The Leading Strategy Of Tesco Plc Assignment Sample

Introduction Of The Leading Strategy Of Tesco Plc Assignment Sample

This study aims to focus on the strategic leadership development via the analysation of the chosen organisation Tesco. In this regard the organisational background along with the industry background is going to be evaluated here. This report considers Tesco Plc as a selected organisation to identify its business process and strategic consideration. Tesco PLC is a UK-based multinational retailer business that captures a leading position in the business market of the UK. This focuses on delivering affordable, healthy and quality food to customers to meet their requirements. Internal and external environmental analysis of this organisation is going to be discussed here along with the use of different theories. Lastly, a few recommendations will be recommended here.

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Organization Background

Tesco Plc includes approx. 330000 employees to continue its supply chain and marketing process of the organisation. The share price of this business is 265.00 p and follows the sustainability of the organisation (Tescoplc, 2023). This company started in 1919 and purchased land in 1930 to expand the business. This business also experienced rapid expansion in 1950 and introduced stamps on products in 1960. The global expansion occurred in 1990 and expanded businesses in different countries in the world. The great initiative was considered in aspects of the introduction of Club Card in 2000 to influence the value-driven services of the organisation (Tescoplc, 2023). This approach is considered influencing delivering quality value to customers through adding points on Club Card as per their marketing and delivering offers to customers to influence purchase intention and develop the brand value of the organization. This

Vision statement

This organisation focuses on specific vision statements such as “Serving our customers, communities and panel a little better every day”

Balanced Scorecard

Figure 1: Balance Scorecard of Tesco Plc

(Source: Self-developed)

The above-mentioned vision statement shows that this organisation delivers value to sustainable development to influence overall outcomes and continue long-term advantages in the business process. The food sector of this business considers its contribution to climate change and delivers vulnerability to its effects. This organisation considered a net zero carbon emission goal for the first time in 2009 and decreased emissions of group scope 1 and group scope 2 by 55% by 2015. This organization considers a target of achieving carbon neutrality by 2035 and meeting net zero carbon emissions by 2050 (Tescoplc, 2023). This organisation includes different partners and suppliers in this journey and continues a net zero carbon emission approach in the overall business process.

This organisation considered an initiative to support local communities as this invested 100 million Euros in ten community projects out of 1000 projects and was involved in the donation process as 52 million meals includes in the donation list. The health consideration includes decreasing calories from food and decreasing approx 71 billion calories from a different food to influence the health of people. This company also focuses on diversity and inclusion in the business process and approx 85% of total employees agree with inclusion in the business process. The positive change involves continuing sustainability and the result shows that approx 45% of waste reduction after 2016/2017 and completed removal of 2 billion plastic since 2019. This organisation also focuses on 100% electricity to continue renewable energy sources in the organisation (Tescoplc, 2023). The social initiative of this business captures a large figure as approx 119.2 million donations are completed in 2022/2023.

Business background

As per the annual report 2022, the retail industry in the UK is one of the major industries that included more than 300,000 separate companies (Brc, 2023). The UK retail industry consists of more than 3 million employees and employment in the UK retail denotes over 8% of all other UK jobs. The major aim of this industry is to provide consumers with daily needs goods as well as services. The major retail companies in the UK are including Tesco, Sainsbury, Morrison, Lidi, Aldi and many more. The UK base detail industry tries to meet all the needs and aspirations.

On the other hand, according to the annual report of the Statista of 2022, the sales value of the UK retailing market amounted to £ 36.73 billion (Smith, 2021). It can also be noted the fact that most of the retail companies of this country generally deals with products and service related to entertainment, food, beverages, fashion, health and beauty care, general merchandise, sport and leisure, home decor and many more. Mostly in the post-pandemic situation most of the retail organisations have started to deal with online retailing and among them, the online retailers of the UK are Amazon, ASOS, Ao.com, eBay, Boohoo, Misguided and many more.

Internal environment analysis

SWOT

Strengths	Weaknesses
Year of foundation 1919 Total market capital £ 21.57 Billion in March 2022 Net income £ 721 Million in 2021 Biggest grocery retailer in the UK Annual revenue £ 57.8 Billion in 2021 The total number of employees is 361,771 in 2021 (Tesco, 2023). Superior usage of technology The facility for online shopping	Fraud Trial Accounting Scandal Covid-19 decreased operating profits in 2021 (Tesco, 2021). Poor operational performance Negative publicity
Opportunities	Threats
Expanding global business in Japan and US Scope to alliances with other brands Cashless facilities such as “Pay without a Card” or “Any Cash” in all stores Delivery within one hour	Expensive production. Competition with supermarket giants Christmas ad controversy Brexit Referendum Issues in the supply chain (StudySmarter, 2022). Rising cost

