Strategic Management Report: Tesco PLC - Strategies and Analysis

This report provides a strategic management analysis of Tesco PLC, a major food retail company in the UK. It begins with an introduction to strategic management and its importance. The core of the report examines Tesco's competitive environment using Porter's Five Forces model, assessing the threats of new entrants, bargaining power of suppliers and buyers, threats from substitutes, and rivalry among existing players. Subsequently, the report utilizes the VRIN model to evaluate Tesco's strategic resources and capabilities, focusing on value, rareness, imitability, and non-substitutability. Finally, the report addresses stakeholder analysis, identifying key stakeholders such as employees, government, and customers and discussing how their relationships are managed. The report concludes with a summary of findings and references.

Table of Contents
INTRODUCTION...........................................................................................................................................3
A Porter’s five forces model........................................................................................................................3
B. Strategic Resources & Capabilities..........................................................................................................4
C. Stakeholders............................................................................................................................................6
D. Business & Corporate Strategies.............................................................................................................7
CONCLUSION...............................................................................................................................................8
REFRENCES..................................................................................................................................................9
STRATEGIC
MANAGEMENT
(Completed file)

INTRODUCTION
Strategic management is a continuous process which helps an organization to analyze, monitor
and assessment its activities in order to accomplish its goals and objectives. In every
organization strategic management plays an essential role as it aids them to survive for longer
period of time at competitive market place. By the help of this, management makes plan for
dealing with future competencies and develop its own position in the working area (Ansoff and
et. al., 2018). Also, they develop innovative ideas and opt advanced technologies for fulfilling
customers need or requirement and make strategic balance between both organizational
resources and goals in the market. As this present research report, it has been disused about the
food retail company of United Kingdom. In this report covered porters five force model for
analyzing competition at competitive market area. Also, VRIN model helps in organization to
analyze its internal capabilities in an effective manner. In addition to this report three
stakeholders are to be takes i.e., employees, government and customer for identifying how they
marinating effective relationship in an organization for providing services to customers. At last,
scope of acquisition is going to be covered in this report.
A Porter’s five forces model
This model is a framework which is used by an every organization for analyzing its
competition in the market environment. It helps business to deal with the market situation and
gain competition in order to accomplish goal and objectives. The main motive of porters five
force model is to analyze or identify their strengths and weakness and guide them to enhance
their level of competition at market place ( Noe and et. al., 2017). Along with this model ensures
to determine companies industrial structure and its corporate strategy for maintaining their
growth and sustainability in an appropriate way. In this section chosen business entity is Tesco
plc group that is based on general merchandise retailer and multinational company. This is
founded by Jack Cohn in the year 1919 and its headquarter in Welwyn Gaden City,
Hertfordshire, England, United Kingdom. Tesco plc company is basically a supermarket or
superstore and their motive is to provide food or any other item at their potential customers in all
around the word and cover huge market share. This company used porters five force model for
measuring its competition, attractiveness, and profitability at market place. Managers of Tesco
plc should use this model for understanding that how this five competitive forces enhance
profitability and establish some strategies for increasing competition and huge loge term
profitability in retail industry. The porters five forces model of Tesco company are described as
below:-
 Threat of New Entrants: - In this force threat of new entrants of Tesco plc is higher as
there are huge scope of expanding business and earning profit. This is because now a
day’s people love to explore new places or eat their special dishes so it is easy for any
company to enter into the market by bringing innovation or doing something new for
attracting customers towards their brand at market place and run business in an effective

way. In context to, Tesco if they make continuous improvement in their food and
provides in good quality at affordable price then it will be easy for them to retain old
customers and attract new customers for longer period of time ( Wheelen and et. al.,
2017).
 Bargaining Power of Suppliers: - The bargaining power of suppliers of Tesco plc is
weak as their number of suppliers high and its switching cost is low so, this is easy for
Tesco plc to switch from one supplier to another supplier. Simultaneously, this is not easy
for supplier to switch easily from Tesco as it can be lead to loss for them.
 Bargaining Power of Buyers: - In this force the bargaining power of buyer of Tesco plc
is high as they have many other options to switch the company. This is because
customers want various offers in the product at minimum price which is difficult for
Tesco to maintain their profitability for longer period of time. Along with this, if a
company brings continuously new products at market then customers will automatically
get various discount or offers on established products. Then this will be easy for Tesco to
can maintain the limit of bargaining power of buyers by keep coming with new products.
 Threat from Substitute Products: - The threat from substitute products of Tesco is high
as when new company entered into the market then there will be various options for
customers to move out for another company. This will be done only if substitute product
can meet similarly to customers need or requirement is highly satisfied them from present
offering company then it will be difficult for company to survive long time at competitive
market. In reference to Tesco plc, can survive long period of time at market by providing
both good quality of services and products to customers and understanding the basic need
of them.
 Rivalry among the existing players: - If rivalry is not so great from the existing players
then they should have decrease prices and overall profitability of the industry
( Rothaermel, 2015). In context to Tesco plc, it plays high competitive retail industry role
at competitive market as they have loyal customers which enhancing their sale and
marinating profitability or sustainability at market for long period.
As per the above mentioned Porters five force model of Tesco plc helps their manager to analyze
the whole market and gain competitive advantage for enhancing its profitability in an effective
manner.
B. Strategic Resources & Capabilities
By using VRIN model analyze the resources and capabilities in competition to the other
supermarkets.
VRIN Model: It is a framework majorly used by companies in order to analyze the key
resources as well as capabilities of the organization. A business entity is a bundle of valuable
resources. Each and every business organization differs from each other on the basis of what

