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Table of Contents Contents Introduction 1. Part A: Business Economics 1.1 PEST analysis 1.2 Porters Five Forces 2.

Part B: Strategy and process 2. Strategy 2.1.1 Corporate strategy 2.1.2 Business strategy 2.1.3 Operational strategy 2.1.4 Purpose of Strategy 2. Process for Developing Strategic Management 2.3 SWOT Analysis 2.4 Porters Generic Strategies and Tesco 2.5 Implementation and Control of Strategic Plans 2.6 Strategic control 3. Part C: International Marketing 3.1 International marketing 3.2 Market selection for international expansion 3.3 THE ANSOFF MATRIX for Emerging Market Selection Conclusion Reference Page No. 02 02 02 04 05 05 06 06 06 07 07 09 10 12 15 16 16 16 17 21 22

Introduction In this assignment the writer has shown how an organization develops strategy and thereby strategic management of an organization has been evaluated here. I have chosen Tesco superstore and evaluated its strategic management. First store of the Tesco was established in Edgar, North London in 1929. Tesco was established by John Cohen and T.E. Stockwell. The main strategy of Tesco is all about ensuring reliability of the customer. It is the first chain store in the UK market that reached the score of 2 billion pound profit and it is the largest retail store in the UK market running right now.

1. Part A: Business Economics 1.1 PEST analysis To inaugurate a strategy for the company in terms of achieving the long term efficiency, there should have an analysis about the future goals and objectives of the organization. PEST analysis is the most perfect strategy here. This focuses on 5 to 6 key factors that can be the matter in future for the growth or failure of the company. Tesco, being the largest company in the

retail world in UK should consider this and it indicates the factors for PEST analysis which is stated in the followingPolitical and legal considerations Risk of potential commission enquiry Because of the non-healthy competitive retail market, Tesco may face the commission enquiry in the coming days which will focus on the competitive mood of the market. GM-FOOD In terms of cataloging the genetically modified food, Tesco can face the protest from the environmental activist because of the growing concern worldwide over the safety in food and food culture. EU-Law European Union law in terms of regulating the monopoly business can affect the company like Tesco and it can create problem for Tesco in terms of the expansion in the European domain which is in the vision of Tesco. Economic Considerations The completion among the larger retail companies regarding the product price Because of the increasing purchasing power the cost is on the downfall in terms of the production Social factors Organic Food and Drink The emerging consensus of the customer in terms of safety in the food habits and mineral products can create an impact for Tesco in future Concern over the GM food, allergy and preservative is also significant The growing concern against the preservative food, allergy, formalin issue and also the GM food can create a damaging affect in near future in the food based retail shops all over the world especially in the developed countries Animal Welfare Policy This policy campaigns over the ban on the animal food and product Strict maintenance of the environmental policies and prescription Changing international concern over the environmental issues and the emergence of global network of environmental activist. Technological Factors Radiation frequency and technological operations in the supply management Practice of FRID in the supply process of Tesco help the company to efficiently carry out the operational task and maintenance To tag and the use of Radio Barcode technology The use of these technological advancement and programs in the operational management of Tesco and further lead the process with the total capture within 2007, can bring a new dynamics in the operational pattern of Tesco Self-checking system initiation which will further involve the customer in the business process

1.2 PORTERS FIVE FORCES Five forces of Porter is basically helps to evaluate the external orientation and environmental features that can impact the organizational behavior or can impact the running of the business. These forces are stated in the followingBargaining power of the customer The purchasing power of the consumer can put the cause to downfall the price of Tesco product. It can lead to a competitive force in the market where the rest rival companies can degrade their product price. It is the key task for Tesco to keep the customer who are loyal to them. Bargaining power of the supplier This is about the demands of the supplier to increase the price for their goods and its taking place now in terms of the dairy products especially. But the powerful group like Tesco has comparative advantage regarding this as they are the largest receiver for these types of products. Threat of new entrants Through striking barrier against the new products arrival groups like Tesco can better handle. This can take through paying large amount to the suppliers as well keeping maximum goods in own hands. In terms of this business scale Tesco always gets privilege. Threat of substitute product Tesco always face threat from competitors like ASDA or the Sainsbury in regarding the lowering of price which compels them to decrease their product price. This ultimately helps the customers in their purchasing pattern. Intensity of competitive rivalry Retail industries always face a different challenge and this is about the competition. They face more competition but the profit scale is never higher than the average scale in the market. Besides, these competitions always take in an unhealthy manner. The strategic policy planning of other retail shops like ASDA, Morrison, and Sainsbury is making the market more competitive for Tesco.

