Business Strategy: Tesco PLC Organizational Audit and Planning

This report provides a comprehensive analysis of Tesco PLC's business strategy. It begins with an introduction to the importance of business strategy, followed by an organizational audit using SWOT and value chain analyses. The report then conducts an environmental audit using PESTEL and Porter's Five Forces models, evaluating external factors impacting Tesco. It proposes an expansion strategy and outlines an implementation plan, including resource requirements and the roles and responsibilities of personnel. The report also assesses the contribution of SMART targets to strategy implementation and concludes with a summary of key findings. The analysis includes an evaluation of financial, human, and physical resource needs, along with a discussion of SMART objectives to maximize sales, increase profits, introduce new products, and create job opportunities. The report leverages various academic sources to support its analysis and recommendations.

Business Strategy
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Table of Contents
INTRODUCTION ...............................................................................................................................3
TASK 1.................................................................................................................................................3
TASK 2 ................................................................................................................................................3
TASK 3 ................................................................................................................................................3
(a and b) 2.1 Analysis of strategic position by carrying out organizational audit of Tesco PLC.....3
TASK 4.................................................................................................................................................4
(a) 2.2 Environmental audit for Tesco PLC ....................................................................................5
TASK 5.................................................................................................................................................5
TASK 6.................................................................................................................................................5
TASK 7.................................................................................................................................................5
(a) Complete a spread sheet template that outlines a basic implementation plan for your new
strategy from Task 5(b) above.........................................................................................................5
(b) 4.1 Assessment of roles and responsibilities of personal charged with implementing new
strategy ............................................................................................................................................5
(d) Evaluate the contribution made by the setting and applying of SMART targets to the
achievement of strategy implementation for Tesco.........................................................................6
CONCLUSION ...................................................................................................................................6
References............................................................................................................................................8
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INTRODUCTION
There are various methods to meet the success in business world but the fact is that the
objectives should be realistic. For this, it is important for the organization to focus on maximizing
strengths and minimizing weaknesses to survive in competitive market. These all will only be
achieved with the help of business strategy (Calof, 2016). It denotes long term business planning
which sets out to accomplish objectives of a business. Without clearly defining it, it is impossible to
attain growth and development in the market place. The following study is relating to business
objectives and to understand its importance within the industries, various cases have taken into the
consideration. Process of strategic planning, formulation of new strategy, approaches to strategy
evaluation and implementation of strategy are major objectives that will be covered during the
research.
TASK 1
Attached in PPT
TASK 2
Attached in PPT
TASK 3
Attached in PPT
(a and b) 2.1 Analysis of strategic position by carrying out organizational audit of Tesco PLC
Organizational audit is a method of determining the nature of environment in which a
company is operating its business. For Tesco PLC, it can be conducted by using various methods
which are following.
SWOT analysis:
Strength
 Opt multi format strategy to increase
customer base every decade.
 Global recognition
 Good leadership style International presence
Weaknesses
 Highly depended on domestic markets
 Poor inventory turnover
 Finance profit level is adversely
impacted because of recent credit crisis
Opportunities
 Growing trends of online shopping
 Opening business in emerging market
Threats
 Increase minimum wages population in
UK
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such as Asian nations. Strategic alliances with other brands
 Increase competition level
 Economic recessions and credit crunches
 Increase prices of food products across
the world.
Value chain analysis:
Primary activities
Inbound logistic  Get supplies from suppliers at low cost.
 Leading market position and good economic conditions.
 Using vendor rating system.
Operation management  Strong supply chain management process
 Able to decrease handling and carrying charges of the
goods.
Outbound logistic Develop and maintain online and offline relationship with
different business partners.
Marketing and sales Adopting both traditional and digital marketing and sales
techniques to increase sales.
Services Following cost leadership and product differentiation strategies to
increase consumer base
Supportive activities
Procurement  Existing supply chain management system assists in
purchasing various goods from fixed suppliers.
 Automated warehouses
Human resource management Followed structured process of recruitment and selection process
(Makos, 2015).
Technological development Adopting different technologies to improved operational
activities and business process.
Infrastructure Use collaborative working system, administrative coordination
and various support system for taking business decisions.
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TASK 4
Attached in PPT
(a) 2.2 Environmental audit for Tesco PLC
PESTEL analysis
Political Due to current financial instability at global level, UK government is
encouraging retailers to creating jobs for domestic community. For supporting
this, Tesco is opening its offline stores at different places of UK for creating
employment opportunities.
Economic It is a major point of concern for Tesco because this factor include cost,
demand, prices and profits. Company is completely depending on the
domestic market UK even it has different outlets across the world. If the
economy of UK or any factor varied than it will directly affect Tesco in high
amount of rate.
