Strategic Report: Tesco's External Environment, CSR, and Strategies

This report provides a comprehensive strategic analysis of Tesco, a major multinational grocery and merchandise retailer. It begins with an introduction to strategic management and its importance for business success, followed by an examination of Tesco's external business environment using PESTLE analysis, comparing it to Asda. The report then delves into a VRIO analysis to assess Tesco's resources and capabilities, identifying its competitive advantages. Furthermore, it explores Tesco's corporate social responsibility (CSR) initiatives, highlighting its efforts to improve labor policies, reduce environmental impact, and promote community involvement. The report also discusses CSR strategies aimed at enhancing organizational success, concluding with a summary of the findings and a list of references.

Strategic
Report
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Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
External business environment and competitiveness.............................................................3
TASK 2............................................................................................................................................8
Corporate social responsibility initiatives..............................................................................8
TASK 3..........................................................................................................................................10
Corporate social responsibility strategies to encourage organisational successes...............10
CONCLUSION..............................................................................................................................12
REFERENCES..............................................................................................................................12
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INTRODUCTION
In order to make business successful it is necessary for the company to formulate and
execute various strategies and approaches in order to obtain growth and longer sustainability
within market place. Strategic management is associated with the development and execution of
the objectives of goals along with initiatives to accomplish various objectives of the company.
Business strategy can be defined as the competitive moves or actions that a business in order to
attract and retain customers, compete effectively, strengthening performance and achieving
organizational goals in adequate manner. Making business strategies is crucial for the company
as this as mean outline the method and ways we should we should be utilize to reach the desire
ends (Mundy, 2019). This is formulated by the top management with an integrated framework in
order to discover analyses and exploit beneficial opportunities while making optimum utilization
of resources and strengths and balancing weaknesses. It is the combination of the proactive
actions in order to enhancing the market position of company along with overall performance
and responses to the unexpected developments and market conditions. This report is based on
Tesco which is a British based multinational grocery and merchandise retailing company with
headquarter in Welwyn garden city, England. This is a third largest retailing as per the gross
revenue measurement. The below report is consist of evaluation of business external
environment along with dynamic capabilities while comparing two companies. Moreover it also
includes analysis of corporate social responsibility of company and CSR strategies use for
enhancing organizational success.
MAIN BODY
TASK 1
External business environment and competitiveness
External business environment is refers to the all the outside factors or influences which
has the direct impact over the operations of the company. In this company e must react taking
usage of various strategies and approaches to keep up the flow of operations organisation so that
desirable outcomes can be obtained (Change and. et. al., 2020). In order to analyses external
environment pestle analysis has been use which is a framework that is utilized by organisations
through which various factors are determine that are prevailing in the market and has direct
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impact on the working and performance of the company. Pastel analysis of Tesco is done below
in comparison to Asda:
Political factor:
This is defined as how and what degree a government step-in the economy. It is also
refers to to the decisions and rules made by the government in which it includes government
policies, political stability, foreign trade policy, tax policy, labor law, trade restrictions etc. In
UK, there is a government stability which is benefit for both the company Tesco and Asda as
with this decision making of the companies will not going to be get impacted. But there is
problem with Brexit proposed legislation which might impact the revenue for both the
companies.
Economic factor:
This is the practice which has a significant impact on how organisation does operations
and how profitable they are. It is associated with economic growth interest rate exchange rates
inflation disposable income of consumer etc. Tesco is the multinational company which has been
contributing in economy while providing employment opportunity in a large number (Waterton,
2021). In which it is necessary for the company to aware about policies for taxation so that they
can take in consideration for own benefits. Moreover, Asda need consider economic factor such
as labour supply and demand, energt prices etc. as these all has the direct impact over the
company's pricing strategy. But due to lock-down bin 2020, many people has lost thei8r job due
to which disposable income of consumers and shopping activities get reduced that has direct
impact over revenue of both the company.
