Strategic Management: An In-Depth Analysis of Tesco's Market Position

This report provides a strategic analysis of Tesco plc, a British multinational grocery and merchandise retailer, focusing on its market size, industry trends, and competitive landscape. It examines Tesco's market share, the impact of the COVID-19 pandemic and Brexit, and the competitive challenges posed by rivals such as Sainsbury's and ASDA. The report includes a SWOT analysis, identifying Tesco's strengths, weaknesses, opportunities, and threats, as well as a PESTLE analysis, evaluating the political, economic, social, technological, legal, and environmental factors affecting the company. Furthermore, it discusses Tesco's segmentation, targeting, and positioning strategies, and analyzes the interests and power of its stakeholders, including shareholders, workers, managers, and directors. The report concludes by highlighting the key strategic considerations for Tesco in a dynamic and competitive retail environment.

STRATEGIC
MANAGEMENT

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK...............................................................................................................................................3
Market size and trend data of Tesco plc .....................................................................................3
Competitors analyses of Tesco ...................................................................................................4
SWOT analyses of Tesco ...........................................................................................................6
Weakness.........................................................................................................................................6
Pestle analyses of Tesco..............................................................................................................7
Segmentation, targeting and positioning of TESCO...................................................................8
Stakeholders analyses of Tesco...................................................................................................9
CONLUSION ...............................................................................................................................10
.......................................................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Strategic management is related to those process under which the business organisation
plan and implement different strategies to achieve the goals and objectives of the organisation.
Strategic management is important to provide the direction to all the policies and strategies of the
organisation. Tesco is the organisation which is chosen here to prepare this report. This report
provides systemic information related to market size and industry trend of Tesco and defies
porters five forces model (Allison, 2019). It includes various micro and macro forces affecting
the organisation and discussion related to both customer and stakeholder analyses.
Tesco is a British multinational grocery and merchandise retailer. It was established in
1919 by Jack Cohen and its headquarter id located in Welwyn Garden city. Tesco is the third
largest retailer in the world on gross revenue. Tesco deals in Retail industry and operates in five
countries across Europe. In Retail industry there are many competitors of Tesco such as Asda,
Sainsbury’s and Morrisons . These competitors holds considerable market share and provides
extensive competition to Tesco.
TASK
Market size and trend data of Tesco plc
Tesco is British multinational grocery company which achieves many millenniums in
their business but between January and may of 2021 company loses about 0.9 percent of its
market share ans now holds 27 percent grocery market. The main reason behind this downfall is
covid pandemic. This pandemic impacts very badly to the global economy and enables all the
economies to go down. During this covid outbreak the most effected organisation of United
kingdom is Asda and Tesco and Sainsbury has the highest market share at that time such as 42
percent but this shall be continue for long time because of Brexit. Under this scenario it becomes
hard for Tesco to operates their business in European nations. Brexit becomes the reason for
inflation in Britain and the preference of customers are shifted towards low price product and it
also the price war start in market. Tesco operates in many countries of world and currently
maintain more than 4000 stores in world wide includes franchisee.

Competitors analyses of Tesco
It is not possible for any organisation operates in market to not have competitors. The
presence of competitors impacts the company in both aspects such as positive and negative. In
positive aspect it enables the organisation to work efficiently for achieving competitive
advantage in industry and in negative aspect it becomes the reason of price war in industry which
decreases the profit margins of organisation (Barney, 2017). Tesco has many competitors such
as sains bury and Asda which provides competitive challenges to company. The comparative
analyses of these competitors are given below on the basis of marketing mix.
Factors Tesco Sainsbury Asda
Product Tesco's products are
Food, pet care
products, gaming
product, toys and party
and gifts product
Sainsbury operates a
chain of supermarts
under which it
maintains of stock
more thamn 30000
ASDA provides
different types of
product under their
diversified range. It
provides groceries,
Illustration 1: Super market shares

