Business strategic planning: a case study on Tesco

Business strategic planning: a case study on Tesco

Introduction

Strategic planning of the business is a crucial tactics for all the corporate firms across the globe to maximise its value and secure future sustainable development through developing proper strategies (Lasserre, 2017). The aim of the study is to evaluate the strategic planning of Tesco and develop an effective planning through which the company can run their operational activities sustainably. Tesco is the largest retailer, established in 1919 and the company is reputed due to its widest supermarket chain across the UK as well as other international markets such as China, India, Malaysia, Ireland, Poland and Hungary. The organisation is efficient in retaining the customers across the global markets and satisfying them through delivering quality products and efficient services according to the needs and preferences of the customers.

Strategic planning

Provide an assessment of the extent to which Tesco’s mission, vision, objectives, goals, core competencies inform its strategic planning

Tesco is a famous retailer across the globe whose profitability and sales volume further provides the company to utilise more opportunities through positive investment and satisfying all the stakeholders of the business (Tesco, 2018a). The organisation is a leading retailer with 472000 colleagues where they are efficient in serving millions of customers every week through their physical stores as well as online activities. There are more than 6809 stores of Tesco where there are approximately 79 million shopping trips per week (Tesco, 2018e). The tag line of the company is ‘Serving Britain’s shoppers a little better every day’ where the organisation aims at improving innovation and creativity for delivering unique service to the customers and maximise the values of all the consumers. The mission statement of the company is ‘We make what matters better, together’ (Tesco, 2018b). The mission statement is also effective to form proper strategic planning so that it is possible to achieve the organisational objective.

The vision of the company is ‘to be the most highly valued business by: the customers we serve, the communities in which we operate, our loyal and committed colleagues and of course, our shareholders’. The organisation wants to be the famous business through innovation and creativity so that it can secure sustainable development in near future. In addition to these, the objective of the firm is to inspire all the stakeholders through building trust and loyalty with all the stakeholders engaged with the business. The business is willing to be the champion for their customers by helping them to enjoy better quality of life in an easier way of living. In this regard, Tesco focuses on the quality products and affordable price so that the customers can purchase more units of products at lower price as compared to other competitive firms in the market. This is also an effective strategy for the company to meet the objective of the business and gain high competitive advantage through developing effective strategic planning. The values of Tesco are,

• Understand the customers
• Be the first to meet the needs and preferences of the customers
• Act responsibly for the social community

The above mentioned values also influence the company Tesco to for proper strategic planning through which they can maximise their vision and mission statement (Tesco, 2018c). Understanding the people including the customers, colleagues and community is necessary and in this regard Tesco focuses on listening the perspectives of all the stakeholders so that they can firm appropriate planning to meet the demand of the stakeholders (Tesco, 2017). In this regard, the company also aims at treating the people fairly as per their requirements and in order to maximise trust and loyalty, Tesco concentrates on,

• Work as a team
• Share knowledge and experience
• Listen and support the stakeholders
• Trust and respect each other

These are efficient to meet the organisational values and Tesco mainly focus on its aims and objectives so that it can run their business activities strategically (Tesco, 2018d). The above mentioned aims, objectives as well as vision and mission are therefore beneficial which influence the company to develop appropriate strategic planning for securing future sustainable development (Tesco, 2016).

The company also has crucial core competencies which are also advantageous as it provide an opportunity to Tesco to form proper planning for running the business activities strategically. The core competencies are such as,

• Making the life of the customers easier to live healthier
• Sourcing great quality and affordable products
• Making positive contribution to the society

These are the main strategic planning through which Tesco tries to achieve the vision and mission of the organisation (Tesco, n.d).

Analyse the factors that have to consider when formulating strategic plans

The above mentioned vision and mission of Tesco is the main factors that influence the managers to develop an effective strategic planning. In addition to these, the values that the organisation set are the second factor that leads the company towards developing an essential business strategic planning through which it is possible to meet the mission and vision of the company (Tesco, 2014). The environmental concern is the third factor where the company is raising awareness about the positive environmental footprint and this is important in establishing a good strategic planning where the company can achieve environmental sustainability. The fourth factor that is effective in formulating strategies planning is the tag line of Tesco which is ‘’Every little helps’, which influence the company to increase innovation and creativity to serve unique service to the customers that will maximise the values for all the customers (Wearden, 2014). The SMART goals and objectives of the firm are also other factors that are considered to be important to set appropriate strategic planning which further provides an opportunity to Tesco to run their operational activities strategically across the globe. The company is also concerned about the competitive advantage and in this regard it is another crucial factor that also motivates the managers of the company to set effective strategy so that high markets hare can be achieved. Hereby, the vision and mission as well as values and environmental sustainability are the crucial factors that influence the organisation to formulate effective strategic planning so that the pre-specified aims and objectives of the company can be achieved.

