. The report also includes a literature review and strategic models to analyze Tesco's internal and external environments, culminating in a final project report with recommendations for change. Furthermore, the report touches upon strategic professional development, highlighting the significance of adapting to the evolving business landscape. Overall, the report offers valuable insights into Tesco's strategic approach to maintain a competitive edge in the dynamic retail industry.

STRATEGIC MANAGEMENT AND DEVELOPMENT OF
EDUCATION

Table of Contents
Introduction.................................................................................................................................................1
Phase 1 Proposal.........................................................................................................................................1
Phase 2 Literature Review...........................................................................................................................2
Concept and need of strategic management...........................................................................................2
Requirement of organizational restructuring..........................................................................................3
Issues present in the process of organizational restructuring.................................................................4
Impact of organizational restructuring in enhancing business competitiveness.....................................5
Phase 3 Analysis..........................................................................................................................................6
Phase 4 Final Project Report......................................................................................................................10
Communicate recommendation for change..........................................................................................10
Assessed task 2 Strategic professional development portfolio..................................................................12
Phase 1 Introduction.............................................................................................................................12
Phase 2..................................................................................................................................................13
Phase 3..................................................................................................................................................13
References.................................................................................................................................................18

INTRODUCTION
By generalized meaning, strategic management is regarded as the formulation and
implementation of organizational goals in company's processes. This is entirely managed by the
top authority of the organization wherein the actions are based upon resource capability of the
entity (Hill, Jones and Schilling, 2014). Furthermore, the emphasis is also required to be laid on
external and internal assessment of business environment which has a direct impact on work
processes. The present research study has been made in this context in which focus has been laid
on strategic aspects of the organization and how it provides opportunities for growth and success.
The study has been emphasizing on Tesco which is a largest retail entity operating the
business in the UK. Tesco has been planning to adopt new approaches to restructure
organizational work aspects. Thus, considering the same, the discussion has been included
regarding the contribution of organizational structural aspects on enhancing opportunities for
competitive advantage. Moreover, the study has also been focusing on the scope of restructuring
organizational work dimensions. Alongside, the researcher has also mentioned issues and
challenges that usually arise at the time of restructuring organization. Strategic models have been
applied in the research work to analyze company's external and internal environment.
PHASE 1 PROPOSAL
Tesco is a British multinational grocery seller company, and it is headquartered in
England. The unit head has analyzed that Tesco has been following the hierarchical
organizational structure in which job roles, positions, and activities are divided into different
parts. This aids the business entity to manage all the organizational operations effectively
(Peppard and Ward, 2016). As per the structure, the top management of Tesco has all the
authority to delegate roles and responsibilities among people. Therefore, it can be said that to
enhance the scope of business, Tesco has been following hierarchical organizational structure.
However, there are various issues which Tesco has been experiencing because of hierarchical
structure and that also impact other functions of the business entity.
There are four layers present in the management which generates bureaucracy; hence it
impedes coordination and collaboration level. Therefore, there is a need to restructure
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organization so that layers present in the management can be reduced. This will also aid in
enhancing flexibility in business processes and accordingly faster flow of information will be
facilitated. Restructuring is required in Tesco because it is highly useful in undertaking effective
business decisions. At Tesco, restructuring is required to implement new designs which can
enhance business capability and effectiveness. There are numerous benefits which Tesco can
acquire through restructurings such as reduction in cost, concentration on key products and
services, incorporate new technology, utilize organizational talent in the best way, to improve
competitive advantage and to reduce financial burdens.
The main reason here for restructuring is to leverage organizational capability so that in
all the domains, activities can be managed suitably. Apart from this, non-monetary benefits can
also be acquired through restructuring the organization. The growth of the company is dependent
on various factors; hence it is essential for Tesco to implement necessary changes in
organizational dimensions. This will also assist the employees to focus more on encouraging
company's value and norms. In addition to the same, hierarchical structure also limits the scope
of innovation and creativity because of less involvement of employees in the decision-making
process (Eden and Ackermann, 2013). Thus, here it can be said that in the form of strategic
management, changes can be implemented in organizational dimension and that can also
encourage growth and success prospects.
Tesco will have to emphasize more on strategic planning so that short –term and long-
term plans can be developed to improve existing management. Organizational sustainability is
dependent on the ways through which business conducts all its operations and practices. While
restructuring business, it will be essential for Tesco to enlist all the aspects so that strategic
management process can be managed effectually. Afterwards, restructuring the business, Tesco
will have to emphasize more on using organizational resources in an optimum manner.
