Strategic Management and Leadership at Tesco

strategicalal Management and Leadership at TescoIntroduction To increase the battle of e really task unit corporate leaders implemented and adapted one of the best way called strategical Planning in the mid 1960s. Strategic cooking is a combination of long term process taken musical none by step of its action to produce best instructions in terms of its drivers may not get wrong scheme (Mintzberg,1994).Background Tesco is the UKs most successful and richly profile super commercialise and one of the worlds leading international retailers. Tesco was founded by Jack Cohen at east London in 1919. The name came about subsequently Jack Cohen bought a shipment of tea from T.S. Stockwell. He made fresh labels using the first three letters of the suppliers name (TES), and the first two letters of his surname (CO), forming the word TESCO (tesco.com). Tesco is the commercialize leader of the super merchandise industry in UK with tax income of 38.558 billion including VAT and 62.53 7 billion of revenue worldwide in 2010 (tescoplc.com). Even in this recession Tesco has made an incredible 3.4 billion profit worldwide this twelvemonth (guardian.co.uk).Task 1 understand the external surroundings affecting the organisation1.1 Importance of external factors affecting TESCOPESTEL abbreviation A PESTLE compend for Tesco essential consider all the important external factors impacting on the company. These factors may concord political, economic, sociological, technological, legal or environmental dimensions. Tescos operations obviously have a authoritative environmental impact, from fossil fuel use to packaging issues. Reducing the demand on the send offet is a challenge for any big company.Tesco must tonicity at all the six factors we have mentioned, which ar discussed be let loosePolitical The increase numbers of political instability bottom of the inning affect the air by the Democratic government, political legislation.stinting rate of inflation, intere st rate, competition demand, employment direct, income levelSociological population demographics ,Lifestle, pattern of social interection, Religion, Believes, NormsTechnological aim of mean Manpower, Transportation.legal Employment laws, Consumers protection laws, investments laws and Health Safety laws (Class lecture).Environmental climate change is affecting supply and transport, how can Tesco adapt (Class lecture).1.2 The needs and expectations of stakeholders in TESCOStakeholder analysis Stakeholder analysis is the document information is provided for the key stakeholders Names and organisation, their role in the project, their level of interest indoors the company, their influence in the idiosyncratic project and innuendo for managing relationship among distributively stakeholder Schwalbe (2007). Stake holder is person or group of people who have legitimate interest in the company and who have direct and indirect communication to the company.Stakeholder analysis syste m Tesco can apply to know the needs and expectations of stakeholders in Tesco.Organisation nodeSupplierEmployees and Managers judicatureMediaTESCOexternal relationship with TESCOConnected relationship with TescoWho have internal relationship with TescoWho is externally linked with TescoWho have external relationship with TescoRole in the projectWho buy their shop from TESCOSupply the output to TescoWho work for TescoWho impose the VAT, Taxes, rent and rate etcSupply the information to customer about Tesco Product.Unique factQuite demanding for fibre of productRequires on time payment for suppliesTo be treated fairly and getting promotionGovernment regulation is obeyed by TescoQuality of product available for clientInterestPersonalValue for moneyTimely paymentContinuity of businessesPersonalJob securityC arer prospectEmployment for community revenueAdherence to regulationProtection of public interestInformational to target audienceLevel of influenceVery high level of InfluenceMode rate level of influenceHigh level of influenceHigh level of influenceLow level of influence(Modified form of Stakeholder Analysis)1.3 Analyse the major change fetching place in the external environment and how they would affect the strategic decision in Tesco.Tesco as one of the multinational retail supermarket is undergoing a major Economic change in the external environment. It has identified the Economic change of its market extension in Asia despite the Economic down turn. Tesco has identified the Asian supermarket as a long term opportunities for them. It has been continuing the investment in Asian market through the Economic downturn to make sure that Tesco will be in an even stronger position as the recession recover. As the market extension programme increasing Tesco has its plan of open 4.9 m square ft in this year (including shopping mall) across the region. The segment of external environment plan across Asia is explained below (Tesco plc.com).mainland China Tesco has t he plan to base the foundation of its market in China for long term growth. It has already opened 17 hypermarkets including three Lifespace shopping centres in deferent cities. It has also the plan of opening 23 hypermarkets in 2010 / 11 in the financial year in which 