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Diploma in Business
Unit Number and Title
Unit 7 Business Strategy - SWOT and PESTLE analysis
This unit 7 business strategy assignment - SWOT and PESTLE analysis sheds light on the aspects of various strategies of business and helps us to comprehend the processes of planning business strategies and evaluating those strategies with the help of implications of different theories. The assignment also helps us to understand the methods of formulating and implementing the strategies. The Business organization that I have taken into consideration for the study is Tesco Plc. I have considered the internal factors and the external factors of the company to make SWOT and PESTLE analysis of the company. I have made an analysis of various aspect of the business strategies of Tesco Plc to see if it has made optimum use of its inputs to obtain value and sustenance in the market or not.
Overview Of Tesco Plc
Tesco Plc is a large company in UK dealing in groceries. It is a multinational company, i.e. it operates in various countries of the world. Its head quarters are in Welwyn Garden City at Hertfordshire in England, UK. Tesco Plc is a retailer company that stands on third position in terms of profitability and stands on second position when measured in terms of generation of revenue. Tesco Plc has stores located in almost 12 countries across the continents of Asia and Europe. Tesco plc was founded by Jack Cohen in the year 1919 in the form of group of market. The name of the Tesco Company was given to it in 1924 when the founder Jack Cohen bought a shipment of Tea from T.E Stockwell. Jack Cohen united the initials of Stockwell and the first two letters of his own surname and coined the name ‘Tesco’.
Tesco plc opened its first store at Burnt Oak in Barnet in the year 1929.The company’s business expanded very fast and 1939, the company had 100 plus stores across UK. Originally the company was a grocery retailer basically but in 1990s, it diversified its products and underwent geographical diversifications by venturing into clothing segment, electronics segment, petrol segment, toys segment, books segment, areas of internet and telecom services, financial services etc. With all these diversifications, Tesco plc transformed itself from being a company of low cost retail segment that has low market with high volume into a business company appealing to customer of all segments in the society. The company now offered variety of products ranging from value to finest range. The process of diversification made the company more successful and the number of stores of the company rose from 500 in 1990s to 2005. Tesco’s operations in UK are differentiated into various formats on the basis of the range and size of products sold. These formats are Tesco superstores, Tesco Metro, Tesco Express, Tesco Express and One Stop. Tesco Superstores are relatively large stores stocking grocery and large volumes of non food product range. Tesco Metro are the stores smaller than superstores but larger than express stores. These are mainly located near train stations and inner busy streets of towns. Tesco Express is the stores for the convenience of neighbourhood residential colonies. Tesco Extra is the hyper markets mainly located out of town area and having the stock of almost all products of Tesco. One Stop are the stores that are even smaller than Tesco Express and this format does not include the name Tesco in it. Tesco is listed on the London Stock Exchange. According to the statistical data of 2015, the company has a worth of £18.1 billion.
Tesco has nearly 468000 employees that are spread all over the world. Tesco has staffs that is flexible, motivated and trained well to meet the needs of the customers. Tesco supports and trains its employees to perform various roles at various levels efficiently. Tesco motivates the employees by enhancing their skills, knowledge, and job satisfaction levels via appropriate programmes of training and development and offering relevant rewards and recognition. (Tesco and society, 2016)
Vision, Mission, Goals And Objectives Of Tesco Plc- The vision and business sytategy of Tesco Plc is to build itself around the clients or customers and the employees. The vision of the company gives the direction to it in which the strategies and policies are to be framed. The mission and vision of Tesco Plc is to become a business organization that has high value and respect in the eyes of its customers served by the company, loyal and committed employees along with the stakeholders of the company and amongst the communities that are associated with thecompany.
Elements Of Strategies Of Tesco Plc To Achieve Its Mission, Vision And Goals
Core Competencies Of Tesco Plc- Tesco Plc has created its core competencies for the enhancement of its scope, expansion of its market share and offering excellent products and services to its customers in pursuance to its vision, mission and objectives. The company has created core competency via IT based and efficiently managed operations of its stores. This has helped the company to offer high quality products to its customers at a relatively lower price than its customers and to build a strong loyalty customer base. (Tarata, 2013)
The strategic formulation of plans in Tesco Plc is a continuous and consistent process based on the analysis of situations via the tool of situational analysis. The existing state of internal environment and external environment is analysed and the objectives and strategies for the company are formulated on the basis of the assessment of these environments. Then the methods to implement these strategies and evaluating them are developed.
Factors Considered By Tesco Plc While Formulating Strategic Plans
Ansoff Product-Market Growth Matrix - Strategic Tool
The Ansoff product -marketng mix strategy tool helps Tesco Plc to understand and assess the strategies for business development.
This tool has various options that possess various kinds of downsides as well as opportunities for different types of organizations. These are given as under:
Boston Consulting Group Matrix (BCG)- The Boston Consulting Group Matrix enables the company to understand the position of the company in terms of business strategic policies and offers a roadmap to the company for the identification of needs for changes.