PHASE 2 LITERATURE REVIEW
Concept and need of strategic management
Strategic management is the process in which business has to undertake decisions related
to allocation and management of organizational resources. It requires appropriate formulation of
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strategies which leads to governing all business norms. Hence, it is evident that with the help of
strategic management, goals and business objectives can be achieved suitably (Wheelen and
Hunger, 2017). This will also allow the organization to monitor and evaluate business
performance which could facilitate organizational progress. Strategic management could also
assist business to enhance core competencies of the business entity through adopting new
processes and activities.
Requirement of organizational restructuring
Organizational restructuring is the process in which changes and modifications are
required to be implemented in business activities. The success of every organization is dependent
on its structure; hence afterward identification of issues and challenges, business needs to
restructure the entity. Revamping and reconstruction are essential for the purpose of facilitating
smooth functioning of the organization (Rothaermel, 2015). After a certain period, it is crucial
for a business entity to change the priorities so that new programs and plans can be implemented.
With the help of organizational restructuring, a business can emphasize on quality aspects for
better performance and productivity. While delegating duties and responsibilities, it is vital for
an organization to adopt appropriate sequence as that will also aid in carrying out all the
practices in a suitable manner.
As per the generalized overview, there are numerous advantages that can be acquired
through restructuring the company; hence in the current scenario, all the organizations are
emphasizing on revamping existing business scenario. Furthermore, restructuring is also useful
in assisting the business to revive from the stage of declination (Bettis, Gambardella, A., Helfat
and Mitchell, 2015). This is also useful in increasing the value of the business to a higher extent.
At the time when challenges appear in the business entity, it is crucial to make use of new
technology and processes to enhance the chances of growth and prosperity. In contemporary
scenario, all the organizations are struggling in attaining competitive advantage; hence for the
same perspective changes are implemented in business processes.
Moreover, restructuring is also significant for the purpose of enabling the opportunities
of expansion in different geographical areas. Therefore, in short, organizational restructuring is
useful in amending the chances of long term survival and success. It is also said that
restructuring aids in positioning the company as a successful entity; hence business entity shows
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greater consideration towards the same. Preferences of customers are changing, and as a result, it
leads the business entity to make favorable changes in the service dimensions. The restructuring
also aids in developing new processes regardless of technological development (Morschett,
Schramm-Klein and Zentes, 2015). Technological development is one such aspect that lies in the
restructuring process, and that also encourages organizational value in external market place.
Here, it can be said that restructuring can assist in managing things in the well developed way.
Communication is yet another benefit that can be acquired through the restructuring of
organizational processes. Organizational structure in crucial in maintaining appropriate
communication and at the same it also enables the distribution of authorities. For instance- while
restructuring the business, Tesco is required to funnel the process of communication through
department leaders. This can also aid in minimizing organizational issues and challenges to a
greater extent. When managers and employees experience issues in the organization, top leaders
must take decisions to make better use of talent. This is also vital regarding enhancing
organizational success and growth aspects. New opportunities can be enhanced through
delegating duties and responsibilities appropriately among organizational employees.
The restructuring also denotes that organization is unable to manage the existing
business practices; hence this is the main reason that leads the business entity to redevelop the
existing operations. Transformation aids the business entity to grow more in a competitive world,
and it not only improves the organizational standard, but also it assists in grabbing the attention
of customers. Moreover, restructuring also drives the business more towards change in
organizational design for coping up with the transformed business environment.
Issues present in the process of organizational restructuring
Restructuring is the process that is associated with many issues and challenges because
varied changes are implemented in business functions. Poor organizational design and structure
can bring multiple challenges to the entity; hence modifications are required to be executed on a
continuous basis. Restructuring is essential to assist the business entity to adopt the ever-
changing business environment (Morden, 2016). Organizational complexity can also be
encouraged through adopting new and different processes. One of the major issues arises due to
less involvement of stakeholders. Stakeholders are considered as the most important people in
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the organization and organization is required to emphasize on meeting the needs and demands of
stakeholders.
The interest of stakeholders needs to be managed in such a manner so that it can help the
organization to attain organizational aims and objectives. It has been observed that restructuring
affects stakeholder's interest and this also impedes investment capacity (Frynas and Mellahi,
2015). Transition phase affects not only internal business activities but also it impedes external
environment of the organization. Further, restructuring makes varied changes in teamwork which
affect the performance and productivity aspects. Thus, on such basis layers of management could
be reduced similarly to uphold the value of existing business operations.
Additionally, restructuring requires financial investment; hence lack of financial
capability can affect the overall business performance. In this aspect, it can also be said that bank
debt is one of the burdens that hamper overall capability of the business restructuring process.
The subsequent process requires working capital so that operations can be managed effectively.