2. Part B: Strategy and process 2. Strategy: Strategy is all about the planning of the organization for the future running pattern and remaking the management of the company. Fulfill the annual expected turnover is the key concern in the planning of the strategy and to reach the target audience is included too. Meeting the demand of the customer and to adapt the market environment is also the part of strategy. The image and the adaptive quality of Tesco in last decades was the key factor in earning huge profit which made the organization one of the leading store of the world. There was many approaches has been taken and transformed in the Tesco strategy like selling cheaply with high piling was the early strategy that was initiated by Jack Cohen. But it had problems as the image of poor was problematic for overall growth. In the later period of 1970s the image was too bad that the advisers even suggested to change the name of the branding. It never changed the original identity and again in the later 2005, it became the number one retail store in the UK market with huge profit. According to the TNS report, there was almost 29% share of Tesco in retail market where the ASDA has 16.8% and Sainsbury in the 3rd position by taking 15.6% share. These three companies are the leaders in the UK market from the year of 1995.

2.1.1 Corporate strategy: In this strategy it mainly concern about meeting the demand and expectation of the shareholder as they are key in receiving the investment. This is known as the operational statement of the company. In the Tesco statement it focused on creating value for its clients as well they shown their interest in terms of receiving commitment from its regular customer. To be honest, loyalty has a key purpose here for Tesco. It believes in delivering service as the customer expect to receive from Tesco. 2.1.2 Business strategy: It is all about the achievement from the business market and the strategies includes hereGlobal expansion Keeping position in the UK market Focusing on the non-food items 2.1.3 Operational strategy: It is the combination of the business and corporate strategy of Tesco. Tesco is very strong in terms of making its workers and clients happy when it deal with the operation strategy and the overall goal.

2.1.4 Purpose of Strategy Tesco statement like-Treat people as we like to be treated signifies the purpose of this company and its all about ensuring trust and commitment from the customer which is very important for long run goal achievement. Tesco is very committed and desperate too to meet the official goals and objectives of the company.

2. Process for Developing Strategic Management Corporate strategy is all about the functioning process in the business market, business strategy is all about making profit and the operational management is the mix of both strategies. In this regard the business strategy of this company can be figured as1. 2. 3. 4. 5. Asserting and meaning the vision of the company Asserting and concentrating on the goal of the company Analyzing the environment of the comparative business world Rethinking on the strategic planning Implementing, proper nurture and controlling the situation

VISION Tesco vision can easily read from the statement of its CEO Terry Leahy where he mentioned that it has only 5% share of non-food market, 2% share in the banking sector and 6% in the convenient field. If they can increase their share it will reach in the class! So it is clear about their dream and target for the future and that is to enter strongly in these sectors. MISSION Mission is the core focus of the company and Tesco is from the very beginning focusing on

achieving commitment of loyalty from its customer and they want to make it through their service. Analysis of the Business Environment To formulate the selected strategies it is important to analysis the company situation. Many political, social, economic and technical issues are related to this. In the analysis process of the operational environment in Tesco in focus on 3 featuresEvaluating the capability and resource factors of the company Evaluating the external orientation and the PEST examine Evaluating the competitive situation in the business arena through the 5 forces SWOT analysis

Core Competencies Core competency is all about the factor of resource and capability of the company that will help the company to foster the aims and objectives and to better compete in the competitive business world. It maintain a strong command if there is supportive competency and it also leads to a greater success for the company in the crucial moment. According to Tesco the core functions in the competencies areIntroducing new product and service for the customer so that there can be an exist of diversity in the market for the clients Ensuring skills and efficiency of the employees so that they can better satisfy the customer Ensuring some unique competency that will keep it ahead than the competitor companies in the field.

