Table of Contents

1. A report that elaborates about the process of strategic planning........................................2

1.1 Assessment of business missions, visions, objectives, goals, and core competencies
inform strategic planning........................................................................................................2

1.1.1 Tesco’s vision............................................................................................................2

1.1.2 Tesco’s core purpose (mission).................................................................................3

1.1.4 Core Competencies....................................................................................................4

1.2 Factors that have to be considered when formulating strategic plans..............................4

1.3 Evaluation the effectiveness of techniques used when developing strategic business
plans........................................................................................................................................6

Tesco have used Profit impact of market strategy (PIMS) to evaluate the effectiveness of
different strategic planning.................................................................................................8

2. A report that involves organizational audit, environmental audit, and stakeholder analysis
and formulating a new strategy..................................................................................................9

2.1 Tesco organizational Audit...............................................................................................9

2.2 Tesco environmental audits............................................................................................10

2.3 Significance of stakeholder analysis to formulate new strategy...................................13

2.4 new strategy for a given organisation.............................................................................15

 1. A report that elaborates about the process of strategic planning

1.1 Assessment of business missions, visions, objectives, goals, and core competencies
inform strategic planning.

1.1.1 Tesco’s vision

‘To be the most highly valued business by: the customers we serve, the communities in which
we operate our loyal and committed colleagues and of course, our shareholders.’
Tesco’s vision has five elements
Tesco’s vision has five elements which describes the sort of company it aspires to be. These
are to be (Tesco , 2018 ):
 wanted and needed around the world
 a growing business, full of opportunities
 modern, innovative and full of ideas
 winners locally whilst applying our skills globally
 inspiring, earning trust and loyalty from customers, our colleagues and communities
Vision statements typically take the form of relatively brief, future-oriented statements—
vision statements answer the question “Where is this organization going?”
Tesco’s vision statement is a future-oriented declaration of the organization’s purpose,
strategy and aspirations. So Tesco’s vision statements provide a bridge between the mission
and the strategy. In that sense Tesco’s vision statements create a tension and restlessness with
regard to the status quo—that is, they should foster a spirit of continuous innovation and
improvement.
The vision statement describes the future of the organization. It reveals what the company
aspires to be or hopes to achieve in the long-term. The vision statement is inspirational and
motivational but also provides direction, mapping out where the organization is headed. In
this regard, it serves as a guide for choosing current and future courses of action. An effective
vision statement should be concise, unambiguous, futuristic, realistic, aspirational and
inspirational. It shouldn’t be generic but rather focus on outcomes specific to the
organization. When writing a vision statement, consider these questions:
 Where are we going moving forward?
 What do we want to achieve in the future?
 What kind of future society do we envision?
Vision statement explains the upcoming intentions of the business. The vision statement is
aligned to both short and long-term Tesco’s goals. The vision statement of Tesco is to be a
leading grocery store in the world in eliminating extended product and service delivery.

1.1.2 Tesco’s core purpose (mission)

‘We make what matters better, together.’

The mission statement denes an organization’s purpose or reason for being. It guides the day-
today operations of the organization, communicates to external stakeholders the core
solutions the organization provides in society and motivates employees toward a common
near-to-medium term goal. In short, the mission statement paints a picture of who the
company is and what the company does. A good mission statement should only focus on
what is most important to the organization. It should be brief, clear, informative, simple and
direct. It should avoid elaborate language, clichés, and generalizations and it should
emphasize outcomes and the people the organization is serving. When writing a mission
statement, consider the following questions (Grant, R. M. , 2016):
 What do we do today?
 Who do we serve?
 What are we trying to accomplish?
 What impact do we want to achieve?
1.1.3. Tesco’s values are:
 No one tries harder for customers.
 We treat everyone how we like to be treated.
 We use our scale for good.
The values statement highlights an organization’s core principles and philosophical ideals. It
is used to both inform and guide the decisions and behaviors of the people inside the
organization and signal to external stakeholders what’s important to the company. An
organization’s core values shape daily culture and establish standards of conduct against
which actions and decisions can be assessed. A values statement should be memorable,
actionable and timeless. The format of the values statement depends on the organizations;
some organizations use one, two or three words to describe their core values while others
provide a short phrase. When drafting a values statement, some questions to consider include:
 What do we stand for?
 What behaviors do we value over all else?
  How will we conduct our activities to achieve our mission and vision?
 How do we treat members of our own organization and community?.
Strategies to improve competitiveness were then developed. The driving forces behind these
strategies are price, quality, range and innovation as well as delivering great multichannel
customer service, for example, through its ‘Click & Collect’ service.

