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Strategic Planning
CONTENTS
No.
Introduction
Topics
Company Background
Page Nos.
3
3
3
2
1. Analyse the major changes taking place in the external environment
1
2. Review the position of an organisation in its current market
2
2. Evaluate the competitive strengths and weaknesses of an organisations
1
3 Develop a comparative understanding of activity from organisations in
.2 the market
3 Create options to form the basis of future organisational strategy
.3
Propose a suitable structure for a strategy plan that ensures appropriate
4.1
.2
4 Construct an agreed strategy plan that includes resource implications
.3
5 Compare core organisational values (ethical, cultural, environmental,
10
10
.2
Produce agreed future management objectives for an organisation
11
5.3
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Develop measures for evaluating a strategy plan
12
12
12
5.4
6.1
6.2 stakeholders in an organisation
6 Design monitoring and evaluating systems for implementation of a
13
17
References
18
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Strategic Planning
Introduction
Strategic planning basically is a method wherein the CEO of the company, keeping in mind
the mission and values of the company, develops a strategic path to accomplish the business
goals while combating the adverse environmental forces like political, economical, sociocultural and technological forces. However, along with planning, strategic implementation is
also very essential. A plan, even when it is full proof, is of no use unless and until it is
implemented in right way. Strategic implementation is a process wherein the management of
the company put the developed strategic plan into action on a regular basis.
Company Background
Tesco is the leading retail company in UK. To expand its growth in both national and
international market, Tesco has to design effective expansion strategies and has to
accordingly introduce new products in local as well as international market.
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The company has to constantly develop innovative strategies to achieve the above mentioned
aims, to gain competitive edge and to combat the rivals.
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Customers expect good service, quality products, affordable products price, and value for
them and their money.
Government: Government are another most essential stakeholders connected with the
organisation. They give permission and offer support to the company to expand, establish or
develop its business. They expect companies to work within the rules and regulation set by
them and pay tax regularly.
AC 1.3 Analyse the major changes taking place in the external environment that will
affect strategy
In the external environment, major changes are occurring in the political, social, economical
and technological factors. Technology is rapidly growing and there is been huge development
in communication and information spread across the world. Ownership pattern in the
corporate world have become more complex and companies today are investment a great deal
in joint ventures, mergers and acquisition to expand their business both nationally and
internationally. Companies are adopting globalised strategies when it comes to operating
business, producing goods and services, distributing goods, and managing workforce.
Economy conditions in different countries are closely linked and finance has now become a
worldwide resource. All these strongly impact the business and formulation of business
strategies.
There are following outcomes on Tesco with regard to changes in the external environment:
Tesco has to constantly combat with the uncontrollable and unavoidable external
environmental forces.
These forces compels Tesco to design strategies with regard to offering better quality
products, operating its business in various demographic reason, satisfying
psychographic needs and demands of the consumers, adopting new technology into its
various business operations, obeying the rules and regulations set the government in
corporate world, and performing environment-friendly business procedures.
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The external environment also affects Tesco strategy on mergers and acquisition to
expand the business, on using limited financial resources, on competing with rivals in
national and international market and on empowering employees and consumers.
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Weaknesses encourage the company to redesign its current plan, opportunities motive
it to invest more on the plan and threats compel it to modify the current business plan.
2. Internal survey and Porters 5 Forces analysis
Using internal survey tool, Tesco can identify if the current business plan is efficient
in attracting more customers and other stakeholders to the business.
Available at : http://crackmba.com/porters-five-forces-model/
It can also use Porters 5 Forces analysis (competitive rivalry, bargaining power of
buyers, bargaining power of suppliers, threats of entrants and threats of substitutes) to
analyse the competitive factors in the industry (political, economical, social, and
technological) and the current position of the company in the market.
3. BCG matrix
With this tool, Tesco can know about its current marketing growth and marketing
share. It can analyse its products and service are viewed as Stars, Cows, Dogs or
Question Marks (four categories in BCG matrix) by the external market.
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Since 2000, Tesco is operating its non-food business like offering financial service,
telecom service, and care for kids through Kidsclub, etc.
Tesco aims to expand its business in local and international market and increase its
profitability and productivity. It is widely spread in Europe market, has established
joint venture with retailers in Asian market and is now aiming to enter US market.
From the beginning Tesco has kept the price of its products low and this is offering though
competition to other retail companies in the market.
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Its megastore concept and strategy may fail if it does not cater to the needs of the
customers in the demographic region of its origin.
With end-less financial and telecom providers in the market, Tescos financial and
telecom service may not turn out successful if it fails to offer best deal and value for
consumers money.
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Besides the grocery products, Tesco also offers new product line and services like loans and
mortgages, electronics, saving schemes, etc. Tesco aims to develop its business in
international countries and therefore it has spread its business in Japan, South Korea, Asia
and other European countries.
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By performing various business operations under cost leadership, Tesco can gain competitive
edge and better position in the market.
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Good management participation will lead to delivering superior quality strategic planning and
its implementation at all level of business unit. They will ensure that all the business
processes are carried out according to the business ethics.
Effective employees participation will result in delivery of good customer service and quality
outcome of business products, processes and procedures. Their active involvement will lead
to achievement of strategic business goals and objectives.
Consumers can be encouraged by the team of Tesco to participate in the strategic planning
process. The team can involve them and take their feedback regarding the business processes
and procedures of the company. Based on the consumers feedback, the management of Tesco
can continue, modify or complete change the processes and procedures to best suit the
customers need.
