Strategic Management Report: Analyzing Tesco's Business Strategies

This report provides a detailed strategic management analysis of Tesco, a leading global retailer. It begins with an overview of Tesco's background, industry position, consumer behavior considerations, and current strategies, including its move towards zero-carbon operations and digital marketing. The report then applies strategic frameworks like Porter's Five Forces and SWOT analysis to assess Tesco's competitive environment, including threats from new entrants, suppliers, buyers, and substitute products. It critically discusses Tesco's competitive advantages, comparing them to those of competitors like Sainsbury's and ASDA, and explores probable industry scenarios. The analysis further examines Tesco's vision and mission statements, highlighting their alignment with market demands and strategic capabilities. The report concludes by outlining possible strategies for defending Tesco's core business and offering recommendations for implementing these strategies, emphasizing the importance of adapting to consumer behavior and market trends to maintain and enhance its market position and profitability.

Strategic Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
Details of the Tesco organisation................................................................................................1
TASK 2............................................................................................................................................2
Appropriate frameworks for strategic analysis of Tesco organisation........................................2
Critical discussion of companies competitive advantage from competitors...............................5
Probable industry scenarios faced by company..........................................................................5
TASK 3............................................................................................................................................6
Analysis about company's vision and mission statements which are aligned to demands of
marketplace.................................................................................................................................6
Companies strategic capabilities.................................................................................................7
TASK 4............................................................................................................................................7
Possible strategies that company follow to defend its core business..........................................7
TASK 5..........................................................................................................................................10
Recommendations to implement strategies in the company.....................................................10
Conclusion.....................................................................................................................................10
REFERENCES .............................................................................................................................11

INTRODUCTION
Strategic management is the process which is implement by company to meet its future
goals and objectives by doing continuous planning, monitoring, analysing and all other
assessments by which company able to meet its goals. This present report will cover details of
Tesco organisation and their previous 5 years planning in strategic management and analysis of
company in which company operates. Further, in this report company's strategies capabilities and
mission and vision statements are to be analysed and possible strategies which company foolow
to defend its core business. At last in this report evaluation of resources implement by company
is to be discussed.
TASK 1
Details of the Tesco organisation
Background- one of the largest retailers store in the world is Tesco organisation. It is founded
by Jack Cohen in 1919.(Ismail, 2017.) It only started with market stalls but as of now they have
diversified their business and becomes worlds largest retail chain which is in books, clothing,
electronic, furniture, petrol, soft wares, financial services, telecom and music downloads.
Company do its operations globally in across 11 countries by that they have 9th largest retailers in
the world which is to be measured by its revenue generation.
The industry- one of the leading brand in the market of UK is Tesco organisation. Company do
its operations globally in across 11 countries by that they have 9th largest retailers in the world
which is to be measured by its revenue generation. It is a public limited company which deals in
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doing business of providing groceries and are merchandise retailers. This company stand for
biggest supply chain market which has diversified business and also most profitable business in
the world. They also had wide range of food retailers in UK. They are also doing their business
in providing online food services in business market of UK.(Hill, 2017. )
Environment/ consumer behaviour- Tesco always remains aware of the consumer behaviour
environment. The pattern of demand, price is always depends upon the current trend and future
trend which is expected by customers from the organisation. The product they supply be in
accordance with the lifestyle changes of the consumers of the market.
Company's strategies- current strategies of company is to become zero- carbon business market
by 2050. Company's aim is to develop loyal customer base and core values in an organisation.
Their plan is to shifting their business towards digital marketing by which they will be able to
attract more customers in the organisation. To create new product lines company has applied in
which they become extra cost conscious under which cost of farm get increased and fish at new
price point. They also implement strategy in which new packaging strategies has been designed
by company to attract customers in organisation.
Reason such strategies have been implemented- their current future strategies is to become
zero-carbon business market and reason to establish this strategy is to become aware and to
maintain business environment. Another strategy is to create new product lines, this dramatic
strategy implemented by company because nowadays customers are more cost conscious and
tesco's products are quite expensive to attract them in organisation company develop this new
strategy.(Barney, 2017.) Company also implemented policy to shift towards digital marketing
which is the recent huge current trend which allow company to reach their targeted market.
Another company's strategy is to design new product packaging under which company
analysed their products which is majorly suffering from drop down therefore, company
implemented new product design by which customer get attracted to their existing products of
the firm.
TASK 2
Appropriate frameworks for strategic analysis of Tesco organisation
Poter's five forces models
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To analyse company's profitability level, porter's five is the strategic management tool
which is used by company. Detail discussion is as follows-
Threat of new entrants- in providing groceries items there are many new entrants which is
there is business market and providing tough competition to Tesco organisation. Their ways of
introducing products is unique such as lower pricing strategies, new substitute of product and
way to reduce cost is providing high pressure on the company.
Bargaining power of suppliers- retail company generally has more suppliers from which they
purchase raw materials, because of large suppliers company has to face dominant position of
suppliers in the business market. Therefore, suppliers may charge higher prices and which
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Illustration 1: porter's five forces model
source:( Tesco Plc Porter Five Forces Analysis,2018)