1.1.4 Core Competencies

The core competencies of Tesco are one its source of business success. It offers the company
a competitive advantage over the others in the business market that comprises of various
competitors (Hamilton & Nickerson, 2003). For instance Tesco’s core competencies are
customer satisfaction and sale acquisition. This has helped the company over the years to
strategize its objectives and goals as well meet its strategic plans. However, from time to time
the company has been updating its core competencies because of changes in technology and
business culture.
In general Mission, vision and values statements serve as the foundation for an organization’s
strategic plan. They convey the purpose, direction and underlying values of the organization.
When developed and implemented in a thoughtful and deliberate manner, these statements
can serve as powerful tools that provide organizations with meaningful guidance, especially
under times of rapid change. Consequently, taking the time to craft relevant mission, vision
and value statements should be carefully considered.
A vision statement is a future-oriented declaration of the organization’s purpose and
aspirations. In many ways, you can say that the mission statement lays out the organization’s
“purpose for being,” and the vision statement then says, “based on that purpose, this is what
we want to become.” The strategy should flow directly from the vision, since the strategy is
intended to achieve the vision and thus satisfy the organization’s mission.

1.2 Factors that have to be considered when formulating strategic plans

Tesco consider different factors to formulate strategic plans (Hill, Charles , 2009)

1. Articulate a vision and a mission

The vision describes what the business would like to be in the long term. It’s an aspirational
statement. The mission shares the business’ purpose for operating.

2. The industry evaluation

In case of strategic planning, evaluation of overall industry is essential. The market size, past
and potential growth, new market entrance, competitive profitability and future threats should
be considered when evaluate the industry. The change of these factors may have great impact
on the activities of an organization

3. Identify your stakeholders

Stakeholders are groups that Tesco business serves or groups that influence Tesco business.
Tesco stakeholders include management, shareholders, employees, customers, suppliers,
government entities and the community. Tesco strategic plan should consider each group that
is relevant to Tesco operation; the role that each group will have in affecting Tesco business;
and the opportunities that Tesco business may have to engage, influence or serve these
groups to ensure that Tesco business succeeds.

4. Scan Tesco internal environment

Understanding Tesco internal environment involves realistically identifying Tesco business’

strengths and weaknesses. Internal factors that may be strengths or weaknesses include
finances, human resources, machinery and equipment, culture and operational protocols.

5. Assess Tesco external environment

In the external environment, identify opportunities and threats. These may be related to
political, economic and demographic factors that are outside of Tesco control but still affect
the business.

6. the strengths, weaknesses, opportunities and threats (SWOT) assessment into a

single analysis

The SWOT analysis fuels goal-setting and positioning Tesco business for success. The
SWOT analysis should help Tesco to consider leveraging Tesco strengths, prioritizing
weaknesses to realign, targeting the strongest opportunities as possible growth areas and
developing a strategy for monitoring and addressing important threats.

7. Define Tesco competitive advantage

Find the unique position that Tesco business can occupy relative to its competitors and given
its strengths and weaknesses and the surrounding environment’s opportunities and threats.
 8. Account for Tesco personal and business goals.

Personal goals represent the individual objectives of management, staff and others involved
in the business. Such goals may include earning money, contributing to the community,
developing professional skills, having time available to spend with family or advancing a
given industry.

9. Determine action steps

These action steps or strategies should bring Tesco closer to achieving the goals that set,
fulfilling Tesco business’ purpose and satisfying Tesco business’ long-term aspirations.

1.3 Evaluation the effectiveness of techniques used when developing strategic

business plans.
To measure the effectiveness and efficiency in an organization strategy, you have to examine
how it links your objectives to the way you plan to achieve them and the means you plan to
use. A strategy is effective if it uses the resources you allocate according to your plan and
delivers the expected results. You have to continually evaluate use of resources and
performance to check if your strategy is hitting your targets (Bart, C. K., & Baetz, M. C.,
1998).

Here are steps you can take to build the best business strategies and execute them with
precision:

1. Develop a true vision.

Vision is an abstract word that means dierent things to dierent people. Classically, a vision or
vision statement is a snapshot into the future. It should include aspirations of what type of
company you want to be, and, unlike a mission statement, articulates what success looks like
in clear terms (customers, markets, volume, etc.).

2. Dene competitive advantage.

At the essence, business development strategy is identifying how a company can deliver
unique value to its customers. In many sectors of the economy, companies are stuck in a sea
of sameness. A wellthought-out business strategy should consider how a company can create
space from competition in its service oering, pricing model, delivery system and more.

3. Dene your targets.

One of the most significant barriers to a strategic business plan is poor targeting. Absent of
very specific targets, companies suffer from unclear messaging and thus misalignment
between sales and marketing. Dening niches and specialties allows companies to focus
resources (of course, some companies are generalists by design).

