Business Strategy Report: Tesco's Market Entry and Strategic Plans

This report presents a comprehensive analysis of Tesco's business strategy. It begins with an introduction to business strategy, defining its role in achieving organizational goals, and then focuses on Tesco, a multinational retail giant. The report examines Tesco's vision, mission, and objectives, along with its core competencies. It delves into the factors crucial for strategic plan formulation, including industry dynamics and competitor analysis, using the SWOT framework. The effectiveness of the SPACE and BCG matrices in business plan development is assessed. The report conducts an organizational and environmental audit of Tesco, evaluating its strengths, weaknesses, opportunities, and threats, followed by an analysis of stakeholder significance in strategy formulation. It proposes a new strategy for Tesco based on the audits and stakeholder analysis. The report explores the appropriateness of alternative market entry strategies and recommends a new strategy for Tesco. It also outlines the roles and responsibilities of personnel involved in strategy implementation, estimates resource requirements, and highlights the contribution of SMART targets to achieving strategy implementation. The report concludes by summarizing the key findings and recommendations for Tesco's strategic development.

BUSINESS STRATEGY

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1 .........................................................................................................................................4
1.1 Asses the business vision, mission and objectives as well as the core competencies......4
1.2 Factor that have to be considered while formulating a strategic plan..............................5
1.3 Effectiveness of SPACE and BCG matrix while developing business plans...................6
TASK 2 ...........................................................................................................................................7
2.1 Organisation audit of Tesco..............................................................................................7
2.2 Environment audit of Tesco.............................................................................................8
2.3 Significance of the stakeholders while formulating the strategy .....................................9
2.4 The new strategy for the Tesco on the basis of auditing and stakeholders analysis.....10
TASK 3 ........................................................................................................................................11
3.1 Analyse the appropriateness of alternative strategies related to the market entry.........11
3.2 Selection of new strategy for the Tesco.........................................................................12
TASK 4 .........................................................................................................................................12
4.1 The roles and responsibility of personnel in charge of implementation the strategy.....12
4.2 analyse the estimated resources requirements to implement the new strategy..............13
4.3 Contribution of the SMART targets to achievement of strategy implementation..........13
CONCLUSION..............................................................................................................................14
REFERENCES .............................................................................................................................15

INTRODUCTION
A business strategy refers to analysing, interpretation, evaluating the decision of different
departments with help the organisation to achieve their goals (Scholes, 2015). Business strategy
is the process in which company determine its objectives, vision, mission which help the
company to design its plan and policies. It consists of all the activities should be properly
planned so that enterprise can fulfil their aim. Business strategy is long term plan. It consist of
around 3-5 years to plan and make strategy. This strategy took place to solve the resources issues
such as financing (Woodcock, Green and Starkey, 2011). The enterprise took decision on what
project company needs to invest.
The company which is considered in this report is Tesco. Tesco is originated from
British. It is the multinational grocery and general merchandise retail store. The headquarter is in
UK. In UK it is the third largest among the retail store and in all over the world it is on ninth
number. The company is having around ten store including Asia and Europe. They are having
largest market share in UK. The company is operating its subsidiaries of Tesco bank, telecoms
and Tesco tech support. The Tesco has its many operations in UK such as Tesco extra,
superstore, express, metro, dotcom and dobbies. The company has its business all over the world.
The company is operating around 13 countries in the world (Kalyani and Sahoo, 2011). The
mode of entry which company chooses is joint ventures and acquisition with the local partners.
The corporate strategy adopt by the Tesco is they produce and sell their own branded
products in the market. Such as food. Clothing, electronic, beverages and other financial
services. To get the advantage from its competitors company innovative use its technology.
Tesco introduce the mobile wallet payment, barcode technology and other. Tesco is also engaged
in CSR (corporate social responsibility). The company is giving the pre-taxes to the government
and also charity to the local community.
Tesco main advertisement tag line is “every little help”. The enterprise promote its
product mainly on television. The company also promote its product by the giving in- store
magazines to its customer. The price are set against the competitor prices. The main competitor
of Tesco in UK market are sainsbury, Nasdaq, safe way etc.
This report is based on the tittle business strategy in which it is mention about the
organisation vision, mission and objectives statements. The factors which are taken into the
consideration while formulating the strategy. BCG matrix and space is use to evaluate the