product in diversified
range. Its products are
fresh salad and
vegetables,fruit
juices,custard or cream
and meal sides and
naans.
clothing, Network
services and various
insurance and credit
facilities
Price Tesco follows cost
leadership pricing in
its business under
which it offers their
product at low price
than their competitors
Sainsbury follows
price discrimination
policy for their
product. Under this
strategy it charges
different prices for
products on the basis
of size and quality.
ASDA operates their
business with cheap
and reasonable pricing
strategy under which it
captures large number
of customers and
increases sales.
Place Currently Tesco
operates 7000 stores in
all over the world
under the name Tesco
metro, Tesco express
and Tesco superstores.
Sainsbury operates
their business from
more than 1000 stores.
Company also present
online and sell their
product from their app
and provide delivery
platform to their
customers.
ASDA is a one of the
biggest retailor of
United kingdom ans
focus on expansion.
Under this strategy it
starts working with
walmart and sell their
products with the
distribution channels
of walmart and it also
operates many stores
Promotion Tesco has great image
of their products
among public and it is
developed on the basis
Sainsbury applies BTL
and ATL strategies to
advertise their product.
It uses news paper and
Asda uses various
social media websites
such as Facebook
YouTube and

of their promotional
structure. Under this
structure company
promotes their
products by using
television advertising
and charitable events.
radio to promote their
products. It provides
various extra benefits
with sale of product.
Instagram to aware the
customers about the
products and services
of company. It also
uses endorsement of
their product by
celebrities.
SWOT analyses of Tesco
SWOT analyses is related to those marketing framework under which the company
evaluate their strength, weakness, opportunity and threats.
Strength
 One of the most important important strength of Tesco plc is their huge and diversified
customer base. With the help of this huge customer base it is easy for Tesco to introduce
any new product in retail market.
 Tesco has strong and large product portfolio which includes different types of products.
This portfolio enables the company to satisfy the needs of different types of customer and
gains customer loyalty.
 Patents and patent licence is the important strength of Tesco which restricts other
companies to use those technologies which Tesco develops and these technologies helps
the organisation to generate revenue.
Weakness
 Currently Tesco is facing controversy related to matter patent of some companies such as
Weatherford and Varco. These companies claims that Tesco violet their patent code of
conduct which will become weakness for Tesco in case of claim proved to be genuine.
 The major part of Tesco's business concentrated with North America which provides 45
percent of their total revenue. It will be very difficult for Tesco to operate their business
in those regions in case of any minor change in rules and regulations.
Opportunities

 Tesco continuously makes investment in their research and development department so
that it can developed new and innovative technology. These new and innovated
technologies helps the company to attract their customers.
 After the covid outbreak, slow down in global economy is seen which effects all
businesses but now the situation becomes improving slowly and provides many
opportunities to companies in relation to healthy products.
 Tesco has made huge investment to acquire other organisations which enables the
company to gain customer base and management qualities of these companies.
Threats
 One of most important threat which every British organisation faces is Brexit. It is related
to the withdrawal of United kingdom from European union. Due to this phenomenon
tesc0o faces many problems to conduct their operations in different European nation such
as increasing transportation cost.
 Another threat which Tesco faces is the global slowdown of economy. This slow down
effects all the activities of companies and stops the wheel of business. It becomes threats
over the survival of many companies.
Pestle analyses of Tesco
There are many external factors which effects the organisation in many aspects. These factors are
important to evaluate by company to make effective strategies on various activities of business.
The brief discussion related to external factors on Tesco are given below.
 Political :- Tesco operates their business operations in United kingdom and many other
countries. The government of respected countries develops many rules and regulation to
be folowed by the corporates. United kingdom terminates all their trade agreements with
European nations under Brexit. This political issue effects the business of Tesco very
badly. There are many problems arise in European nations that the cost of transportation
increases and British companies faces many criticism and restrictions from these
countries.
 Economic :- It is required for tesco to keep monitors various economic factors because
the minor change in any policy can cause company very badly. There are many factors of
economy such as employment, income, taxation and many policies of governments.
Tesco is a multinational company and has many operations which helps the economy of

