Strategic planning & management essay study help on: Tesco Company

Q??Write about SWOT, Pestle and strategic analysis of Tesco Company??Introduction

This report has been designed in order to get the brief overview about the strategic management of the Tesco Company. External Environment of the Tesco Company has been analyzed to know how the Company manages its external environment. Good and Bad Examples have been indicated by analyzing the external environment of the Tesco Company. In general Good example can be Tesco recognizes that the retailing has the greater consequence on people factors and jobs being the inherently labor-intensive and local sector. Tesco recruits great numbers of disabled, elderly workers and student and paying them least rates (Rowley, 2005). This shows that the Tesco manages its political factor very well. In general, bad example can be It is viewed that economic aspects are of worry to the Tesco, because aspects are probably influence the prices, profits, costs and demand. Tesco could be greatly impacted by any downturn in the food market of the UK and are revealed to the concentration risks of the market.PESTEL Analysis of the Tesco Company

Political Factors

It is viewed that Tesco is working in globalized environment with the stores throughout the globe. It is very clear that performance of the Tesco is greatly impacted by the legislative and political situations of these countries comprising the EU. For legislations of the employment, the government motivates the retailers to offer the combination of the job opportunities from lower paid, flexible and domestically related jobs to greatly skilled, greater paid and centrally positioned jobs. To fulfill the requirement from the population category like students, senior citizens and working parents (Thomsen, 2004).  Tesco recognizes that the retailing has the greater consequence on people factors and jobs being the inherently labor-intensive and local sector. Tesco recruits great numbers of disabled, elderly workers and student and paying them least rates. In the industry, with the typically great turnover of the staff, these workers provide the greater level of the loyalty and hence show the desirable employees. This is the best example of the PESTEL Analysis which shows that the Tesco Company maintains its political factor in the best manner by recruiting the great numbers of elderly workers, disabled and students and paying them least rates.

Economic Factors

It is viewed that economic aspects are of worry to the Tesco, because aspects are probably influence the prices, profits, costs and demand. In general, most impacting factor on economy is great level of the unemployment that minimizes the efficient need for several goods, adversely impacting the demand needed to manufacture such goods. In general, economic factor is greatly outside the power of the Tesco Company, but its consequences on the marketing mix and performance could be profound. Therefore, Tesco could be greatly impacted by any downturn in the food market of the UK and are revealed to the concentration risks of the market (Lindgreen & Hingley, 2003). This can be considered as the bad example of the strategic management because the Tesco Company would be impacted by any kind of downturn and this downturn cannot be estimated by the Company because it happens anytime and impacts the market of the Company.

Social factors

It is very clear that recent trends reveal that the customers of the British have shifted towards the bulk shopping and one-stop that is because of the range of the social challenges. Therefore, Tesco has enhanced the price of the non food item accessible for the sale. Demographic changes like aging population, enhancement in the female employees and reduction in the home meal show that the retailers of the UK are concentrating on the added value services and products. In summation, the concentration of the Company is towards the own-label portion of business mix, operational and supply chain improvements that may alter the cost out of business. For example: Tesco adapts the products mix for accommodating the enhanced need for the organic product. This shows that the Tesco Company manages its social factor very well. This can be considered as the good example of the strategic management because the Tesco adopts the product mix for accommodating the increased need for the organic product.

 Technological Factors

It is very clear that the technology is the major variable of the macro environmental that has impacted the formation of various Tesco products (Graiser & Scott, 2004).  The new technology benefits the both company and the customers: satisfaction of the customer increases because products are available, service may become personalized and shopping convenient. The commencement of ECR initiative offered the shift which is clear in food supply chain management. The stores of the Tesco use technologies such as Intelligent Scale, Wireless device and RFID. The implementation of the EPOS and electronic scanner has greatly enhanced the competence of stocking and distribution activities with requirements being shared in actual time to supplier. This factor of the PESTEL analysis can be considered as the best example of the strategic management because the Company has implemented the EPOS and electronic scanner for increasing the stocking competence.

Environmental Factors

In year 2003, there has enhanced pressure on several managers and companies for acknowledging their accountability to the community and perform in the way that benefits community overall. The main social issue threatening retailers of the food is environmental matters, the basic area for the Companies to perform in the responsible way. In general, Tesco’s CSR is focused with the path in which the organization surpasses the least obligations to the stakeholders mentioned through corporate governance and regulation (Graiser & Scott, 2004).  The current legislation formed the new tax on the advertising fatty and processed foods. The Government has decided to launch the strategy for the sustainable production and consumption to cut the waste, minimize usage of the resources and minimize the environmental damage. The current legislation offered the tax on the advertising fatty and processed foods. The fat tax straightly impacted the Tesco product varieties which have been adapted, impacting the associations with both customers and suppliers. This can be considered as the bad example of the strategic management because implementation of the fat tax directly affected the product varieties of Tesco which have been adapted and impacting the relationships with both users and suppliers.

