Evaluation of the Company's Strategy Essay Example | Topics and Well Written Essays - 2000 words

Evaluation of the Company's Strategy - Essay Example The main objective of author of the study is not only to show the current strategic position of the company through strategic management analysis, but also would help in conducting environmental scanning, strategy formulation and implementation. This would help in understanding the changing market dynamics. The design of effective strategies for each line of business of the company would help in gaining competitive advantage over its competitors. The strategic evaluation of TESCO would also be done to help the managers assess the present organizational structure for error detection. Introduction: History TESCO is one of the leading supermarket retailer in United Kingdom (UK), and the fourth largest retailer in the world after Walmart, Carrefour and Home Depot. It is also one of the largest online grocery retailers in UK (Humby, Phillips and Hunt, 2008). Initially, Tesco specialized in food retailing but later it diversified into non food segments like clothing, electronic appliances, banking, insurance and telecommunications (TESCO Plc, 2013a). Present Situation of TESCO The company has a worldwide presence in China, India, Hungary, Slovakia, Czech Republic, Poland and many other countries. TESCO employs 300,000 people and operates 3,000 stores worldwide. TESCO employs 300,000 people and operates 3,000 stores worldwide. The company operates 200 stores in UK itself and offers a varied range of food items. It is the leading brand of food retailing in UK followed by Everyday Value. Tesco has always believed that the strategy of the company needs to be revised as per the changing taste and preference of consumers. Tesco believes in improving the customer service by responding to the customer needs and wants. The stores are usually renovated from time to time, in order to give customers a warmer and refreshing feel in the stores. TESCO products are usually low priced and of better quality (TESCO Plc, 2013b). The company believes in undertaking environmental and soci al responsibilities. It publishes its corporate social responsibility charter every year (Dinkhoff, 2009). Analysis &Critical Evaluation of TESCO Strategic Positioning It is necessary to undertake a strategic analysis at an industry level and also analyze various strategies for targeted segments. A useful and purposeful framework, which will help in identifying the resources and capabilities that are required to operate within a particular market (Aker and McLoughlin, 2010). This framework helps in formulation of strategies that help the company in gaining competitive advantage over its competitors. Porter’s Five Forces Model The five forces framework model developed by Michael Porter is instrumental in determining the competitive intensity and attractiveness of an industry by the interaction of five competitive forces. Threat of new entrants: The UK retail industry is suffering from economic slowdown which is indirectly affected by the low consumer spending and decrease in t he demand of varied food and non food items. There has been limited entry of retail departmental stores in the UK retail