Evaluating Tesco's Strategy: Planning, Environment, and Business Plan

This report provides a comprehensive analysis of Tesco's strategic planning process, beginning with an introduction to strategic management and its importance in achieving a competitive edge. It critically assesses the processes organizations use to determine their strategies, specifically focusing on Tesco's mission, objectives, environmental scanning, strategy formulation, implementation, and evaluation. The report also evaluates the impact of internal and external environmental variations on Tesco's strategy using SWOT and PESTLE analyses, highlighting strengths, weaknesses, opportunities, threats, political, economic, social, technological, legal, and environmental factors. Furthermore, it reviews Tesco's business plan, which is included in the appendix, to provide a holistic understanding of the company's strategic direction. The analysis aims to offer insights into how Tesco navigates its business environment and adapts its strategies to maintain its market position. Desklib provides access to solved assignments and study resources for students.

Strategic planning

Table of Contents
INTRODUCTION...........................................................................................................................1
Strategic management.................................................................................................................1
A critical assessment of the process used by organisations to determine their strategy.............1
A critical evaluation of the impact of internal and external environmental variation on
organisational strategy................................................................................................................3
A review of an organisation’s business plan...............................................................................6
CONCLUSION................................................................................................................................7
References:.......................................................................................................................................8
Appendix..........................................................................................................................................9
Business Plan..............................................................................................................................9

INTRODUCTION
Strategic planning is considered as road map for the organisation. It is described as the
art for developing certain business strategies, executing them as well as analysing the outcomes
of the implementation of the plan in respect to the organisation's entire long term goals and
desires. It is the idea which concentrate on interlinking several departments such as finance,
human resource and marketing in the organisation for reaching their strategic goals. Along with
this, strategic management is the synonym of strategic planning. Tesco is taken as base company.
Tesco is a British multinational groceries and retailer which was established by Jack Cohen in
1919 in UK. The organisation is specialised in the selling of clothing, electronics, software and
many more. In this report, it covers the term strategic management with the process of the
strategic planning for identifying their strategy. Along with this, it also includes the internal and
external environment factors variation of the organisational strategy. At last, a review of an
organisation’s business case is mentioned in the appendix.
Strategic management
Strategic management is describes as the determining and details of all the strategies
which a manager could carry over so that, the organisation could able to carry better perform as
well as competitive edge. The firm could have the competitive edge when the income generation
is much higher than the average profitability in that industry in which the firm belongs to. It can
also be stated as the bundle of all the acts and decisions that a manager takes and finalise the
outcomes of the performance of the company (Bernadus and et. al., 2020). This includes
planning of forecasted as well as unfeasible contingencies and this could be applied to both small
and large organisation. It provides a broader view point to the personnels and so that they could
comprehend their job which is fit in the firm and also how it is interrelated to the members of the
organisation.
A critical assessment of the process used by organisations to determine their strategy
Strategic planning process is a technique that firms utilise for creating plans for reaching
the long term goals. This process assists in developing a path for which strategic objectives are
put into effective for reaching and where the initiatives would be much less helpful to the
organisation (Balyuk and Balyuk, 2021). In context to the selected organisation, the strategic
planning process is mentioned below:
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Missions and objectives: The mission statement includes the long term vision of the
company in regards to what the firm wants and whom they wanted to serve. This states the
purpose, products or services, customers, market and technology of the organisation. The
mission statement describes the vision which encompasses the unchanged values and purposes of
the company as well as the future goals which would assists for pursuing the upcoming
opportunities (McDavid, 2021). The mission of Tesco is to be the leading organisation in regards
to their grocery commodities and services. The vision of Tesco is to be the leading store in terms
of grocery across the world by minimizing the extended good as well as delivery of the services.
Objectives referred as that ends which the firm seeks to reach through functions and existence.
This includes long range aim, detailed goals of the department as well as the individuals
assignments. Through vision, leader of the firm defined the financial and strategic objectives.
These strategic objectives are interlinked to the position of the organisation as well as comprised
of the measures such as brand image and market share. The objectives of Tesco is mentioned
below:
 To expand their consumer base
 To assure of the satisfaction of customers
 To make sure of the modern motivational strategies assuring about their workers are
retained and satisfied by their jobs To develop green environment as well as sustainable firm finances
Environmental scanning: It is the second element of the strategic planning process where the
strategic objectives are related to the environment of the organisation and they should know the
form of the environment in which they have to function. The environmental analysis comprises
of the collection of the related data, interpreting the future influences of the working of the
organisation and identifying which are opportunities and threats that are provided by the
environment (Steiss, 2019). These environmental data could be gathered from several sources
such as verbal information from multiple individuals, spying and predicting. This process would
work more effectively on a constant basis and it is makes an intrinsic element of the strategy
formulation. Environmental scanning analyses the internal and external factors of the
organisation.