Table 1: SWOT analysis

(Source: Self-developed)

Analysis

It can be analysed that the SWOT analysis framework has developed the basic idea regarding the major strengths, weaknesses, opportunities and threats of this organisation. The highest market capital, net income and annual revenue of this company along with the highest number of employees (StudySmarter, 2022). On the contrary, the major weaknesses of this organisation are related to fraud trials, accounting scandals, decreased operating profits in 2021, poor operational performance and negative publicity. It can also be depicted the fact that this company has the major opportunity to expand its business globally and provide the scope of cashless payment to its consumers (Tesco, 2022). At present this company may face diverse threats from high competition, scandals, the Brexit movement and many more.

Porter’s Five Forces

The threat of new entrants	Presence of retail giants Requirement of new entrants Focusing on general merchandise Economies of scale	Strong force
Bargaining power of suppliers	Presence of a huge number of suppliers Increased supply capacity Suppliers have an effect on the successful organisational growth Tesco has specific authority over the suppliers	Weak force
Bargaining power of buyers	Various vendors in the market Increased awareness of the customers quality of products Switching cost Tesco consumers are concerned with deviating from one retail store to the other	Strong force
The threat of substitute products	A few alternatives to retail stores Products are commonly accessible Low-cost items and services of the stores Use of advanced technology	Moderate force
Rivalry among existing competitors	Increased demand in the community Multiple platforms and rivalry Major competitors are Sainsbury, Asda, Morrisons and Aldi (Adamkasi, 2021). Scale operations and discounts.	Strong force

Table 2: Porter's Five Forces

(Source: Self-developed)

Analysis

As per the analysis of Porter's Five Forces competitive framework, it has been identified that this company may face strong force from the threats of new entrants, bargaining power of the buyers and rivalry among the existing competitors (Rahman, 2020). On the contrary, the major factors of the bargaining power of the suppliers may develop the fact that this company has the low power of their suppliers.

External environment analysis

PESTLE	Factors	Impact
Political	Follows the modern democratic parliamentary system The rate of government stability is 0.54 Involves Brexit deal 81.30 points in the corruption level index during the period of 1995 to 2022 (Trading Economics, 2023)	Positive
Economic	The GDP growth rate is an approx 7.5% Increased in consumer prices index by 8.7% during the last 12 months to April 2023 (Ons, 2023) FDI developed in 2021 by 83.1 billion Euro to 2002.4 billion Euro (Ons, 2023) Decrease in the unemployment rate by 0.2% after December 2019.	Positive
Social	Digital marketing fee of approx 1065 Euro Large literacy rate of approx 99% (una, 2023) Follows the Multicultural system inside the community	Positive
Technological	The innovation rate is 59.7 points The expected investment in digital technology can be developed by 14.56% from 2023 to 2027 (Statista, 2023). Internet users are approx 96.68%	Positive
Legal	Consumer protection act Equality Act 2010 (Legislation, 2023) Employment relation Act 1999	Positive
Environmental	The air pollution index is 38 at present and the maximum rate is 81 GHG emission intensity decreased by 5% (Ons, 2023) C&I waste generation rate was 33.8 million tonnes in 2020 (Gov, 2023)	Negative

Table 3: PESTLE Analysis of the UK

(Source: Self-developed)

The above-mentioned table shows PESTLE analysis of the UK and identifies the positive and impact of each factor. This analysis shows that the UK captures five positive reviews in political, economic, and social, technological and legal factors of the country. However, the presence of pollution and wastes includes a negative review of the environmental factor of the country.

Identification of strategic theories

Different strategic and leadership theories can be helpful for Tesco to easily increase organisational values. Hence, different strategic theories have been discussed as follows with respect to the business growth of Tesco.

Strategic leadership theory

Strategic Theory presents a brief and legible base for exploring the social manners associated with the competition. Thus, the major notion of this theory lies under the wide international relationship. It is the tool that is directly associated with the understanding of the decision-making of any organisation. It has also been identified the fact that “Strategic leadership” is an approach and practice in which the leaders may use distinct styles of management (Schoemaker et al. 2018). The leaders may develop a concept for their employees that can allow them to adapt to the new changes and also to remain competitive in the modern changing economic as well as technological climate.

Trait theory

This theory is almost similar to the “Great Man theory” of leadership and the ”Big Five” personality factors of this theory can be helpful for the employees of Tesco to be more motivated and energetic to bring more future organisational growth and development as well (Healthknowledge, 2019). The major five factors of this theory are including “Openness to experience”, “Conscientiousness”, “Extroversion”, “Agreeableness” and “Neuroticism” (Tenhunen, 2023). Apart from that, this theory of Leadership is influenced by these five central traits. This theory can be more effective for the leaders of Tesco to increase the experiences, and values of the organisation.

