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Strategic management is the practise of devising various strategies to improve workplace productivity. This aids in the development of various processes and models to give change and strategy so that the organisation may improve its workplace performance. Creating a process modification to evaluate better performance.
SECTION-1
Background
Tesco is a retail company based in the United Kingdom that offers supermarket and hypermarket services to customers. The headquarters of the company are in Welwyn Garden City, England. Tesco has been in business for nearly a century, having been started in 1919 and currently ruling the UK market. Following that, sales grew, and by the end of 1939, they had grown to 100 Tesco stores. Working on development and growing vital work in the retail industry, the company currently holds the largest market share in the United Kingdom. Jack Cohen founded Tesco, which now has over 7000 stores throughout the world. The company is aiming to expand its services and reach new markets so that it can deliver services to a broader audience and improve profits. The company's services are mostly provided in Ireland, the United Kingdom, America, Slovakia, and the Czech Republic, among other places.
The product range of Tesco includes the product and services from the supermarket, hypermarket, superstores, bank services, credit services, kitcheree, home stuff etc. these are the services and many other services of product and services are offered by Tesco to their customers and include the increase of business in Retail industry. The competitors in the market are increasing in the business as Sainsbury’s are one of the leading competitors for the business in a market which is affecting the business of the company.
The mission of Tesco: Tesco's mission is to improve everything we make. This demonstrates that their service delivery process is superior to the competition, and their goal is to ensure quality.
Mission Statement: The mission statement is one of the short forms of a statement that outlines what, why, and how a function is carried out in an organization. This gives them a better knowledge of the organization's goals and objectives, which they are attempting to attain.
The vision of Tesco: Customers, who are one of the people the company is seeking for, to establish a good market name and brand recognition in the retail industry. The organization is working on a vision to improve customer happiness and implement the required changes in order to achieve better results.
Vision Statement: The vision statement outlines the company's long-term goals. It is a manual to assist organizations in making decisions.
Aim and Objectives:
Working in company process to help the environment and increase market reputation
Working on customers satisfaction and understand them better form the rivals.
Increase the sales revenue by the year end and control the covid-19 situation.
Maximising the wealth of the Shareholders.
SECTION-2
PESTEL Analysis
Political: The increase in Tax rates, change in policies by the movement of the UK affecting Tesco business. Pandemic provides new guidelines to works with high price fluctuations. The instability in the finance for the country is to be considered.
Economical: the decreasing economic and its stability after covid-19 impact, company terminating people and the unemployment affecting the economic stability of the UK market.
Social: Trends need to be adopted by Tesco as they need to develop an increase of trend working and developing online for a longer period for services to offer to customer (Thiersa, 2019). Even after the pandemic, the company is looking to increase sales services online.
Technological: Utilization of technologies to increase the ways to offer services and product to the customer in the market. The online stores and places where the order can be put. Development of technological use to work in UK market of recession.
Environment: Companies that are under pressure to work on sustainability and environmental challenges are also helping society through their operations. Tesco is committed to its carbon footprints and working on minimizing the waste for the business.
Legal: the policies of the UK government and legislation are making an impact on Tesco working performance. The code of practices from the FRC affected the food business of the company working in the retail sector (Zim and Zahan, 2019).
Porter Five Force and their drivers of change
Competitive rivalry: The competitive rivalry is high; the market is increasing in the online sector for business. There are competitors which have already made strong work in the online market which is very hard to beat (Keiningham and et.al., 2020).
The threat of Substitute: The threats are low, because of the retail industry being working on so many products and services that it needs high interest to break the ordinary chain of workable.
The threat of new entrant: The threat of new entrant is high as there are different small emerging stores in the market which are easy to develop the retail business. Capital is not an issue for the company which are working in small retail shops and they can use the pandemic situation to make an online service for customer causing the retailer like Tesco in market.
Bargaining power of Buyer: The bargaining power of customers will be high as the situation makes the demand low and the power shift to customers as they can choose the product and service accordingly.
Bargaining power of supplier: the power of the supplier is low as the company is already working on a high platform with multiple numbers of suppliers that can help them reduce the power of the supplier to low. They need to work on this (Fadeyi, 2020).
