- 500+ Experts Online to help you 24x7
- Guaranteed Grade or Get Money Back!
- Rated 4.8/5 Out of 5087 Reviews
Introduction to Organizational Strategic Choice
Strategies are formed in the organization for accomplishing required goals and objectives of the business in successful and effectual manner (Rachet, 2014). It is assertive that companies should adopt systematic approach for making action plans for business so that long term competitive growth of the enterprise can be ensured.
(a) Strategic purpose and introduction of the organization
Tesco is a leading retail firm of UK that offers superior quality products and services for its business consumers. Wide variety of goods are offered by company and millions of consumers are getting benefited by it. Retail industry of UK is getting highly competitive and many organizations are executing their operations in this sector.
External Environmental Analysis
Political :- Rules and regulations that have been formed by government of state are mandatory to be followed for all the organizations. Government of nation forms norms that are mandatory to be followed for all the organizations that are working in the country (Balasopoulou and Geitona, 2016). It is assertive that all the business activities in the Tesco organization should be performed as per the norms. It will help for carrying out required business activities in legal and lawful manner.
Economical :- Different changing situations of nation gives impact on the different operational activities that are performed in the company. Inflation and deflation situations of nation gives influence on the purchasing power of people and due to that business activities of the Tesco entity gets affected (Mkude and Wimmer, 2015). For example if there is inflation situation in nation than due to that purchasing power of people reduces and they feel difficulty in buying products that are at a higher price rates.
Social :- All the products of the company are developed by keeping the expectations and needs of buyers into consideration. Tesco company considers needs and expectations of buyers while selling and designing and developing the products of the enterprise. Buying behavior of people gets influenced and due to that impact is observed on the purchasing behavior shown by them.
Technological :- Science has done rapid advancements and innovations and new techniques that are happening in technical sector gives impact on the overall activities that are performed in the entity. Rival firms that are working in retail industry are taking advantage of this opportunity and due to that impact is observed on overall business activities that are performed in the enterprise. It is vital for Tesco to adopt new technology to execute their required business functions (Grünig, and Kühn, 2015).
Environmental :- Different types of climatic change activities such as changes in environmental conditions. Temperature change situations also gives impact on the various business activities that are performed by the Tesco business organization. Natural disasters and climatic changes situations also gives impact on the operational activities of the company and logistics and supply chain activities of the enterprise gets influenced due to it (Kuitunen, 2014). It is assertive that proper analysis of all the external market situations should be done so that necessary functional activities of the enterprise can be performed without facing much difficulties.
Legal :- It is critical that all the business activities of Tesco company should be performed in legal and lawful manner so that required goals and objectives of the enterprise can be accomplished without facing much difficulty. It is assertive that norms that have been formed by government should be followed properly. For example taxation policy of the state needs to be followed by the company (Grünig and Morschett, 2017). All the regulations and policies that have been formed by government of UK needs to be complied with. Legal guidelines changes from one nation to another nation and it it vital that rules of one particular country should be followed properly.
Competitive Industry Analysis
It is critical that competitive industry analysis should be properly done so that opportunities available for a company. Challenges that organization is supposed to face in international market area can also be analyses and it will help for making better and effective strategies for Tesco company. Various techniques and action plans that have been adopted by rival firms for gaining huge market share can also be analyzed and it will help for making better strategies for gaining competitive advantage for the business (He, 2015). Porter's five force analysis can be used for carrying out competitive industry analysis for Tesco organization.
Bargaining power of buyers :- Buyers have many options for purchasing their products as many retail organization are offering superior quality products at lower price ranges. It is required that need, preferences and expectations of buyers should be fulfilled so that sales of the entity can be enhanced.
Bargaining power of suppliers :-Bargaining power of Suppliers is low as Tesco company has many suppliers for selling their products. Company does bargaining with buyers for reducing the prices of the products that are being supplied by them.
Threat of new entrants :- Retail industry of UK offers huge success and growth opportunities. It is the major reason for which many companies are trying for starting new ventures in grocery retail sector. Threat of new entrant is high and it create challenge for the Tesco company. New entering companies required to invest huge capital for carrying out their operations in this sector and prior permission from government and other regulatory authorities is also required to be taken. There are many existing players in retail industry that are already carrying out their business successfully (Burgenmeier and Mucchielli, 2013). New entrant firms required to adopt strategic approach for facing the challenges that have been created by existing market players of grocery retail industry. Threat of new entrants is medium and Tesco company needs to be awrae about challenges craeted by new entrants.
Competitive rivalry :- There are many rival firms that are operating their functions in retail industry and it includes Iceland, Lidl, Aldi, Waitrose, Morrisons and Sainsbury's. All the companies adopts different strategies for selling their products in market. All firms tries for gaining big market share and due to that competitive rivalry becomes high. It becomes assertive for Tesco to adopt innovative and strategic approach for gaining competitive advantage for the business (Antonioli, Mancinelli and Mazzanti, 2013). Grocery retail industry of UK is facing tough competition and due to that it has become challenging for gaining a good position in industry market area.
Availability of substitutes :- Wide variety of products are supplied by Tesco company and other retail firms that are operating in UK also supply different variety of products. There are many substitute products that are available in market that can be used by consumers. All the substitute products are available in following categories including clothing and jewelry, health and beauty, home appliances, tops and baby products, home electrical products and health and beauty care products. Wide variety of products that are offered by Tesco are in comprehensive range. There are many substitutes available in market that can be used by consumers. Other than this rival firms are offering many varieties for buyers. Threats of substitutes is high.
Strategic Capability Analysis
SWOT analysis helps for evaluating opportunities and threats that are available for business. It assists the organization in making better and effective action plans.
Strength :- Tesco company holds big market share in grocery retail industry of UK and efective supply chain and logistics operations. Effective consumer information tool is used by the company and it helps for making stronf property portfolio.
Weaknesses :- Recently Tesco company observed weak financial performance and due to that overall profitability and sales of the enterprise got affected. Financial scandal that happened in the year 2015 also created negative brand image of the organization. In addition to that employee turnover rate is high in the company which also is a weakness for the org