Social In present time, demographic changes, alteration in customer behaviour,
attitudes and other things impacts on Tesco business can be easily seen. As per
the changes in the trends and modifications in social values, company starts to
response according to it.
Technology With the help of advance technology, Tesco has started to improved the
customer experience and tries to meet their expectations. Company has
installed different kinds of machines such as RFID, ESL, EFTS etc and these
all are giving the convenience to the service users.
Environment With the time, Tesco starts to take social responsibilities along with
development of new products. To save the environment, company is now
using different techniques such as reduce wastage, effective use of resources,
minimize environmental damages etc.
Legal The different legal factors have affected Tesco operations. Without giving the
notice, company can not change the prices of the goods. So for increasing or
decreasing the prices of the products, organisation has always followed the
rules.
Porter's Five Force model:
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Threat of new entrance For Tesco, the following threat is high because UK grocery
market has been converted into hypermarkets. It has increased
competition level and given huge opportunities to new
companies to enter into the market.
Threat of new substitutes Low because stores of Tesco are near to residential and working
areas which provide convenience to the customers for shopping.
Bargaining power of buyers High because consumer want to buy good quality products at
low prices.
Bargaining power of suppliers Low because suppliers of Tesco belong to food and grocery
industry and they do not want to lose the contracts with biggest
retail company.
Intensity of competitive rivalry High because Tesco has faced direct competition from its strong
rivals in terms of prices, product, promotion etc.
TASK 5
Attached in PPT
TASK 6
Attached in PPT
TASK 7
(a) Complete a spread sheet template that outlines a basic implementation plan for your new
strategy from Task 5(b) above
(b) 4.1 Assessment of roles and responsibilities of personal charged with implementing new strategy
As per the expansion strategy that has been selected for Tesco, the need is to decide the roles
and responsibilities of personnel for implementing the strategy in best possible manner. Role of top level management – This part of managerial team in Tesco will play a key role to
decide over the place where the expansion is to be carried out. They will decide over the
resources to be needed, and formulate aim and objective for the same. A proper time line
will also be set by them so as to ensure that strategy has been implemented in the best
possible manner (Hamilton and Webster, 2015).
 Middle level management – There role is to act as a link between top and bottom level
management. They thus analyse the organizational climate as per the strategy to be
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formulated. Further the management then informs the top level managers regarding the loop
holes (Stevens and et.al., 2013). They further take meetings with lower level managers to
identify the existing resources and skill set so as to ensure that Tesco’s expansion plan is set
in best possible manner. They can further be involved in discussion circles where ideas can
be suggested by them regarding expansion strategy of Tesco.
(c) Analyse the estimated resource requirements for implementing your new strategy Financial Resources – Finance are a required with respect to Tesco’s expansion strategy.
This is as company will be investing in new products as per the changed market. It will
further require adhering with new channels of distribution channels and setting an enhanced
production capacity. The need here will be to make use of financial resources such as
working capital, bank loans as well as other sources of finance. The estimated financial
resources require to implement new strategy within Tesco will £255500. Human Resources – The Company will further need a set of skilled Human Resources so as
to implement the strategy in best possible manner. The need here is to get a check over
Existing staffing resources and then recruit external employees (Ferrell and Hartline, 2012).
Tesco in terms of its expansion plan will need employees who are well trained, ready to
move abroad as well as good in multi-language.
 Physical Resources – This include varied kinds of operational resources that may assist in
ensuring that expansion plan of Tesco is well in place. Hence the management team of the
company will require resources in form of IT systems, softwares, production facilities etc
(Abraham, 2012).
(d) Evaluate the contribution made by the setting and applying of SMART targets to the
achievement of strategy implementation for Tesco
Application of SMART targets by Tesco is likely to aid in ensuring that the planned strategy
is properly implemented by the company. The SMART criteria is likely to assist in assessing the
overall suitability of objectives that have been set to ensure towards a worthy expansion plan.
Adhering with the criteria is likely to generate a more structured approach that can aid in planning
out for more realistic targets (Piercy and Morgan, 2015). Some SMART objectives for Tesco are as
follows.
 To maximize the sales by 18% and increase profits by 15% at the end of 2023.
 To decrease the prices of goods by 10% at the end of 2020.
 To introduced more healthy eating products by end of 2022 year end.
 To develop more job opportunities for the community by 22% at the end of 2023.
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CONCLUSION
It can be concluded from the report that any company including Tesco is required to
formulate proper strategies and make planning in such a way that they can be attained in the best
possible manner. The need here is to maximize strengths as well as reduce the weaknesses of
strategic formulation as well as implementation so as to survive in competitive market.
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