Tesco Strategic Analysis

The purpose of this paper is to analyse and assess the operational environment of Tesco while considering its competitive position. The organisation is found to be successful since it is the largest food retailer in the UK. It is noticed that the success of the organisation is based on the implication of efficient and competitive strategic tools with the major role of diversification. The consistent strategies have enabled the considered organisation to expand and grow in the international market and different segments other than food and grocery. In addition, the paper is reflected the strategic analysis of the organisation highlighting its business strategy to provide the ethical assessment of its strategies along with their evaluation.

This market has been changed into the controlled business of supermarkets since the last thirty years (Schiraldi & Smith, 2012). The mainstream of the large chains has developed their supremacy on the basis of their operational competence, spending on the marketing mix, as well as one-stop shopping. This aspect has the significant influence on the traditional shops including bakeries, butchers, and grocers (Yu & Ramanathan, 2014). The organisation has imposed the strong barrier for the new entrants into the grocery market. For instance, the organisation has become challenging for the new entrants in the market for raising capital due to the sufficient fixed costs as well as advanced supply chains (Soosay & Fearne, 2012). It is apparent in the gigantic amounts of capitals of the huge chains such as Tesco in the enhanced technology for the checkout and “stock control systems” influencing the new contestants as well as the present organisations (Fofana & Jaffry, 2015). There are other obstacles as well for the considered organisation including the economies of scale and the differentiation, which are

It has consolidated the primary positions of the retailing stores such as Tesco for the negotiating aspects of appropriate marketing prices from the suppliers that small chains are not able to imitate (Smith & Thanassoulis, 2015). The suppliers based within the UK also face threats from the increasing abilities of retailers for sourcing their products from the international markets at the lower rates. The relationship of the retailers with the sellers can have the similar effects on limiting the strategic freedom of the organisation while influencing their margins. The forces of the competitive rivalry have minimised the profit margins of supermarket chains as well as the suppliers (Felgate & Fearne,