Evaluate the effectiveness of two techniques used by Tesco in developing strategic business plans

The two technique of Tesco are such as effective leadership and management and managing commitment to being a responsible retailers. These two techniques are beneficial for the company for developing effective strategic planning. Among the two techniques, the second technique, managing commitment to be a responsible retailer is more crucial as compared to previous one as it influence the managers and the employees to develop appropriate strategic planning so that the aims and objectives of the company can be fulfilled. The company needs to develop effective business planning to run the business sustainably and the technique of managing the commitment provides a scope to Tesco to satisfy all the stakeholders and run the operational activities fairly. Managing commitment is an advantageous tactic for the company which influence the managers to develop proper business planning so that all the requirements and preferences of the stakeholders can be fulfilled and it is possible to satisfy them so that the firm can retain them for long run and operate the organisational activities across the international markets sustainably (Slack, 2015).

Strategic development

Analyse the strategic position of Tesco by carrying an internal audit

SWOT analysis, core competencies of the company is helpful to conduct internal audit and stakeholder’s analysis in this regard is also beneficial to identify the ways the company can manage their stakeholders. Through internal audit, it is therefore possible to understand the strategic position of Tesco, which is necessary further to develop effective strategic planning in near future so that the company can achieve their aims and objectives. Through the SWOT analysis, it is easy to understand the strategic position of the brand and for Tesco, bran reputation and wide presence in international countries are the main strengths of the company to run their organisation strategically. On the other hand, the company has the multi strategic format where it operates through supermarkets, hypermarkets, discounted stores and convenience stores. Large stores, availability of the products and operational efficiency are other strengths through which the company can develop strategic planning for running the business sustainably (Wood, 2014).

The major weaknesses are negative media coverage, low profit volume and weak presence in many emerging markets. On the other hand, the opportunities are increasing demand for retail items as well as rapid growth in e-commerce. Moreover, the innovative digital media for promotional activities and market expansion are other opportunities through which Tesco can run their business sustainably (Kantar World panel, 2015). There are some threats such as economic recession, rising cost of raw material and high competition which may raise difficulties for Tesco to develop effective strategic planning. As per the above analysis, it can be stated that, the strategic position of the company is strong where the organisation has the capability to maximise their performance to manage all the stakeholders successfully. On the other hand, the stakeholder’s theory is appropriate for internal audit of the company which further provides a scope to evaluate the company’s activities what has been implemented by Tesco for managing their stakeholders.

As per the stakeholder’s theory, the company develops effective strategic planning to satisfy the stakeholders. In this present case, Tesco focuses on listening the perspectives of the stakeholders including, customers, employees, managers, other staff members, government, social communities and suppliers where the organisation aims at satisfying all the people engaged with the business. Monitoring their behaviour, motivating them and sharing information fairly are the tactics of Tesco to satisfy the stakeholders and retain them for long run. The activities are effective where it provide a scope to Tesco to develop effective strategic planning further top meet its aims and objectives. The core competencies are also important for internal audit and through steering wheel of Tesco; it is possible to understand the capabilities of Tesco in developing effective strategic planning in near future.

As per the steering wheel of Tesco, there are people, community, operations, customers and finance through which the company tries to create values for all the stakeholders. Managing responsibility towards the community, maintaining operational efficiency, investment and maximise profitability, improving trust and loyalty among the customers are the tactics of Tesco to improve their strategic position so that they can develop and implement effective planning for further organisational growth.

