STRATEGIC MANAGEMENT

Strategic Management Report - Analysis of Tesco

Abstract

The research paper highlights the importance of Strategic Management for organizations and businesses. The paper emphasizes on the leading British retailer Tesco. Swot Analysis of the company is provided in the paper. Furthermore, PEST Analysis along with Porter's Five Forces is analyzed in order to perform effective analysis of the environment in which the company operates. Some of the recommended strategies in order to efficiently compete with the challenging environment and competitors are provided as well.

Table of Contents

Introduction4

Part A: Business Economics5

Tesco Strategic Analysis5

Company Review5

The Macro Business Environment of Tesco Group5

PEST Analysis - Tesco5

Part B: Strategy and Process8

Micro Business Environment8

SWOT Analysis8

Strengths9

Weaknesses12

Opportunities13

Threats15

Part C: International Marketing19

Porter's Five Forces19

Threat of New Entrants19

Bargaining Power of Suppliers19

Bargaining Power of Customers20

Threat of Substitutes20

Bargaining Power of Competitors20

Core Competencies of Tesco21

Sustainability Role of Tesco21

Part D: Strategic Management Comparison of Tesco and other UK Retailers24

Model 124

Model 226

Model 327

Strategic Analysis of Tesco and Sainsbury28

Tesco28

Sainsbury's30

Recommendations for Future Tesco's Strategy32

Conclusion32

References34

Strategic Management Report - Analysis of Tesco

Introduction

Strategic Management is a process that is moving towards achieving and maintaining a competitive advantage that enables the company to continue in the market. Furthermore, this advantage must be achieved by an organization, the company, which is a complex set of people, resources, processes, cultures, etc. that is constantly changing as the surrounding environment, therefore, the management of the company must first know what goals to aim and then manage and coordinate all efforts to achieve those goals.

This process should be performed periodically and revised whenever a significant change occurs in any of the many issues affecting the company. It is also essential that it involves the whole team to make it a project undertaken by all without hesitation, be exciting and serve as a guide to the various avatars in which the company is immersed providing a reference to the contrast of various options.

Part A: Business Economics

Tesco Strategic Analysis

Company Review

Tesco is an international distribution based primarily in the UK, in Ireland and Asia. Its capitalization is 34.84 billion at 11 July 2008 and its turnover is 80 billion Euros in 2008. Tesco is British distribution group and 3rd World Group. Its activity revolves around three areas: distribution in the UK, international distribution and financial services.

The Macro Business Environment of Tesco Group

The Macro-Environment consists of factors that may influence an organization externally. This is usually outside of the control of corporations. Examples of factors that may influence a business are changes in interest rates, changes in cultural trends and tastes, more competitors in surrounding areas as well as greater regulations or changes to government laws. A popular method used to analyze the macro-environment is through a PESTLE analysis which stands for political, environmental, sociological, technological, legal, and ethical issues (Balchin 1994 pp.43-57).

PEST Analysis - Tesco

Political Factors

The political environment includes all government actions that affect the business in the retail trade. This effect may be through formal legislation, such as the law on the sale of goods, as well as through competition policies and planning ...