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Need of Strategic Development in Organisation for Smooth Run

4556 Downloads1 I Published: 29 Jan ,2019

Introduction

The strategies are the unit of several tasks that are applied by business organisations for attaining different long term objectives. For this purpose, it is necessary for the business firm to make a right identification of its core competencies, setting out concrete vision and mission along with objectives. These steps taken for making a good business plan helps in moving the enterprise towards right direction of success (Meissner, 2012). In current report, the strategic development of an organisation has been selected for discussion. The chosen firm for this purpose is Tesco which is a leading retail entity in UK. The report will have a discussion over various strategies that have been developed by mentioned company to attain success in the market. Besides this, the report will talk about strategies implemented by Tesco which were criticised by different people. In addition to this, there us a discussion about the organisational culture as well which will help in getting the deeper insight of firm.

Task 1

1.1 Strategies applied for growth and development

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The business organisation requires developing several missions, objectives and a broad vision so as to move forward towards the development of a strategy for success. As a result, Tesco also formulated all above stated statements, so as to achieve desired success. Besides this, initially, Tesco used the strategy of PIMS or Profit impact of market strategy which helped it in gaining the competitive advantages (Rossi, Vrontis and Thrassou, 2014). However, prior to this, enterprise develop a set of vision, mission and objectives as well that can aid in moving towards set direction.
Vision: The vision statements are the future point of view set by the company so as to set aims to reach there. This helps in making a constant growth by firm by putting hard efforts towards this. The major vision which has been set out by Tesco is ‘To become a leading retailer firm at a global level by giving maximum satisfaction to all its customers and stakeholders.

Mission: The mission statements are set for determining the processes that will be used for running business, providing quality services to the customers and meeting expectations of all stakeholders. The mission statement of mentioned enterprise is to:

  • Expand the share in market
  • Attain customers ‘satisfaction by creating value for cost paid (Jüttner, Christopher, and Godsell, 2010).
  • Earning higher revenues and loyalty.

Objectives: Apart from the above stated vision and mission statement, it is necessary to develop some goals and objectives as well that are targeted to achieve within a specified period of duration. Further, the goals are made to achieve long term plans while the objectives are helpful in gaining the short term objectives. Therefore several objectives and goals framed by mentioned company are:

  • To deliver efficient services in retail sector
  • To become a leader in retail market at global level

Core competencies: The core competence refers to a special expertise which is possessed by an organisation that is helpful in attaining a special place in market as compare to its competitors. Through this competence a firm can gain loyal customers by increasing their trust on brand (Blackburn, Hart and Wainwright, 2013). Cited entity has the core competence of its wide network of retail stores that has made it a trustable brand among customers.

In past, the organisation has applied various strategies that had helped it in presenting itself as a responsible and caring business concern. Some of the strategies that have been applied since past are: step taken to save waste food, healthier living, giving assistance to local communities etc. At present, the organisation is focussing towards restoration of its reputation. For this purpose, the company is working with various suppliers so that it can supply quality products to customers. Besides this, mentioned enterprise is also making efforts for hiring more staff who are skilled so as to bring better productivity within organisation. The cited venture has applied the Porter’s generic strategy for attaining competitive advantage and success in market. In Porte’s generic strategy, there are three main elements: Cost leadership, differentiation and focussed strategy. Tesco uses hybrid strategy in which it has applied the cost leadership as well as differentiation so as to gain competitive advantage over rivals (Campbell, Edgar and Stonehouse, 2011).

Task 2

2.1 Criticisms of strategies applied in past

Tesco has been a part of criticisms for many of its previous strategies from customers, suppliers etc. among them some of the strategies which were criticised are as follows:

Pricing and advertising: Tesco used a strategy to attract large number of customers so as to gain more market share. For this, it launched a strategy of giving discounts on its various products. Stated enterprise gave price cuts on different products and services, while later on the practice of this strategy was allegedly criticised as in actual situation, it was not discount. They advertised this price cut as a huge saving plan for customers. Actually, the company used strategy for supplying less popular items at lower price and thereby enhancing the level of cost for more popular products (Cinquini and Tenucci, 2010).

There was another strategy which was applied by mentioned enterprise, so as to increase revenues and reduce level of absence among employees. In 2004, Tesco made a declaration for making a deduction in the payment of sick leave that was given to its workers. By this deduction, their major aim was to reduce the number of unplanned leaves among the staff. As a result, there were many workers of mentioned enterprise who were forced to work in spite of their poor health. Many union leaders and employees made a serious criticism of this practice which was not ethical to decrease the absence among workers (Gokhberg,Meissner and Sokolov, 2016).

Task 3

3.1 Environmental analysis

The environmental audit of the Tesco Company can be done by applying several models so as to gain a deeper insight in the situations. As per environmental audit of Tesco, two models can be applied among which one is SWOT analysis and other one is PESTEL analysis. On this basis, the discussion over both two methods has been done in the following section.

SWOT analysis

The SWOT analysis refers to different strength, weaknesses, opportunities and threats of an organisation for which it is necessary to develop useful strategies. To overcome the threats and weaknesses of a company, the firm has to make an identification of its strength so as to utilise available opportunities in market (Damanpour and Aravind, 2012). As per this, the SWOT analysis of Tesco firm has been formulated which is as follows:

Strength

  • Tesco is a leading firm in retail sector with largest number of physical outlets at global level.  
  • The policies and marketing strategies of mentioned enterprise are strong that helps in generating large revenues for business.
  • The cited venture has large number of brand loyal customers and has good CRM strategy as well.