efficiency of the business. Tesco SWOT and PESTLE analysis has been done in this report. How
the stake holders are very important while making the enterprise strategies. The 5 porter model
has been discuss in this report (Montgomery ed, 2011). What are the roles and responsibilities of
the individual in the enterprise to assess the policies. What are the resources which are used to
implement the strategies are mention in this report. The report is all consist of Smart targets
which enterprise need to achieve for the strategy implementation.
TASK 1
1.1 Asses the business vision, mission and objectives as well as the core competencies
Vision is the statement which company formulate. This statement indicates where
company want to see themselves in the future. The position and level which enterprise need to
achieve in the future. This is the first step before making the strategies.
Vision of Tesco: The Company wants to be more valuable company in the eyes of its
customer and stake holders. The enterprise wants to serve globally with it modern and innovation
process.
Mission statement refers to all the policies which company needs while achieving vision.
Mission follow the vision. The enterprise makes its plan which can help to reach its vision.
Mission of Tesco: Company wants to create the value for their customers. The company
also wants to increase the brand loyalty. The enterprise want to expand the market share to
achieve its desire vision.
Goals and objectives gives the general guidelines to the enterprise to reach its desire
position within the specific period of time (Verbeke, 2013). The objectives and goals can be long
term and short term according to the business needs. Objectives follow the goals and goals
follow the vision and mission of the company. Following are the goals and objectives of Tesco.
 To become the successful retailer.
 To expand the retail services.
 Growth of the core business.
Core competence refers to the unique skills and abilities that company have. By which
company can make its business exceptional among the competitors (Grant, 2016.). This can help
the company to gain the competitive advantage from its competitors. And increase the brand

loyalty. The core competence of Tesco is its retail network which can help to achieve the goals
and purpose of business successfully.
1.2 Factor that have to be considered while formulating a strategic plan
Strategic plan refer to process by which company can make the decision about its
resource allocation (Campbell, Edgar and Stonehouse, 2011). Enterprise collect various
information from the inside and outside of the organisation and determine where the y needs to
make the improvement in situation the strategy planning comes in to picture. It provide the
guideline to the enterprise to implementing the strategy. While formulating the policies
enterprise need to be considered the following factors. The Industry: In this the company make the strategy suitable for the particular industry
such as its market size, business nature, potential growth, future threats and competitors
in the market. If these factors changes its affect the business environment so enterprise
needs to regularly monitor these factors to make the proper strategy plan. Tesco comes
under grocery and retail industry. Before making any decision they need to considered
their industry nature and size. According to that that they make plans on which they want
changes. The competition: It is another factor which needs to be considered while making the
policies. The enterprise cannot achieve its goals and objectives without understanding the
nature of the competitors. The enterprise looks after the strength and weakness of the
competitors. According to the company needs to make the strategy so that business unit
can serve its customers better than its competitors. In context to Tesco the main
competitor are Aldi, Asda, sainsbury, walmart, Morrisons and others. While making
strategy plan company need to see their competitor strategy and then formulate policies.
 Strength and weakness: When enterprise is making the policies it is important that they
should do the SWOT analysis. So that enterprise comes to know its strength, weakness,
opportunities and threats. Company needs to make the strategy which can improves its
strength and over come from its weakness. The business unit can achieve its goals when
they improve their weakness. Tesco have many strength and weakness which they need
to address in proper manner. They can use their strength in order to make better policies
and formulate plans by which they can overcome from their weakness.
M1. Identify and apply strategy to find appropriate solution