9 will be lifespace shopping mall (Tesco plc.com).Economic factors scrimping in China are getting stronger and stronger day by day as the all developed countries are moving to China to invest as that countrys Economic environment growing up. As the China is the world most populist country in the but the unemployment rate in that country are comparatively low than any other developing country. The inflation rates are getting lower and lower as the economy getting faster.Political factors China is a communist country but the political environment and the situation is very stable. China has legislated its countrys government legal and policy as to be comfortable for hostile investor.Technological factor China has the mo st updated Technology in the world. It has the infrastructure of providing the sensitive engine room to the rest of the world. As all the supermarkets buy the latest technology for their company from china so the Tesco can better implement the technology in China.Task 2 Review the existing business plans and strategies in Tesco2.1 using eliminate tools to analyse the effect of new business plan in TescoThe appropriate tools of analysing the rate of flow business plan are to do rise analysis and BCG intercellular substance analysis for Tesco. SWOT analysis is to know what Strength, Weakness, Opportunities and Threats Tesco have in order to run the current business. BCG matrix analysis stand bys Tesco to develop appropriate strategies for each product.2.1.1. SWOT AnalysisStrengthTesco is the largest Supermarket chain in the UK (4811 outlets)Tesco has very strong brand name and financially powerfulIt has more than 90 years of redevelopment sector account financial statement (established 1919)It has grew up through acquisitionIt is third largest retailer in the world.Better use of technology and marketingWeaknessesIt is potentially would be strong for Tesco to focal point in single market for specialisation as it is entering numbers of different markets.Diversification into unrelated and less experience businesses (e.g. Insurance).Unclear environmental policiesHigh dependency on UK domestic market.OpportunitiesStrategic alliance with other company which is good opportunity for Tesco.Market extension is one of the conducive opportunity for TescoJoint venture can bring good opportunity for Tesco.Tesco.com is online shopping site for Tesco can be attractive for Tesco.ThreatsIntensive competition in the UK with Sainsburys, mark Spencer and Morrisons, ASDAGovernment Cut and increases in Tax will have retrospective effect on Tesco Finances organCustomer is always the big threats for Tesco2.1.2. BCG Matrix analysisThe BCG MatrixStarComputer gamesFinancial products (credit cards and insurance)Question Mark?Or Problem childTesco MobileCash Cow clear produceGroceries/winefashionDogSaucer crisppackagingHighMarket growth rateLowHigh Low congeneric Market shareStar Tesco is a Star with high market share and high market growth retail industry. It is because Tesco has the potentiality of generating significant income. Tesco is investiture more money to attain maximum hit of being a Star.Cash cow Tesco could be considered as a cash cow with high market share but high market share. Because its Distributions, Quality and extra service to the consumer and equipped with new innovation product in the UK. It has to maintain the current dodging and the existing market activities.Question mark Tesco is definitely not the question mark. Because of the Tesco financial service, Tesco insurance and the Tesco Mobile has not yet have the maturity date in the market.Dog Tesco can be considered as a Dog in that case of removing the idol product from the Market.2.2. Review the position of Tesco in its current marketReviews the current market position of Tesco is the best process of evaluating its present performance in the market and identify the market share and market growth.Tesco market positionChart Retail market positionTesco The given chart shows Tesco has 30.3% of present marketSainsburys Sainsbury has total 16.5% of present market.Asda The given chart shows Asda has 16.9% of current market share.Morrison Morrison has 12.3% of current market positionWaitrose Waitrose has 4.4% of present market position.Others the combined market position of Aldi, Netto,and Lidl stood at 18.6% (wall street journal,2011)2.3. Evaluate the competitive strengths and weakness of Tesco current business strategies2.3.1. matched strengthsTesco is the largest Supermarket chain in the UKTesco has very strong brand name and financially powerfulIt has more than 90 years of service sector historyIt has grew up through accusationsTesco represent in 4811 lo cationsIt is third largest retailer in the world.Better use of technology and marketingThe largest retailer in the world after Wal-Mart and Carre quadruplet.Performing its operation in 13 countries worldwideStrongly committed for corporate social responsibility.It has been famous for Food, Drinks, Clothing, Electronics, Financial services, Telecom, Home insurance and for Tesco fuel (Tesco SWOT analysis, 2010).2.3.2 Competitive WeaknessCustomer is big threats for Tesco.Environmental disaster can bring the business down like-snow fall, volcanoes etc.It is potentially