Government department can be involved in strategic planning by letting them know about the
strategic decisions and plans of the company. Their approval in business processes can help
the company to function smoothly in the changing market condition.
Strategic Planning
Success metrics: To convert the strategic plan into action and for action to remain on track,
Tesco needs to develop appropriate way of measuring success and make sure that those
measures steer operational activities. Success or performance metrics are the success
measurement tools that ensure that strategic planning activities are in place.
Strategic Planning
Ethical value with current business objectives: Tesco has powerful ethical value and it carries
out its business ethically. It has won Trading Fairly Award in UK for best ethical
performance.
Cultural value with current business objectives: Tesco creates friendly and motivating work
environment/culture for its employees. 19% of its employees are women and are designated
directors position. The main aim of the company is to develop leadership qualities in its
employees.
Environmental value with current business objectives: Company takes accountability for its
environmental responsibilities and therefore it carries out its business processes in such a way
that it doesnt affect environment. It aims to reduce CO2 emission by 5% in comparison with
previous year and to lessen it to 0% by 2050.
Social value with current business objectives: Tesco maintains a strong social relationship
with all its stakeholders and treats everyone with respect. It has 92% of suppliers all across
the globe. It thrives to improve its relationship with its loyal customers by catering to their
needs.
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AC 5.3 Produce agreed future management objectives for an organisation
The management of Tesco has following future objectives:
It is a leading supermarket in UK and aims to be the top-most retailer in international
market by 2023
It targets to acquire 60% of core UKs business by 2018
It aims to achieve success in its non-food business, like insurance, electronics and
mobiles, by next 3 years.
It creates SMART objectives that are specific, measurable, achievable, and realistic
and time bound. Tescos objective specifies what its business is all about, it takes
effective measures to execute its objectives, the objectives are potential enough to be
achieved, realistic objectives eliminate the chance of any unprecedented action and it
creates and implements its objectives in appropriate time period to gain competitive
success in the market.
It needs to consider Porters Five Forces (competitive rivalry, bargaining power of
buyers, bargaining power of suppliers, threat of substitutes and threat of new entrants)
as a marketing strategy to be a successfully operating competitive firm.
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Tesco to beat the rivals and sustain its position as a leading retailer in the market for long
period.
Outcome measure: This measure is about evaluating the outcome of the plan, that is, whether
it helped to satisfy customers and fulfilled their needs. It basically evaluates the impact and
the advantages of the plan. If the strategic plan helps Tesco to satisfy its customers demand,
it can strengthen its relationship with customers and increase its customer base.
2007
2008
2009
2010
2011
2012
2013
2014
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amongst the customers
Suffered heavy losses
Expected to reach a
break-even point
Estimated to generate
good profit
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AC 6.3 Design monitoring and evaluation systems for the implementation of a strategy
plan in an organisation
Monitoring and evaluating the proposed strategy, on a regular basis, is the most important as
well as most challenging task for the management of Tesco. Since the process is intense, it
requires lot of time and research work on its part. A strategy if effectively implemented can
prove to be beneficial in determining the success of the company.
There are number of ways through which Tescos management can evaluate the progress of
their strategies as well as their business. At the managerial level, Tesco can monitor the
progress of the strategies through board meetings after every 3 months and analyse whether
any changes needs to be done in the strategies. Designing a worksheet which gives step-bystep evaluation of how the strategy is progression can also be effective. A well-formed
workshop, presentation, seminar, etc. attended by all those who designed the strategies can
serve the purpose of evaluation better.
Besides, creating a monitoring and evaluation system can help to gather and analyse
information about the strategy and also help to evaluate its efficiency with regard to the
business growth. Tesco can monitor and evaluate its strategic plan by designing 5 years
logical framework analysis which emphasises on assessment of final results and impacts. It
should cover baseline, mid-term and final evaluation of the company.
Conclusion
Formulating effective strategic plan is essential for the success of Tescos products and
services. At every stage of strategic planning, it is essential for Tesco to examine the barriers
to planning and try to overcome them to obtain desired success. With the best plan in hand,
the company can design win-win product and service that would attract attention of vast
customer. However, while formulating the plan and developing the product, it is essential for
the company to abide by the business ethics or else it might loss the trust of its loyal
customers in long run.
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References
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Oxford University Press Inc.
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Elsevier Butterworth-Heinemann.
Calabrese, D. (2008), Strategic Communication, 2nd Edition, Washington D.C.: The
International Bank for Reconstruction
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South-Western Cengage Learning
Dibb, S. and Simkin, L. (1994), The Marketing Casebook, Cases and Concepts, 1st
Edition, London, Routledge.
Garvin, D. (1988), Managing Quality, The Strategic Competitive Edge, 1st
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Edition, Mason: South-Western Cengage Learning
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Hooley, G., Saunders, J., Piercy, N. and Nicoulaud, B. (2008), Marketing Strategy
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Nugent, N. (2006), The Government and Politics of European Union, 6th Edition,
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Sharma, S. and Starik, M. (2004), Stakeholders, the Environment and Society, 1st
Edition, Massachusetts: Edward Elgar Publishing, Inc.
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Tesco (2013), About us, Available from http://www.tescoplc.com/index.asp?
pageid=6 Assessed on 10th May 2013
Thompson, J. (2001), Understanding Corporate Strategy, Oxford: The Alden Press
Ved, P. (2005), Business Environment, 1st Edition, New Delhi: Anmol Publications
Pvt. Ltd.
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