TESCO PLC

Analysis of the Strategic Position of Tesco PLC

Contents
1. Introduction..................................................................................................................................4

2. Strategic Position of Tesco Plc....................................................................................................4

2.1. Analysis of Competitive Internal and External Environments.............................................4

2.1.1. Internal Analysis of Tesco Plc.......................................................................................5

2.1.2 Analysis of the Competitive Environment of Tesco Plc................................................6

2.2 Stakeholder and Financial Analysis of Tesco Plc..................................................................8

2.2 Strategic Position and Strategy Capability of Tesco Plc.......................................................8

3. Current Strategic Options for Tesco Plc....................................................................................10

3.1 Identifying Current Strategic Options for Tesco Plc. with TOWS Matrix..........................10

3.2 Analysis of Strategic Options for Tesco Plc. with Ansoff Matrix.......................................11

3.2.1 Market penetration Strategies for Tesco Plc.................................................................11

3.2.2 Market Development Strategies for Tesco Plc.............................................................11

3.2.3 Product Development Strategies for Tesco Plc............................................................12

3.2.4 Diversification Strategies for Tesco Plc.......................................................................12

3.3 Strategic Evaluation of Options for Tesco Plc. in SAF Framework....................................12

3.4 Justification for Options for Tesco Plc................................................................................13

4. The Potential Impact of Contemporary Strategic Management on Tesco Plc...........................13

5. Self-Reflection...........................................................................................................................14

5.1 Introduction..........................................................................................................................14

5.2 Gibbs Reflective Model.......................................................................................................15

5.2.1 Description....................................................................................................................15

5.2.2 Feelings.........................................................................................................................15

5.2.3 Evaluation.....................................................................................................................15

5.2.4 Analysis........................................................................................................................15
 5.2.5 Action Plan...................................................................................................................15

6. Conclusion.................................................................................................................................16

7. Reference List............................................................................................................................17
1. Introduction
This report aims to critically evaluate the significant internal and external factors that
influence and impact the financial ability, strategic position, and sustainability of the
organisation. The selected organisation is Tesco PLC. Tesco is a well-known retail store in the
UK (United Kingdom) having multiple outlets throughout the region and an international
platform the company started its business in the year 1919 and become its first retail store in
England and with time Tesco has covered a wide area of retail business in the UK (Tesco, 2022).
In the business environment, effective management and strategies have a significant impact on
the overall business that can add valuable amendments within the company and become the
source of continuous development for the business (Dzwigol et al., 2019). For that purpose,
strategic position and strategic options for the organisation have become essential for the
business as it develops diversified options to the business in terms of evaluating several key
factors related to the organisational development which become a source of achieving a
sustainable position in the market (Collins, 2021). This report will discuss the current strategic
position of the company along with the available strategic options to the organisation. This report
further highlights the contemporary strategic management issues of the company.
Tesco provides diversified products to their clients related to daily usage for that purpose,
the company poses a wide area of business which includes the business of groceries, clothing,
electronic items, Tesco Mobile, Tesco banks and Tesco magazine. Due to the wider scope of
business, the current report has focused on the retail business of the organisation which mainly
deals with the groceries business which is supposed to be a profitable commercial for Tesco (Fu,
2021). The report discusses the current strategic position of Tesco, current strategic options
available for the company, contemporary strategic management thinking issues and critical self-
reflection that can be developed through personal learning of the entire topic which adds value to
the report.

2. Strategic Position of Tesco Plc.

2.1. Analysis of Competitive Internal and External Environments
The analysis highlights a company’s functioning that is consistently interacting in
internal and external environments (Kornelius, 2020). In order to gain a competitive advantage, it
is imperative to analyse and evaluate its internal factors by applying SWOT analysis and then
identify the external factors influencing the strategic position of the company with the structure
of Porter’s Five Forces.
2.1.1. Internal Analysis of Tesco Plc.
SWOT analysis assists in identifying the strengths, threats, weaknesses, and opportunities
of Tesco PLC’s internal environment that helps the organisation to lead in the competitive
market (Amirshenava and Osanloo, 2022).