There are different kind strategy for which Tesco can go for such as product
development, market development, market penetration and diversification. As Tesco is having
good compand on UK market they can go for other areas. For this the can adopt market
development strategy so that they can sell their existing product in new market.
1.3 Effectiveness of SPACE and BCG matrix while developing business plans
There are two technique suggested to Tesco.
SPACE matrix having the four quadrant and indicates which strategy is more appropriate
to formulate the strategy of particular organisation (Ackermann, and Audretsch eds, 2013). The
four quadrant are aggressive, conservative, defensive or competitive. In aggressive quadrant
company take the advantage of the opportunities having in the external market. The company try
to overcome the weakness and minimize the threats. In conservative the firms should stay closer
to the core competence and avoid the risk taking. In defensive the enterprise focus on the internal
weakness and try to improve them by taking various measures. In competitive quadrant the
enterprise use the competitor strategy to gain the customer satisfaction (Hsieh and Chen, 2011).
Tesco use the aggressive quadrant they make best use of opportunities they get from the market.
Tesco also use the defensive to improve the internal weakness and make firm stronger.
BCG matrix represent the four type of situation which company may face and company
needs to formulate the effective strategy to overcome and make best use of these situation.
Following are four situation faced by the Tesco. Stars: Star indicates the high growth and high market share of the company product. The
company is earning higher profits with expanding the business. In this situation company
needs to make the decision how they sustain in the market with the same position. Cash cows: In this situation the growth is less but the market share is high. In
situationCompany makes the decision how they can increase the growth of product with
the high market share. Question mark: This situation indicates high growth but low market share (Hoejmose,
Brammer and Millington, 2013). Enterprise face the risk because of low market share can
leads to the losses for the company. In this companies needs to launch the product in new
market to increase the market share.
 Dog: In this situation both market share and growth is low. In this situation company
should not take the risk because it result in shut down of the business.

D1. Justify valid conclusion
Business plan is very important aspect of very business. Every enterprise need to prepare
it so that they can get particular direction to achieve their goals. There are many types of
technique which can help to formulate business plans. There are two techniques which is used by
Tesco. BCG matrix and SPACE. This both can help to identify where they need to invest and
where there is need to generate awareness according to that business plan need to be decided.
TASK 2
2.1 Organisation audit of Tesco
In this report the audit of Tesco is conducted by the SWOT and Ansoff matrix analysis.
The SWOT analysis help the enterprise to identify the internal strength and weakness. Following
is the SWOT analysis of the Tesco.
Strengths:
 The Tesco is the world’s largest retail operating company in UK.
 Company is earning the higher profits from its operations.
 They have the proper implications of strategy.
Weakness:
 The dependency is more on UK and European countries.
 Tesco product prices are high compare to other local stores.
 High cost of transportation incurred.
 Less diversification in other geographical area.
Opportunities:
 Expand the business in other counties.
 Start business online and home delivery services.
 Can create the more superior products.
Threats:
 Many other competitors in the market.
 Recession can influence the company sales.
 Increasing in unemployment level can have the risk for the company.

In context to the company Tesco has the high competitive advantage (Acquaah, 2011).
Through the experience in doing business in European countries the company make the plan to
expand the business in Asian countries that can improve the diversification of the market.
Ansoff matrix of Tesco Market penetration: To increase the market share the company expand its business to the
other countries. Tesco use the competitive pricing strategy and promotion by advertising
to sell its products in different markets. To open the business in other location give the
growth to the business. Market development: Tesco adopt this situation when the demand of the existing product
is declined in the current market (Li and Tan, 2013). The company try to sell its product
to the new market. Product development: This situation is adopted when the product sale is decrease in the
market the company launch the new product to sell its existing customers and also attract
the new customers by adding more feature into it.
 Diversification: Tesco understand this method for that they regular do the research and
development so that thy product and market should not go outdated. The company has to
bring new product in new market in this situation which incurred high cost and time.
M2. Select and design appropriate method
Tesco can adopt can one of above strategies according to their business requirements. As
they can expand their market by adopting market development in which they introduce existing
product in new market. Company need to research about new markets and their customer needs
and wants. According that they can offer products and services to them.
2.2 Environment audit of Tesco
Tesco use the PESTLE analysis to audit the business environment. Political factors: Political factors are those factors which affect by the government of the
countries. Business has to address certain rules and regulation given by the political
authorities of the countries (Boies, Lvina and Martens, 2011). These rules and regulation
changes every year such as tax policies, fiscal policies etc. this factor is not under
controllable by the enterprise. Many countries allow Tesco to expand their business in
their countries because it generate the employment.

