TESCO CORPORATE STRATEGY



Tesco Corporate strategy



Tesco Corporate strategy

Introduction

From the very beginning of Tesco's strategic existence, the company has strived towards success through increasing growth and market share. The 1990's witnessed Tesco grow dramatically by entering an extensive range of markets; including new geographical markets and new product markets. BBC news (2007) provides the following map to indicate Tesco's diverse geographical locations; operating in 11 international markets.

Tesco's Corporate strategy

PESTEL Analysis

Political

Whilst the UK government does not portray any signs of drastic turbulence for the future; Tesco must place an emphasis on the predictions in the rise of fuel and energy costs, a potential threat towards the company (Cox & Brittain, 2000). The fundamental political influence that places a vast consequence and threat to Tesco and its operations is the taxation policy within the UK. Tesco's Summary Group Income Statement demonstrated the impact corporation taxation has on the organisation with taxation costs totalling a staggering £772million (BBC news , 2007).

Economic

The economic stability of any organisation's operating market can be a crucial factor, affecting business operations directly and indirectly. Economic issues that are liable to impinge on Tesco in the future are inflation and interest rates. High inflation can be damaging to the functioning of the economy whilst low inflation can help foster sustainable long-term economic growth. Tesco must be fully equipped to adapt to changing interest rates; as they influence spending and saving within the economy and ultimately the prices set for goods and services (Haberberg & Rieple, 2001).



Social/ Cultural

Lifestyle trends of the market are a fundamental social issue that will influence Tesco's operations significantly. It is argued that Tesco's ability to meet the demands of its customers is what has facilitated the organisation's large scale of success; a key critical success factors (CSF) for Tesco (White & Walters, 1997). Tesco understands the importance in monitoring and adapting to changes in lifestyles, a skill required to obtain the title of market leader in such a competitive industry. Tesco must not only adapt but predict changes in consumer trends and lifestyles. Social-cultural and lifestyle changes have resulted with a new strategic group, as changes in the macro-environment have highlighted new market spaces/ strategic gaps. It is thought that the most current strategic gap is the obscene growth rates in the use of internet shopping (BBC news , 2007).

Technological

Tesco continually invest into research and development to grant innovative ...