Johari Window model

It is popularly known as a personal development or self-awareness tool. In this regard, it can be depicted the fact that the four major quadrants of the Johari model can be most effective to analyse the effectiveness and self-awareness of the employees of this organisation (Selfawareness, 2022). Hence, the Johari model a valuable method for enhancing the self-awareness and development of the employees of Tesco along with its group situations. It also acts as a tool or framework for a “two-way communication” process with the group.

Figure 2: Johari Window model

(Source: Selfawareness, 2022)

Open/self-area or arena

The first section of this framework is to be filled with all details identified by both the organisation and their employees (Communicationtheory, 2019). In this regard, the organisational leaders of Tesco view themselves as active, and the employees have also identified the major characteristic that can occupy the open area.

Blind self or blind spot

The UK-based retail organisation Tesco aimed to grow their area of collaboration with their employees and consumers by the method of disclosure and feedback (Hampson, 2021). Hence this step of this model can be effective for Tesco leaders to improve and increase their self-awareness and understanding of the employees so the blind spot can be minimised.

Hidden area

This step of this model has highlighted the fact that the group of employees of this organisation will be able to intercommunication more actually with the consumers and this type of understanding can easily improve their motivations (Selfawareness, 2022). This step can provoke the organisational leaders with the help of self-disclosure they can come from the open area to the hidden area easily.

Unknown area

This step of this framework can support the group members of Tesco to communicate more effectively with the consumers and they may also understand their reasons for motivations, need and satisfaction.

Mendelow’s Matrix

High power	Customers Trade associations Suppliers Media Alliance partners	Managers Entrepreneurs Executive committee Shareholders Leadership teams
Low power	Government Environment group	Trade Union Employees Council Designers Contractors
Low interest	High interest

Table 4: Mendelow's Matrix

(Source: Self-developed)

The above-mentioned table shows Mendelow's Matrix and delivers a stakeholder analysis of Tesco. This includes different stakeholders as per power and interest basis. This considers the allocation of stakeholders in aspects of minimal effort, keeping informed, keeping satisfied and key players' consideration of the organization

Effect of the current plan

The planning and implementation of initiatives are important activities of the organisation to continue long-term advances in the organisation. Tesco also includes different types of plans and initiatives to influence the overall performance of the organisation. Tesco declared redistribution of business products in 2016 and considered a target of approx 85%. However, this target was completed as the organisation captured 88% of the redistribution of surplus food products of the organisation. This plan included two different partners such as FareShare and Olio to complete the overall targets of the organisation (Tescoplc, 2023). FareShare has a large community group, network as this organisation has approx 8500 community groups, and this supports Tesco in completing donation activities in the organisation. This partner supports Tesco in completing donations of approx 25 million meals to different community groups and charities in the country. This organization also considered Olio, food-sharing applications in 2020 and supported in completing the food distribution process (Tescoplc, 2023). This organisation contributed to completing approx 20 million meals donated to local communities. This entire redistribution initiative supports achieving the sustainability goal of the organisation.

Figure 3: Six strategic drivers of Tesco Plc

(Source: Tescoplc, 2023)

This organisation considers six different types of strategic transformation such as differentiated brand, decrease in operating costs, developing cash from operations, developing mix to capture group margin, developing value from property and innovation in the organisation. The differentiated brand includes the continuation of long-term value through satisfying customers and supporting communities to meet with sustainability targets of the organisation (Tescoplc, 2023). Decrease in operating cost includes reviewing and reducing of entire cost through identifying alternative opportunities and continuing the cost-effectiveness process. This organisation captures a reduction of approx 1.5 billion Euro operating cost of the organisation. Development of cash from business process considers a three-year target to generate 9 billion Euro cash from operations. Development of the mix consideration focuses on achieving group margin and includes sustainable profitability in product ranges, channels and business processes to capture a group margin target of approx 3.5% to 4.0% (Tescoplc, 2023). Property strategy involves developing value in the business process by influencing customers by sharing offers-based approaches to products and services. This can contribute in develop value from property. In addition, innovation strategy focuses on developing capabilities in different factors such as channel, product and customer of the organisation.

Influencing Review

It has been identified the fact that after the major analysis of the internal and external environmental analysis of Tesco, this company has taken a target to bring development within the influence costs, demand, prices and profits of this organisation. In the post covid situation, the unemployment rate of the UK has decreased by 0.2% and this company has taken the target to bring more influence by providing that facility of high employment (Smith and Stone, 2020). It has been noted the fact that Tesco has already grabbed the high competitive advantages and as a result, this company has taken the target to bring more development within the target to bring low prices to their products. This company also want to bring influential review for their future development by bringing high quality to their products and also by providing experienced customer service.

