EXTERNAL ENVIRONMENT OF TESCO

External Environment of Tesco



External Environment of Tesco

Introduction

The food retail market includes the retail sales of all food products, both packaged and unpackaged, as well as beverages (including retail sales of all alcoholic and non-alcoholic beverages). The retail industry will be evaluated for this paper. The retail industry of America will be discussed in this paper. The company in the retail industry chosen to be discussed in this paper is Tesco Corporation. Tesco is one of the USA's leading food and grocery retailers. The company operates its retail business through various store formats ranging from small convenience stores to supersized hypermarkets (Duncan 2011, 47).

Tesco is a company based on customers and staff, quality properties around the world and numerous opportunities for growth. Their mission is to build on these achievements for all their partners. For the future, the continuity is obvious. They have a solid strategy, a strong team, and during the most risky in terms of trade diversification is now behind them. Nevertheless, some changes are needed because we know that improvements are possible: the clients are changing, and Tesco does the same.

Tesco's mission is to generate worth for consumers to gain their loyalty for the life time. Tesco's success is reliant on the customers and the people, the customers who do the shopping and people who are working with them. Customers are likely to return if they like what Tesco is offering them, and shop again with them. If the team finds what Tesco reward them, team work more hard to help customers (Duncan 2011, 47).

Methodology and Literature Review

Internal and external factors make up the organizational environment. The environment is thoroughly analyzed which makes the developmental and forecasted factors for the determination of organizational success. The organizational strategy determines the opportunities of the organization and the potential threats it may face. Internal scanning observes the internal organizational environment. Discussion, interviews and surveys provide the data for the assessment of internal environment. Long-term plans are affected with the changes in external environment. Industry environment, national and macro environment are studied for the external analysis (McTaggart 2006, 8).

The main weakness of Porter's Five Force Model is its historical context. The model assumes a classic perfect market in economics perspective. The model can best be applied to simple market structures. With multiple interrelations, products, segments and markets the implementation of five force becomes complex. The today's market structures are dynamic whereas the model assumes static market structure. The model is not suitable for the preventive actions. The model is based on the competitive idea. The model lacks the discussion of various strategies such as strategic alliance, linking through information system, virtual enterprise and others. Rather it discusses the approach of achievement of competitive advantage of companies over one another even on suppliers and consumers. The model lacks a proper application on today's business model and market dynamics.

Findings and Analysis

Threat of New Entrants

The grocery market has changed into the supermarket-dominated business over the last 30 ...