Social factor:
This is also known as socio-cultural factor which is refers to the area that in walls
standard belief and attitude of the population. This is associated with the family, friends, social
group that has impact on individual's opinion attitude and standard of living. UK is the consist of
he multicultural population in which trends has been indicates that customers have moved over
the bulk shopping and one-stop shopping. Along with this customers become more aware of
health issues for this Tesco has accommodating the demand for organic product and also
increased the number of non-food items for sale (Tsetsura, 2020). On the other side, Asda is
enjoying the social changes with development of economy in which people have disposable
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income to spend. Young population in UK have money to spend that provide support to
co0mpany to enhance revenue as well as customers base.
Technological factor
This is defined as the all externally generated changes in technology and process that are
used by organization. Technology in UK is changing or upgrading at the fast pace, in which
Tesco has utilised them as in terms of online shopping , social media performance etc. in order to
influencing the customer, through offering them various technical advantages. The company has
been has taken the initiatives to successfully shift trends of shopping to online along with 43% of
its shoppers today. Moreover, ASDA has also im0pliemnnted various latest technology which
helped in different ways. This has been used in retail outlet and distribution that has provide
support in the reducing wait time.
Environmental factor:
This is refers to food water light pollutants natural calamities etc. That has direct impact
on living beings. In this Tesco has take the various initiative for improving the conditions of
environment and for making sustainable society. In this initiative has taken to eliminates and
reduce all the non-cycle plastic to the minimum level and explore more opportunity to use the
residual plastic which still being utilised. On the other side, environmental factor in UK has
helped ASDA to becoming the one of the most sustainable companies (Eken, and Gezmen,
2020). For this ASDA has been investing more in sustainability and CSR activities that also has
adverse impact over financial of the company.
Legal factor:
This is refers to laws and regulations made by government in respect to the particular
industry. This includes health and safety consumer rights and law product safety maternity and
paternity leave etc. the changes in the government policies has direct impact over the operations
of the company such as food retailing commission have been formulate and provides certain
rules and regulation that has to be followed by the all companies in retail sector (French, and
Gordon, 2019). In 2016, Tesco has the certain allegations in terms of age and gender bias which
is prevailed at working environment. This has impact their image of company within market
place. Moreover, ASDA has been following the rules and regulation in which it is operating such
as it cannot pay less than minimum wages to nay any employees in UK.
VRIO ANALYSIS:
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VRIO analysis is a framework that develops company’s largest strategic scheme as this is
a basic strategic process in which any form initiated with the vision statement along with internal
and external analysis strategic choices and strategic execution. This is also defined as a tool
which helps in to understand the elements of business which has been provides a long term
competitive advantage. It might be resources capability partnerships all product and anything
which provides advantage to company.
VRIO analysis of TESCO
Resources valuable rare imitable organized
Human
resources
- - -
Distribution
network
- - - -
Patent - -
Financial
resources
- - - -
Human resources: This is define as the workforce of the company which has been work
together to accomplish organizational goals, which is highly valuable for the Tesco as this has
been leads to high productive outcome. It is also rare and in organized form, and cannot be
imitate by other rival firm. Thus it shows high competitive advantage.
Distribution network: This is refers to the channel or path used by the company in order
to transfer goods from production place to final users (VELIKAYA, SVINTSITSKAYA, and
SCHMERLING, 2018). This is highly valuable for Tesco as this provide support to reach
consumers. It is rare and organized but can be imitate by rival firms, therefore, this reflects
sustainable competitive advantage.
Patent: It is define as the tool which has been used by the company to protect its
products, service, process and brand. This is highly valuable as it has been allow company to sell
its products without any competitive interference. It is rare for Tesco as this not easily available
and are not possessed by competitors and cannot be imitate by any other firm. But this is not
organized as Tesco has started selling its patent before expire.
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Financial resources: These are the most valuable resources for Tesco as this is needed to carry
out the business effectively and smoothly (Kormann and Suberg, 2021). Along with this, it is
rare and in orgnised form as this has been provides proficiency in the operations of business but
this can be imitate by other firms thus this presents sustainable competitive advantage.