these resources are and how they all are combined with them. Resources includes assets, raw
materials, information, knowledge and many more which will aid the company in order to
successfully accomplish their organizational goals and objectives as well as to gain the
competitive advantage ( Ginter, Duncan and Swayne, 2018). Some of these resources give
competitive advantage to the business. With the help of VRIN model TESCO will be able gain a
complete framework about the capability and resources of the organization. VRIN stands for
Value, Rareness, Imitability, Non-substitutable. All these elements are further explained in
detailed:
Value: It refers to all those resources of a company which bring value to the products and aid the
business organization to gain competitive advantages at the marketplace. In addition to this,
these are those resources which bring value to the products and services offered by the company.
In the present context of TESCO, it has been analyzed that long there are various resources
which bring value to their company. Along with this, company uses latest technology in order to
provide best products and services to their customers which will bring competitive advantages to
the company.
Rareness: These are those resources which are available to all rivalry companies and rarely
provide any kind of competitive advantages to the organization. In addition to this it includes raw
materials, employees and many more things which are similar to every competitive company and
produce very rare or little advantage for the business entity. In reference to TESCO, it has been
said that every organization have employees in order to produce goods and services. As a result,
employees create very rare competitive advantage to the company.
Imitability: It is the ideal resource of one company which is not easily copied by any other
rivalry company. These are those resources which are not easily copied, imitate or produced by
any other companies as it is suitable for one organization. In the present context of TESCO,
company uses customized software in order to manage their employees and other business
activities. Such software are prepared according to the requirement of one company and not
easily copied by other organization. Every organization has its own working culture so that
software which is suitable for a company is not suitable for other ( Hill, 2017).
Non-substitutable: Those resources come under this part which is very difficult to copy as it
includes very rare resources. There are various food retailing companies which produce similar
kind of products and services in order to satisfy the needs and wants of customers. In reference to
TESCO, non-substitutable products are those which are not easily copied by other company in
order to produce goods and services. TESCO is creating such strategies which will aid them in
creating competitive advantages and which are not easily adopted by any rivalry company.
As per the above mention, it has been analyzed that there are various resources used by
an organization in order to maintain sustainability at the competitive marketplace. In order to
analyze internal capabilities, potential and resources company use VRIN model. Managers and

business analysist use this model to assess company’s internal resources which will aid them to
gain competitive advantages. In addition to this, present company in this report which is TESCO
is gaining competitive advantage at the marketplace as compared to its rival companies. After
analyzing internal resources of the company, with the help of VRIN model it has been analyzed
that there are various resources which bring value to the products and services of the company.
C. Stakeholders
Stakeholder analysis along with stakeholder relationship and set out how managers will
manage these relationships.
Stakeholder analysis: It is a process a process where interest of shareholders has been
assesses in order to accomplish a plan or project. It is a key part of stakeholder management
( Hitt and Duane Ireland, 2017). It is a method used by various companies very frequently while
preparing a project in order to analyze the changing attitude of potential stakeholders. In the
present context of Cambridgeshire Fire and Rescue Service, stakeholder analysis includes three
main stakeholders which are customers, employees and government. Some of the stakeholders
have the power to influence working of the company, some of them do not affected, so it is the
responsibility of a manager to determine such stakeholders. High power, highly managed individuals: In this part of the shareholder analysis matrix
it has been said that, company must engage those people who have high power. Along
with this, management team of the company put efforts in order to satisfy stakeholder’s
needs. In context to Cambridgeshire Fire and Rescue Service, employees have high
power and mangers should involve them in their new projects. In addition to this, to keep
the employees of the company satisfied, management team should involve them in their
decision making process.
 High power, less interested individuals: Under this section of stakeholder analysis
matrix, management team of the company has to put lot of work and effort in order to
keep their stakeholders satisfied. But on the hand they become bored if managers of the
company continuously message them about the changes made in the organization. In
reference to Cambridgeshire Fire and Rescue Service, government of the country has
high power but they are less interest in the changes take place within the company
( Lasserre, 2017). Along with this, if management team of the company provides
information to the government on a regular basis they become bored. As a result, they
will show less interest towards the company.
 Low power, highly interested individual: Individuals comes under this section needs to
be informed adequately as no major issues or problems are arising within the
organization. In the present context of Cambridgeshire Fire and Rescue Service,
customers of the company have low power. These are the individuals who provide help to
the company in regards to the detail of a particular project.