Supporting and reinforcing management holds more value in restructuring; therefore the absence
of such thing can affect overall business standards (Stead and Stead, 2013). At the same time,
while restructuring business standards, it is vital for employees to show greater commitment
towards work so that existing issues can be minimized. Employee commitment can merely
enhance organizational competencies.
Furthermore, restructuring requires employee accountability in which employees have to
assure that they are capable of managing all business processes effectively. They are also
required to assist the business during troubles and problems. Restructuring is required in the
technological domain as well so that organizational standards can be amended. For instance-
with the help of technological development, Tesco will be able to manage business processes
successfully. Moreover, lack of transparency in business processes can also create different
issues and challenges. Hence, while restructuring organization, necessary concerns should be
taken into account.
Impact of organizational restructuring in enhancing business competitiveness
Restructuring has a direct impact on business competitiveness, and it can also make the
business more efficient and capable. With the help of reorganizing, several benefits can be
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delivered to the employees who can also enhance employee satisfaction and loyalty. According
to the generalized concept, restructuring requires changing organizational direction; hence most
often it is useful in reducing the operational costs. Reduced organizational expenses can enhance
productivity and performance level; thus overall business capability could be increased
accordingly.
Additionally, when a business eliminates or minimizes layers of management, it
enhances the chances of improving communication and decision-making process. Usually,
business restructures the existing processes to introduce new technologies which also increase
operational efficiency (Hubbard, Rice and Galvin, 2014). For instance- adopting new
technological sources aids the business entity to record all the business aspects in accurate and
correct manner. Restructuring can encourage business competitiveness through facilitating more
control over organizational tasks and practices. Organizational efficiency can also be enhanced
through the process of restructuring; thus it can directly contribute to increasing competitiveness
level. Therefore, various aspects of the organization can be improved through restructuring and
at the same time, it can also aid in addressing organizational issues and challenges.
PHASE 3 ANALYSIS
To analyze the internal structure of the company, Daft's structural model has been applied
which chiefly focuses on organizational restructuring. The model is categorized into structural
dimensions, and contextual dimensions and both have diverse variants that change organizational
perspective. In structural dimension, centralization shows the extent to which functions are
dispersed in the business entity. This could be done either in the form of integration with other
functions or through geographical association. Further, formalization states that in restructuring,
Tesco has developed policies and procedures for meeting the requirements of external market
place (Rees and Smith, eds., 2017). Hierarchy is also developed to specify the levels of structure,
and this is also essential regarding maintaining balance in work processes at Tesco.
Routinization depicts that Tesco is developing organizational processes to raise
organizational standards. It can also direct Tesco to enhance the level of performance. As per the
model, restructuring depicts specialization in business practices so that all business activities of
Tesco can be refined as per organizational goals. Training also holds the most important part of
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this domain which aids organizational members of Tesco to learn more and to perform their roles
and responsibilities effectively. With the help of training, organizational members encourage
their skills and knowledge level (Harrison and John, 2013). Henceforth, it can be said that with
the help of structural dimensions, Tesco has implemented many things that can amend the
practices and performance level.
However, on the other hand, it can be said that competition has been increasing in the
market place; therefore Tesco has been changing business practices as per the emerging business
requirements. This not only enhances organizational capability; but also it aids in creating a
competitive edge over rivalries (Sakas, Vlachos and Nasiopoulos, 2014). Due to changing
market requirements, Tesco is also focusing more on technological advancement so that
opportunities for creativity and innovation can be enhanced. This not only raises strengths of the
business but also it minimizes the number of challenges.
The other aspect of the model is based on contextual dimensions which have five major
variants. It chiefly focuses on cultural practices and norms which specifies how much Tesco is
concerned towards values. In contemporary market place, all the business entities are
experiencing competition on greater extent; therefore in this respect, Tesco shows more concern
towards cultural values and beliefs. Typically, the business environment is an association of
external and internal factors that affect business practices. Tesco has acknowledged all such
factors through applying strategic business models. The environment includes social, political,
technical and economic arenas that change business functioning. For every factor, Tesco has
implemented different business processes.
Tesco also depicts greater consideration towards organizational goals. According to that,
priories of business are being defined. Goals direct the business to adopt different work practices,
and at the same time, it also motivates the employees to put more efforts in work management.