2.1.1.1 SWOT Analysis

Strengths Weaknesses
 Tesco Plc. indicates strong brand  Tesco Plc. makes low investments in
recognition to lead in its industry (Tesco, customer-oriented services that could lead
2022). its rivals to gain benefits in near future.
 Tesco Plc. demonstrate a broad range of  The high rate of turnover of workers at the
dealer and associate networks that assists lower level is another weakness of Tesco
to deliver effective customer service and Plc. that could lead the company to
also assist to manage competitive manage a high pay scale for maintaining
challenges. the latent in the company (Upadhyay,
 Tesco Plc. focuses on talent management Kumar, & Akter, 2022).
and the skill development of its workers.  The low-cost technique used by Tesco
 Tesco Plc. has extensive product offerings Plc. is to offer services and products at a
that assist the company to penetrate low price yet such a strategy is costing the
various customer segments in the retail organisation by generating low profit.
industry.  Tesco failed in export operations in Japan
 Tesco Plc. have a successful track record and US. Tesco
of customer-driven innovations.  Tesco Plc. faced food quality scandals
 Tesco Plc. uses emerging technologies in which badly affect its brand image.
the best optimal way for enhancing the
experience of shopping for its customers.
 Tesco Plc. is demonstrated a 60%
expansion in its online sales Chen, 2022).
 Opportunities Threats
 The trend of consumers switching to  The high turnover could lead the company
higher products indicates an incredible towards a shortage of skilled human
opportunity for Tesco Plc. as the company resources.
has a strong brand image.  Instability in the political environment
 A low rate of inflation can bring more such as Brexit and the China trade war
effectiveness and stability for Tesco Plc. impact the overall stability of Tesco Plc.
in the market which can expand the  One of the biggest threats for the company
consumption of the company’s products is expanding commoditisation of services
(Kumar, Reddy, & Krishna, 2022). and products.
 An increase in laws and regulation  Tesco Plc. is also facing stiff challenges
enforcement by the government could from its local and international
make it more difficult for unorganised competitors, as they are also catching up
retail stores in the industry which can with innovative product development
provide an opportunity for Tesco Plc. for (Moura, 2021).
growing its customer base.  The trend of stagnation in rural markets
 Expanding the adoption of online services and saturation in urban markets is an
by consumers will also allow the ongoing challenge for Tesco Plc. in the
company to give new offerings in the retail industry. Product adoption is slow in
retail industry. rural markets and much more cost-
consuming to reach rural consumers.

2.1.2 Analysis of the Competitive Environment of Tesco Plc.

The external competitive environment of Tesco Plc. will be analysed by applying Porter’s
Five Forces.
2.1.2.1 Competitive Rivalry
The competitive rivalry of Tesco Plc. can be demonstrated by the intense competition
from its rivals such as Sainsbury, Walmart, ASDA, and Carrefour. These are developed
organisations with strong logistic networks and supply chains. These competitors offer the same
range of products at approximately the same prices (Mahmood et al., 2022). In this way, major
marketing and advertisement techniques are carried forward by all retail industry leaders to
position their companies as distinct from their competitors through diverse marketing campaigns.
Therefore, competitive rivalry is a strong force to affect Tesco Plc.’s operations.

2.1.2.2 Threats of Substitutions

Although there are numerous products that can be used as a substitute for the actual
products of Tesco which are meeting the basic customer requirements, Tesco is offering products
such as petrol, clothing, groceries, clothing, electronics and more which are in demand the whole
year. In this way, the threat of substitutes is low (Wynn & Jones, 2022). Apart from this, price is
also a factor of deciding for daily consumers. If the products are offered by someone with low
prices, then customers might prefer them as such products are fulfilling the daily needs of the
customers, this lead down further the substitution threat to minimum levels. Yet, Tesco is famous
for its best product quality which provides a competing position. Therefore, the threat of
substitutes will be a moderate force to affect Tesco Plc.’s operations.

2.1.2.3 Threats of New Entrants

One of the main aspects to consider in affecting Tesco’s operations is the threat of new
entrants. Although, competing against a leading retailer such as Tesco would not mean easy and
the marketing or sales efforts would barely match (Krummel, 2022). However, the current big
rivals can always come up with their scale of economies to offer discounts and operations. Apart
from this, it would be tough for new entrants to offer such big discounts, or to access supply
chains or distribution channels already dominated by Tesco Plc. Hence, the threat of new
entrants is considered to be a weak force to affect Tesco’s operations.