Market Growth and Relative Share Matrix- The business units of Tesco plc are is placed on the matrix and are categorized as Question Marks, Stars Marks, Cash Cow Marks, or Dog Marks. The units in the category of Question marks hold lower market share relatively and are full of uncertainties. When significant changes are made in such units, the market share of these units’ increases and then they come into the category of Star Marks. On further positive changes they acquire the position Cash Cow marks. In case the positive changes do not come in the business units placed in the Question Mark Category, they turn into Dog Marks which refer to the business units of very low values for the company. Such units can be shut down. The cash generated from the Cash Cow group of units is reinvested. (Kaplan Financial, 2012)
SWOT analysis tool is used by Tesco Plc to identify the strengths, weaknesses, opportunities and threats of the company.
Pestel Analysis- Environmental Audit Of Tesco Plc
Stakeholders- Definition-Stakeholders of a business organization or company refer to the individuals who are directly or indirectly associated with the organization and have an interest or stake in the organization. The stakeholders are the employees of the company, the customers, the director and the management, media, investors, creditors, social groups, society, community, government, unions etc.
Stakeholders’ Analysis-It is a method or tool or technique that helps in identifying the individuals or stakeholders whose help and support is needed for making the operations of the company successful.
Presenting New Strategy
Within the present scenario, the new strategy that is being proposed by me includes:
Following measures can be taken for formulating the strategy:
To run a successful business and to retail a proper position in the global market the strategic team of the companies has to keep an eye on the changing trends in the market since it makes a huge impact on the business, hold the clients and future success. The continuous analysis of the market helps the company to plan its strategies to alter the success factors. In the current scenario the competition among the competitive companies is at its peak to hold the top position and to retain it and this can only be done if the company understands its client’s requirements, keep on a research in the recent trends and introduce its new products and offers to attract the attention of the customers. Tesco is ruling the UK market since a long time and regularly facing big challenges from its competitors. To deal with it Tesco needs to bring out some changes in its products and marketing strategies to grasp the attention of its customers. (Reference for business, 2011) Tesco can plan to introduce a new line product from their regular league and that is more favourable for the people of all age group. Tesco can plan to target a new dimension of audience and prepare the store to become a place for one stop shopping point. Tesco may plan to introduce a section of leather bags, travelling bags and shoes.
The Strategic and marketing team may alter the promotional strategies by using the latest technologies and personal man to man marketing plans. The introduction of new products are necessary for the substantive growth and this let the company to elaborate the brand name in new fields and open the opportunities to earn more profits. The advantage of achieving substantive growth is that the company gets numerous opportunities for the future and the funds earned as profit can add value to the further planned projects. While designing the strategies for the company, the role of substantive growth plays the major role. Entering in the dimensions of new entries by the company keeps the curiosity of the customers alive. The regular changes in the market trends have to be followed by all the company employees and the needs and demands of the customers should remain at the regular check. If the old products are out of trend, they need to be discarded regularly. (Marketing 91, 2015)
As it is always discussed and is a fact that the every company needs to adapt itself according to the changing scenario of the business market to sustain in the market and retain the top position among its competitors. For this the companies make certain strategies to attract the customers and win their loyalty towards the company. TESCO being the leading company of UK needs to bring out the changes in the products and offers to hold the numbers one position in the business world. It has planned to introduce the new section of leather products, specially the bags, handbags, travelling bags and shoes. The product will have a wide range from budgeted bags to good quality superior bags. The same will go for the shoes also. Company will provide promotional offers and fix the cost of the products keeping in mind the requirements, demands, class and pocket of the customers. The products will be useful for all the sections of the society and this will elaborate the dimensions of the audience.
The introduction of the product will be done through effective marketing via technology and personal Marketing along with the promotional offers to the existing and new customers. All the investments will be done under the supervision of the most efficient strategic team and it will assure that the plans and projects are such designed that the company only gains the success and earns the profit. (Net MBA, 2014)
Any company which is going through a certain changes in the process or launching new products have to implement the strategies for the success of the planned project. For the implementation of the strategic process the employees and the managers need to work hard and understand their roles perfectly. The main role is played by the personnel in charge of the process. The implementation of the strategies impact on the duties and responsibilities of the in charge and he needs to have a thorough understanding of his work.
The management and the employees of TESCO work in a unit to achieve the goals targeted by the company. The new product will be launched in the market and will require an efficient set of the employees. The implementation of the new strategy will require the collective help of the resources like
Strategy implementation targets the goal set by the company to achieve. To attain these goals SMART goal setting is applicable as it helps in setting the structure and places track ability into the objectives and the goals. The SMART targets bring out the reality in completion of the goal. TESCO has also set the SMART targets that have a specific nature, realistic, can be completed in specific time and measurable.
Contribution of the SMART Targets:
The specific nature of the SMART targets in TESCO has made the company to put on all the efforts to achieve the success of the planned project. The specific nature helps in finding out the questions like from where, how, when the target can be completed The realistic SMART target makes the project attainable in the specified time period. This includes the project should have enough time, money and efforts of the employees. The measurable goal setting will tell how to deal with the success and how to retain the position in the market for the future. The targets have to be completed within the given deadlines. For this the whole team needs to work in full swing to go after the target. The deadline needs to be realistic and approachable. (Your Coach, 2016)
This assignment has helped us in understanding the hard work that is required to establish a business and sustain the position in the business market. The employees of the companies work with their hundred percent dedication to attain the targets established by the companies. It explains the importance of the Strategic planning for the companies to launch the new projects and adapt the current scenario of the global market to satisfy the customer’s needs and demands.
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