2.3 SWOT Analysis Information Technology has an important role in the modern business world. Its main purpose is to see the position of the company and the external and internal variable that are playing role for or against the company aims and objectives. It check the opportunity and the threat for the company that comes from the external force. SWOT stands for strength, weakness, opportunity and threat and these all are very important to evaluate and to further promote the company. SWOT analysis regarding Tesco is included in the followingStrength Branding name of Tesco Loyalty from the clients Largest retail shop in UK Well established and have good will for a long time Excellence in the product decoration Active online support Position in the important places Club card system to enhance the trustworthiness from the customer Weakness Disproportionate use of fossil fuel and heating system in the market and transportation of the Tesco product

Poor communication among the branches sometimes Opportunity Here are the opportunities for Tesco to further glorify its involvement in the marketShould enhance the relation with the customer Opportunities to enter in the demanding European Union market More sales opportunity to connect the customer with the online support and promotional strategy among the vast audience. Threat Here are the assumed threats that can impact Tesco in future if the necessary steps does not get attractionLarge energy expense The growing trend of Taxation over the retail shops Emergence of the low price super shops like LIDL Competitive growth of ASDA and Morrisons The present economic depression worldwide The trend of unemployment in Europe 2.4 Porters Generic Strategies and Tesco Through the long analysis on the strength and weakness of the company in the growing market, now policy makers should concentrate on the strategies for the better growth and continuation of the company. It is must to have a look in this regard over the strategies given by Michael Porter. Its known as the making and keeping the advantage in the market. The 3 strategies are included in the followingDifferentiation It is a very unique strategy where the company introduces a product which is very unique and rare compare to its rival companies in the market. But there should have a minimum idea among the people in the market so that it can reach a portion of customers in the market. Cost Leadership It is a very practical and well received strategy where the company receives the goods comparatively in lower price from the suppliers than its competitors in the market. This is all about the business game where the company itself should play the lead role. Focus It is all about the branding and promotion of the particular products of the company in a especial segment of the market with ensuring the quality, affectivity and capacity to capture the audience for this. In the retail industries the profit and competition is very thin and Tesco being the biggest holder of this market has all these ability to control the market in favor of this company. There are lots of generic policies has created in the present organizational culture and these strategies are included in the followingDecreasing the cost

Quality enhancement Understanding the feelings and expectations of the clients Small period of cycling Strategic partnership Capacity to adapt immediately with the change In the following the strategies of Tesco has been statedDecreasing cost It is all about the reduction of the cost and enhancing the quality and productivity and Tesco has a strong policy regarding this price calculation and completion with the competitors. It has policy to supply the effective and quality product. Quality Enhancement Tesco has a strong concentration to improve the quality and to lead in the market. It inaugurates new policies, new decorations in the stores and also bring new ideas in the online management which is a big change in the policy of Tesco and it is also getting huge support from the customers. Going close to the customer Customer is always confusion for the business company. It is one of the core task for the company to understand the choice, manners and demands of the customer so that it can serve according to their expectation. Tesco has an advantage in this regard and it is well smart in capturing the ideas and getting close to the customer to make them loyal to Tesco.

2.5 Implementation and Control of Strategic Plans Implementation The taken strategy should implement properly by the company and its a challenging task for the company. Strategy matters when it goes for implementation. Tesco in this regard taken the challenge to adopt all 4 strategies to retain the market place. This process is very complex as many issues are related to this. To understand the psychology of the customer is matters for implementing the strategy of the company. Effective implementation of strategy There are 3 essential criterias to implement the strategy of Tesco. The suitability: Whether the taken strategy is perfect to meet the goals of the company or not. The acceptability: In regard to the adjustment and analyzing the risk level whether the strategy can receive by the shareholders or not. The feasibility: It focuses on whether it is feasible or practical for the company or not. Tesco maintain the factors below in terms of implementing the taken strategies for the companyAvailable time and enough resource to implement the strategy Less dependency relation There can be choice of the employees and also a different perspective towards the strategy

