TESCO PLC

Role and Impact of Strategic Thinking



Table of Contents

Introduction1

Section A1

Tesco PLC1

Purpose of Tesco2

SWOT2

Strengths3

Weaknesses4

Opportunities4

Threats4

PESTEL5

Political5

Economic5

Social6

Technological6

Environmental7

Legal7

Section B8

Porter's Five Forces8

Threat of substitute products and services8

Threat of entry of new competitors9

Intensity of competitive rivalry9

Bargaining power of buyers10

Bargaining power of suppliers10

Value Chain Analysis10

Inbound Logistics10

Operations Management11

Outbound Logistics11

Marketing and Sales11

Services12

Support activities12

Company Infrastructure12

Human resource management12

Technological Developments12

Section C14

Evaluation14

Recommendation14

Role and Impact of Strategic Thinking

Introduction

This paper discusses the impact of strategic thinking on completive options of Tesco. The strategic tools like, PESTEL, SWOT, value chain analysis and Porter's five forces are used to identify the environmental analysis. The essence of competitive strategy lies in connecting a firm to its environment. It's all the game of synchronizing the environment internal to the firm with the external environment. This paper will be done in three sections. Section A, being dedicated to deep analysis of environment in addition to company's introduction and its mission. Section B is dedicated to the analysis of industry and Tesco's strategy and value creation. Finally, section C is prepared specially to identify the strategy gaps and their possible solution.

Section A

Tesco PLC

United Kingdom's leading food and grocery retailer, Tesco operates in retail business through various diverse formats which range from convenience stores to hypermarkets. These stores include Tesco Metro city centre stores, Tesco Express convenience stores, Tesco supermarkets, and Tesco Extra hypermarkets. The stores of Tesco offer a wide range of products from food to electronic item. The company operates in 14 countries with an escort of 5,380 stores located in Europe, North America, and Asia, as per the report of FY2011, Euromonitor International, (2012b: 2),. Five business segment of Tesco enable its operation in different geographical locations including, Asia, US, UK, Rest of Europe and Tesco Bank. Tesco dominates in UK, and is the market leader in its industry. Major Products and services of Tesco are Products Mobile phones, Electrical goods, Petrol, Services, Clothing, Food, General merchandise, online sales, fresh & easy, financial services, and even Telecommunication services Euromonitor International, (2012b),. However, our focus in this report is grocery and food, so financial and telecom business sectors of Tesco will not be discussed.

Purpose of Tesco

The Ex-Chief Executive of the company, Sir. Terry Leahy believed in not going after simple maximizing shareholder's wealth as others, instead “the company's core purpose is to create value for its customers and to earn their life time loyalty”. Furthermore, the Chief executive stated that, the purpose of Tesco is 'to treat people, how we like to be treated” (Tesco, 2012).

These statements by Ex-CEO of Tesco PLC serve as the mission and vision of the company. The company has long term strategy which is, to broaden the scope of business in UK. This objective includes non-groceries and sustainable strong growth in all areas. Telecom, Financial services and non-groceries are likely to be the key focus of the company.

Tesco is also the largest online operator of grocery services in UK. Tesco offers multiple products through its electronic window. This includes its core products in Grocer, Telecommunication, software, DVD rental and even financial ...