Strategic Management Case Study: Analyzing Tesco's Business Strategy

This case study provides an overview of Tesco Plc's strategic management, analyzing its vision, mission, competitive landscape, and strategic planning tools. It includes a SWOT analysis highlighting Tesco's strengths, weaknesses, opportunities, and threats, as well as a PESTEL analysis examining the political, economic, social, technological, environmental, and legal factors affecting the company. The report also uses the Boston Consulting Group (BCG) Matrix to assess Tesco's various business segments, identifying cash cows, stars, question marks, and dogs. The analysis further explores Tesco's competitive profile, internal strengths, weaknesses, and long-term objectives, offering recommendations for business expansion and employee cultural training. The success of these recommendations is to be evaluated through revenue generation and employee integration reports. Desklib provides access to similar case studies and study tools for students.

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Executive Summary of TESCO:
Tesco is one of the largest grocery store businesses in the United Kingdom. The vision of the company is to “To be the most highly valued
business by: the customers we serve, the communities in which we operate, our loyal and committed colleagues and of course, our
shareholders”. There are five elements of Tesco’s vision statement, needed and wanted all over the world, innovative, modern and possess many
ideas, a flourishing company which is full of prospects, local winners while employing their skills internationally. In addition to this, the mission
of Tesco Plc. states that “We make what matters better, together.” (Ayodele, Abdallah, & Issaka). Tesco is correspondingly competing with the
local convenience stores. In addition to this, Lidl and Aldi are also being viewed as strong market competitors in the United Kingdom. The major
competitors of the Tesco Plc. are Sainsbury, ASDA, and Morrison, they are generally referred to as the big four within the United Kingdom.
These 4 organizations are known as the big four in the UK. According to the SWOT analysis of Tesco, the organization has an extensive and
diverse customer base, patent license agreements and patents, as well as a strong product portfolio as its strengths (Grundy, 2017). The
weaknesses of the company are concentrated operations and infringement controversies. New opportunities can open if Tesco continues to invest
within its research and development, constructive search for international top drive market, and strategic acquisitions. The threats which the
company is facing are seasonal variations, worldwide economic environment and risks in gas and oil industry (Jenkins, & Williamson, 2015).

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According to the PESTEL analysis, the company is facing impending and current legislations, rates of taxes, rate of unemployment, political
instability, and the country’s economic conditions. The major economic factors for the company are cost of labour, the presence and
diversification within the international market. In terms of the legal factors, Tesco plc is ought to comply with the Food Retailing Commission
(FRC) stringent practice code (Hammad, 2015).
Looking at the Boston Consulting Group (BCG) Matrix, the matrix is comprised of cash cows, stars, question marks and dogs. For Tesco Plc.
their fresh meat section is the cash cow of the company (Medarac, 2014). Tesco has several star products, one of which is the Tesco Bank. The
question marks of the company are Tesco lard, it can produce some profit, but it is not highly demanded by the consumers. As for the dogs,
Tesco’s mobile segment is in the dog section of the BCG matrix for Tesco Plc (Accolla, & Garini, 2017, July). The report provides an overall
outlook on the strategic planning of Tesco Plc, which is inclusive of the strategic planning tools and in what manner they are used by the
company. In addition to this, in what manner Tesco complies with the legal and economic requirements of the countries in which it operates as
well as the opportunities it can acquire and the threats which Tesco Plc, might face.
Tesco’s vision and mission must be:
A company which wants to be needed and wanted by each and every market in the world.
It wants to be a growing business which will be full of opportunities. It wants to be a company which will implement innovative idea in its
business operation.

