MKT3031 - Entrepreneurial Strategy Report: Tesco PLC Analysis

This report provides a comprehensive analysis of Tesco PLC's entrepreneurial strategy, examining the company's approach to achieving its objectives and maintaining its market position. It includes an overview of the organization, a PESTLE analysis detailing the political, economic, social, technological, legal, and environmental factors impacting Tesco's business, and a SWOT analysis identifying the company's strengths, weaknesses, opportunities, and threats. The report also discusses Tesco's global market situation, key strategic objectives, and strategic choices, along with recommendations for improving its market position. The analysis covers various aspects of Tesco's operations, including its financial services (Tesco Bank) and telecommunications (Tesco Mobile), highlighting the challenges and opportunities the company faces in a rapidly changing market environment. This document is available on Desklib, a platform offering a wide range of study resources and AI-powered tools for students.

Entrepreneurial Strategy

TABLE OF CONTENTS
1. INTRODUCTION.......................................................................................................................4
2. Overview of the organization .................................................................................................4
3. Pestle analysis of the company ..............................................................................................4
3. Global market situation of the Organization...........................................................................7
4. SWOT Analysis .....................................................................................................................9
5. The key strategic objectives..................................................................................................11
6. Strategic choices....................................................................................................................11
7. Implementing strategies........................................................................................................13
8. Recommendations.................................................................................................................14
9. CONCLUSION..........................................................................................................................15
REFERENCES..............................................................................................................................17
APPENDICES...............................................................................................................................18

EXECUTIVE SUMMARY
Entrepreneurial strategy is a method used by company in order to identify their unique
approach and techniques to meet the objectives effectively. By using buiness strategy the tesco
plc has successfully achieved its goals and reach its customer base. With the help of strategies,
company can help guide the decision making process for resource allocation and improve
productivity as well.

1. INTRODUCTION
Entrepreneurial strategy is the systematic means through which a company establish and
manage its fundamental collection of relationships with its business environment. Every
organization has its own strategy which includes, few of them identify a problem that needs
proper solution and others. With the help of entrepreneurial strategy company will be able to
identify their unique and different approach. By using effective strategy, the firm will be able to
position themselves in the market. The present report will be based on Tesco plc, situated in the
UK providing various types of product or services to customers. With the help of PESTLE and
SWOT analysis, the company can easily find out major factors that may impact the business
operation. Furthermore, the report will provide detailed information about strategic objectives
and global market situation of Tesco plc along with recommendation to improve market position.
2. Overview of the organization
Tesco plc, situated in UK is one of the most popular brand which provide varieties of
products or services to customers. Tesco plc is the second largest retail company in the whole
world which provides large varieties of goods and services in the context of profit. The firm
achieve the title of third largest grocery company in the world which is measured by revenues.
A company offers great deals on products and services like homeware products, financial
services, books, toys, electronics, clothings, food items and groceries. Tesco plc has strong brand
equity in the world, by using effective marketing strategy the firm has achieved success into its
business operations. The firm has curated a large customer base and satisfy customers by
providing them quality services. Also, the major aim of the firm is to reduce price of products or
services but also maintain a good reputation of better quality. By using advanced digital strategy
and updated technology the company has successfully achieved progress in the retail industry.
3. Pestle analysis of the company
The PESTLE analysis highlights the different factors that may impact Tesco plc business
and its operations. By using this method, company can understand market dynamics and improve
its business strategies continuously.