Gap Analysis

Gap	Current State	Future State	Actions to Close Gap
Market Competition and Issues in pricing strategy	Expensive product rate as compared to other supermarkets such as Aldi, Morrison, Lidl and Sainsbury’s (Grocerygazette, 2023)	Competitive in the business market and value-driven preference of customers	Can consider offer-based initiatives to influence customer purchase intention
Product shortage issue	Filled veg product gaps with Snack (Plymouthherald, 2023)	Decrease in product availability, sales volume and revenue generation	Can diverse product range and suppliers and implement digital technologies in the supply chain process
Lack of efficiency in the online selling process	Considers charging more to suppliers to influence the online selling process (Bbc, 2023)	Delays in the delivery process and a decrease in customer satisfaction	Can consider collaboration with different partners to influence product availability and online marketing process
Presence of the gender pay gap	The gender pay gap in Tesco is median as the value shows approx 8.7% gender pay gap (Retail-week, 2023)	Can increase employees' dissatisfaction and conflicts in the business process	Can consider women empowerment and development of senior female representatives in the organisation

Table 5: Gap analysis

(Source: Self-developed)

The above-mentioned table shows four different types of gaps present in the business process such as market competition and issues in pricing strategy, product shortage issues, lack of efficiency in the online marketing process and the presence of a gender pay gap in the organisation. This table includes a suitable action plan to mitigate those issues and continue the sustainable development of the organisation.

Reflection upon the core organizational values

Values and purposes deliver strategic consideration in the business process to continue the effective activities of the organisation. Tesco considers customers, communities and planets in the core purpose and value of the organisation. This organisation focuses on understanding customers to anticipate and respond to customer's expectations and needs of the organisation. This business group considers the wide range of customer zone and focuses on different settings for diverse business reach ability and activities of the organisation. This business includes banking services in the retailer process and influences mobile-based marketing facilities to develop the sales volume of the organisation. This company also considers Dunnhumby's retailer, booker's wholesale customers and supplier clients to influence customer and sales volume of the organisation (Tescoplc, 2023). The communities’ purpose includes delivering jobs availability, supporting producers and suppliers, involving in donation activities and continuing community programs to influence people regarding sustainability in society. In addition, the planet considers the core values and purposes of this business including sustainability targets through decreasing negative impact on the environment.

This organisation considers decreasing plastic waste and carbon emissions and developing the utilisation of renewable energy sources in the organisation. This sustainability consideration includes an entire business process and supply chain process of the organisation to decrease negative impact on the environment and develops a healthy environment in the country. The core values of this business include understanding customer needs, being active to meet customers' needs and being responsible for communities to influence social and environmental factors of the organisation. The internal environment of this business considers core values such as continuing team performance, diversity and inclusion, trust and respect, listen and support for each other. This organisation also focuses on appreciating its employees for contributing a quality performance to meet with overall targets of the organisation (Tescoplc, 2023). This considers sharing knowledge and experience with employees to develop their skills and support them in completing their daily activities. In addition, this organisation also includes decreasing food waste and developing healthy considerations in food through decreasing calorie values in food products. Therefore, these core values can deliver effective support in continuing the sustainable development of the organisation.

Recommendation

Deliberation of stakeholder engagement and communications

The major stakeholders of Tesco are customers, creditors, suppliers, competitors, local communities and the government (Tescoireland, 2023). In this regard, this company has been facing issues in maintaining the proper relationship with its consumers and other stakeholders mostly the suppliers, customers and vendors. In this regard, it can be recommended that Tesco leaders need to focus more on their engagement with their stakeholders mostly with the consumers. Most of the shareholders and stakeholders of Tesco desire a good return on their future investment.

Increase engagement

In this regard, it can be concluded that Tesco has to increase its engagement with its Customers. In this regard, the leaders of this company need to understand the competitive market. Thus, this company needs to highlight the major aspects that have made them different from other retail companies. This company needs to clarify and convey their message to their consumers. The leaders of Tesco can maintain their relationship with their consumers mostly via texts, voicemails, the intranet, blogs and in-store communications. Apart from that this company needs to explore “Strategic Partnership Opportunities” to keep innovative innovation within their products and services (Nelson, 2022). The customer engagement program can also be helpful for Tesco leaders to enhance their marketing process. It can be also recommended that this company needs to be more focused on the development of a strong relationship with the vendors and distributors as well.

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