VRIO analysis of ASDA
Resources Valuable Rare Imitable Organised
Financial
resources
- - -
Management of
operations
- - - -
Leadership - - -
Employees - - - -
Financial resources: This is defining as the money which is needed by the company in
order to carry out the business operations smoothly so that desirable outcomes can be achieved in
effective manner. It is highly valuable for ASDA as this help in to invest in external
opportunities to attain growth (Knüttgen, and Loogen, 2018). This is rare as this is only
consisting by few companies, it is organized within ASDA and cannot be imitate by others firms.
Management of operations: It is defined as the administration of business practices
which has been develop the highest level of efficiency possible within organization. This is
valuable for ASDA in which it is rare and organised but this can be imitate by other firms. Thus,
this represent sustainable competitive advantage.
Leadership: This is refers to the ability of an individual to influence, guide, direct to
employees and teams towards accomplishment of organizational goals. This is valuable as this
help in enhance profitability, productivity ad overall performance. This is rare and cannot be
imitate by other firm as every firm use their own different styles as per working culture.
Employees: Workforce in ASDA is valuable which is rare and organised but can be
imitate by other firm through providing better incentives and working conditions.
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TASK 2
Corporate social responsibility initiatives
Corporate social responsibility is refers to the self regulating business model which has
been provide support company accountable as socially for itself, stakeholders and for the general
public. This is a broad concept which is consisting of the many form depending upon the type of
company or industry. With support of CSR programme or activities and volunteer efforts,
organisation can provide benefits to the society along with boosting their brands (Kemp, 2018).
Moreover, CSR activities also hep company to build strong relationship among employees and
corporations, boost morale and help both employer and employee to feel more connected with
the world around them. Companies have been adapting the CSR activities to grow the business to
the point where they can give back to society. There are various initiatives taken by different
companies in different ways in order to get relative advantage some of them are discussed below:
CSR initiatives of Tesco:
Improving labour policies: This is define as the treating employees fairly and equally
along with ethically through which feel valued and connected to the company for longer period
of time. This is followed by Tesco as this is an multinational company which has been operating
at different international locations with labour law that are differ in different countries. This
initiated taken by the company in which it has formulate and implement various strategies
through which all the labour are treated ethically and equally at all location. With help of this
company is able to maintain its labour and brand image within market place.
Environmental policies: This is the primary focus of many companies in their
commitments for the CRS activities through which they can improve the environmental
conditions along with sustainability. In which Tesco has clearly committed it will going to
reducing its carbon foot print by 50% by 2020. carbon footprint is consist of maount of
greenhouse gases such as carbon dioxide, emitted by an organisation which is depend on
business operations, their size, and their locations. The action taken by Tesco to reduce carbon
footprint has been considered beneficial for environment (Baiev, and. et. al., 2019). Along with
this has been also undertaking various initiatives for remove and reduce all the non-recycle
plastic to then minimum level of usage. In last years company has changed its 800 products
which provide support to reduce 4000 tones of -plastic waste. But taking these steps has impact
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over the company's financial as this has been spent more for little gain through which
profitability of company can be impacted.
Volunteering: Participating in the volunteering in community events has been reflects the
company's sincerity as by doing good for society without expecting anything in exchange this
has been help the company in to enhance its overall brand image and reputation. Tesco has been
initiated through identifying new and creative method to encourage and reward the voluntarism
of employees in which they have been providing support to society and environment. Moreover,
this is also done through which customers has been seen them as entity which is socially
responsible and fulfilling requirement in along with many more responsibilities.
CSR initiatives of ASDA:
Volunteering: Asda has been also participate in the volunteering preprogram for the good
cause in which Asda has been support the charity “Tickled Pink” and have various days of
fundraising to raise money with the aim of making awareness for breast cancer. In this they have
decided the day on which employees have to wear pink cloths as to show their support and build
a image of brand (Ruokonen, and Temmes, 2019). This has been providing support to Asda in to
build a reputation on international level and help in top attract more customer base.
Environment policies: This is the initiatives taken by the companies in order to protect
and improve environment conditions. For this Asda run “go green for schools” scheme in which
customers that are local are provided rewards with the points whenever they will use the same
carrier bag or bag for life that is used earlier as well and these points are given to the schools that
can claim for the green prizes. This initiative has been taken to reduce waste in which Asda has
an ongoing effort with its suppliers to cut the amount of packaging which is used for all products.