Source: (Achinas and et.al., 2019)
Political factors- since the retail company operates worldwide, political factors greatly
impact the productivity and performance of the firm. A slight change in the political factors can
impact the operation of the company. This includes rules and regulation about taxation, trade
policy, fiscal policy and many more. Due to ongoing financial instability in the world after
COVID-19, government encourage companies to offer jobs for the people. As Tesco plc is one
of the leading company in the world, the firm has to follow major policies that ensure safety of
its products or services and employees (Nandonde, 2019). If the company follow these factors,
then they can enjoy the opportunity to carry out trade. The change in tax policies after Brexit will
impact the profitability of the company.
Economic factors- These factors are the main point of concern for the company, as they
are most likely to leverage demand of products or services. Along with this, it is mostly

leveraged costs, prices and profit margins. A slight change in the policies like changes in rates,
taxation, interest rates can impact the accessibility of finance. Tesco plc managers have to keep
track on such changes related to pricing as it will impact the sales and revenue.
social factors- nowadays, purchasing power and behaviour of people is mostly
influenced by social and cultural factors. In today's environment, people are more attracted
towards organic products. Due to this trend, the company has planned out its stores to facilitate
these needs and wants. As the people prefer buying everything in bulk, the company has also
provided this facility at its stores. With the attitude of customers, Tesco has successfully
managed to capture its clients base by promoting organic items so that they can easily satisfy the
needs of clients. But in the future, the firm has to keep track on changing trends so that they can
offer with sufficient products or service to satisfy its customers.
Technological factors- new trends related to technology have been changing at a fast
pace, and to stay relevant in retail industry, it is important for Tesco plc to keep up with changing
and advance technology. Nowadays, customers are attracted towards online shopping and fast
delivery system and spends more time on social media (Adamyk, 2019). By providing various
technical benefits and other facilities to customers the company has successfully managed to
shift the trends of online shopping and getting their products home delivered. Tesco has also
invested more amount on energy efficiency in order to meet the long term goals to reduce its
carbon footprint and maintain sustainability.
legal factors- A small change in policies made by government, directly influence the
business operations of the Tesco. It is mandatory to follow both domestic and international
market laws to run business smoothly. For example- it is essential for retail and food industry to
follow rules made by government that is food retailing commission. In order to maintain
reputation of the company, Tesco plc has to follow legal factors.
Environmental factors- In today's environment, people are more concerned about
environment. Tesco has undertaken major steps in order to help improve the business atmosphere
and focused on creating a more sustainable society and satisfy the needs of customers
(Christodoulou and Cullinane, 2019). Recently, the firm has adopted strategies to remove
wastage and reduced the usage of plastic to minimal level and explore good and new
opportunities to gain competitive advantage.

3. Global market situation of the Organization
Source: (Tesco plc share price forecast, 2021)
 Tesco plc has achieved good market position in the retail company because of its
marketing strategies and growth methods. As of 2016, Tesco plc is the fifteenth most
valuable retail industry providing varieties of goods. The company is leading grocery
retailer with a market share of over 25% which is quite high as compared to others. Tesco
has numbers of stores worldwide where more than 400000 employees are working. As
per latest report, the market share is 28% which is quite good among all the retail
company in the UK.

 Now, the company is focusing on expanding its online capacity because people are
spending more time on social media. Due to COVID-19 customer are more concerned
about social distancing, so they only want to purchase products or service online via
website, mobile application of company. Tesco plc is also providing servicing like
telecommunication, financial services, loans and others to satisfy the requirements of
customers.
 Tesco bank- The company also provide facility of financial support to customers and
offers varieties of financial services, this bank is situated in UK and was formed in the
year 1997 named as Tesco personal finance. This bank offers a range of insurance and
schemes to its customers it also offers credit cards, savings, mortgages and travel goods
to its loyal customers. They also provide cross sell financial services and hence become
the third popular bank in the British bank awards. By offering finance services they firm
have achieved success in customer satisfaction.
 Tesco mobile- The firm also provide mobile telecommunication facilities to its
customers and own its market position in the UK retail industry. They mobile services of
Tesco plc provide free calls facility and free text benefit to people. They also offer bill
pay, prepay, mobile sim card plans and many more to satisfy its customers.
 Around 4673 stores are available worldwide where customer can purchase products or
services as per their convenience.