would be difficult for Tesco to centralize in single market for specialisation as it is entering numbers of different markets.Lack of experience in insurance and phone market may be destructive for their business.It has very high transportation costVast amount of fuel used for transportation which not friendly to the environment around dependency on UK markets can be risky in the case of market down turn.Tesco position i n of high price product can trend the revenue in the competitive market (Tesco SWOT analysis, 2011)2.3.3 Evaluate the efficientness in Tesco Tesco as one of the multinational supermarket in the UK has its Strength is very competitive and constructive against the competitors. Tesco has enriched its strengths to be competitive in the market. Tesco has the system to implement the strength in the wider field. It has mainly identified and selected the strengths for expansion its markets internationally.Tesco has its weaknesses very little study to the strengths. The in effect(p)ness of the Tesco weaknesses is to transform them into potential strengths. Tesco has the weakness is to identify them and focus to avoid the potential risk which may arise.Task 3 underdeveloped options for strategic planning for Tesco3.1 Using modelling tools to develop strategic options for TescoPorter generic strategy has been identified the appropriate strategy for developing strategic options. According to ostiary Competitive strategy is the search for favourable competitive position in the industry, which can erode or improve depending on a firms picking of strategy. (Porter, 1980). It has identified four conceptual steps which is indented to identify the competitive advantages in the business performance (Eldring, 2009).Porter Generic strategiesCost leadership preeminenceCost focusDifferentiation FocusBroad scopeNarrow scopeSource of Competitive Advantage3.1.1. Cost leadership Tesco has the attempted to become the low cost manufacturer in the retail industry in order to accumulate highest t profit by setting a standard product price. It has the strategy to focus on low cost leadership strategy in every activity and invest the extra profit into the Market.3.1.2 Differentiation Although Tesco follows the cost leadership strategy but it is price sensitive and responsible for quality product.3.1.3. Cost focus Tesco as the UK largest supermarket retailer do not follow the cost foc us or niche market strategy.3.1.4. Differentiation focus Tesco as one the biggest supermarket in the UK has differentiation focus strategy of identifying the segmented market among the competitors to remain reliable and competitive.3.2. commenceing a comparative understanding of activity from Tesco in the marketAccording to Laura lake A positioning map, is a useful tool for planning your position relative to your competitors position. It helps you map key attributes of you and your competitors product, service or business. A rudimentary positioning map containing a graph that has two points one being high quality and other opposite site of the graph representing low quality. Rank yourself and your competitors on the graph based on the perception of the consumers (Lake, 2009). A consumer positioning map is a tool which is intended to identify the position of a brand in the market and rank the company by the market place it has in the market.Consumer place MapHigh Product QualityP remium brand Bargaining BrandSainsburysTesco Asda,WaitroseHigh cost Low costCowboy Brand Economy BrandMarks Spencer Ice land, Lidl, Aldi.Co-operativeLow product qualityTesco Market position3.3. Create options to form the basic future Tesco strategyCreating options to form the basic future Tesco strategy could be Ansoff Matrix. Tesco as one of the giant supermarket in the UK has remained highly competitive with the competitors. Tesco corporate Strategy has made us to understand the sympathy of being most high profile supermarket chain in the UK and one of the worlds leading international retailer.Ansoff Matrix to analyse Tesco future StrategyAnsoff Matrix for Tesco afoot(predicate) NewMarket PenetrationUK core retail marketProduct DevelopmentNon-food retail market likeTesco Mobile, Insurance, Cloths,Tesco fuel.Market DevelopmentInternational retail marketLike Asia, Europe, United StatesDiversificationNon -food retail market (organically and non-organic diversification)CurrentNewSou rce Tesco corporate Strategy 2010Task 4.Develop a strategic plan for the organisation4.1 A suitable structure that would ensure participation of all stakeholders in Tesco.Stakeholder analysis and stakeholder is suitable structure that would ensure participation of all stakeholders in Tesco.Stakeholder MappingLevel of interestLow HighAGOVERNMENTBSUPPLIERSCCUSTOMERDINVESTORLowPowerHighGovernment Government has low level of interest by the change Tesco brought into service.Suppliers Investor who put the money in Tesco has high level of interest by the change has happened.Customer Customer has low level of interest of what Tesco has brought the change.Investors Supplier as internal stake holder has high level of interest of what change has brought into Tesco.Stakeholder analysis Stakeholders are those people who have legitimate interest in Tesco. There