This is the sustainable and affordable alternatives that will be use to reduce waste and its impact
over environment.
Labour practices: In today's scenario business leadership has been determine that
diversity at workplace is beneficial for all when every employee is getting alone and working as
team. Labour policy has to be applied on all even those which are at the highest level of
company. For this Asda has been review its own diversity policies and protocol which will
provides support to determine complaints and violations (Sargen, 2020). This build a good image
of company along with this, also help in to build positive working culture that will boost good
morale and high productivity.
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There are various benefits which has been gained through corporate social responsibility and this
is an essential responsibility which for the company which operating at international level.
TASK 3
Corporate social responsibility strategies to encourage organisational successes
It is necessary for the multinational company to induce corporate social responsibilities in their
operations so that competing in international market will become easy and it can promote its
brand in effective manner through which their customer base also get increased (Um and. et. al.,
2018). As socially resposible company demand more complex and strategic decision making for
the allocation of resources and corporate governance and for this there are various strategies used
by the multinational company for CSR that has been also contribute in the success of a company.
Some of the strategies are discussed below:
strategies of TESCO:
Promoting health and inclusive workplace cultures: Social responsibility has to start
with the workplace culture and the internal community. Organisation which has been following
this in their operations has developed the environment in which their own employees develop
and shine. For this Tesco has been providing the training session which is considered as step for
right direction in order to maximizing the shareholders value (Zillner, and. et. al., 2019). High
value training effort has provides support to Tesco in communicate values across shareholder
segments. Along with this it is necessary for the company to recognize that diversity training is
just a one step for larger, ongoing strategy for establishing positive culture. Company with strong
work-place culture has developed positive feedback loops which has enhanced company's social
responsibility mission.
Designing goals with the measurable impact: Companies which are socially responsible
have set the measurable goals which have been keeping its business accountable for itself and
stakeholders. Tesco design the goals while keeping various priorities in mind in which those
priorities includes community impact, internal business practices, marketing reach and public
and government relations (Burdett, and Cameron, 2021). Moreover, time setting is a another goal
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setting consideration in which CSR manager of Tesco has consider both short term and long term
goals for a programme. It is the responsibility of CSR leader to set the goals which has been
reflects accurate time horizon. As per this socially responsible company are able to measure the
effectiveness of CSR programmes along with this, adopt the programmes accordingly with
priorities such as customer loyalty and improved reputation which provides success in the
multinational market.
Strategies of ASDA:
Aligning community impact goals with business practices: Organisation has to analyse
their goals of community impact along with the business practices, in which executive have to
work towards alignment between gaols and practices (Rough, and. et. al., 2021). This has been
happen sometimes that corporate social responsibility did not match their business practices
through which consumers are misleading that a company's product, services and practices are
socially or environmentally responsible. So for this Asda remain authentic to what are
community impact goals are which are align with business practices so that negative backlash
can be eliminated.
Leverage to their core capabilities: Company can accomplish authenticity when they are
taking usage of their strengths. This is most impactful strategy which is used by the Asda to be
socially responsible is to take the advantage of their strongest assets such as for Asda its brand
image, reputation of being one of the largest supermarket chain of UK is the strongest assets
through this company achieve authentic impact through social corporate initiatives. With this
becomes easy for company to utilize financials for social causes without any focus as its brand
image help in to make social responsibility program successful. In regards of this the best
socially responsible companies has been accomplished the clarity of the purpose through
considering and focusing on their core capabilities. This help in to attain higher position and
growth in the international market.
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CONCLUSION
As per the above analysis it has been concluded that business strategy is refers to the action
or moves taken by the company to attract and retain customers, compete effectively, building
strong competitive edge and strengthening performance for the better growth and longer
sustainability. Business has been operates environment which is consist of various opportunities
and threats that are prevailing within business environment. In this company has focus on
obtaining dynamic capabilities and relative competitiveness for the better growth. Corporate
social responsibility is a self regulating business model or strategy which is used by company to
be socially accountable that helps to build a better brand image and higher customer base.
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