Source: (UK grocery market share., 2022)
 Due to rapid changing in the political, economic and technological factors the company
has to face a lot of challenges. This has created pressure on managers of the firm to deal
with changing tax rates, legislation and economic condition (Guo and Wang, 2019). The
company has also faced pressure of providing jobs to local people of UK so that
unemployment rate can be maintained to develop the economic growth.
 Despite its success, the company also faced many problems and issues such as the horse
meat scandal, BREXIT, decreased in its quality of products and failure to understand and
identify the changing trends and culture in the other locations.
4. SWOT Analysis

Source: (Soegoto, 2021)
Strengths-
 The major strength of the company includes Tesco is one of the popular groceries and
retail organization in the UK.
 The company follows new advanced packaging method to attract more new customers.
Also, the firm has shifted towards promoting organic products.
 More than 400000 staff members working in various roles and achieving goals according
to their responsibilities.
 Along with this, the company has more than 7000 physical stores so that customers can
easily purchase things. In addition to this, the firm has its own online website where
customers can choose products or services as per their choices.
 The firm also focused on using digital marketing in order to promote the brand image via
social media and other marketing campaigns.
Weaknesses-

 As compared to other retail company, Tesco has limited presence in emerging countries
which has limited scope to achieve success in those countries.
 Due to its weak operating performance in few locations has affected its brand image.
 The marketing department of the company has to focus on research and development
strategy and work on doing sufficient ground research before implementing any
techniques.
Opportunities-
 Due to changing customer and market trend related to eco-friendly products or services
and advanced technology, the Tesco plc has big opportunity to expand its business
operations in different countries by using good strategy related to promoting brand
reputation, the company can grasp many opportunities to attract more new customers.
 The company has good opportunity to partners up with the local market and learn
knowledge about the local business strategies to achieve goals and objectives.
Threats-
 Due to Brexit, the company has faced lot of challenges related to trade because Tesco has
been running its business activities in many European countries.
 Due to heavy competition in the retail industry, the company has to maintain
relationships with other firms which is a big concern.
 Rapid changing in the policies and rules made by government related to taxation can
impact business operations of Tesco plc.
 Nowadays, Rapid changing of advanced technology, has created high pressure on Tesco
plc and other retail industry. So companies has to focus on constant innovation requires
attracting more customers and gain competitive advantages.
5. The key strategic objectives.
STRATEGIC OBJECTIVES- strategic objectives are the big picture goals created by the
company which provide detailed information about what the firm will do to fulfil the
requirements of the customers and to meet the organizational goals (Strategic objectives., 2022).
Basically, it is a kind of performance goals set by the industry. There are different types of
strategic objective Tesco plc needs to focus on:
 To increase profitability throughout the year
 To increase internal revenue over the upcoming years

 To decrease unnecessary expenditure
 To develop new product line
 Maintain budget for marketing initiatives to avoid any uncertainty in the future
 Reduce wastage in order to maintain sustainability in the world
 Create proper feedback strategy for Employees
 Develop innovation and technology
 Initiate satisfaction of customers
6. Strategic choices
For every business industry, it is necessary to focus on developing strategies with the
help of effective growth techniques. An effective leader understand that if their company is to
grow in the upcoming year which is long-term success, they can't stick with one model or
mindset even when business operation are going well. They need to understand the concept of
changing trends and cultural difference. Therefore, Tesco plc leaders need to find new
techniques to improve profitability and meet the strategic objectives as mentioned above. By
using new ways the firm will be able to increase customer base which is beneficial for their own
brand image and profitability. There are many options available such as entering in new markets
or emerging markets. But the company needs to understand the fact about how to enter the
market and which strategy will work best for the firm's success.
Ansoff matrix- product/ market expansion Grid is another name of Ansoff matrix.
Basically, it is a tool used by company in order to plan and analyse their growth strategies which
is beneficial to improve overall performance (Yaqoob and Omer, 2021). The Ansoff matrix
shows four important strategies the company can utilize to grow their business and helps them to
analyse the risks associated with each one.