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Strategy formulation: The data from the environment scanning must get along from
strengths to opportunities which is determined which working for the weaknesses and external
threats.
Strategy implementation: The strategy is implemented through budgets, procedures and
initiatives. The implementation includes the organisation of the assets and encouragement of the
personnels of the company for reaching the objectives. This could create a significant influence
on the successful of the firm (Chirima, 2018). In big firms, the strategy that implemented would
be distinct individuals from those who formulated that. In regards to this, a proper care should be
taken for communicating the strategy as it may not be successful if the strategy is misunderstood
or if the managers at the lower level resists the implementation as they don't understand why a
certain strategy has been chosen.
Evaluation and control: The strategy needed to be monitored and modifications which is
vital has to be taken care. The implementation of the strategy should be evaluated and adjusted
as per the requirements. The evaluation and control comprises of various steps such as stating the
parameters that has to be measured, defining the targets for the parameters, doing the
measurements, compare and contrasting the outcomes for the pre-defined standards and making
the vital changes. The outcomes of the implementation could be compared and contrasted in the
light of the set objectives and control procedures operates (Berisha Qehaja, Kutllovci and
Shiroka Pula, 2017). A further analysis would take place if the outcomes and the objectives
become different. For this, a suitable actions would be needed to overcome the gap. It would also
required alteration in the strategy if an issue occur.
A critical evaluation of the impact of internal and external environmental variation on
organisational strategy
SWOT analysis
SWOT analysis is a framework for evaluating the organisation and their environment
which assists in concentrating on the major concerns. This could supports in making focus to the
limited assets as well as the abilities to the competitive environment. Strength and weaknesses
are considered as internal factors which could be altered while opportunities and threats are the
external factors which could not be change but can be modified (Konovalova and et. al., 2018).
In context to the selected organisation, SWOT analysis is mentioned below:
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Strength: Tesco is considered as one of the top retail grocery and supermarket in the
United Kingdom. They are implementing a very simple business model and this assists in
reduction of the costs by having an effective waste management system. This creates an outcome
of having a successful relationship with its vendors that assists them in delivering the
commodities in a timely manner. Along with this, they have won awards for the British favourite
supermarket and also awarded Grocer's Label Food for 25 times. Moreover, Tesco is also
popular as they have created many job opportunities for the individuals. They gave employment
to 500,000 people across the globe and offered more than 700K job opportunities which makes
them a job provider in the United Kingdom.
Weaknesses: One of the major drawback is that, they are unable to established
themselves in the markets of Japan and US as the company could not export their operations and
implement their plans effectively offshores. In 2018, Tesco suddenly changed their Clubcards
without informing the customers which makes them furious as the consequences. Also, the
organisation has faced accounting fraud scandal where the selected organisation has shown a less
profit in their accounting ledgers for avoiding the taxation (Sumiarsih, Legono and Kodoatie
2018) . There was a sever impact on the performance of the company because of Brexit which in
return, the market prices fall to 9% and this figure could not capture the investors. Tesco is
following a low cost strategy that provides commodities and services at a lower price for their
customers.
Opportunities: Tesco has introduced a new discount stores which is known as Jack and
recently are perform well in the industry. In regard to this, the organisation must invest as it has
the potential to grow and has the ability to compete with its competitors. Along with this, the
organisation has the opportunity to penetrate into new and emerging markets such as Turkey,
South Korea and so on. Tesco is not able to perform well in some nations and in regard to this,
they could make a strategy to make partnership with the local businesses and educate itself about
the local markets (Sadeghpour, Motahari and Nejatbakhsh Esfahani, 2021). This would assists
them in elevating their sales and making an effective presence in the markets.
Threats: Tesco has encountered with Christmas scandal where the advertisement was
supposed to be funny but instead, it offend many individuals. People said that it was
disrespectful and a direct attack on the Christmas faith. Also, the economic factors such as
taxations, government rules and legislations represents as a serious threats towards the
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development of the selected organisation in some parts of nations. In 2017, another threat of
Tesco was about the fake food product Woodside Farms where no farm was identified in their
lists of assets. Another threat is the Brexit exit from the Europe which leads in having serious
impact on the selected organisation as they were having their businesses in several European
countries.