2.1.2.4 Buyer’s Bargaining Power

One of the major aspects relating to the bargaining power of buyers is the great number
of competing retailers. Since the provision of products by Tesco Plc. is mostly those concerned
with basic customer needs, the consumers possess the capability to select those stores which are
providing least prices and maximum economies of scale (Bhattacharjya et al., 2022). Yet, the
basic goods’ prices will hardly change over the retail industry. The product quality is also similar
among all shops. In this way, the bargaining power of buyers can be considered to be low.

2.1.2.5 Supplier’s Bargaining Power

Suppliers indicate less bargaining power comparatively when it is to the products
supplied by Tesco Plc. There are numerous suppliers who often use Tesco Plc.’s products in their
retail stores. Moving from one supplier to another is much easier for Tesco Plc (FFU, 2022).
There are various available suppliers for similar items in every store. This allows the retailers to
select the products from those vendors who give them at the least price. Eventually, it makes the
supplier’s bargaining power a weak force.
2.2 Stakeholder and Financial Analysis of Tesco Plc.
Within the business environment, Tesco mainly focuses on stakeholders for their business
development strategy in which the management has focused on the implementation of
developing programs for their stakeholder’s motivation by that approach organisation have
created effective work which becomes a source of productivity for the company (Tesco, 2022).
Along with that, an operative organisational culture of Tesco leads the company towards
customer and stakeholder satisfaction that can generate profitable business for Tesco within their
groceries business. To get a competitive advantage in the international market the management
of the company has adopted their international strategy in which Tesco focuses on flexibility in
their global operations by introducing their groceries products on an international platform
(Forbes, 2022). By that approach, the company can enhance its efficiency in terms of financial
performance which becomes a source of attaining a sustainable strategic position for the
organisation.
2.2 Strategic Position and Strategy Capability of Tesco Plc
It is observed that the strategic position and capability of the organisation reflect the
positive reputation amongst the competitors that can develop operative strategies to develop their
business effectively. Tesco holds 26.7% of the market share as of October 2022 which is
supposed to be a significant achievement for the company by that approach organisation has
strengthened its position in the local and international markets (Tesco, 2022). The strategic
position of Tesco is defined as the company indicating a positive reputation in the retail business
of the UK which reflects its strategic position for that purpose, the organisation has used a
loyalty program to strengthen its strategic position in the market. Along with that to maintain a
positive strategic position in the market Tesco has to adopt a low pricing strategy for business
development in which they offer a quality product to their client at reasonable prices which
becomes the source of strengthened their strategic position (Kumar, Reddy, & Krishna, 2022).
Due to the significance of strategic position and capability the management of Tesco has adopted
a pricing strategy in their business to provide groceries products to their clients at a reasonable
price that can enhance their value and become the source of creating a positive strategic position.
The organisation is one of the leading retail stores in the UK have multiple outlets and
stores in the UK hence the company has introduced its business on an international platform as
well. The current strategic position of Tesco has become stable as the management has extended

their groceries business to an

Figure extent
1 Market level
share in theretailers
of Grocery UK that attracts
in Great Britain people towards their services
(2017-2022)

because the company provides diversifiedSource: Statista,

products 2022 to groceries which includes clothing,
related
food items, and daily usage products. Tesco Plc (Wynn & Jones, 2022). has launched its business
in different parts of Europe including Hungary, France, and Italy by that approach management
has maintained its positive reputation in the market which becomes a source of attaining a
valuable strategic position for Tesco.
 It is articulated that the analysis of internal and external factors that can impact the
strategic development of Tesco become a source of increased financial performance,
sustainability, and ethical considerations that can attract customers towards their business and
provides a competitive advantage over the competitors like Asda and Sainsbury (Statista, 2022).
For that purpose, a few factors can impact the current strategic position of Tesco in which the
factor of cost leadership has become a core part that can generate profitable revenue for Tesco
Plc. by that approach the company can reinforce its current strategic position in the market.