are six steps of analysing the stakeholder in Tesco. Those steps areStep 1.Identify stakeholders Identifying the stakeholders is the fir st step of analysing the stakeholder in Tesco. The stakeholders are in Tesco is Customers, suppliers, Buyers, Employees Managers, Community, Government, and Media.Step 2.Prioritise Stakeholder Prioritise the stakeholders in Tesco according to their attribution is very important element of bring the development in Tesco. It is an effective process of gradual involvement.Step 3.Develop an engagement strategy One of the important element of stakeholder analysis is to develop an engagement strategy of stakeholders with Tesco. It brings the commitments and individual duties belong to individual into practice. The methods of involvement could be Meetings, presentations, Group facilitation, Delegating, develop and share a change plan.Step 4.Map their profile Mapping their profile according to their level of influence and Level of interest is significant element of analysing stakeholder profile.Step 5.Optimise their support Stakeholder analysis is the effective way of involving Stakeholder s into direct and indirect approach of Tesco activities. Optimising their support means, the support is provided by stakeholder is to hold them in the best possible way. Utilise the support of stakeholders resources.Step 6.Monitor changes Changes may come according to the demand of time. It is vital to monitor the changes may come potentially.4.2 Develop criteria for reviewing potential options for strategy planDeveloping the criteria for strategic focus plan is a form of various sources. The reviewing options are to identify the effect of management strategy in Tesco. The options consist ofAttractiveness to stakeholder The criteria that involve the stakeholder must have the attractiveness to the stakeholder. It should reserve the interest of Stakeholder and to be attractive to themFeasibility studies Tesco has Human resource management of 472,000 people work for Tesco. It has got Technological approach of applying the self service till and online shopping service for the consumer .Effects on Market position and share The cadence of making the potential options for strategic plan is to assess the effect on present market position (30.3%) and the share it has.Risk assessment The option for strategy plan is to identify the potential risk and assess it properly which may arise anytime during the strategic plan.Cost benefit analysis Commercial Cost benefit analysis is a process of measuring, comparing and identifying the commercial cost that involve the investment in return of benefit in Tesco.4.3. Construct an agreed strategic plan that includes resource implicationConstruct an agreed strategic plan that includes SOSTAC. This can be applied to identify the resource implication. SOSTAC stands for S- Situational, O- Objectives, S- Strategy, T- Tactics, A- use, C- Control. Among all the meaning of SOSTAC Application could be used for an agreed strategic plan that includes resource implication.Tesco resource implicationActivities20112012BudgetResearch(cut the cost of living)Reward(share to be given to staff)Outlets(in china)CommunityEnvironmentJan JuneJuly regretsJan JuneJuly Dec200 millions98 millions170 millions7 millions...................Source Tescoplc.comTask 5.Examining factors Tesco strategy plan5.1 Compare core organisational take to bes with current business objectives of Tesco.Tesco as a most successful high profile supermarket retailer in the UK and one of the worlds leading international retailer has generated its core organisational value with its current business objectives.Ethical value with objectives Tesco as the one of the giant supermarket has very strong Ethical value with its stakeholder. It has 91% of suppliers around the world say Tesco treat them with respect. It has the plan of roll out ethical trading incentives schemes and Trading fairly Awards to two further product categories in the UK as key performance indicators for 2011(Tescoplc.com)Cultural value with objectives Tesco as most successful supermarket ha s the objectives of creating a beautiful place to work for everyone. Tesco has 19% of board directors are women. Developing more topical anaesthetic leaders in each country remains a key priority (Tescoplc.com)Environmental value with objectives Tesco has more accountability of practising environmental issue. It is very responsible on environmental impact. It has got the plan of reducing carbon dioxide emission 5.5% compared to 2009. It has set up a target of become zero carbon business by 2050(Tesco plc.com)5.2 Develop appropriate mission and vision statement of TescoTesco mission statement Treat the customers as the best way they can be.Tesco vision statement Tesco must go with the statement of Every Little Helps. It has come through the massive amount of simply sell Groceries to Tesco extra where possible everything is available for customer. As we are growing up internationally we should remain focus of earning the lifelong loyalty as representing local.5.3 Producing agreed f uture Management objectives for TescoTesco future management objectivesTesco to be no 1 as a international retailer within 10 yearsTo have 60% of the UK core business by next 5 yearsTo be successful in non-food as successful in food.