Strategic Analysis of Tesco: Business Development Report

This report presents a comprehensive strategic management analysis of Tesco, a leading multinational supermarket. It begins with an introduction to strategic management and its importance, followed by an overview of Tesco's strategic directions, including human capital, strategic planning, and technology strategies. The report then applies Porter's Five Forces to analyze the competitive environment, assesses Tesco's strengths, weaknesses, opportunities, and threats through SWOT analysis, and identifies its competitive advantages. It also explores the probable industry scenario, considering the impact of COVID-19. Furthermore, the report delves into Tesco's mission, vision, and VRIO analysis of its resources, followed by an application of the Ansoff matrix to explore growth strategies. The resource implications of the recommendations are discussed, leading to a conclusion on the importance of strategic management for Tesco's continued success. The report also includes references to support the analysis.

Strategic management

Table of Content
 Introduction
 Strategic directions followed by Tesco in previous years
 Porter’s five forces
 SWOT analysis
 Company’s competitive advantage
 Probable industry scenario

Table of Content
 Mission and vision of the organisation
 VRIO analysis
 Ansoff matrix
 Resource implications of the recommendations
 Conclusion
 References

Introduction
Strategic management is the process of making efforts for effective management of all the
operations that are performed by the enterprise for meeting the long-term objectives. It is very
important for all the companies to make sure that they are paying attention towards it as it will
facilitate the accomplishment of difficult tasks. In order to make sure that all the predetermined
plans are being implemented successfully it is very important for all the entities to pay attention
towards it. It will help them to analyse the steps that should be taken to meet future goals and
objectives. This presentation is based upon Tesco which is one of the largest multinational
supermarkets around the world. It is operating its business in various countries. This
presentation is mainly based upon the value of different models and decisions that were taken
by the enterprise to attain growth.

Strategic directions followed by Tesco in previous years
 Tesco is one of the largest retailers which are operating business at global level. It is very important for
the organisation to analyse all the strategic directions that are followed by it so that their impacts could
be determined. Some of them are human capital strategy, strategic planning and technology strategy. All
of them are the strategic directions that were followed by Tesco in previous years. Human capital
strategy helped Tesco to enhance the profits by 20% which provided growth to business. With the help
of strategic planning Tesco tries to analyse suitability of the strategy which will be implemented in
future. With the help of it, Tesco recorded a profit of 3.8 billion from sales. Technology strategy is used
by Tesco to make changes in the technology which is used by it. It helps it to attain growth.

Porter’s five forces
 Porter’s five force analysis is used by companies to analyse the
impact of five different types of forces upon functionality of business.
These are threat of new entrant, threat of substitute, bargaining power
of supplier, bargaining power of customer and competitive rivalry.
 According to the analysis the threat of new entrant for Tesco is
moderate and for the purpose of dealing with it, Tesco is required to
pay attention towards the quality of all the items that are sold by it to
the customers. It will help to reduce the possibility of negative impact
of new entrant on business.

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 The bargaining power of suppliers for Tesco is low because of the large number of
them in the industry. It helps the organisations to choose the supplier which is offering
the goods on lowest price so that funds could be saved for future.
 Competitive rivalry in the supermarket industry is very high because of end number of
competitors for Tesco. Some of them are Sainsbury’s Asda, Walmart etc. Due to this
Tesco have to face very huge competition from other organisations. In order to deal with
it is very for the organisation to attract large number of customers by setting competitive
prices for all the items that is sold by it.

SWOT analysis
 In all the organisations a specific model for the purpose of identification of all
the strengths, weaknesses, opportunities and threats is used. It is known as
SWOT analysis. It can help to analyse actual position of business and
facilitate the managers to formulate effective decisions for betterment of
business. Tesco is using it to determine all the key elements of entity which
are resulting positively as well as negatively for it.
 The main strength of Tesco is that it offers its products to around 18 nations
so it captures a very large market. It is having strong customer base by
offering good quality items to them. Apart from this, it is one of the
productive grocery stores on the planet which helps it to establish positive
market image.

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 From the analysis of opportunities, it has been identified that Tesco can offer natural
food to the customers in future which will help it to capture larger market area and
establish a positive market image. Apart from this, Tesco can also expand in new
countries where it has not yet established its business.
 There are various threats for Tesco and the major one from all of them is the
competitors such as Aldi, Walmart, Asda etc. The governmental policies are changing
continuously and due to which Tesco will be required to change its strategies on
continuous basis. Ignorance of any of the policy will leave negative impact upon
business.

Company’s competitive advantage
 Tesco is mainly focused with price and promotion so that it can attain competitive
advantage for business. With the help of it, the managers try to make sure that the enterprise
will be able to reach the long-term business goals or not. Tesco sells most of the products at
very low price as compare to its competitions which enhances its competitive advantage and
also helps to enhance profits by a very high percentage. On the other hand, all the
promotional strategies that are formulated by Tesco facilitate it to be the first choice of
clients. It provides timely discounts to all its clients so that it can be their first choice it is
the main promotional strategy which is focused by it.

Probable industry scenario
 After the impact of COVID 19 it becomes very tough for the Retail Industry like Tesco, Marks and
Spencer Sainsbury’s and many more to make their comeback and hidden competitive advantage within
the market. In relation with this retail sector face lot of problems and challenges because of the current
pandemic that leads to bring major changes within the technological and digital line of the company.
In terms of this Tesco need to offer their product through online mode and make everything on the
online platform like payment purchasing selling and so on. In relation with this Tesco adopt new and
advanced technology with more security in order to offer their product within the market and also tries
to reach out to their customers all over the world.

Mission and vision of the organisation
 Tesco develop their mission and vision by considering the requirements of market and their
potential customers and always try to figure out the mid way to fulfil requirement and demands of
customers and develop prominent strategies according to it. In relation with this the mission of
Tesco is to develop unique products and bring innovative ideas within the market that leads to
attract maximum number of customers towards their organisation and also helps in maintaining
their image within the frequent changing business environment.
 Tesco also tries to provide significant satisfaction to their customers by offering products
according to their want. Moreover the vision of company is to provide high quality and valued
products and items to their customers that help in maintaining healthy relations with customers and
retaining them with the company for the longer period of time.