Strategic Management Assignment _ Tesco (GC0357)
Executive Summary
The aim of this report is to critically analyze the strategic issues of Tescobusiness, to provide recommendations for John Lewis. Thus, the report first analyses the business environment of Tescousing strategic analysis models and then recommend using strategic decision-making models.
The findings of this report come from several secondary data sources, where the data is both qualitative and quantitative. Both qualitative and quantitative data related to Tesco business are collected from mainly TescoAnnual Report-2014. Data on strategic models and their application mainly come from several books, journals, and websites, where the main book used is “Principle of Marketing ” authored by Kotler et al. (2014) and ” Introduction to marketing” authored by Palmer (2012).
For analyzing the business environment and competitive positions, Porter’s Five Forces Model and SWOT Framework have been applied. On the other hand, for making a strategic decision, Ansoff’s Growth Model and Blue Ocean Strategic Model have been used. Porter’s Five Forces Model discloses that Tesco has both opportunities and threats in the current market. Thus, if Tesco can overcome the threats identified and can take the opportunity identified, it will be able to gain sustainable competitive advantages. SWOT analysis reveals if Tesco can reduce its weakness and threats, and can use the current strengths and the potential opportunity effectively, it will be able to gain sustainable competitive advantages.
Ansoff’s Growth model suggests Tesco increase its operation by opening more stores in local areas like Tesco and Sainsbury’s to improve sales and market share, to focus on online marketing, social media marketing, and mobile device marketing to attract technology prone customers, and to engage customers through building long term relationship through effective customer relationship marketing (CRM). Blue Ocean Strategy Model suggests Tescoto eliminate its quality products with integrity and consistency, to raise its products towards target customers through different marketing and promotional campaigns, to consider cutting products price a bit, and to create a new market introducing innovation and creative products through R &D………
Table of Contents
Executive Summary.
1.0 Introduction.
2.0 Strategic models applied in Tescobusiness environment
2.1 Strategic Models for business environment analysis.
Porter’s Five Forces Framework.
SWOT Analysis.
2.2 Decision-making models.
Ansoff’s Growth Model
Blue Ocean Strategic Model
3.0 Conclusion and findings models used in terms of Tescostrategic issues.
3.1 Findings and Conclusion.
3.2 Recommendations for John Lewis.
4.0 Researcher’s learning from this coursework.
5.0 Individual contribution to Group Discussion.
Group forming.
Accomplishing individual tasks.
Monitoring and evaluating group work.
Group performing.
References.
1.0 Introduction
This report has critically analyzed the business environment of Tesco in terms of strategic issues. Tesco is a partnership supermarket that is operating across the UK. Tesco has been growing up slowly and steadily with increased sales and profits. In section 2.0, the report has focused on strategic models and their application in John Lewis. Strategic models have been grouped into two sections: models for analyzing the business environment; and models for making strategic decision decisions. For analyzing the business environment and competitive positions, Porter’s Five Forces Model and SWOT Framework have been applied. On the other hand, for making strategic decisions, Ansoff’s Growth Model and Blue Ocean Strategic Model have been used. In section 3.0, the report has summarised and concluded the findings of the models used. Section 4.0 has defined the researcher learning as a group discussion through this coursework. Section 5.0 has outlined the researcher’s contribution to the group discussion. Finally, the report has been concluded in section 6.0.
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2.0 Strategic models applied in Tescobusiness environment
Strategic models used in this report have been divided into two groups: models for analyzing the business environment, and models for decision making.
2.1 Strategic Models for business environment analysis
According to Kotler et al. (2014), a business environment consists of both external and internal situations. Thus, when a business environment is analyzed, it is needed to analyze external and internal environmental factors. For analyzing the external environmental factors of John Lewis, this paper has used Porter’s Five Forces Model. For analyzing the internal environmental factors of John Lewis, the SWOT framework has been used.
Porter’s Five Forces Framework
This model focuses on five key forces that define the attractiveness of the market and competitive intensity. This model is mainly used by organizations to understand if new products or services are profitable or not (Kotler et al., 2014). The key strengths of this model, it defines the strengths of business in the present competitive market and identifies the business power. In addition, the model help to avoid mistakes and improve weaknesses. However, there are limitations to this model. The key limitation of this model is it cannot provide information on the business internal issues, it only analyses business external issues. In addition, the model only emphasizes key external forces but business in general faces many more challenges that come from the external business environment (Kotler et al., 2014).
| Porter’s Five Forces Model applied to Tescobusiness | |
| Porter’s Five Forces | Analysis of John Lewis |
| Competitive rivalry | Tesco facing high competition from Tesco, Sainsbury’s, Marrison, Asda, Primark, H&M, etc (John Lewis, 2014). |
| Newmarket entrant | The threat of new entrants is low because it would be cost-effective to set up chain stores like John Lewis. In addition, Tesco is a mature retailer that has a strong brand image and improves customer loyalty (John Lewis, 2014). |
| Substitutes products and services | The threat of substitutes is very high because competitors (including Tesco, Marks & Spencer etc ) are developing similar products and services (John Lewis, 2014). |
| Customer bargaining power | Customers have high bargaining power because they have lots of alternative choices with low costs (John Lewis, 2014). |
| Supplier bargaining power | Suppliers have low bargaining power because Tescomainly depends on its own brand products (John Lewis, 2014). |
Table: Porter’s Five Forces Model analysis on Tesco Source: Reporter
SWOT Analysis
SWOT Analysis is a technique that is applied to analyze a business’s strengths, weaknesses, opportunities, and threats. The key advantage of the SWOT framework is that it helps organizations to analyze both internal and external factors. However, if the organizations depend only on this model, it cannot gain its organizational goals and objectives because there are a variety of issues that impact business performance (Kotler et al., 2014)……….
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