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Apart from this, one of their major aim is to be an organization which will be able to earn the trust of the customers with their business activity
as the formation of the customer loyalty is a much needed vision for the organization as well.
Competitive Profile Matrix
Tesco
Plc.
Tesco
Plc.
Sainsbu
ry
Sainsbu
ry
ASD
A
ASD
A
Morriso
n
Morriso
n
Critical
Success
Factor
Weigh
t Rating Score Rating Score Rating Score Rating Score
Advertisi
ng and
Marketin
g 0.1 3 0.3 2 0.2 3 0.3 1 0.1
Packagin
g 0.1 2 0.2 1 0.1 2 0.2 2 0.2

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Product
Quality 0.1 3 0.3 2 0.2 2 0.2 2 0.2
Brand
Loyalty 0.2 2 0.4 1 0.2 1 0.2 1 0.2
Customer
Taste 0.1 2 0.2 2 0.2 2 0.2 1 0.1
Price 0.4 4 1.6 2 0.8 1 0.4 2 0.8
Total 1 3 1.7 1.5 1.6
Internal Strengths:
Diversified Customer Base: Tesco had a wide range of customers from different fields including Oil and Gas companies, drilling contractors,
equipment brokers which enables the organization to ignore the dependency on a particular segment of the business operations in order to
generate the revenues.

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Products and Services: The organization is able to offer six model systems of the top drive systems which inherits changes managed by the
organization depending on the customer’s preferences. The organization offers a wide range of products with efficient after sales services which
helps the organization to hold their customers for a longer period of time.
Weakness:
The organization is significantly dependent on the UK and Europe market for the generation of the revenue and that is not a good sign for the
organization as the organization will not be left with any other developed option as target market.
Tesco significantly focused on increasing the price in order to increase the profit margin in the intensely competitive market which was not an
appropriate strategy by the organization in order to survive in the competitive market as that was putting intense pressure on the customers.
Long Term Objectives:
The organization is primarily having three objectives which are:
The expansion of the target market into different markets other than the UK and Europe market which will enable the organization to have the
second option in case of any sort of emergency like inflation (Brannen, Moore and Mughan, 2013).
With the significant size of the organization, it is subjected to immense amount of cultural differences among the employees of the organization
which needs to be nullified in future.

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The usage of the patents needs to be carried out carefully by the organization as it is observed that the organization faced significant amount of
criticism due to the infringement in the usage of the patents.
Implementation of the recommendations:
The business expansion or the midmarket capturing can be done in order to create substitutes for the existing market. It can be done by offshore
manufacturing. In case the organization is not considering concept of the relocation of the infrastructure feasible, they can implement the plan of
outsourcing (Wood, Coe and Wrigley 2016).
The Human Resource Management of the organization must implement adequate cultural training for the employees so that the employees be
able to perform as a team in a more effective manner.
Review:
The success of the business expansion plan will be evaluated by the record of the generation of the revenue to be presented in the Annual
Business Report.
The success of the employee cultural training will be reviewed by the report of the employee integration in the organization and along with that
the report of employee efficiency in team work will also be instrumental in reviewing the success of the strategy.

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References:
Ayodele, A., Abdallah, N. M., & Issaka, Y. USING TESCO AS A CASE STUDY.
Brannen, M.Y., Moore, F. and Mughan, T., 2013, September. Strategic ethnography and reinvigorating Tesco Plc: Leveraging inside/out
bicultural bridging in multicultural teams. In Ethnographic Praxis in Industry Conference Proceedings (Vol. 2013, No. 1, pp. 282-299).
Wiley/Blackwell (10.1111).
Grundy, T. D. (2017). Dynamic Competitive Strategy: Turning Strategy Upside Down. Routledge.
Hammad, A. (2015). Strategic Change and Its Management to Expand Business Through Implementation of Models: A Case Study of Boots
UK.
Jenkins, W., & Williamson, D. (2015). Strategic management and business analysis. Routledge.
Medarac, H. (2014). Matrix Marketing and Technology Innovation-The Development of Strategic Marketing Model Building (Doctoral
dissertation, PhD thesis, Leeds Metropolitan University, Leeds, UK).
Wood, S., Coe, N.M. and Wrigley, N., 2016. Multi-scalar localization and capability transference: exploring embeddedness in the Asian retail
expansion of Tesco. Regional Studies, 50(3), pp.475-495.

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