 Economical factors: Economic factors are those which are influence the economic
condition of the particular country. These factors are currency exchange rates, demand,
inflation, GDP etc. Tesco is affected by the demand, prices and profits. To come up from
these factors Tesco minimize its risk by the internationalization and diversification. Social factors: Social factors are value, belief, taste and preferences of the common
groups in the country. This factor play a very important role for enterprise. The Tesco
provides and design the product according to the customers’ needs, Tesco come up with
the non-food items to meet their expectations. Technological factors: Technological factors refers to the innovation and techniques of
different process. The process and methods of serving the consumer are change day by
day. Tesco always use the high technology in their business to serve the customer in
effective way. Tesco is offering the online shopping (Haley, Haley and Tan, 2011). Home
deliver process to retain more customers and increase the brand value. Legal factors: The Tesco follow all the rules and regulation implied by the legal laws.
 Environmental factors: Tesco doing its business in the ethical way. The company is
highly associate with CSR activities. Tesco try to minimize the wastage during the
production.
2.3 Significance of the stakeholders while formulating the strategy
Stakeholder includes customer, employees, suppliers, shareholders, government, creditors
and others which are involved in the business activities. The stakeholder analysis help the
company to identify the more supportable and useful person for the business. Following are the
importance of the stakeholder analysis.
 This analysis help the company to identify the skills, knowledge, positions, alliance of the
stakeholders so that company can choose the more appropriate stakeholder for the
company requirement.
 This analysis help the manager to identify the problems and misunderstanding between
the stake holder and then make the effective strategies.
 This analysis help to clarify the vision, mission, and objectives of the firms to the stake
holders.
 It can help to identify the company potential opportunities and threats.

 The company can identify the groups they want to participate in the process of planning,
implementation and evaluation.
 Companies get the important opinion from its stakeholder to make the policies and
strategies.
The steps which company follows to stakeholders’ analysis.
 Identify the potential people involved in the company (Azar, 2011).
 Next step is to evaluate the stakeholder interest, power and influences on the business.
 Last step to develop the good understanding among the stakeholder to take the opinion
and feedback to formulate the strategy and its implementation.
2.4 The new strategy for the Tesco on the basis of auditing and stakeholders analysis
Tesco is having wide range of the products. The aim of Tesco is to create the value with
satisfying its customers’ needs (Acquaah, 2013). So for this Tesco can go for the new product
development in which they can bring the new products with new innovation and technology.
This strategy can help the company to increase its customers and satisfy its old and new
customer at same time. The enterprise can reach to the customer expectation by offering them
new product. The new strategy which be used by company is market development and product
development. In product development Tesco bring new product to their existing market. In
market development company can extant their business in other areas. By which they can serve
new customers with their existing products. This strategy help the organisation to expand its
business. Earn more revenues, attract more customers and other further opportunities. This also
help the company to get the competitive advantage over its competitors in the market.
D2. Managing and organising activities
Managing and organising is very important for company. The plans and policies which
enterprise is making it is very important to regularly control and monitor so that strategy can be
implemented in effective manner. The enterprise should have proper resources to implement
their plans and controlling help them to compare standard performance with actual ones by
which deviations can be identify.

TASK 3
3.1 Analyse the appropriateness of alternative strategies related to the market entry
There are multiple of ways to entry into the new market (Slack, 2015). The company
have choose the most appropriate method to enter into the foreign market so that they can
successful expand the business.
Substantive growth: Related diversification: When the product is launch which is similar to the company
other product line is called related diversification. Unrelated diversification: When the product which launched is different from the other
product of the company is known as unrelated diversification. Horizontal integration: When the different companies are manufacturing the product at
the same level. The production take place in the same or different industry.
 Vertical integration: The companies are involved in the production at different level but
in same industry is known as vertical integration.
Limited growth: Market penetration: It tends to penetrate the market by increasing the market shares of
existing products or by new products. This can be done by giving advertisement and
discounts. Market development: It refers to expand the new market by offering them existing
products. Product development: It refers to the launching the new product in existing market. This
can help the company to increase the revenues.
Retrenchment: Turnaround: This can be used for converting the poor performing company to the
profitable company. Liquidation: In this company is making the strategy when the product reaches to last
stage of its cycle (Chang and Graham, 2012). By this strategy company can pay its
creditor by selling its business assets.
 Divestment: This leads to the selling the own business to the another company.

