Strategy:strategy is very much important for any business because it is related to the achievement of organizational goals, visions, and objectives that is set up by the top level management. Strategy is a process that indicates the plan of action through which an organization will be able to reach its stakeholders to satisfy them(Steiner, 2014).
Mission of Tesco
For achieving the goal of an organization, mission statement is a kind of written statement that describes the way through which a company will be able to achieve its long term targets such as Vision. Tesco, like other organizations, has a mission statement and that is “we make what matters better, together.” The company tries to provide the customers better quality products and services to meet their organizational goals.
Vision is the expectedfuture target of a business and it is the dream of the entrepreneurs that “what we want to achieve”. The vision of a company really hard to achieve but the company tries so that they are able to reach as near as possible to their vision. The vision of Tesco is to expand its business all over the world, use modern technology and use innovative ideas to promote its business worldwide.
The goals of an organization are the targets that are followed by the objectives and that are not much specific as objectives. For example, Tesco may set a goal such as “we want to reduce the cost within two years.” It is a long term target but not a specific one for Tesco.
Strategic plan is a systematic and step by step process that helps the managers of a company to take decisions related to organizational strategy. The strategic planning helps to achieve the goal, missions and visions of a company and also helps the higher level authority to identify the potential strengths and threats for the company (Steiner, 2014).
Ø The Boston Matrix:
Figure: Boston Matrix (source: self created)
Ø SWOT Analysis:
The second tool that Tesco can use a tool for measuring the effectiveness of their strategic plan is the SWOT analysis. The SWOT analysis for strategic plan is given below(Composites industry gets SWOT analysis, 2001).
Strengths are some factors which are internal to the organization and managers have control over these factors. These types of strengths can be good quality precuts, loyal customers, good and famous brand name etc. Tesco has trained employees over 530000, loyal customers for their shops and their product quality is high.
The second factor which is very much internal is weakness, and inability to manage these types of weakness can create threats for the company. If Tesco selects bad location for their company, this can be a weakness for their company. Tesco is very much dependent on their UK market, which can be their weakness. Because any fall of customers in this market will reduce their profits in the long run.
Name of the Student
The first part of value chain analysis is the core process thatdelivers the product or service to the end users with the help of market intermediaries. The core or primary activities are given on the chart.
Figure: value chain analysis (source: self created)
The second one is support activities, and they help the core activities to go on. The support activities are the followings.
Figure: value chain analysis, support process(source: self created)
Strengths: the internal factors that are in the favor of a company are the strengths of a company and they are in the control of the management. For example, the good brand name of Tesco, quality of their products, and large skilled workforce can be good strengths for them.
Weakness: the second factor is the weakness, which is also an internal factor. The elements can create threats for the company if the company fails to reduce the weakness for the company. For example, they need to reduce the investment risks in the new or foreign market.
Figure: Elements of SWOT analysis
Opportunities: some factors are related with the outside environment of the company and they help to increase the strengths of the company. For example, the new investment opportunity for Tesco that is available to the foreign countries is not in the control of management. They need to rely on the better environment for this.
Threats: the next one is the threat that is available in the environment of the outside of the company. The increasing foreign competitors, the unknown foreign market, the threat from the government or any law can be considered as a threat for the company.
The external environment of any business is out of the control of any manager and this environment can affect the business activity of the company. A good tool for this kind of analysis is the external environment is the PESTEL analysis.
PESTEL analysis:the PESTEL analysis is given on the following discussion.
Political factor: the first factor of PESTEL elements is the political factor, and any kind of good or bad political situation can affect the activity of the business. For example, if the political situation of a foreign country becomes worse, it can reduce the profits of TESCO(Kampanje, 2012).
Economic situation: the economic situation such as inflation, deflation, interest rate, loan amount also affects the business activity. For example, if TESCO wants to take loan from any financial institution and the amount of interest is high, they need to bear more cost as interest.
Social factors: the religion and beliefs, the system of the education, buying habit are some factors related to social factors. TESCO needs to take the buying behavior the people of different country and they need to make their plan according to their social factors.
Technological factor: the development of recent new technology also needed to be considered by the management. The availability of new technology can be a good competitive advantage to TESCO. For example, TESCO can introduce their online shopping system, mobile payment system etc to satisfy their customer needs
Environmental factors: strategy need to be taken so that the company can avoid the negative environmental affect by the company such as environmental pollution. For example, TESCO wants to be a zero carbon business within 2050, and this project can be a good way to cope with environmental factors.
Legal factors: the last element of PESTEL analysis is the legal factors, such as law related to environment, workers, factory etc. A company needs to follow the law of a particular foreign country. So, if TESCO wants to continue its business in the foreign market, they need to obey the law.
Porter’s Five Forces:
The elements of Porters five force model are very much useful to analyze the competitiveness in a particular market or industry(Michaux, Cadiat and Probert, 2015). The elements of five forces are shown on the following graph
Any person or party related to any business activity that has direct interest on the business activity, and can be affected by the business activity of is known as stakeholders.
The stakeholder analyses are the method of identifying the important stakeholders for the business and protect their interest. For example, the customers and the government are the two important stakeholders for TESCO. So, the most priority should be given by TESCO to them to protect their interest for the business purpose(Missonier and Loufrani-Fedida, 2014).
The stakeholder power matrix is the matrix that shows the combination between interest and power and what to be done in different situation. For example, if the interest and power are both lower, the company should use minimal effort and monitoring only.
The importances of stakeholder analysis are given in the following points.
Ø They are able to know the most important stakeholders for them.
Ø TESCO can satisfy the stakeholders by giving importance to them.
Ø The correct information given is possible by TESCO to the important stakeholders which are required by them.
Ø TESCO will be able to maintain a good relationship with their stakeholders.
Ø The important stakeholders, for example the customers, become loyal customers of TESCO.
TESCO targets to market their business a zero carbon business within 2050, so they should plan for this accordingly. The new strategy is given for Tesco in the following table.
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