impact is that they reduce overall performance and profitability of the company in retail
business.
Bargaining power of buyers- customers of the business markets always demand lot from
company, this situation put pressure on Tesco company in which they have to continuously
provide some type of offers and discounts to customers. Other small retailers are providing low
fair prices of products which also put pressure on company to provide items with low range of
prices.
Threat of substitute products- company's profitability suffers when other companies does same
production of products in different ways which customer's needs get satisfied. This production of
substitute products also suffers Tesco's overall profitability.(Grundy, 2017.) Threat of substitute
products factor in this company is high as many small retailers are their in the market which is
providing production of substitute products with low range.
Rivalry among existing competitors- there are intense existing players in market which
decreases company's long term profitability by building sustainable different products in the
market.
Swot analysis of Tesco organisation.
Strength-
 One of the largest profitable company
in business of supermarkets and
providing tough competition to
competitors of business market.
 Company has strong financial stability
because it has significant cash reserves
available in company.
 They have strong brand image in
providing the best quality services.
Weakness-
 As company is facing high competition
in market because of that profit margin
of retailer got reduced.
 Company highly depend on the market
of UK and Europe by which other
business market in which company
operated has to suffer a lot.
Opportunities-
 By compliance with other brands
company has more opportunity to
Threats-
 Major threat factor for company is
economic recession in country by
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attract customer in the organisation.
 Another opportunity is to grow their
business by doing online services.
which customer reduce their power of
purchasing.
Critical discussion of companies competitive advantage from competitors
Tesco is one of the largest UK grocery firm which dealing in many business services like
books, petrol, clothing etc. because of the diversified business they also have to face competition
from their competitors. The Biggest competitors of Tesco are Sainsbury's, ASDA, Morrison's,
Aldi, Lidl, and Waitrose. According to recent data survey its market share from January 2015 to
October 2018 is 27.9%
By analysing porter's five forces model and swot Tesco is able analyse factors on which
they have make strategies and policies.(Haleem and Jehangir,2017. ) Porter's five forces help
company to find factors like new entrant of the market which providing tough competition to
company. They also able to find bargaining power of buyers and suppliers by which they will
able to cut unnecessary cost which company is bearing.
Company also has done SWOT analysis by which they will able to know company's
strength, weakness, opportunities and threats. By finding that company fill able to find solutions
which overcome with the weaknesses of the company and by which their profitability increase
up in business market.
Probable industry scenarios faced by company
Generally hypermarket get hit by neighbourhood convenience stores. As compared to
other market competitors of Tesco organisation's way of doing business is different. Their main
aim is to expand their business by satisfying customer needs and to provide the best quality
services to customers. Company current market share according to statistical data from January
2015 to October 2018 is 27.9% which leads them from other market competitors. But nowadays
there are many competitors of the Tesco which are providing same substitution of products in
lower price by which company has to face reduction in overall profitability of the company.
Tesco is the leading brand in the market of providing the best groceries items but they also have
to face competitions from the small retailers which are also providing same products in cheap
fair price which helps them to influence customers. (Barney,2017.)
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This neighbourhood convenience stores majorly affect company's overall profitability
and by providing products with fair price they are also attracting customers in their own stores.
Therefore, company have to establish effective policies and strategies in which company will
able to introduce new and innovating products by which they will able to maintain effective loyal
customer base support in business organisation. New effective policies and strategies is to be so
strong enough that other competitors will not able to compete them with making of products
substitution.
TASK 3
Analysis about company's vision and mission statements which are aligned to demands of
marketplace
Tesco company has five core elements which include that to grow their business around
the world and to satisfy customer's needs. Another vision of the company is to grow business
which is full of opportunities so that their organisational goals get achieved. They also want to
develop business which is full of ideas and innovating by which new products gets established in
organisation. Another vision is to earn customer's trust by which they will able to develop
effective customer base and communities in organisation.
Mission of the company is to make products which is in the best quality and satisfying
customer needs in business market. Company's vision and mission are interlinked with each
other therefore to fulfil demand of the market they have established various new opportunities.
Current demand of the consumers from hypermarkets organisations are increasing day by day.
(Hill,2017.) Nowadays customers did not have much time to go and take food from market
therefore, by developing online home delivery food and grocery services company will able to
achieve their mission and vision.
Another demand in market of Tesco is to create product packaging. Nowadays customer's
only get attracted to products whose labelling and packaging is specific and complete details are
provided on that therefore if company want to grow business opportunities then new product
packaging is to be established by the company. To achieve company's targeted vision and
mission company have to make policies which helps them to coordinate demands which satisfy
customer needs and which also improves company's overall profitability in business market.
Effective policies' is to be established by company by which current demand in market will get
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achieved. If company will able to satisfy needs of the current market situation then they will able
to earn customer's trust towards company.
Companies strategic capabilities
Major aim of Tesco is to get growth in business and to achieve maximum amount market
share in business. To attained maximum growth and desired result of the business, entity have to
designed strategies which helps them to achieve organisational objectives. For Tesco main
consideration is to hold stakeholders in the company. To get growth in organisation company
have to establish strategies which is in according to customer so that by satisfying their needs
company will able to achieve effective growth in business markets.
Another capabilities of Tesco is to provide better service delivery to customers of the
business organisation. By shifting their business to digital market company have achieved
tremendous growth and have provided tough competition to their competitors of business
markets. Another capabilities of Tesco is that they are doing business in worldwide sector
therefore by introducing new products or products line they will able to manage effective
company's growth and will able to achieve needs to targeted markets. (Helfat and Peteraf, 2015.)
Company have effective market share by which they will able to introduce and develop
new product services in retail stores by which they will get to know customers expectations and
will able to satisfy them by doing new improved innovations, and ideas in doing production.
Company also has strong brand image and by that they will able to develop and introduce new
products among customers. They also have strong financial capabilities by which company's will
able to do innovation activities in organisation. These effective capabilities of the company
makes them strong among the competitors and which also helps them to develop strong image of
brand and also to develop effective cash reserves in the company by which they able to do
innovation activities which helps company to improve overall performance of the company.
TASK 4
Possible strategies that company follow to defend its core business
To defend its core business company will apply the Ansoff Matrix by which they able to
develop effective policies by which company will get succeed in business opportunity. Ansoff
matrix is an essential marketing tools by which company will able to generate revenue through
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developing new product and services in its core business. This models helps company to grow
their sales in new market competition.
Under this model, four factors is to be considered by the Tesco company and that is
Market Penetration, Market development, Product and development and Diversification. Its core
business is to provide effective groceries items in their supermarkets. Their new strategies is for
digital marketing and this will be studied by these four factors.(Hill, Jones and Schilling, 2014.)
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Illustration 2: ANSOFF MATRIX
source:(The Ansoff Model,2018)