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Weaknesses

  • The major portion of its operating business is limited to European and UK market.  
  • The diversification of its business on geographical basis is too less.
  • The prices of products supplied by Tesco are more as compared to other similar supermarkets (Gartner, Carter and Hills, 2016).
  • Transportation cost of business is higher.

Opportunities

  • The company has a wide opportunity to expand its business in global market by focussing more over its geographical diversification.
  • It may develop its services in the area of online selling and giving home delivery services.
  • It may focus on giving better services based on superior quality of all products and services.

Threats

  • The rate of unemployment has increased in recent years which pose a risky condition for mentioned enterprise.
  • Competition has become fierce in the market where many similar retail chains have emerged which poses a great challenge for Tesco.  
  • The reputation of company in past years have decline as it has been found of using some alleged strategies to make more money and sustain competition (Griffin, 2013).  
  • The sales of organisation have decreased severely because of less income.

PESTLE analysis

  • Political factors: The operations of mentioned entity is at global level, as a result, the said company has to take care of different factors like tax rates, laws, political conditions of various countries. However, many political parties allow it to operate as it gives larger job opportunities.
  • Economic factors: The stated venture operates in a very risky environment as any minor alterations in demand, cost or revenues, the functions and strategies of business can be impacted to a large extent.
  • Social factors: Tesco serves a large segment of consumers where different consumers have different taste, preferences and choices (Meissner, 2012). It use to change very frequently as well. Hence, it is a complex task for cited firm to serve all segments as per their choice and demand.
  • Technological factor: The technological development is taking place rapidly because of which enterprise has made many profits. As a result of technological development, new services related to online service, internet marketing strategies have aided in making greater profits.
  • Environmental factors: Operating business in an ethical way is vital so as to run business for long terms. The stated entity has made different strategies and frames CSR activities as well so as to reduce any type of environmental wastages in its surroundings. The quoted organisation has made a commitment to decrease the carbon footprint to 50% by the end of next three years (Jüttner, Christophe and Godsell, 2010).
  • Legal: To operate the business at global level, it has to fulfil the legal formalities, registration processes etc. frequently with great care within each country and its provinces so as to avoid issues at later stages.

Task 4

4.1 Organisational culture and leadership style

The organisational culture of a company refers to the shared beliefs, perceptions and values which are basically responsible for shaping behaviour of each individual within workplace. The organisational culture of Tesco is very friendly and cooperate where each work use to coordinate all activities with other co workers so as to exhibit maximum results. As per the situation, task culture is applied where teams are formed so as to perform a particular task or resolve any issue (Campbell, Edgar and Stonehouse, 2011). In this type of culture, power use to shift towards members, having an expertise in that field.

Leadership style: The leadership style in the mentioned enterprise is based on situational type. As per this type of leadership style, the organisation use to make a decision and lead all its workers according to the demand of situation. This leadership style provides greater flexibility to take any type of decision within firm so as to match the situation and resolve current issues. Beside this, the hierarchical organisational structure is followed according to which there is one CEO who heads all departments and their functions (Cinquini and Tenucci, 2010). It has been noticed that the current CEO of aforesaid company is Dave Lewis who has adopted aggressive strategies for recovering the falling position of entity. As a result many positive changes have been noticed in his leadership in recent years.

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Conclusion

The strategic development is a vital concept that is used by companies to make greater advantages and sustain competition of market. The above report is based on Tesco who uses its number of strategies to give a tough competition to rival firms. The report concludes that vision statements are the future point of view, set by the company so as to set aims to reach there. Besides this, mentioned enterprise was indulged in alleged business practices as well which was criticised as well by different stakeholders. In addition to this, report has made a PESTLE and SWOT analysis which shows a good position of market currently while have some threats of competition. As per situational leadership style, the organisation use to make a decision and lead all its workers according to the demand of situation.

References

  • Blackburn, R. A., Hart, M. and Wainwright, T., 2013. Small business performance: business, strategy and owner‐manager characteristics. Journal of Small Business and Enterprise Development. 20(1). pp.8-27.
  • Campbell, D., Edgar, D. and Stonehouse, G., 2011.Business strategy: an introduction. Palgrave Macmillan.
  • Cinquini, L. and Tenucci, A., 2010. Strategic management accounting and business strategy: a loose coupling?.Journal of Accounting & organizational change,6(2), pp.228-259.
  • Damanpour, F. and Aravind, D., 2012. Managerial innovation: Conceptions, processes, and antecedents.Management and Organization Review.8(2). pp.423-454.
  • Gartner, W. B., Carter, N. M. and Hills, G. E., 2016. 7. The language of opportunity1. Entrepreneurship as Organizing: Selected Papers of William B. Gartner. pp.218.
  • Gokhberg,Meissner, D. and Sokolov, 2016. Deploying Foresight for Policy and Strategy Makers: Creating Opportunities Through Public Policies and Corporate Strategies in Science, Technology and Innovation. Springer.
  • Griffin, R. W., 2013. Fundamentals of management. Cengage Learning.
  • Jüttner, U., Christopher, M. and Godsell, J., 2010. A strategic framework for integrating marketing and supply chain strategies.The International Journal of Logistics Management,21(1), pp.104-126.
  • Meissner, H.G., 2012.Strategic international marketing. Springer Science & Business Media.
  • Rossi, M., Vrontis, D. and Thrassou, A., 2014. Agro business in a changing competitive environment–Campania firms’ strategic, marketing and financial choices.World Review of Entrepreneurship, Management and Sustainable Development 5,10(2-3), pp.312-333.
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