With the help of organizational goals, all the employees are encouraged towards appropriate
directions (Jenkins and Williamson, 2015). This helps them to contribute more in bringing the
opportunities of growth and success. Cultural dimensions also emphasize on the size of the
business which represents some people employed. Tesco has employed a huge number of
employees in different departments so that all the tasks and activities can be managed
accordingly. Organizational resources are utilized in a prominent manner which underpins
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strengths of Tesco. This is also useful in improving performance and productivity of the business
organization. Apart from this, long term benefits can be obtained easily where product
development as one of the strategy can allow in gaining competitive edge over its rivalry. This
will allow to become leader in the market and can act as development tool in every possible
manner.
Tesco also ensures that resources should be suitably utilized so that organizational
capability can be enhanced. Employees are also directed to allocate resources in an optimum way
so that the chances of wastage can be reduced. This also increases the lifespan of Tesco; hence
business can survive in competitive market place for the longer period. Technology is yet
another dimension that encourages Tesco to grow more, and this also aids in improving business
practices. To restructure the business, Tesco needs to focus more on technological aspects so that
all the activities can be performed prominently. With the help of technology, the ability of
business is increased as new processes are being adopted by Tesco to deliver standardized
services to the end users. Tesco also can improve business operations as the business is greatly
concerned towards the advanced use of tools and equipment.
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At the same time, SWOT analysis claims that Tesco can survive in competitive market
place because of enhanced business strategy. Strengths of Tesco states that business policies of
Tesco are developed with the view to enhancing competitive positioning. Therefore, in such
respect business strategy can be used in such a manner so that it can minimize organizational
weaknesses. However, at the same time, Tesco has many opportunities to prosper in the
competitive market especially among successful rivalries (Rothaermel, 2015). However, it is also
analyzed that Tesco is lacking in maintaining coordination among different departmental
managers. Considering the same problem, Tesco must focus on developing fewer layers in the
management so that work can be suitably aligned among people.
At the same time, competitive positioning of Tesco is identified with the application of
Porter's model. It is ascertained that there are several industry players in the retail market that
highly affects services of Tesco. Moreover, changes are also identified in the realm of company's
strategic positioning.
Porter five forces model can be considered as one of the most efficient models to
analyze the impact of external environmental factors on overall operations of a business
enterprise. Further, the model and its analysis on Tesco is mentioned below as;
Bargaining power of suppliers – It can be asserted that there are a large number of
vendors available in the supermarket retail industry. Further, the cost of switching from one
supplier to another is almost zero or very less (Haleem and Jehangir, 2017). Thus, providers of
Tesco do not have adequate power to dominate the price and policies. The company is also able
to enhance the volume and margin of operational profits by making use of its bargaining power
and carrying out a delay in the payment of all its suppliers.
Bargaining power of customers- It can be termed as one of the most important external
threat which is affecting the overall operations and profits of Tesco. In the present scenario, the
customers in supermarket retail industry are available with wide variety of options regarding
purchasing products and services (Hammad, 2015). It has been analyzed through the model that
Tesco is required offer quality products and services at low prices to attract more customers and
maintain its market position. In addition to this, aggressive marketing practices are required
carried out to attract new customers and retain the old ones. The company is also required to
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focus on conducting training programs for employees’ so that they can become competent and
deliver satisfactory services and products to all customers.
The threat of new entry – It has been evaluated that for a supermarket giant like Tesco,
the threat of new entrants in the industry is very small. The rationale behind this is that huge
amount of capital, and technological resources are required to compete with businesses such as
Tesco. Apart from this, the major market share has been captured by big brands in the
supermarket retail industry, and thus, it is quite difficult to enter the market. On annual basis new
companies are entering into the market. But Tesco operates on wider basis due to which new
entrants have less impact on the business operations.
Competition among rivalry – The competition among competitions in the retail
supermarket industry is quite intense. It has been analyzed that fierce competition has adversely
affected the key areas of Tesco (Asiedu, 2015). For example, the company is facing issues
regarding attracting new customers and increasing the volume of sales and profitability. At
present, Tesco is facing stiff competition from the brands such as Sainsbury and Asda. The
organization is required to carry out changes in its products, services, and strategies at regular
intervals to deal with competition and sustain in the marketplace. Apart from this every company
is offering same type of product in the market due to which business has to face large number of
challenges at the time of operating in the market. No such restrictions and barriers are present
that may prevent businesses from entering into the retail sector and due to this reason
competition level is high in the market that does not allow business to earn higher profits as per
their business goal.
The threat of substitute – It has been analyzed that the threat of substitute of Tesco’s
products is moderate in the industry. Furthermore, the alternatives of company’s products are
being offered by small convenience stores located in the country (Felgate and Fearne, 2015). For
a brand like Tesco, the small convenience cannot be considered as a significant threat. The
quality of products offered by substitute brands is deficient, and therefore, customers prefer to
buy products from Tesco instead of opting for its substitutes in the market.
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