Key Competitors and Relation with key factors
The key competitors of Tesco are the ASDA, Sainsbury’s etc. there are many other competitors which are working in the market of the retail industry and making an issue with the company in their productivity and profitability. Working in retail the competitors are developing a different pricing strategy to capture the market and also providing the initial services by developing the home deliveries and utilization of technologies to get stable in the business market.
The key factors are:
The competition is working on the market situation of the UK and the pandemic changes which are necessary to develop better occupational in market. Their need to be developed performance for the business in which they are supposed to initiate change. Tesco working on new ways where the competitors have already adopted those business change to work in. the competitors are working on market trends and changing the market to work in increasing performance. Working on the purpose of competitive analysis and flexibility for the data and trends in the market. Working according to the market competition and the company’s study is essential to make an impact on the competitors in the market. Tesco needs to work on the necessary process of development and strategy to work on.
VRINE Model
Value: It is essential for the company to value their strength sand understand their weakness to work in better performance in business. The company values their customers, and they also provide the necessary development in employees who are helping in getting performance (Niemczyk and Sus, 2020).
Rare: the rarity of Tesco in the market is their loyalty towards the customer which is helping them in getting the best results in the market. The customer can be trusted towards the company to work within pandemic for safety and security purpose.
Inimitable: there are factors that can control the competitors and imitate them as the high cost, time, property rights etc. these are the key factors that can control the limit of competition in the market to work in.
Non-substitute: providing the best of quality to the customers can help in customer retention and the Tesco works to develop their working in the market to provide suitable changes in company services.
Exploitable: working on the full potential to provide the damage to a competitor and increase the result in the market. This is vital for Tesco to increase their performance with full force to develop results in the market (Sakunia and Parikh, 2020).
Summary of last 3 years
Over the previous three years, Tesco has expanded its store count as well as its procedure for introducing new ways of working. In their workplace, they had developed a change and management procedure. The covid-19 circumstance forces managers and leaders to adapt their working processes in order to implement a new plan. The company used new methods of development and made the required changes in the workplace to aid in the transformation process. Tesco is seeking to minimize competition, which necessitates more changes. To deal with the Covid-19 issues, they provided a production modification as well as an increase in internet marketing. Working as a top leading brand in the retail industry the company occupies new stores with the online process of delivery in the market to control the losses. The pandemic lockdown affected the business which the leader covered with the new changes in results. For the fiscal year of 2021, the company faces a decrease of 1% as they are working in a situation of developing economy of UK (Tesco PLC, 2021). The gross margin of the company went to 6.85% and the operating margin is 3% in the market for 2021.
SECTION-3
Strategy Diamond Framework
The strategy framework of Diamond is the 5 elements which are explaining the needs for a complete strategy to work on the development of the Tesco strategy over the market to achieve better results in the market. The five elements are as follow:
Arenas: The arena provides information on the goods as well as their business channels. This is critical for the organization to understand the channels they work in; Tesco must comprehend their market segment and the aim to acquire more business. This can lead to business development because it will improve Tesco's development performance in order to transform the market concept. The basic understanding of the Arena strategy is to provide information on where the company is active in the market (Teece,2020).
Vehicles: This gives the client a better knowledge of the change as well as ways to engage with the audience. This is critical for the company since Tesco invests in internal vehicle development and provides the required tools to attract customers. Tesco has formed a strategic agreement to collaborate on the development of technology to improve the process of connecting audiences to the company.
Differentiation: Tesco must develop a plan to increase market rivalry by focusing on differentiation such as brand image and pricing of firm products in order to gain a competitive advantage in the marketplace. The market's speed of operation, so that the client recognizes Tesco's high quality and efficient operation in order to win the market (Vidjak, 2019).
Staging: The company's main aim should be to develop the oversell process of change in the workplace so that they can achieve greater heights. It entails participating in Tesco's expansion strategy, which requires the management to work on a global scale and provide services to the public. The speed of the interval events needs to show a proper differentiating as Tesco work in the development of business and also include the development of the workplace. As Tesco works on business development, which includes workplace development, the speed of the interval events must exhibit sufficient differentiation.
Economic logic: Economic logic is a strategy for providing development in the workplace by changing the way people operate so that they can achieve better goals and market results. The economic logic demonstrates the methods through which a firm can obtain a return on its investment in the market (Vuorinen and et.al., 2018). Working on the lowest levels of the scales to adjust pricing in order to improve Tesco's performance over the competition. Prices must be perfect in order to achieve better outcomes in the market, where they are attempting to expand their firm.