( Mobile, Insurance, electronics ) by 2015To be recognised by community of what we do by regular contribution within next 5 years.Objectives with SMART Tesco should implement the objectives with SMART. The SMART stands forSpecific Tesco management future objectives should be based on Specification of what Tesco need to do.Measurable take over measure must be taken in order to implement the objectives.Achievable The objectives must be based on the potentiality of being achieved. existent To avoid the unprecedented acts Tesco must place its objective on realistic.Time based To be competitive in the market locally and internationally Tesco must utilise the objectives on time and should have proper time frame.Strategy To be competitive in the market place Tesco need to follow the porter five forces.5.4 Develop measures for evaluating a strategic planTesco as one of the multinational high profile supermarket need to develop some measures for evaluating strategic plan. The military rating of strategic plan is to be placed on specific elements.The strategic plan for Tesco The area of strategic plan is consist of Environment, Communities, The responsibility of buying and selling products, Healthy choice for consumer, employees and managers.ItemsDescriptionsDurationEnvironmentCarbon dioxide emission to reduceBy 2020 30% and 100% by 2050CommunityTesco need to work for the local community to involve them with TescoIn the relative time consume.Faire tradeHealthy choiceJobTesco need to be 100% fair trade in the marketTesco need to provide more healthier food for customerTesco need to employ more women at the high level position for not being discriminatedIn the comparative market timeBy next five yearsBy 2015Environment Tesco as responsible s upermarket need to unfold the climate change strategy by focusing reducing in the chain of supply by 30% by 2020. It also needs to reduce the emission of distribution network chain by 10% compared to last year.Community Tescos community programme needs to carry out in locally in deferent culture in deferent country in order to benefit by the local people while experiencing the international.Tesco need to have a strategy Fair Trade Model when buying and selling the products.Healthy Choice for customer To carry out the policy of providing healthy choice Tesco need to impose a strict rule of selling Alcohol. It should focus on encouraging customer to eat more healthy food in order to avoid the risk of bad and embarrassing health.To make Tesco level place for everyone it need to ensure that women are in the better represented at senior level wherever Tesco operate. It also needs to employ more local leader as a key importance.6.2 Create appropriate airing process to get commitment fro m the stakeholder in Tesco.To get the commitment from customer and retain them with the organisation Tesco need to apply appropriate process of making effective communication to the customer. The effective dissemination processes are discussed below.Through Media To make a positive and productive communication with Stakeholder Tesco can contact by media with to get their feedback to be more commitment with them.Newspapers In order to make the effective communication with stakeholder Newspapers in one of the appropriate process of making them involved with Tesco. Tesco can on a regular basis supply the information to stakeholder and let them know what is the contribution is kept by them.6.3 Design monitor and evaluate systems for the implementation of the strategic plan in TescoStrategic plan Strategic plan that includes SOSTAC. This can be applied to identify the resource implication. SOSTAC stands for S- Situational, O- Objectives, S- Strategy, T- Tactics, A- Application, C- Contro l. Among all the meaning of SOSTAC Application could be used for an agreed strategic plan that includes resource implication. The strategic plan of SOSTAC is the effective plan that Tesco Can apply.Monitoring evaluating system Monitoring and evaluating the system is discussed below. There are many types of monitoring system. Which are.Goal based Evaluation In order to implement the strategic plan set up a goal based on rating in Tesco. Goal base evaluation is a conducive way of monitor the progress when the implementations are taking place.Outcome based evaluation when the implementations are taking place check out the outcome of the progress is very important way of implementing the strategic planRegular reports Set up a monitoring team those will submit the report on regular based to identify whether the Strategic plan are taking place or not.Meetings The meetings may take place on regular based between the coalition teams to know how the implementation are taking place and the r esults of meetings can help to develop the expected Strategic plan.Conclusion In order to remain in the market place implementing and analysing of the strategic plan is very important for Tesco to adapt. The strategic plan is the continuous and gradual approaches of applying in to the company. Tesco as one of the most successful international retailer it should follow the strategic plan to be more competitive among the rivals.