PESTLE analysis
PESTLE analysis is a tool which is utilised by the organisation for tracking all the
external factors which creates impact on the operations of the firm as well as the planning for
introducing a new product or service in the industry. In context to the selected organisation,
PESTLE analysis is mentioned below:
Political factors: As Tesco is operating in many countries such as Czech Republic,
China, Slovakia and many more, they have make sure about their different political environment.
The United Kingdom has a stable political environment which supports the organisation being
the top retailer in the local market. Another one is the COVID 19 which create impact on many
industries in such a manner that it also leads in shutting down of many organisations as no
person was allowed to step out of their houses which leads employees to start work from their
homes (Jamalifar and Salehi, 2020). As Tesco has maintained its e-commerce platform, they
were able to rescue themselves from becoming the victim of the outbreak.
Economic factors: Tesco was able to survive in the COVID 19 pandemic with the help of
its e-commerce platform but there were many organisation which shutdown due to pandemic and
several people lost their jobs. The higher unemployment rate creates an unstable financial
situation. Tesco has expended their businesses in many nations but they are still depend upon
the British markets as the majority of revenue is generated from here. If the local government
launches new laws on e-commerce platforms, this will creates influence on the sale, profitability,
cost of the organisation.
Social factors: Tesco is following the local social and cultural trends of distinct
communities and then sell them accordingly. For example, the organisation is selling Halal meat
in the stores of UK for Muslim customers. Along with this, the organisation also came up with
its own halal meat label in Thailand and Malaysia (Osborne and Strokosch, 2021). Also, now a
days, people are switching more towards plant based vegetarian food. Tesco make sure to sell
vegan product to their customers which it make a revenue of 4.1 million pounds in 2020. As
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Tesco is aware of the chaining trends, they could assures to make vegan food products by 300%
in 2025.
Technological factors: Tesco has been using latest technology which make sure to
provide a better customer experience which is he main reason for being a successful firm. They
also provide facility to pay for the commodities using mobile applications, m-commerce as well
as barcode scanning systems. As COVID 19 as created an impact on every individual in some
manner, the e-commerce platform of Tesco has boosted the trend and pattern of online shopping
experience. People started to order groceries online and avoid getting infected by the virus. The
organisation was able to survive the outbreak due to their online platform (Sotiriadis, 2018).
Also, Tesco has partnered up Amazon Go for developing of cashier-less billing facilities. This
provides shoppers with an experience in saving of their time.
Legal factors: As the legal structure and government rules and legislations of distinct
government differs and in such case, the firm should follow local and international laws. Before
Brexit, EU has introduced with a law that restrict organisation for performing any anti
competitive activity which means that the selected organisation cannot acquire and merge with a
large firm of its size in Europe. After Brexit, the law is not applicable in UK but it is active in
EU. Also, the organisation cannot recruit people and offer them less than required wages (Yusefi
and et. al., 2017). Along with this, the organisation cannot sell alcoholic drinks to young
underage teenagers.
Environmental factors: Tesco has recently launch their phase 2 of the recycling plan and
it encompasses of remove, reduce, reuse and recycling of the plastics. This would assists the firm
in decreasing as well as removing the non-recyclable plastics. Also, the organisation is working
on the project for recognising the illegal fishing boats which are endangering sea life with the
non seasonal hunting.
A review of an organisation’s business plan
Business plan is stated as written documentation which describes how an organisation
define their objectives and strategies for achieving the goal. It outlines a path for the organisation
for marketing, operations and financial points. This documentation is considered as vital as it is
used to capture the investment prior the firm has launched its proved record (Carayannis, Ilinova
and Cherepovitsyn, 2021). The business plan for Tesco is mentioned in the below Appendix.
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CONCLUSION
From the above discussion, it can be concluded that strategic planning is vital for
organisation as it develops a route to follow. Along with this, the very first strategic plan is the
business plan that outlines the main purpose, goals, financial fields and the mission statement of
the organisation. In this report, it includes strategic planning process with evaluation of the
impact of the internal and external factors on the organisation with the help of SWOT analysis
and PESTLE analysis. Also, a business plan has been mentioned in the appendix.
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References:
Books and Journals
Balyuk, I. and Balyuk, M., 2021. Strategic Planning as a Tool for the Economy Efficiency
Growth: Foreign Experience and Russian Practice. ISTORIYA, (e20).
Berisha Qehaja, A., Kutllovci, E. and Shiroka Pula, J., 2017. Strategic management tools and
techniques: A comparative analysis of empirical studies. Croatian Economic Survey.
19(1). pp.67-99.