3. Current Strategic Options for Tesco Plc.

3.1 Identifying Current Strategic Options for Tesco Plc. with TOWS Matrix
The TOWS analysis examines the internal issues inside an organisation. The TOWS
analysis can be determined from the SWOT analysis that helps to analyse strengths,
opportunities, threats, and weaknesses. The research of TOWS highlights respective aspects in a
way akin to the paradigm of SWOT analysis. The major critique of SWOT traditional analysis is
that does not explain the correlation between several components and categories. However,
TOWS analysis will help to examine relevant choices that Tesco can follow while balancing both
internal and external components.
In accordance with TOWs Matrix strength indicated Tesco has been facing external
pressures from various rivals that have frequently developed significant positions in the market.
As a consequence, there is a need to be vigilant for businesses for ensuring that incredible
services are offered to customers (Amirshenava and Osanloo, 2022). Since Tesco is all time
market leader, the company has a competitive position over the increasing discounts and can
utilise to converse the competition by applying the technique of cutting prices that can be
accomplished by mass purchasing. Tesco is already having a share of about 27% in the market
share hence it can avail itself of the opportunity to increase its sale by expanding the organic
food market by using its significantly developed brand recognition in the market (Chen, 2022).
Tesco Plc. can adopt more emerging technologies to boost the shopping experiences of its
customers by introducing new technologies. For instance, Tesco Plc. the executed innovation of
radio-frequency identification apart from barcodes that enables Tesco Plc. to scan and count
items automatically (Tesco, 2022). Such technology saves the employees’ efforts as stock is
automatically counted and suppliers are aware timely about the stock that is required to be
supplied. The major area to focus on for Tesco Plc. is that Tesco Plc. failed in adapting and
operating its business and sale specifically outside of Europe, in Japanese and US markets. This
failure was due to ineffective exports. As a consequence, Tesco closed after five years in the US
and after nine years in Japan. Tesco Plc. can improve its business strategies of exporting to
develop strong business recognition outside of Europe (Upadhyay, Kumar, & Akter, 2022).
The major threat identified to Tesco Plc. is the food quality and safety issues in which
Tesco Plc. has been involved in the past. Such situations placed a negative impact on the image
of the brand. For instance, Tesco Plc. was highly affected by the ‘horsemeat’ scandal. The
scandal claimed that Tesco Plc. uses horse meat in its products and is being as beef. This led
Tesco Plc.’s market value to fall by more than £300 million (BBC, 2022). Tesco Plc. can regain
its brand reputation by increasing employee and customer satisfaction which will directly
enhance customer confidence in the brand, specifically, if the employees and customers suggest
the products of Tesco to others.
3.2 Analysis of Strategic Options for Tesco Plc. with Ansoff Matrix
This section examines the application of Ansoff Matrix in the world's leading retail leader
Tesco Plc. It identifies the way in which Tesco Plc has applied marketing penetration, marketing
development, and diversification strategies over the decades for expanding the company's
operations.
3.2.1 Market penetration Strategies for Tesco Plc.
The strategy for market penetration can be used by Tesco to increase sell of existing
products in the market, increased capacity of production will enable Tesco to obtain customer
growth that will lead to the effectiveness in cost overhead controlling. It will allow Tesco to lead
with competitive pricing to appear to the consumers. Tesco can also expand its market
penetration by investing in advertisement and marketing activities to promote its brand
distinctively. Tesco can also explore innovative ways of distribution that will enable the
company to reach new consumer segments (Collins, 2021). Tesco can acquire its rivals; such
acquisition will allow higher penetration by enhancing the accessibility of Tesco Plc. to various
customer segments and groups in the current market. Tesco can also recognise new
characteristics and features in current products that will facilitate the company to improve its
market penetration.
3.2.2 Market Development Strategies for Tesco Plc
With the strategies of marketing development, Tesco can boost the growth of its business
by introducing current products in new markets. Tesco can make an investment in research and
development for identifying new customer segments (Mahmood et al., 2021). Investing in R&D
will allow an understanding of diverse marketing trends, cultures, and consumer behaviours.
Tesco can also make the investment to develop brand awareness that will assist the organisation
to reach new customer segments and expand visibility.
3.2.3 Product Development Strategies for Tesco Plc.
Tesco can make improvements, modifications and innovations in current products for
offering its consumers enhanced and new offerings that will lead the organisation to expand its
consumption by increasing the sale of its products. Tesco can get engaged in strategic
partnerships for exploring options for product development (Zhu, Yue, & Chen, (2022). Such a
partnership can enable Tesco in accessing new product developments with the least investment
hence involving the least risks.
3.2.4 Diversification Strategies for Tesco Plc
Tesco can also expand by mixing and involving in diverse businesses. With a new
business strategy of diversification, businesses could engage Tesco to determine innovative
options and ideas for businesses to acquire or launch for the purpose of development and growth
(Alshamsi, Pinheiro, & Hidalgo, 2018). Tesco can make a partnership or can acquire businesses
and organisations that indicate efforts in diversifying into new consumer segments with services
and products that are entirely new.
3.3 Strategic Evaluation of Options for Tesco Plc. in SAF Framework
Based on the above strategic options for Tesco can be evaluated through the SAF
framework in which the particular method provides suitability to the respective strategic options
which become a source of enhancing capabilities for the organisation in terms of achieving an
operative strategic position. Moreover, the SAF framework can evaluate the strategic options for
Tesco by minimising the chances of risks associated with the strategic options that can develop
uncertain conditions for the management to develop their business (Cao, Navare, & Jin, 2018).
For that purpose, the SAF framework can evaluate the strategic options in which it develops the
value of money for the organisation in which management can provide groceries items to their
customers at affordable prices that can attract new customers towards their business and become
a source developing effective strategy regarding the business development.
Further, the framework evaluates the strategic option of fast delivery, a particular option that
provides a positive experience to customer in which the management have served their local and
international customers through their operative services. According to the evaluation by SAF
framework, the strategic option of a loyalty program becomes beneficial for the customer of
Tesco because by the utilisation of that strategic option organisation can attract new customers
towards their service which can generate a competitive advantage for the company (Yawson &
Yamoah, 2022).
After analysing strategic options for Tesco through the SAF framework it is observed that the
strategic option of a loyalty program is supposed to be an effective option for the organisation to
pursue because the certain option provides methods of getting customer satisfaction by a club
card facility to the regular customers of Tesco that develops the interest of people for shopping
(Rosnizam et al., 2022). Such a strategy can help the company by marketing its product
effectively because the method seems to be an attractive approach to getting an operative
strategic position in the market.
3.4 Justification for Options for Tesco Plc.
In accordance with the SAF framework and proposed market penetration strategies by
applying Ansoff Matrix, Tesco must decide particular strategy for the future enhancement of the
company to reduce the challenges that Tesco has been facing (Alexander, 2020). Choosing the
right strategy is a significant task to give viability and value to the organisation. Hence, market
penetration is the most effective strategy for Tesco. Concerning that, Tesco can expand its
business globally by minimising the consequences and risks such as improvement in product
packaging to reduce product quality risk, focusing on product modification, and unnecessary
operations, expansion in customer engagement, and increasing consumer segments. As per the
SAF model, the strategy of market penetration will assist Tesco to develop and maintain the
feasibility, accessibility, and suitability of products and boost profitability by introducing
products globally. Hence, such strategic options for Tesco are selected because it will allow
Tesco to allow its product introduction internationally and to sustain its market position
throughout the UK and outside Europe as well.
4. The Potential Impact of Contemporary Strategic Management on
Tesco Plc.
Strategic management is the most crucial aspect for each business as it provides an edge
in a competitive market (Fuertes, 2020). The most significant element of strategic management is
the development and planning of organisational goals and to comprehension of those goals
effectively (Roozitalab, 2022). The strategic management of Tesco Plc. allows the continuity of
its emergence over the long term, where the main challenge can reduce the company’s
sustainability. Hence, Tesco can face competition to develop its market outside Europe. Tesco
can lead to several risks if the strategic management is not implemented properly which can lead
to loss of cost control. Tesco can take benefit from a market penetration strategy that can
minimise the risk of over cost, and can control the cost overhead. Therefore, strategic
management is considered the most significant aspect of the organisation in supporting its
business in an uncertain and rapidly emerging environment.
Furthermore, the operational managers at Tesco can optimise resource management for
meeting the goals developed by management. For increasing effectiveness, all the workers must
be informed about the strategy of the organisation. Hence, management’s effective
communication in decision-making is important to keep the employees involved and motivated.
This can happen by briefing notes to workers, collective meetings, or even e-mails. Apart from
this, operational managers should comply with the strategic decisions of the company to develop
a balance between operation and strategy to lead to effective productivity. All aspects of the
business must be monitored regularly and plans are to be made when necessary to ensure the
objectives are met ultimately. In this era of globalisation and advancement, the strategic
management of Tesco makes it possible for it to develop and sustain brand recognition over the
decades (Chen, 2022). This success has not resulted by chance but it is an outcome of effective
strategic management. Consequently, without strategic management, it would be complicated for
Tesco to sustain a competitive position in the market.