Recommendation
Recommendations for Tesco is to make sure that there are right actions which are being taken with time so that the company would be able to have a better place for themselves in the market and maintain their customer base as well. The company is very friendly with the technological use which is taking place in the market and that is a great advantage but the use of them at the right time and place is very essential. In the market, there are a lot of small businesses which can be captured by the company and made sure that they are providing better services and products than them so that there are better sales. It is critical to developing the correct strategy for the organisation in order to be able to adapt and implement such changes so that improved standards may be achieved. The technological working environment is good, but the company's web presence is lacking, which is an important element that the business should address in order to achieve higher standards. Businesses have to be made sure that there are better working standards as well which is improving the working environment for the workforce which is going to be a great factor for the company to work upon. Improving the customer’s feedbacks and working upon them is very important to make sure that there is a good lining which is present for the products and services which are coming up. Reducing the shrinkage which the company must have to be able to detect the working and make sure that there is going to be higher opportunities which are going to be present.
There are a lot of collaborations that can be done for the future as well by the organization to make sure that they are having the right customer base for themselves. Content-based filtered which must be present to make sure that there are right purchases and working which is going to be present. Customers must be assisted more frequently, and proper work optimization must be ensured. There will be fewer errors for the company's improved operating and functioning, and the company will be able to maintain proper working standards. Value for money is really vital, and it must be delivered to clients with all products and services. Customers must be offered greater variety, and the company will perform better in the market. Clients must be able to purchase items and services more quickly, and the market must ensure that client happiness is present in order for the system to function properly. Interaction must also be increased in order to ensure that the company is well-represented in the market and that a high degree of transparency is maintained in order to maintain market standards. Quality and portfolio of the company have to be maintained by the organization in order to be able to have the right working and standards which are present. Items of the company have to be of good quality and standards which the company has gained over time to have a better competitive edge.
CONCLUSION
To grow Tesco's business, the analysis found that the corporation must develop its strategy against market competition and have a deeper grasp of the business environment. This resulted in a rise in better resources, which in turn led to an increase in performance for the retail industry in which they work.
References
Books and Journals
Fadeyi, A.P., 2020. An Analysis on the Application of Motivational Theories at Workplace and the Impact on Employee Engagement: A Study of Tesco Ireland (Doctoral dissertation, Dublin, National College of Ireland).
Keiningham and et.al., 2020. Customer experience driven business model innovation. Journal of Business Research, 116, pp.431-440.
Niemczyk, J. and Sus, A., 2020. The Concept of Global Competencies of Corporations in the Context of a Global Mindset. European Research Studies, 23(2), pp.30-39.
Purba, J.T. and Tan, J.D., 2018. Owners' integrity, customers' relations, and focused attitude as strategies for family business sustainability and growth: an empirical study. Journal of Economics, Business, and Accountancy Ventura, 21(2), pp.219-228.
Sakunia, D. and Parikh, P., 2020. High Cash Burn in a Price Conscious Economy with Low Switching Costs.
Teece, D.J., 2020. Fundamental issues in strategy: Time to reassess. Strategic Management Review, 1(1), pp.103-144.
Thiersa, A., 2019. Penelitian pengaruh lingkungan internal dan external terhadap kinerja keuangan perusahaan dalam industry ritel makanan dan obat-obatan di Inggris. SKRIPSI-2019.
Vidjak, M., 2019. The Competitive Advantage of Nations: Porter's Diamond Framework for Croatia (Doctoral dissertation, University of Zagreb. Faculty of Economics and Business. Department of Organization and Management.).
Vuorinen and et.al., 2018. Mapping the landscape of strategy tools: A review on strategy tools published in leading journals within the past 25 years. Long Range Planning, 51(4), pp.586-605.
Zim, Z.S. and Zahan, M., 2019. Local versus global brands: The internationalization process in Food and Beverage Industry. The Business & Management Review, 10(5), pp.58-66.
Online
Tesco PLC, 2021. [Online]. Available Through: < https://in.investing.com/equities/tesco-plc-financial-summary/>.