Tasks are in the correct way to get implementation Well engagement among the responsible groups of the company Communication and the power of the authority about the accountability and efficiency of the strategies. Resource allocation The gathering of the required resource is an important part of the implementation process of the company. To allocate the resources Tesco has the following approachesLevels of the adequate resource and the practice The sufficiency of the required resource Adjustment with the time and proper schedule In the following there are some resources practiced by Tesco is included that used to implement its strategiesFinance Financial issues are the key concern for the company in terms of its allocation and confirmation for the investment in the company planning. Tesco will be made of 5billion within the next 5 years and it has a plan to invest 100million for the innovative funding for the environmental technological development. It has also projected almost 70% growth in the financial level of the business arena it is concerned about. Human resources In terms of the human resource management a company should have the clear idea about how many employees it required and how many is exist in the company right now. It should also focus on the skill, creativity and adaptive power in the recruitment and development of the employees through proper training program. Tesco has almost 260000 employees and it has special focus on evaluating the performance of its employees in the regular basis. It has some core facilities like childcare, flexibility time and choicely workplace to motivate the employees. Tesco has a plan to increase more than 2000 job in the present year worldwide. Materials Tesco has strong material management throughBetter supply chain system Practice of RFID technology to operate the materials Practice of electric bar coding Value chain management effectively Time Managing the time schedule is the key concern for Tesco in terms of holding the supervising position. Project management In terms of managing these aims and objectives, missions with a group format in the company, there should have a clear understanding by everyone about the individual responsibility, importance of the role and the responsibility given to them. Tesco monitor these groups through the IT department. This section always prioritizes in using the sophisticated technologies that helps to better operate.

2.6 Strategic control Reporting, feedback systems and performance review Controlling is an important function for the company. To control the performance of the employees the manager should have a clear idea about the mission and vision of the company. Tesco use the 360 degree appraisal system to evaluate the performance. It helps to improve the quality and efficiency for both the employees and the officials related to Tesco. It also put importance on the feedback of its customers to enhance the relation and loyalty of the customer. Benchmarking Benchmarking is an audit made by the company to evaluate the performance of its employees. In this benchmarking Tesco use the 360 degree appraisal system. Total Quality Management It means the implementation of the strategy, policy and operational tactics for enhancing the quality with marinating the culture of the organization. Tesco deploy the customer service manager in this process. They check the whole procedure and sent the evaluation with the feedback to the authority. Justification To justify the strategies taken by Tesco it goes for the following stepsIntegrating the function and the logistical issues Satisfy the customer Respecting the market demand Decreasing complex issues regarding the operation Controlling the cost of implementing strategies

3. Part C: International Marketing 3.1 International marketing People living in different parts of the world have different needs and its the major implication of the international marketing. There are many companies which are operating in different parts of the world, a list of these are Cola-Cola, Nestle, Google, Microsoft. These entire have own brand identity in the world across the corners and borders. These businesses products have global audience and they have different marketing campaign to sell the products over the borders. People living in different area have different values, beliefs, languages and customs and so on. International marketing tries to find out the suitable corners where it can reach and where it can operate is business activities. Global brand Gillette is found over the border because is strong international business and marketing practices.

3.2 Market selection for international expansion Marketing could have different dimensions and different perspectives depending on different

places. The core competency and opportunity measurements are key determinants of international market selection criteria. According to Penrose (2009) some common theories can best acknowledge the selection of target market in international market. These things can best determine if we divide it into national market competencies and these are factors which are most used among the international practices (Kindleberger, 2009). There are some other theories which can also be a part of the international market selection strategies which selecting the nations.

Foreign market can be divided or fragmented depending on its curativeness in terms of basing whether it has the opportunity of making the product successful in the market. It also testifies whether they have enough capability to grab the local human resources and other resources. In a study, Johanson and Vahlne (2007) employed another theory in patterning the culture and its habitants. He showed in foreign market the factors are totally different from other national market. The international market shows some distinctive behavior in terms of it market structure and commitment. Internationalization of markets possesses transaction and cost analysis model as well. (Coases, 2007). The explanation of developing network and adapting the environment, interacting with the stakeholders, interacting in the market can have implications how a company can enter into a country. There are more common characteristics and manners which are influential in building the organizational structure. According to Cunningham (2006) the business strategies, approaches and other perspectives of internationalization causes some newer forms of implications in making the strategies for the new market. The expansion of the decisions and strategies are some variable which always need to remember. In a study, Dunning (2008), suggested that the parties in the internationalization collects strategies from the economic theories and their choice of culture, modernization, ownership, localization all are inherited from some common senses and these decisions are also made of from creative tendency. The accounts of export, import, firms efficiency, competitive advantages and other perspectives are enhancing internationalization.