5. Self-Reflection
5.1 Introduction
Self-reflection refers to the process in which an individual provides a reflection on the
attitudes, thoughts, ideas, desires, and behaviours of observation and learning in the depths of
understanding (Khairul & Foong, 2022). In line with this, I am explaining my learning
experience throughout my favourite module “Strategic Management” as a strategic manager by
applying the Gibbs Model of Reflection.
5.2 Gibbs Reflective Model
5.2.1 Description
As a strategic manager, I maintained focus on developing certain customer profiles. Such
a strategy will influence teams of project management and also impact each element of my
business and its operations. I learned to manage priorities in project management.
5.2.2 Feelings
At the beginning of this module, I was so excited to learn about the topic of my interest.
Now, I feel that I have gained a lot of knowledge throughout the module. It has improved my
decision-making skills and helped me to learn new strategies of effective management that will
assist me in my future as a strategic manager.
5.2.3 Evaluation
When I started to learn this module I was required to clarify strategic management and its
aspect. Now, when the module is completed, I have the capability to understand every
perspective of strategic management thoroughly. I have now developed priorities that how to
make decisions as a strategic manager in my role. Hence, it will assist me in effectively fulfilling
my responsibilities.
5.2.4 Analysis
When developing the objectives of an organisation, strategic management indicates a
clear message concerning its vision. Hence, the strategy for business management and
development plays a crucial role in financial considerations for every project (Fauzi et al., 2022).
Most successful companies are dependent on their strategic managers responsible to help the
company with strategic planning. Thus, knowledge and understanding of strategic management
are mandatory for strategic managers to give potential output for the company.
5.2.5 Action Plan
Everyone wants to be respected and recognised for their efforts and so, I will look
forward to seeking personal fame in corporate performance. I will focus on organisational goals
by analysing all the requirements of my business and resist temptation by focusing on the issues
and challenges of the business and also on my personal concerns. Various organisations consider
strategy development as a yearly exercise but I will prefer to ensure that my team of project
management will regularly examine the progression and modify the strategy as per requirements.

