Evaluate And Analyse The Strategic Perspective Of Tesco Marketing Essay

Evaluate And Analyse The Strategic Perspective Of Tesco Marketing EssayThe aim of this spell up is to evaluate and analyse the strategic perspective of Tesco. This go forth include checking through all the activities of Tesco both in the U.K and globally.OBJECTIVESThe aim and objective of this write up is to examine the general operating strategies of Tesco, the challenges they argon facing, what motivates them, their strategic directions, what strategy they are pursing presently. Also, what challenges lies ahead of Tesco and also to know where they will be whitethornbe in the attached five years.METHODOLOGYMaterials were consulted and sorted for in order to get stemmaamental in carcassation about Tesco and its operations. These materials will link from books, journal and online sources.ACHIEVEMENTSDuring the course of this research, we impart been able to analyse Tesco strategic options, directions, aspirations and operations. The position Tesco is at the moment has been establ ished and their future directions. However, the present achievement and success of Tesco potfulnot be over emphasised in new-fashioned times.CHAPTER ONEINTRODUCTIONThis research is basically to explore the strategies Tesco Plc is pursuing, their core competencies and their challenges. It is also to evaluate those competencies to know if they are digestable and also if they provide node value. besides research will be done as the research progresses.BRIEF HISTORY OF TESCOTesco is a British international grocery and general merchandising retail chain. It is the largest British retailer by both global sales and domestic market share, with profits exceeding E3 billion and the third largest global retailer base on revenue behind WAL-MART of U.S,A and CARREFOUR of France. (http//www.evri.com)Further online source stated that the compevery started as a one man business in capital of the get together Kingdom East and was funded by JACK COHEN son of a polish Jewish tailor. He sold groc eries in the markets of East end in 1919 but the make first appeared in 1924. The name derived after Jack Cohen bought a large shipment of tea from T. E stock well( Formally messrs Torring and stock well of nice Lane ), he made new labels by using the first lead letters of the suppliers name and the first two letters of his surname to form the word TESCO. The first store was opened in 1929 in Burnt Oak, EDGWARD- LONDON. On the part of food retailing, Tesco is one of the largest food retailers in the World, operating more or less 2,318 stores and employing over 326,000 people. It provides online services through its subsidiaries. The UK is the companys largest market where it operates in the following areas Extra, Superstores, Metro and Express.The company sells almost 40,000 food items, including clothing and other non-food items. The companys own-label products (50% of sales) are at three levels, value, normal and finest as well as convenience produce. Many stores require gas s tations becoming one of British largest independent petrol retailers in 1991. Other retailing services offered by Tesco include Tesco personal Finance, Tesco.com and Tesco Direct launched in 2006.Tesco is a supermarket giant. Research and retail analyst have identified around reason like Tescos are everywhereTescos sell to everyoneTesco sells everythingTesco has branded itself in such a way that its success is inevitable. They always take into account dissimilar implications for customers, their employees, shareholders and other concerned bodies. Tesco places importance on its mission statement.Tesco have developed various international marketing strategies in various countries like China, Sweden, Malaysia, Poland, e.t.cTESCO COMPANY profile correspond to information cited from on an online source, universitydissertations.com, Tesco runs more than 2,300 supermarket, hypermarkets and convenience stores in the United Kingdom, Ireland, central Europe and Asia. Tesco is the market le ader in food retail in the United Kingdom where it has its highest market share existence compared to other countries where they operate.Tesco operates in various categories of shop sizes, from hypermarkets (Tesco extra) to small urban stores (Tesco metro) and convenience and gasoline retailing (Tesco express) including Tesco fiscal services.Also according to this same source, Tesco is a global leader in online grocery sales as it owns about 35 % stake in United States grocery chain called Safeways Grocery works.Tesco is a leading online grocery store at the moment they are now evening moving into expanding their business by diversifying into other areas.TESCO SWOT analytic thinkingSTRENGTHSTesco has diverse ranges of productsThey have a strong cash flow positionThey increase sale and trade profitsThey have a Strong balance sheetThey taper on brand awarenessThey have human resourcesStrong Online shopping facilityTesco open 24 hours a dayThey have a leading supermarket chainThey ha ve capabilities of converting resources into finished goods.WEAKNESSESSPerception of low quality (Tesco value brands)Lack of local cognition of customers (international markets)Lack of foreign culture knowledge (International markets)OPPORTUNITIESTesco develop brand awareness globallyConstant New Market opportunityMarket shift to globalisationInnovation and AlliancesLow cost brand growthDiversificationNon-Food offers Tesco untapped new markets with higher margins.THREATSNew and existing competitionIncrease in the hurt of raw materialsEconomic recessionFar-east low cost brandsHigh competition for customers and resourcesCHAPTER TWOELICITING AND EVALUATING schemeTesco is pursuing hybrid strategy in all their markets.Tesco strategies can therefore be analysed with the Bowmans