 Low power, less interest individuals: In the present context of Cambridgeshire Fire and
Rescue Service, it is the duty of management team of the company to examine such
stakeholders who have less power over the company. But on the other hand, by providing
them excessive information and details about a project, stakeholders become bored and
move towards other organizations.
For example, employees and the government of the country have high power and interest in
the project. But on the other hand, customers might have high interest but they do not have
enough power towards the project of the company ( Morschett, Schramm-Klein and Zentes,
2015).
In order to manage effective relationship of company’s stakeholders, managers of the
company should provide accurate and relevant information to their customers. For marinating
long term relationship with their Employees Company and management team should provide
healthy working environment to their employees. Along with this for maintain effective
relationship with the government, managers of the company should follow all the legal rules and
regulations and maintaining the surrounding healthy and safe. As a result, by adopting such
things managers can maintain a smooth and healthy relationship with their stakeholders.
D. Business & Corporate Strategies
Examine the changes in the scope of Sainsbury as a corporate entity following acquisition of
Home Retail Group.
Sainsbury is one of the biggest supermarket chains in UK, which was founded in the year
1869 by John James Sainsbury. In the year 2016 company acquire a Home retail group plc in
order to create one of the largest food and non-food retailers in UK. There are various
motivational factors for Sainsbury in order to acquire home retail group. Acquisition is a process
when a company acquires or purchases most of the shares of other company and gain all the
control or power of the organization. These are various reasons for acquiring a company which
includes diversification, increase in market share, growth strategy and many more. Some of the
reasons or factors are as follows:
Growth Possibilities: Company will expand their growth in other countries after acquiring other
competitive companies. In the present context of Sainsbury, company acquire home retail group
in order to increase their growth and capturing other competitive marketplace. Acquisition will
aid Sainsbury in developing new market along with development of new products. With the help
of this Sainsbury will be able to grow more in the marketplace and gain more competitive
advantages by satisfying needs and wants of customers.
Increase in Sales: With the help of new product development as well as by capturing new
market Share Company might enhance their sales ( Frynas and Mellahi, 2015). After acquiring
home retail group, Sainsbury expand their business and provides high quality goods and services

to their customers. As a result, company will be able to increase their profitability as well as
performance. In the present context of Sainsbury, company provides attractive schemes and
coupons to their customers which will aid them to increase their sales at the competitive
marketplace.
Reduce competition: In today’s competitive world there are various substitutes of a product
available at the marketplace. In order to reduce competition among similar companies,
acquisition is the method adopted by different organizations. In context to Sainsbury, company
acquire home retail group in order to reduce competition from the marketplace. along with this,
by acquiring home retail company, Sainsbury will be able to attract more and more customers
will enhance their profitability as well as performance of the company ( Morden, 2016).
Diversification: After acquiring home retail group, Sainsbury will be able to diversify their
market share. Both the companies deal in retail industry, but services and goods provided by
them are totally different. In the context of Sainsbury, company deals in consumers goods. With
the help if acquisition company will be able to diversify their product line across the world
( Bryce, 2017). As a result company can enhance their profitability and maintain sustainability at
the marketplace.
New Technology: Sometimes for an organization, implementation of a new technology within
the organization becomes very costly. As a result, company acquires other company which
already has implemented latest technology in their business venture. In the present context of
Sainsbury company acquires home retail company as well as their latest technology. With the
help of this, company might able to produce effective goods and services by using such
technologies.
As per the above mentioned, it has been analyzed that there are various external as well
as internal factors will leads to acquire other business ventures. By acquiring Home retail group,
Sainsbury will be able to diversify its market along with increased profitability.
CONCLUSION
As per the above mentioned report, it has been analyzed that in order to survive in the
marketplace for a longer period of time strategic management plays very important role. In this
report porters five force models has been examined in context to TESCO, along with this with
the help of VRIN models company will be able to analyze internal capabilities and resources of
an organization. VRIN models are used to examine the internal potentials of a company. With
the help of these resources company will be able to gain competitive advantage at the
marketplace. Along with this, this report helps in stakeholder analysis in which three
stakeholders have been taken. These stakeholders are employees, consumers and the government
of the country. At last, this report has examined the motivational factor for acquiring Home
retail group.

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