Carry out environmental audit for Tesco

For environmental audit, PESTLE analysis of Tesco is beneficial where it is possible to evaluate the external environment for doing the business of the organisation

Assess the significance of stakeholder analysis for Tesco when formulating new strategy

The stakeholder analysis is useful in order to understand the strategies of Tesco that it has implemented for managing all the people engaged with the business. The company is efficient in maximising satisfaction level of the stakeholders and the company is capable of developing an effective strategy that would improve stakeholder’s value in near future. Building trust and loyalty through communication and cooperation is the tactic of Tesco in meeting the requirements of the stakeholders where it is possible to retain them for long run (Haddock-Miller and Rigby, 2015). The stakeholders in this regard are also effective to contribute positively in the strategic planning of the organisation so that the pre-specified goals and objectives of the company can be maximised. The stakeholders are cooperative to maximise the profitability and sales volume of the company by retaining more customers for their quality products and services (Wheelen et al., 2017). The company is also effective to fulfil the needs of the stakeholders by making the business transparent and fair where the stakeholder’s values are maximised well. Hereby, the stakeholder’s including the customers, employees, and government, social communities, managers, shareholders and suppliers play crucial role in achieve organisational success through proper leadership and management as well as implementing the strategic planning successfully.

Using the case study and the research information present a new strategy for Tesco

Tesco is capable of utilising their strengths and resources for developing an effective strategic planning for sustaining in the business sin future. The strategy is to expand the company in Qatar is one of the attractive markets for establishing the business. The company can expand their business through this strategy and strengthen their customer’s base. This is an effective strategy that will help the company to maximise their profitability volume and sales units through successful expansion of the business in Qatar. Qatar is developing rapidly and it further provides a scope to establish a business and run tits operations successfully due to political stability and economic growth. The market expansion is the main strategy through which the company can secure sustainable development in near future. Through market entry, the company can establish their stores in a new market and gain high competitive advantage over other competitive retailers in Qatar. It is also possible to maximise the organisational aims and objectives through market expansion strategy where the company can create stakeholder’s value and retain them for long run. This is effective for sustainability of the business where the managers and owners of Tesco can run their operations in Qatar successfully.

Strategic Evaluation

Tesco needs to develop effective strategic planning for appropriate strategic evaluation where it can utilise the future opportunity of effective market expansion which further provides a scope to sustain in the business successfully. In this regard, the first strategy is to export the products of Tesco and establish a physical store in Qatar. The second strategy is strengthening online activities through online promotional technique for retaining the audiences in Qatar. These two strategic planning is effective for the organisation Tesco, to enter into new market Qatar and gain high competitive advantage. The first strategy is appropriate as it helps Tesco to export their products to the international market through establishing a physical store where the customers can see the products and make effective purchase decision.

Opening a discounted store of Tesco in the international market is beneficial as it helps to target the potential buyers and retain them for the quality products and services. As Tesco focuses on lower price strategy, it is also advantageous for the company to retain the customers and attract them for quality products at affordable price. This strategy is also effective for gaining high market share in the new international market and improves competitive advantage in the international retail industry. Through opening store in the new market, the company is able to improve trust and loyalty among the customers as well as other stakeholders and create strong retail network in the nation.

On the other hand, the second strategy of improving online presence in Qatar is another effective tactic for market entry and high competitive advantage. The demand of online activities is increasing rapidly across the international market where maximum numbers of customers prefer to purchase quality products from online and e-commerce where they can see the availability of the products of a particular brand and choose the right product from home as per their choice and preferences. Hereby, it is an appropriate strategy for Tesco to improve the online presence of the company in the new international market where it is possible to retain more customers in the local market. In this regard, the company needs to focus on promotional tactics for improving online presence and the strategy of promoting the organisational website and products in the new international market is beneficial for Tesco to increase market share and enhance competitive advantage in near future.

The promotional activities through online is also beneficial where the customers can interact with the representative of the company and it will be helpful for the staff members of Tesco to deliver efficient service by acknowledging their actual needs and preferences. This is also effective for improving understanding about the customer’s requirements and it also provides a scope to build strong corporate relationship with the customers in the new market. In addition to these, the online activities and promotional tactics also give a scope to Tesco to improve brand visibility and attract more customers for their quality products and efficient service. In this regard, Tesco also needs to strengthen their supply chain in order to improve online presence of the brand in new market place. In this regard, efficient distributors and suppliers as well as proper supply chain network are helpful for Tesco to distribute their products as per the customer’s requirements.