6. Conclusion
This report highlighted aspects of strategic management for providing a brief
understanding by examining theories, concepts, and models applied to Tesco Plc. Tesco is a
well-known retail store in the United Kingdom having multiple outlets throughout the region and
at an international level. This report elaborated on four significant components of the strategic
management of Tesco, current strategic options for Tesco, the strategic management approach,
and its potential impact, and in the last the report provided self-reflection. Furthermore, the
SWOT analysis in this report determines the strengths, opportunities, weaknesses, and threats of
Tesco in the market. Additionally, Porter’s Five Forces are also applied to develop a view of the
competitive environment of Tesco. Furthermore, the TOWS matrix is also applied to examine
relevant choices that Tesco can follow while balancing both internal and external components. In
line with this, the Ansoff matrix was applied to effectively develop a future strategy for Tesco to
expand its corporate strategic position. Using the SAF framework strategy of market penetration
is chosen because it will assist Tesco to modify existing products and introduce its products
globally to sustain a competitive position in the market.
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1. PESTLE Analysis
Political Economic
 One of the key political changes  In terms of economic position, the
implemented by the UK government country was a victim of the financial
in 2011 is a new tax policy. To crisis. Despite the financial crisis, the
improve government income, the economy resumed its growth pace,
administration raised the VAT rate to and GDP increased by 2.7%.
20%.  As the grocery business expands,
 However, this has resulted in fewer economic development is a good
client spending, which has impacted indicator for the company.
earnings (Feys and Probert 2015).
 The government has also suggested a
fat tax to combat obesity and its
associated consequences. This has
also had a negative impact on Tesco's
sales, prompting the company to
introduce a completely new healthy
food collection.
Social Technological
 These are the factors associated to  Technology is critical to the success of
society. Tesco sells its goods via an any organisation. Technological
online portal (Newton 2014). improvements in the corporate world
 This has resulted in a shift in the tastes have created opportunities for
of the elderly, who are more prone to company organisations.
internet shopping nowadays due to  Tesco has taken use of mobile
mobility concerns. technology, which has enhanced the
 Despite this positive societal Company's delivery services and
component, the Company has been allowed customers to choose their
accused of not offering quality favourite wine (Barney 2017).
products following the horsemeat  Aside from that, disruptive
crisis. technology, a revolutionary
technology, has entered the market.
Tesco must address the rising
popularity of this technology since
customers value disruptive
technologies in changing times.
Legal Environmental
 The Company is harmed by the UK's  According to a recent press release,
normal agricultural policy, which does the Arctic ice is melting, producing a
not reconsider direct subsidies. serious environmental hazard. Tesco
 As a result, the Company may face has recognised this and has launched a
large fines for pressuring agricultural new initiative emphasising energy
suppliers to sell at cheaper rates. usage and greenhouse gas use.
 Technological and environmental
variables are critical concerns for the
 company to consider since they have a
big impact on the business.
2. Porter’s Five Forces
Porter Five Forces for Asda/ Retail Industry
Bargaining Power of Suppliers Bargaining Power of Buyers
 Supplier negotiating power is  Customers' negotiating power is also
comparatively high since switching costs
relatively low since Tesco sources
in the retail business are cheap.
food and non-food goods from  As a result, if customers are dissatisfied
with Tesco's product variety, customer
over 1,000 suppliers worldwide
service, or price strategy, they may easily
(Tesco, 2018e). transfer to another shop.
As a result, Tesco can simply  Nonetheless, Tesco serves almost 80