Clear target markets give a company the ability to create an integrated sales and marketing
approach, where marketing enables sales productivity. Sales and marketing plans are
executed more effectively when targets are tight.

4. Focus on systematic growth.

“A thriving company is a growing company.” It is only through growth that companies can
afford to invest in things like technology, the best people and new equipment. The strategic
plan should identify in which segments a company will grow and in what proportion, so that
the product mix yields a specific net margin result.

Only after coming to such conclusions could a company know how much it can afford in
terms of capex, overhead expenses and so on.

5. Make fact-based decisions.

Strategy is a garbage in, garbage out exercise. Executives often complain about a lack of
good data, but we consistently nd information that is useful in the formation of business
strategy.

We once worked with a Vistage member who was trying to quantify the value of various
segments served. By accessing the public records of a nearby port, we were able to quantify
actual shipments of merchandise by potential customers.

6. Long-term strategic business plan.

In the face of constant change, planning horizons are shorter than they used to be. However,
only thinking quarter to quarter is a trap that may rob companies of their ability to see around
the bend.

Best-in-class companies create processes designed to treat strategy as an annual cycle rather
than a one-time, static event.

7. Flexible strategy development.

Companies can think long term and still be flexible. For example, a critical component of
business strategy development is an external forces analysis. Companies should be evaluating
long-term external forces, and adapting based on new information (meeting regularly perhaps
quarterly) to pivot.

8. Be strategically inclusive.

To be flexible, companies are including different people in their strategy than in the past. At a
time when companies are hiring more millennial employees, there is greater transparency.
While I am never one to advocate that companies open their books (as that is a personal
decision for the entrepreneur), there is certainly movement toward more inclusion and
transparency.

Deciding who to include in strategy formation is a critical selection.

We recommend business owners include people they can trust and that can think
strategically.

9. Invest time in pre-work.

If you want your managers to take strategy seriously, make them conduct research and
prepare relevant information in advance of your strategy meetings.

10. Measure your results and execute

 Excellently, every strategy should be actionable. Companies that are best-inclass:

 Have a strategic action plan that they track often (usually monthly).
 Promote common ownership of the plan across executives and departments.

Tesco have used Profit impact of market strategy (PIMS) to evaluate the effectiveness of
different strategic planning

Profit impact of market strategy helps to sustain competitive advantages by providing

evidence to assist policies and procedures. So Tesco would be able to make accomplishment
and implementation of policies and procedures (Tesco , 2018 ).

PIMS strategy considered following facts:

 Nature of business environment

  Production process structure.
 Business competitive position.
 Budget allocation
 Strategic development
 Operating activities

2. A report that involves organizational audit, environmental audit, and

stakeholder analysis and formulating a new strategy

2.1 Tesco organizational Audit

An organization audit for Tesco can be conducted by SWOT analysis. SWOT analysis helps
to identify company’s internal strengths and weakness and company’s external opportunities
and threats. It helps to figure out a company’s strategic positioning (Grieves, 2006).

SWOT analysis of Tesco is given below:

Strengths of Tesco: Weakness of Tesco:

 Large market share - Its large market  Dependent largely on UK and Europe
share allows the company to introduce countries.
new brands into the market  Lack of geographic diversification.
 Market leader – Tesco is currently a  High price of Tesco compared to other
leading grocery supermarket in the UK. local firms.
Its strong market position helps Tesco to  High transport cost
enjoy the benefits of economies of scale
(Tesco 2010).
 A strong brand – Tesco has a good
reputation among its customers because
of the quality of its product offerings. It
provides quality products at low costs to
its customers.
 Diversification – Tesco has diversified its
product offerings and expanded its
business to overseas markets.
 World’s largest retail company operating
 in different countries.
 Has a sound profit and revenue
generation policies.
 Has a good business strategy.

Opportunities of Tesco: Threats of Tesco:

 Overseas markets – Given its strong  Stiff competition – In the UK, the
brand, Tesco has the potential to expand competition within the food retail sector
into new markets in Europe and Asia. is very high. Thus, a new product may
 Retail in Non-food products – Tesco can not do well in this market despite Tesco’s
do well in the marketing of non-food strong brand image.
products, including fair-trade clothing,  Labor Laws – In the UK, the minimum
because it is a well-known brand. wage stands at 58% (NMW 2009). This
 Possibility of increase area may affect Tesco’s profit margins, as
diversification. much of the revenue will be spent to pay
 Fostering online sales and home delivery employees.
services.  Low-cost products –Tesco’s focus on
 Able to provide superior products and providing quality products at low costs to
services. its consumers has cemented its leading
position in the market. The growth of the
company is at risky position because of
increase unemployment rate in recent
years.
 High competitive market.
 Decline in income which badly effects
the company’s sales.