United kingdom grow fastly. Tesco also performs their business operations in major part
of America so it continuously analyses the changes occur in economy to protect the
business from severe loss. There are many economical issue to which Tesco has to
overcome such severe downfall of economy due to corona outbreak.
 Social :- Tesco performs their business in many countries of world and deals with various
social factors such as tradition culture and any more. Company analyses the dynamic
need of consumer that customers now prefer to purchase all needed product in only one
go so to fulfil this need need company prepares many bulk selling schemes (Denning,
2017). It is seen in present business environment that the preference of customer are
shifted towards the organic product which provides many opportunities to organisations
to sell organic product in market and earns adequate revenue. The preference of
customers area also shifted towards the healthy products after the corona outbreak and it
will become great opportunity for Tesco to become success and increases their market
share.
 Technological :- It is not possible for any organisation to gain customer loyalty without
the use of latest technology in market. There is cut throat competition in the market and
tesco has many competitors such as Sainsbury and ASDA which provides similar
products in industry so it I necessary Tesco to use modern technology in their business
activities so that it can provide a product in market at lower prices and achieve
competitive advantage in industry. One of the most important technology which Tesco
uses is to provide a facility of online shopping to their customers. This technological
factors plays important role to increase the revenue of company.
 Legal :- Every country has their some rules and regulations to operates their business
class effectively. Business organisations has to follow these rules and regulations because
if company neglect these rules several penalties to be incurred on company. Tesco has to
follow the guidelins which the food regulation authority of UK established.
 Environmental :- There are many environmental issues which world has to face, these
issues are arises due to the mal practises of many organisations. To reduce these issues
government develop many environment laws to be followed by Tesco.

Segmentation, targeting and positioning of TESCO
It is related to those marketing framework under which the company develops many
segments of customers on many basis and targeted a desirable segment to positioned their
product.
 Segmentation :- It is related to those process under which the company divides the
whole market into small segments on the basis of their income, size, class and gender.
Tesco segment the market of united kingdom in many segment and each segment are
related to the buyers of high and low income, different gender and class of society.
 Targeting :- Under this aspect of marketing framework company analyses all the related
segment and select the most desirable segment to positioned their products. Tesco
targeted the segment of low budget buyers and work on the strategy of cost leadership.
 positioning :- This section is related to setting the image of segmented products on the
minds of customers and this includes the promotion of products with different marketing
strategy. Tesco uses television marketing and direct marketing to advertise their products.
Stakeholders analyses of Tesco
The main of this analyses is to evaluate the power and interest of different stakeholders of
Tesco and the discussion is given below.
Internal stakeholders of Tesco :- The mainMarketing plan of Unilever internal shareholder of
tesco are their shareholders, workers, managers and directors. They are powerful and plays an
important role in company (Bonsu, 2019). The shareholders of tesco are Black rock inc, Norges
bank and Schroeder plc.
 External stakeholders of Tesco :- It is related to those stakeholders which are present
outside the organisation but they have interest in organisation. These are creditors,
competitors customers and suppliers. These all have less interest in Tesco but has high
power to influence the company.
 Influence of stakeholders in Tesco :- There are many stakeholders of company some
having high power ans some have low power but it does not means that anyone is not
important all the stakeholders are important for tesco . The most influential stakeholders
of Tesco are their shareholders because all the decisions are taken by these shareholders.
 Conflicts in stakeholders of Tesco :- There are different stakeholders of Tesco which
are important for taking any decision. Sometimes these stakeholders creates conflicts

between them and the result of this conflict is to delay in many decisions such as payment
to any party and decision relating to any merger or acquisition.
Marketing plan of Unilever
Marketing plan is related to those framework under which the organisation prepares
strategies to achieve the goals of organisation. The marketing plan of tesco is given below.
Mission
The overall mission of Tesco is to become success in market by their low price products and also
achieve cost leadership.
Vision
The vision of Tesco plc is very far and deep. Company wants ton become the biggest
retailer of the world which provides each and every types of product.
Objectives
The objectives of Tesco is to achieve the success in market by achieving economies of
large scale production. The overall objective of the company is to fulfil the demands of their
customers with their diversified product range.
Strategies present with Tesco
There are many strategies to become success in this competitive market such as cost
leader ship and premium pricing product. Under the method of cost leadership, company can use
modern and advanced technologies in the process of production which enables the company to
produce the product at low cost. This helps the company to provide the products to customers at
reasonable price and achieve competitive advantage. Under premium pricing strategy company
can provide high quality product at charges high prices from customers. This enables the
company to generate revenue.
Strategies adopted by Tesco
Tesco is adapting cost leadership strategy for their products, under which it provides their
products to customers at reasonable prices and achieve competitive advantage.
CONLUSION
It is concluded from this report that strategic management is important for business
organisation to become success in this competitive market and there are many strategies which
company has to follow to gain competitive advantage (Brzozowska and Szymczyk, 2017). This

reports concludes that the internal and external factors affects the operations of organisation ion
both positive and negative aspect.
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