million consumers each week (Tesco,
negotiate product pricing while 2018d). This fact diminishes clients'
negotiating power marginally.
picking just those suppliers that
supply high-quality items.

Threat of Substitutes The Threat of New Entrants

 In the retail business, the danger of  Because enterprises must commit
significant financial resources to establish
substitution is moderate. On the
their position in the retail industry, the
one hand, tiny convenience stores danger of new entrants is low.
 Another problem preventing businesses
and organic shops are substantial
from joining this market area is a high
alternatives for huge retail chains, level of market saturation (Smithers,
2018).
posing no real danger to Tesco's
financial survival.
 Furthermore, because of the
economies of scale effect, Tesco
would provide the same items at a
lower price, making them more
appealing to consumers (Tesco,
2018e).
 Industry Rivalry
 The UK retail market is very competitive due to the presence of various
organisations (e.g., Aldi, Lidl, Morrisons, and Sainsbury's) in this sector.
 The biggest competitors battle over items, pricing, and promotions, resulting
in a high level of similarity (Chernev, 2018).

3. VARIO Analysis
Valuable Rare
 According to Tesco Plc's VRIO  According to Tesco Plc VRIO
Analysis, its local food goods are a Analysis, local food items are not
valuable resource since they are uncommon. Other companies can
highly distinctive. simply give these in the market.
 Customers place a high value on
these as a result. Customers
 Tesco Plc's resources in the same
appreciate these items more than way, reducing competitive
advantage. This indicates that Tesco
competitors because of their
Plc benefits from competitive parity
distinctiveness. as a result of local food items. Tesco
Plc can still use this resource since it
is useful.

Inimitable Organised
 Tesco Plc's Patents are not
 Tesco Plc's financial resources are
effectively organised, as revealed by
expensive to replicate, according to the Tesco Plc VRIO Analysis. This
suggests that the organisation is not
the Tesco Plc VRIO Analysis.
fully utilising these patents.
 To accrue enormous levels of  There is an underutilised competitive
advantage that Tesco Plc may
financial resources, new entrants and
convert into a sustained competitive
competitors would need equivalent advantage if it begins selling
patented items before the patents
revenues over a lengthy period of
expire.
time.
4.SWOT Analysis

Strengths Weaknesses
 Tesco Plc. indicates strong brand  Tesco Plc. makes low investments in
recognition to lead in its industry (Tesco, customer-oriented services that could lead
2022). its rivals to gain benefits in near future.
 Tesco Plc. demonstrate a broad range of  The high rate of turnover of workers at the
dealer and associate networks that assists lower level is another weakness of Tesco
to deliver effective customer service and Plc. that could lead the company to
also assist to manage competitive manage a high pay scale for maintaining
challenges. the latent in the company (Upadhyay,
 Tesco Plc. focuses on talent management Kumar, & Akter, 2022).
and the skill development of its workers.  The low-cost technique used by Tesco
 Tesco Plc. has extensive product offerings Plc. is to offer services and products at a
that assist the company to penetrate low price yet such a strategy is costing the
various customer segments in the retail organisation by generating low profit.
industry.  Tesco failed in export operations in Japan
 Tesco Plc. have a successful track record and US. Tesco
of customer-driven innovations.  Tesco Plc. faced food quality scandals
 Tesco Plc. uses emerging technologies in which badly affect its brand image.
the best optimal way for enhancing the
experience of shopping for its customers.
 Tesco Plc. is demonstrated a 60%
expansion in its online sales Chen, 2022).