 Legislative Factors

Various government policies and legislations may have the direct consequence on the Tesco performance. For example, the FRC recommended the enforceable practice code must be formed various practices like demanding payment from the supplier and altering agreed prices. The existence of the strong competitor with the established brand makes the threat of price wars and robust needs for the product differentiation (Thomsen, 2004). The policies of the government for control of monopoly and minimization of the buyer power may restrict entry to the sector with controls such as license requirement and restricts on approach to the raw materials. Tesco provides consumers the price minimization on the fuel purchase based upon the amount used on the groceries at the stores.Opportunities

Tesco UK beauty and health ranges remain to develop and it is recently the rapid developing retailer of skincare in market. The Tesco Company has market leading situation in both healthcare and toiletries and number 1 retailer in goods markets of the baby. Across all beauty and health ranges Tesco Company continues to spend in price for delivering the value users. In current time, Tesco has 19 stores with pharmacies and opticians. Tesco works in 6 countries in the Europe in summation to UK, the State of Republic, Czech Republic, Turkey, Poland and Slovakia. It also works in Thailand, Japan, Malaysia and Taiwan. It can be said that opportunities available at the Tesco considered as the best example of the strategic management because the Company remains to spend in the price for delivering the value for the users.

Threats

It is very clear that the international expansion is expensive. Entering into the new market with the new brand needs heavy marketing and investment and additional operation expense and distribution. The debt of the Tesco may enhance before it starts to minimization. The price follower in the market of the UK is about to become as the aggressive investor. Tesco has great programme of the capital expenditure because of the great investment for the new stores. The expansion of the Tesco is aggressive and has small cash for other operations.  It is viewed that the global business is developing and expected to donate higher amount of profits to the Tesco over the few years and the Company is greatly dependant on the market of UK. In the supermarket industry of the UK for e.g. the group of Morrison successfully buying the chain of Safeway may change the stability of supermarket power of UK. It can be said that the threats available at the Tesco considered as the bad example of the strategic management because Tesco is dedicated to the price leadership and this may result in the step down in the industry profitability (Flavián, Haberberg & Polo, 2002).

Five Forces

Threat of the New Entrants

This is shown in the great investment made by the large chains like Tesco in developing technology for systems of stock control and checkouts which affect the existing ones and new entrants. Other barriers comprise differentiation and economy of scale accomplished by the Tesco in its aggressive tactics in the development of the product, better distribution and promotional activity (De & Tonchia, 2003).

Bargaining Power of the Customers

It is viewed that Tesco famous card of the loyalty-Club Card continues the successful strategy of customer retention which considerably enhances the profitability of the business of the Tesco. In meeting the needs of the customer, customizing service, better choices and continuous flow in store promotion allows brands such as Tesco to monitor and retain the base of the customer. This can be considered as the good example of the strategic management because it shows that the Tesco manages its base of the customer in the best possible manner.

Bargaining Power of the Suppliers

This force shows the suppliers power which might be affected by the main grocery chain and the fear of hampering the business to great supermarket. Hence, this consolidates leading place of the stores like Tesco in bargaining the better promotional values from the suppliers.

Threat of Substitutes

In general, substitution is capable to minimize the demand for the specific product. In the industry of grocery, this may be view in type of good for good and the substitute of the need and weakened by the new trends like small chain of the convenience store is prevailing in the grocery industry. In this situation, Tesco is trying to purchase current small scale businesses and initiating express and metro stores in city centers and local towns of Ritz. This can be considered as the good example of the strategic management because the Tesco Company manages its threat of substitutes by purchasing the small scale businesses when the small chain of the convenience store is prevailing in the Grocery Industry.

Bargaining Power of the Competitors

It is viewed that the Tesco operates in the mature and flat market where the development is complex and users are significantly demanding, large chain like Tesco is accruing great amounts of the user information which can be used to share with the user Ritz. This competitive market has reinforced the accelerated stage of the development and resulting in the condition in which grocery retailers of the UK have to be creative to build and maintain the share of the market.

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