3.2 Selection of new strategy for the Tesco
The aim of Tesco is to become the international retailer. The company wants to expand
its business all over the world and to accomplish this goals Tesco adopt the market development
strategy. In which the company offers its existing products to the new market. By this strategy
Tesco open its operations in Switzerland (Khalili Shavari and et. al, 2013). The company provide
both food and non-food items. The company also adopt the strategic alliance mode to enter into
the Switzerland market. Market development is one of strategy to growth market and profits.
There are other alternatives which also available to Tesco is different pricing strategies, new
distribution channels, new geographical markets and others. By Tesco have other alternatives
also to growth their market share and earn more revenues. Once the company enter into the new
market they can adopt the product development strategy to satisfy the customers and give the
competition to competitors.
M3. Present and communicate appropriate findings
In above question company wants to expand their market and earning more revenues for
this they planning to adopt market development in which the offer same products and services to
new market and customers. This can help them to achieve there aims and goals.
TASK 4
4.1 The roles and responsibility of personnel in charge of implementation the strategy
To implementation of the strategy company needs the personnel. The work is divided
among the employees according to their roles and level in the management. The Tesco
employees those who are involved to implement the strategies have the certain roles and
responsibility. To achieve the goals of the company these roles and responsibilities should be
cleared to the employees. In context to the company the CEO of Tesco is responsible to
communicate the information related to the strategies to their employees and other parties. The
CEO of the company is responsible for the strategic planning.
The responsible authorities in the implementation strategy has to maintain the proper
records. It is the responsibility of the employees to address all the legal and ethical standards
while implementing the strategies (Zott, Amit and Massa, 2011). The top management.
Managers has the responsibility to regularly monitor the situations. The manager should take the
overview of all the activities taking place in the organisation. The performance of the employees

should be control by the manager and compare the standard performance to the actual once. So if
any changes required it can be done at that particular point of time. The overall performance of
the enterprise can improve the strategic planning.
4.2 analyse the estimated resources requirements to implement the new strategy
There are different types of resources which are used by the company to implement the
new strategy. Each and every resources are equally important for the organisation. Following are
resources which are required to implement the new strategy. Human resources: In order to successful implementation of the strategy company need
to considered the human resources within the company. Employees are very important
part of the enterprise. The Tesco required the employees to execute the strategies must be
more innovative, productive and knowledgeable. Financial resources: The financial resources refers to the resources which are help to
run the business. Finance is required in every activity of the business Tesco finance its
strategy in more effective manner. The finance can be done in the form of equity and
debt. Tesco prefer the equity finance as there is no need to pay the regular fixed interest.
 Time and material resources: The time is very important to implement any strategy in
the business (Annabi and McGann, 2013). There is time limit to execute every strategy in
the enterprise. The material should be available with company at the right time so that
they is smooth production take place in the organisation. Tesco used the high technology,
machine to make the quality of product.
4.3 Contribution of the SMART targets to achievement of strategy implementation
SMART target refers to the goals which fixed by the Tesco. There is criteria that this
target are achieved in particular time period. The SMART indicate the specific, measurable,
agreed, realistic and time based (Torrent-Sellens, 2015). The aim which are fix by the company
should be realistic. No imaginary goals should be fix by the company. Following are the
importance of the SMART target.
 The target which company wants to achieve should be specific. If the goals are not
specified than all efforts are gone waste.
 Target should be measurable (Firnkorn and Müller, 2012). If they not measurable it is
impossible to find out the leakages and company cannot find the problem.

 The target should attainable. If Tesco cannot attain the target whole process have to
repeat again.
 Tesco need to fix the target which they think they can achieve. There should not be any
imaginary goals which enterprise not able to achieve.
 The target and goals fix by the company should timely achieved.
D3. By bring all the aspects of SMART targets company can achieve their goals in proper
manner. Strategies and plans are proper set and company need to specify whether they met the
SMART targets or not. Any objectives which are not satisfy this element need to be change so
that firm can save their cost and time both. The employees firm can bring new ideas and by their
creative thinking they can formulate strategies and bring new solution in their enterprise.
CONCLUSION
Proper implementation of strategy requires proper analysis of the external environment.
The main aim of Tesco is to create value and increase the market share. Tesco should expand its
business by more geographical regions. Tesco needs to adopt the market development to expand
its business in new countries and after expansion the company can follow the product
development process to retain the customers. For this expansion company needs to analyse the
market. Enterprise can use these tools SWOT, PESTLE and BCG matrix to analyse the market
and accordinglycan implement the strategies. Effective implementation can be done by using the
resources properly.

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