3.3 THE ANSOFF MATRIX for Emerging Market Selection It is a unique strategy in the strategic management. It focus on analyzing the process of organization in terms of the product quality and market dealings. It concentrates on whether the company is going through the appropriate market policy or not. The off matrix for Tesco is started in the following-

Market penetration Improving services Improving quality Product development Expand own brands like The Finest and TESCO Value. Expansion into non-food sector Adding new products to the existing product line Market development International expansion and globalization Home shopping Developing small express stores

Diversification New services Crafting a strategy Through focusing on the ideas discussed in the previous pages Tesco has adapted a strategy which will keep the company in the leading position of the UK market. The strategy initiated by Tesco isRespecting the customers through respecting the choice and values of the UK people as they are the key mentors to keep Tesco in the leading position of the retail market for the decades. Should incorporate a 6 element approach to go for an international company but of course keeping the domestic ideas and satisfying the local people first. Through this matrix Tesco already made some strong evaluation and adapted some strong planning for the better profitability in the market. Evaluation The BCG matrix Boston Consulting Group matrix is a very useful method. It focus on analyzing the portfolios of the production in the company. The description stated in the BCG matrix is clearly defined the practice of cash. In the following the terms used in the BCG matrix is clearly described-Stars These are those products which is turning good profit for the company. It needs a special treatment as it is keeping the customers movement towards the company and should maintain a regular progress in the market of this product. Problems It consists of the product which is not attracting the customer or failed to capture the clients of the market. Cash Cows These types of product is drawing better attraction from the market and bringing the profit too but there is no continues growth regarding this. It is in same position. There should have especial treatment for this from the profit it draws for the company. Dogs These are the product which is not performing well but growing gradually. It needs focus by the company so that it can maintain minimum growth with a profit. It needs immediate decision by the company. The following is the BCG matrix for Tesco Star On-line shopping Organic foods Loyalty cards Dogs Frozen uncooked foods

Loyalty cards Non-grocery items New services Cash cows Branded products Delicatessen Meat and dairy products Cooked foods

Problems On-line shopping with demographic analysis Home delivery of products

Depending on the concept and idea above and also through a deep evaluation by Tesco, company picked out the factors related to the success and it is mentioned in the following1. Through improving the service and the quality of the product. There will be diversity in the product. It focuses on the personal interaction with the customer so that they become loyal to the company product. 2. Understanding the behavior of the customer it should go for a people based approach, Should increase the capacity to provide service to more people.It should give more options about the choice and putting respect in the expectations of the people. 3. Making a clear difference from its rival companies through developing service and introducing quality products 4. Maintaining a diversity in the collection and in display 5. Concentrate on the changing trend of the global market as well taking the adaptive challenges to keep the customers in hand. Based on these factors Tesco adopted 4 strong strategies to come back strongly in the market as the biggest retail shop in the UK Market.

Conclusion Tesco identifies the importance of introducing the new products and developing the service for better commitment from the customers. Tesco may get the threat from the rival companies being the largest retail shops and it may force to cut the product price even. It identifies the possibilities to enter and the coming threat so that it can better implement and initiate the strategies which are important at present for further exposure. Through analyzing the PEST and SWOT it founds some core threats, opportunities and the challenges for the future which will help to rethink about the future earlier. It also wants to flourish the business with the increasing of non-food items. It also focus on the feedback of the customers and to play according to their expectations. Recommendations Tesco should avoid the fuel based supply chain and focus on the cost effective implementation as the price of fuel is increasing worldwide. Through improving the services it can lead far from the completion with its rival companies. Should try to capture and keep the domestic support through providing better service. Growing completion can force to reduce the price so Tesco should be careful and think about the alternatives if the situation emerges. Should more concern about the growing environmental consciousness worldwide.

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