TESCO PLC

Critically Assessment of Tesco PLC Strategies



Table of Contents

Executive Summary1

Introduction3

Question# 13

Answer3

PESTEL4

Political4

Economic4

Social5

Technological5

Environmental5

Legal6

SWOT6

Strengths7

Weaknesses7

Opportunities8

Threats8

Question#29

Answer9

Industry's Competitive Trends10

Rivalry among Competitors11

Comparison to Closest Competitors12

Sustainable Competitive Advantage12

Conclusion13

References14

Executive Summary

The essence of strategy lies in aligning the company with trends in the external environment. It aims at augmenting the internal resources in a way as to make the best of opportunities and dodge the threats with least or no loss to business. Tesco PLC or simply abbreviated as “TSCO” in London stock exchange is a leading British Grocery, food and retail store chain operator in multinational arena. The removal of trade barriers between countries has helped expansion of a large number of businesses. The liberalization of Trade in China and inclusion of ten more countries in the European Union (EU) also promoted the trade relationships between the Western and Eastern Europe, thereby liberalizing trade. The consumer preferences are shifting towards ready to made food and organic food, which is likely to squeeze the profits of retail chain operators like Tesco. The retired people outnumber the children in UK, who tend to eat less outside home, which is in part encouraging for grocery sellers like Tesco. The awareness of environment is also one of the biggest trends prevalent. Tesco is balancing this demand of customer by placing information about the carbon footprint on many of its product. The company is emphasizing most on introducing organic food products variety, environmental concern of the customers and increasing convenience for the customers.

When it comes to stock of internally developed assets, resources and competences, Tesco competes through several store formats to cater the needs of a wide range of customers. Company has developed its assets and competencies through strong focus upon its purpose which is that, company should not go for maximizing the wealth of shareholder; instead the company should strive to create value for its customers as its core purpose and gain loyalty of lifetime. Tesco holds 11.7% share in the retail market of UK with strong relationships with suppliers and entry barriers for new entrants and competency for offering the lowest prices in the market. The company is facing difficulties as consumer preferences are changing towards organic foods which are less profitable for the company, aged population which is not very tech savvy, and competitors fighting with the company for ever lower prices. Tesco will need to identify the customer preferences and introduce increasing convenience with value for customers; otherwise, competitors are there to fill that gap.

Critically Assessment of Tesco PLC Strategies

Introduction

Strategy is all about positioning the company in place where it can take best advantage of opportunities and dodge the threats. Conceptual frameworks are required to understand and map the changes in the external and internal environment. The company chosen for this paper is Tesco PLC, which is well diversified in terms of products and services and also in term of geographies. The paper discusses several tools used in strategic evaluation of the firm's position in competitive landscape. These tools include PESTEL analysis, and SWOT ...