Justify one of the chosen strategies

Both the strategies are useful for Tesco in order to expand their business and gain high competitive advantage, but the second strategy is more effective for Tesco in order to improve their market share and expand the business internationally. The strategy is ‘to maximise online presence of Tesco through online branding’. Online activities of the company are one of the major tactics of the corporate firms for attracting the local customers and strengthen their customer’s base successfully. Through this strategy, the company can increase brand visibility band enhance market communication in the new market place where all the customers can interact with the sales person of Tesco and gather effective feedback regarding the products and services. Improving promotional tactics and strengthening the company own website is also beneficial where Tesco can be efficient in positioning the brand successfully. In addition to these, it is advantageous for Tesco to choose the strategy o increasing online presence through promotional tactics and strengthening supply chain network as this helps the brand to distribute the organisational product and enhance the sales volume and profitability of the company. Hereby, through his strategy, the organisation Tesco will be able to maximise their business goals and objectives and create values for all the stakeholders engaged with the business.

Strategic Implementation

Understand how to implement a chosen strategy

The recommended strategy for Tesco is to improve online presence of the brand so that it is possible to retain more customers for their business and it further helps to expand the business internationally and gain high competitive advantage. In this regard, the role of the engineer and IT managers is to develop effective website for the company by utilising hardware and software. It is their responsibility to manage the customer’s data and protect it so that the consumers can trust the organisational entity to share their personal information for transaction. Customer relationship managers plays a crucial role in this regard to provide 24*7 service to the consumers and resolve their queries and it further helps to retain the customers and improving customer’s loyalty.

The sales person needs to handle the clients and understand their actual preferences so that the quality products can be delivered as per their requirements. Additionally, the managers plays a significant role in strengthening their supply chain in the new international market so that it is possible to distribute the products and deliver it to the customers as per their needs. Moreover, the marketing experts need to develop effective content that will be helpful to attract more clients in the market. Simple and attractive content in this regard helps to improve customer’s conversion rate where the customers can choose the option and order their products successfully. In addition to these, it is also the role of the marketing experts to improve search engine optimisation and retain the clients through cooperation and communication so that it is easy to increase conversion rate (Hill, Jones, and Schilling, 2014). The marketing mangers also need to be concerned about social media advertisement so that it is possible to promote the brand through social media platform and interact with the customers directly.

Analyse the resource requirements you will need to implement a new strategy at Tesco

The company Tesco needs to invest more in improving the online activities and in this regard the main resource that is required is financial resource which is necessary for implementing the strategy. In addition to these, the company needs to implement the Information and Communication technology as well as strengthen the Information Technology (IT) infrastructure. In addition to these, human resource is one of the major resources which are required to implement the planning in Tesco where the organisation needs to for managing the digital activities. Computer engineer as well as the IT manager is required to handle the technology and develop the company’s website successfully. Moreover, the company needs to manage copyright and Data Protection for successful branding of Tesco through improving online activities. Effective software is required in the company through which the engineers and managers can handle the online branding of the company Tesco. In addition to these, Hardware is also another resource which includes computers, Wi-Fi, internet LAN connections, CPUs and Monitors to handle the online activities of the company.

Evaluate the contribution of SMART targets to the achievement of strategy implementation at Tesco

These activities are the major targets which will help the company to implement the strategy of improving online presence in the new international market where aims and objectives of Tesco can be achieved sustainably. Creating professional website is necessary through which the company can promote their products and service that they offer to the customers. Secondly, developing search engine optimisation and increasing conversation rate through enhancing communication are also essential for Tesco so that it is possible to improve online branding. Additionally, sending personalise email to the customers will be beneficial to improve trust and loyalty and apart from this developing effective content for the company’s website is also beneficial to attract the customers in the new international market. Moreover, the target of maintaining customer relationship management and supply chain management is also beneficial for Tesco to implement the above mentioned strategy successfully. In this regard, through SMART analysis it is possible to evaluate whether the targets can be achieved successfully so that the main strategic planning of improving online branding of Tesco can be achieved.

Conclusion

Tesco has the capability of utilising financial and human resource to develop effective IT infrastructure and deliver high quality products and services at affordable price. In this regard, the best strategy for Tesco is to improve online presence through developing company website, search engine optimisation, strengthening supply chain and e-mail marketing which are beneficial to improve customer relationship management.

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