Bernadus, G.S. and et. al., 2020. Systematic Review of the Builder Method and Product of the
Information System Strategic Planning at Higher Education Institution in Indonesian.
Journal of Advanced Research in Dynamical & Control Systems. 12(6). pp.939-947.
Carayannis, E.G., Ilinova, A. and Cherepovitsyn, A., 2021. The Future of Energy and the Case of
the Arctic Offshore: The Role of Strategic Management. Journal of Marine Science and
Engineering. 9(2). p.134.
Chirima, D.T., 2018. Strategic planning practices in manufacturing firms operating in Zimbabwe
(Doctoral dissertation).
Jamalifar, G. and Salehi, H., 2020. The effects of rehearsal and strategic task planning on L2
Willingness to Communicate. The language learning journal. 48(2). pp.162-169.
Konovalova, E.E. and et. al., 2018. Forming approaches to strategic management and
development of tourism and hospitality industry in the regions. Journal of
Environmental Management & Tourism. 9(2 (26)). pp.241-247.
McDavid, C., 2021. Strategic Planning and Organizational Performance: A Mixed Methods
Study of Strategic Planning Practices in Texas Public School Systems.
Osborne, S.P. and Strokosch, K., 2021. Developing a strategic user orientation: A key element
for the delivery of effective public services. Global Public Policy and Governance,
pp.1-15.
Sadeghpour, A.J., Motahari, A.H. and Nejatbakhsh Esfahani, A., 2021. Goal and Goal Setting in
Strategic Planning, Case study: Qom Water and Wastewater Company. Journal of
Water and Sustainable Development. 8(1). pp.31-40.
Sotiriadis, M., 2018. Strategic Analysis and Competition Analysis. In The Emerald Handbook of
Entrepreneurship in Tourism, Travel and Hospitality. Emerald Publishing Limited.
Steiss, A.W., 2019. Strategic management for public and nonprofit organizations. Routledge.
Sumiarsih, N.M., Legono, D. and Kodoatie, R.J., 2018, January. Strategic Sustainable
Management for Water Transmission System: A SWOT-QSPM Analysis. In Journal of
the Civil Engineering Forum Vol (Vol. 4, No. 1).
Yusefi, A. and et. al., 2017. The Barriers against Strategic Plan Implementation from Managers’
Perspectives in Teaching Hospitals of Shiraz University of Medical Sciences, 2016.
Sadra Medical Journal. 5(2). pp.87-98.
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Appendix
Business Plan
Business plan is considered as a written documentation that states the core business activities,
objectives as well as the strategies to plan and reaching to the goals. In context to Tesco,
business plan is mentioned for them to overcome from their weaknesses:
Executive Summary: Tesco is a leading retail chain in UK which was founded in 1919 by Jack
Cohen. The organisation is facing many issues which have become weaknesses of the firm such
as the firm has not able to establish themselves in markets of Japan. Along with this ,the
organisation has encountered with the angriness of the people as they changed the Clubcards
without informing. Also, the firm has face loss due to Brexit that directly influences in the
performance. Various fraud scandal was also the involved.
Mission: The mission statement of firm is to be the champion for the consumers and assists them
to enjoy a better quality of life.
Vision: The vision statement of Tesco is to be the most highly valued organisation through
serving the consumers, communities in which they operate, loyal colleagues and shareholders.
Objectives: The objective of Tesco is to overcome from their weakness such as they were unable
to establish themselves in Japan, Brexit issues and fraud scandals,
Competitive advantage: The organisation has its presence across the globe which makes them
popular. Along with their excellent suppliers, they are able to cater their customers worldwide.
Also, they are offering various types of products and services in many fields which makes its
competitive advantage.
Financial overview:
Particular 31/12/15 ($) 31/12/16 ($) 31/12/17 ($)
Production cost 4000 - -
Promotion cost 2000 1200 800
Advertisements cost 1000 800 1000
Technology cost 1100 1000 1600
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Total cost 8100 3000 3200
Problem: The issue arises in the organisation is about the Brexit issue, fraud scandal issue and
the they are unable to operate in markets of Japan.
Solution: In order to make Tesco operate in markets of Japan, they could partnership with the
local firm of Japan so that they could understand the Japanese markets and the purchasing
behaviour of the customers. Also, the organisation could make ethical policies so that there will
be no rumours about the fraud cases.
Initiative: Tesco could conduct their training and development program for their employees in
order to develop their knowledge regarding useful policies and norms.
Market Research: The organisation can conduct customer survey in order to analyse their
perspectives.
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