Opportunities Threats
 The trend of consumers switching to  The high turnover could lead the company
higher products indicates an incredible towards a shortage of skilled human
 opportunity for Tesco Plc. as the company resources.
has a strong brand image.  Instability in the political environment
 A low rate of inflation can bring more such as Brexit and the China trade war
effectiveness and stability for Tesco Plc. impact the overall stability of Tesco Plc.
in the market which can expand the  One of the biggest threats for the company
consumption of the company’s products is expanding commoditisation of services
(Kumar, Reddy, & Krishna, 2022). and products.
 An increase in laws and regulation  Tesco Plc. is also facing stiff challenges
enforcement by the government could from its local and international
make it more difficult for unorganised competitors, as they are also catching up
retail stores in the industry which can with innovative product development
provide an opportunity for Tesco Plc. for (Moura, 2021).
growing its customer base.  The trend of stagnation in rural markets
 Expanding the adoption of online services and saturation in urban markets is an
by consumers will also allow the ongoing challenge for Tesco Plc. in the
company to give new offerings in the retail industry. Product adoption is slow in
retail industry. rural markets and much more cost-
consuming to reach rural consumers.
5.Generic Strategies
Cost Leadership Differentiation
 Any corporation achieves cost leadership when  Differentiation is a method of
it can offer items at reduced prices. making changes to a product's
 To achieve cost leadership, the corporation design, packaging, flavour, and other
must maintain certain practises such as aspects in order to make it more
acquiring materials at cheap rates, using its competitive in the market and so
own transportation and warehousing system achieve a competitive edge.
for transporting and storing products, and
utilising a short distribution route (Tyagi,  Apple, Google, and Microsoft all
2009). adopt a high differentiation strategy.
 Tesco adheres to the aforementioned principles Distinction in products and services
in its operations, allowing it to provide is required to keep a firm in the
excellent items at extremely affordable rates to market for a long time, however
its consumers. Tesco's strategy is not centred on
differentiation.
Focus Strategy Product Uniqueness
 Focus indicates focusing on a small group of  Porter's generic strategy is used to
clients. The new firm that wants to grab the assess how a corporation might
specialised market employs a focus approach. progress in competing with market
 Tesco's focus approach is meaningless because competitors. Michael Porter offered
it serves several sectors at the same time in three techniques through which a
multiple regions. firm might achieve its business-level
strategy, indicating whether the
organisation should pursue cost
leadership, differentiation, or a focus
strategy.
6.Ansoff Matrix
Market Penetration Market Development
 Market penetration entails a  Market development is defined as
corporation remaining in its present the sale of current items to a new
market with its existing offerings. market. Market development is
 However, in order to remain expensive for small businesses, but
competitive in the market, the firm it is necessary for large corporations
must make certain adjustments to the as well.
product's design, packaging, and  Tesco is pursuing this expansion
pricing; otherwise, the company will plan by entering the convenience
struggle to stay in the market for an store business and opening
extended period of time. additional stores internationally.
 Tesco, for example, boosts its food
sector share by offering high-quality
items in the current market.
Product Development Diversification
 Product development occurs when a  Diversification occurs when a
corporation creates new items while corporation begins selling wholly
remaining in the present market. new items to a new market.
 When a corporation wants to build Diversification is hazardous since
new brands in the market, product new items take time to reach buyers
development is required. (Denis et al., 2008).
 Tesco has begun offering insurance  For example, Tesco will be
services, demonstrating product diversified if it embarks on a whole
development. Under the existing new set of businesses while
brand name, the product is being abandoning its prior ones. Tesco is
developed. recognised as a food shop, and when
it began to create mobile devices, it
left its mark.

7.Financial Analysis
Competition Profitability ratios

 Tesco's current assets were allegedly  Profitability ratios are used in

$21.74 billion, while its current organisational management to assess
liabilities were reportedly $23.58 a company's capacity to generate
billion as of August 31, 2020. revenue relative to expenses,
(Jiambalvo, 2019). As a result, the operating costs, and balance sheet
UK supermarket's current ratio was assets. These measures show how
0.92 at the moment. successfully a company uses its
assets to generate profits and value
for its owners (Cokins, 2017).