strategy clock below.ssssssTesco Position on clockCUserspc userPicturesbowmans_lesson.gifT correspond to strategyexplorer.com online resource, a hybrid strategy seeks simultaneously to achieve specialization and low price relative to competitors.Tescos Hybrid Strategy is pre-dominant in the UK market. Rival organisation like Asda seek to pursue low cost strategy and another(prenominal) rival, Sainsburys tend to pursue differentiation (broad) Strategy.Hybrid strategy can give an organisation payoff especially when larger volumes of sales can be achieved. This is a plus to Tesco competitive advantage considering their market share in the U.K market. Tescos aspirations in the near future are to pursue full differentiation strategy which they may want to achieve in phases.In additional to this Strategy, Tesco also utilises Market development strategy which has increased their balance sheet strength and global presence. According to online information from Tescoplc.com, Tesco Diversifying into areas like Non-food, Financial services and Telecoms and also new markets abroad in Asia, Central Europe and recently into the UnitedTescos strategy towards market growth has broadened their scope of bu siness over the years into new markets outside the U.K. Tesco has an established and sustainable. Their Strategic decision to diversify in 1997 has contributed to their success in recent years. (www.Tescoplc.com)TESCO STRATEGY OBJECTIVESAccording to Tesco online source, the objectives of their strategy areTo be a successful international retailerTo grow the core UK businessTo be as strong in non-food as in food.To develop retailing services such as Tesco Personal Finance, Telecoms and Tesco.comTo put community at the heart of what they do.TESCO TWO AREAS OF CORE COMPETENCIES substance and distinctive competencies are very important to any organisation who wants to lead in its industry and also provide customer value.According to Hunger J.D and Wheelan, T.L (2001) P.56, Resources are the organisations assets. Core competence capabilities, in this context mean the ability of such organisation to exploit and use these resources.These resources can be analysed by Barneys VRIO framework below.TESCO VRIO modelingRESOURCESVRIOH.RYesYesYesYesOnline shoppingYesYesYesYes24hr storesYesYesYesYesCash Flow positionStrongYesYesYesYesBalance sheetYesYesYesYesTesco is very strong considering the resources they have at their disposal. They also utilise all these resources to the fullest. They are in a very strong position both in the U.K and around the globe where they are operating.According to tutor2u.net (online) (n.d), core competencies are those capabilities that are critical to an organisation achieving a competitive advantage.Two areas of Tesco core competencies areThe Tesco.com experienceNon-food strategy strengthThe Tesco.com will effectively supply good customer interface that personalises online shopping which make it more efficient thereby giving customers value.The non-food strategy is one of the strongest tools Tesco has at the moment. It is giving them advantage to tap into new markets with very high margins.CHAPTER THREEIS TESCO CORE COMPETENCES AND STRATEGY S USTAINABLE?If we want to analyse whether these resources and competencies are sustainable, I would say yes. I arrived at this conclusion because looking at the strategy they are pursuing and their core competencies couple with their market penetration and development around the globe, they should be able to sustain these core competencies and strategy. It can also be noted according to the speech of Tesco director that they are market leaders in most of their international markets.TESCOS PESTEL ANALYSISPOLITICAL FACTORSTesco is a globalised company as they operate in many countries. Political conditions and legislations in these countries have highly influenced Tescos success.ECONOMIC FACTORSTesco does not have any power over economic factors. Economic factors can affect cost, prices, demand and profits.SOCIOLOGICAL FACTORSAccording to Ivory research (Online) (2010), current trends have indicated that British customers have moved towards one stop and bulk shopping, which is due to v arious sociological changes. Aging population now eat ready meals which reduces cooking at home. expert FACTORSIvory research (online 2010), stated that new technologies benefit both customers and Tesco. Food chains have been more accurate and equipments like self checkout, electronic fund transfer facilities have rattling increased the success of Tesco globally.ENVIRONMENTAL FACTORSThere have been increased demands from organisations for responsibility of the milieu. Tesco has commitment on corporate responsibility to the environment they operate in.LEGAL FACTORSVarious legislations from different government have influence on Tesco, For example, legislations about suppliers and so on.STRATEGIC COMMENTARYTescos core competencies can really help them to achieve an increased competitive advantage. This is obvious because of their focus on new markets outside the U.K. Tesco needs to focus on their key strategies like the Non-food and the tesco.com.Tescos customer loyalty can be susta ined by continuous customer value provision. Tapping into new international market is a good turn for Tesco has this will increase their global market share and turnover. Tescos fresh and easy brand in the United States would develop and increase their global profit turnover if they focus on that market.CONCLUSIONTescos strategic direction for the future is very important and crucial to their global strength. I can see Tesco competing closely with Grocery giant, Wal-Mart in the nearest future. Their success in the last 12 years has proved that they can really move into the global market and become like coca-cola in the nearest future.