Market penetration- under this company will change opening hours of their stores which will
be in accordance with customers expectations by which company will able to generate effective
sales in organisation. Company will order processing time by which customer feels free to
purchase products and which increase overall sales volumes of the company. In doing digital
marketing company have to provide details of their products on company's website by which
customer can able to select whatever item they want to purchase and this provides company to
generate effective sales through digital marketing process.
Market development- under these types of strategies company will think factors which leads
them to enter in new market. Tesco in their research finds new online market by which they will
able to sell their products. In this company will able to provide additional facilities and offers
among customers in placing order which helps them to generate effective sales of new products
in the business market so that company will able to earn effective profitability in business
market.
Product development strategy- under this factor company will think on factor which increases
their existing products and services.(Kwak and et,al., 2018) To enter into the world of
digitalization company will offer some discounts on their selected products by which customer
will get influence and make purchase of that product through company's website and this leads to
improve overall profitability of the company and company will able to improve quality of their
existing products by getting feedback from customers.
Diversification- under this factor company will able to move into new market with new products
and services by the support of existing customer base which helps them to improve sales in the
organisation. Here to enter into digital world Tesco will provide discounts and offers to their
customers by which they will able to influence customer to purchase different products of the
company.
These are all the factors by which company will able to defend its core business and will
able to enter into new business markets. Tesco's new strategy is to develop or to shift their
products in digital market. So to enter into that market and to improve their sales in that market
company have to apply this four factors by which they able to develop effective policies which
generate their overall sales and profitability of the company. To enter in to digital market
company has to take support from existing customers by providing effective offers and discounts
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by which they influence others to try new products of the company.(Spyropoulou and et.al.,
2018. )
TASK 5
Recommendations to implement strategies in the company
Tesco is the world leading brand in the business of supermarkets. Therefore, to survive
effectively in business market company has to make policies and strategies by which they will
able to maintain their leading position in the world. There are certain recommendations for
company to improve or enhance their business growth. Firstly company will have to diversify
their business in other countries too as this company is established in selected countries so by
establish super market in other countries company will able to maintain their leading position in
business market.(Dawes,2018) Another recommendations for company is to increase their
market share through innovation, or by strengthening customer relationships, to compete with
other competitors of business market and by hiring effective practises in the company.
To improve sales volume, company has to shift their business towards digital marketing,
and have to develop effective human resource management under which by offering different
discounts and offers company will able to attract existing customers as well as also able to bring
new customers in the organisation. Overall profitability of the company will get improved only
when company will able earn trust of customer and this will get happened when fair price of
products will offer to them. New products lines of services is also to be developed by company
so that by establishing effective strategies they will able to develop new product line of business
in companies.
Conclusion
From the above study it can be concluded that strategic management plays an important
role in company to generate effective profitability of the company. In this present report, chosen
organisation is Tesco and details of the company is provided in first task of the report. After that
in this report appropriate framework for strategic analysis of organisation is discussed and also
competitive advantage of company is also explained in this report. Further, in this report
company's strategic capabilities and their vision and mission statement which are aligned to
demand of the market is explained. Possible strategies to defend company's core business and
recommendations to implement strategies in company is explained in this report.
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