Tesco's Strategy: A Case Study

In order to justify the definition of strategy, we could take different approaches and come up with a variety of definitions. In reference to the renowned author (Mintzberg et al., 1998), he defined strategy as an idea or a set of rules, which is created to guide the handling of a specific situation. In other words, strategy is a “stream of actions” that is made up of a consistent behavioural pattern, whether conscious or subconsciously, according to Harrigan (2006). The brand Tesco has gradually expanded internationally, taking the place as a leading grocery and common merchandise retailer in the United Kingdoms (Tesco Plc, 2013).

In the year 1919, Jack Cohan has become the pioneer of Tesco, starting the business as a grocery retailer and

Suppliers may encounter negative effects as a consequent of increased product and service prices, as well as their quality, as asserted by Fernie and Sparks (2004). Karagiannopoulos et al (2005) believes that some key factors affecting the bargaining power of suppliers are suppliers concentration in relation to the firm’s concentration, competition among suppliers, and level of input differentiation, among other factors. A good example is when a company invest a vast capital amount in the country, it is entitled to more favourable prices with exclusive discounts, something that other smaller competing companies are not entitled to (Ritz, 2005). Hence, Tesco has a high bargaining power that increased in proportion to its huge investment. If a particular supplier is charging too much, Tesco can consider switch to another supplier.

The level of competition in any market is in essential determined by the competitive rivalry or competitors’ bargaining power. Porter (1980) mentions that examples of factors that can affect this force include the degree of competitive strategy, flexibility of an organization’s customization and differentiation of products and services, innovation that leads to sustainable competitive advantage, and advertising strategies. The increase of customer demands for more innovative services as well as differentiation and a diversity

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