Considering its internal strengths and external opportunities, it is found that Tesco has a great
competitive advantage. Though experiencing highly competitive market, Tesco is expending
its business in Asian countries that increase the possibility of diversifying internationally.
2.2 Tesco environmental audits
Tesco’s approach to working with communities helps it stand out from its rivals. Its
commitment to using its scale for good is demonstrated by Tesco’s ‘Three Big Ambitions’:

 To create new opportunities for millions of young people around the world.
 To improve health and through this help tackle the global obesity crisis.
 To lead in reducing food waste globally.
There are three main Environmental Audit Stages or Phases (Kim, Unheel, 1996):

Phase 1: The Pre-Audit

 Create the Audit Team, including a mixture of skills, talents and perspectives
 Create an Audit Plan
 Previous Audits including corrective actions and status of prior audit items
 Prepare a list of questions that regulators would ask, follow-up questions on prior
audits, and requests for additional materials needed
 Begin to fill-in the Disclosure of Violation Table as issues are identified

Phase 2: The Audit

 Set the ground rules

 Determine what happens which issues are identified
 Conduct daily meetings to keep every informed
 Air/Water/Waste/Noise controls, monitoring and records
 Check documents for completeness, consistency, legal compliance, and whether
it’s up to date
 Conduct a Site Inspection
 Evaluate Operations for Compliance
 Take samples if needed
 Interview EHS personnel, operations, management, maintenance, to see if policies
are understood and consistently handled.
 Discover issues of concern
 Conduct a Closing Meeting listing and discussing of all issues, develop corrective
actions for each issue
 Phase 3: Post-Audit

 Preparing the Environmental Audit Report and Disclosure of Violations form

 List confirmed issues and Areas of Concern
 List Action Items and required follow-up

In order to carry out an environment audit of Tesco PESTLE analysis is carried out
(Tesco , 2018 ).

Political factors: - Tesco operates its business worldwide. As a result global political factors
affect its business operations. Those factors are tax rate, government policies, legislation etc.
Many countries allow Tesco to operate retail business in their countries because Tesco offers
many job opportunities to their unemployed workers and also ensures trustworthiness.

Economic factors: - Economic factors like demand, profit price etc. have a great impact on
Tesco. Any slowdown in market can negatively influence the business operation of Tesco
which will indicate that Tesco will be at a great risk. Internationalization and diversification
are the main reasons for success of Tesco.

Social factors: - Social and cultural change is a very crucial matters for every organizations.
Due to social change, Tesco begin to provide non-food items for customers. The behavior and
attitude of customers within society influence the business activities of Tesco. For this reason
Tesco is adapting changes to accommodate with the social changes and concentrating on
operation improvement and supply chain management in order to increase overall business
performance.

Technological factors: - Technological factors also have great impact on organization. Tesco
always concerns about various technological change. Advancement of new technology bring
significant success for Tesco. Now Tesco is offering online shopping and home delivery
services to its customers by using advance techniques. Tesco is trying to provide services so
that customer can be satisfied and benefited. It has also introduced self -services points for
the customer ease and that has reduced labor cost also.

Environmental factors: - Environmental factors also affect the business activities of Tesco.
Doing business in an ethical way is important condition for every organization. Tesco is
highly concerned with corporate social responsibilities. Tesco is also concerned with how to
satisfy its stakeholders. Tesco is minimizing the wastes that is produced their factory in order
to save environment.

Legal factors: - The performance of Tesco is directly influenced by the government policies
and legislatives.

From the above it is found that PESTEL analysis provides proper information about the
factors that influence Tesco’s business environment.

An audit can be a valuable tool to determine a facilities compliance with current

environmental regulations and record progress being made. It provides additional benefits to
the business (Freeman, Edward, R. , 2010):

 An environmental audit can help you avoid fines by regulatory agencies by

identifying non-compliance issues and allowing time for corrective actions before
an inspection.
 Audits increase awareness of environmental standards and employee
responsibilities. Increased compliance leads to fewer enforcement actions and
penalties.
 Regular environmental audits identify and inform management of the newest
regulations that apply to the business.
 Environmental audits improve employee relations and improve the company’s
image in the community.
 Companies with environmental stewardship programs are desirable to investors
and employees.
 Environmental audits reduce operating costs by identifying issues sooner,
minimizing waste, and allowing the company to plan corrective actions.

2.3 Significance of stakeholder analysis to formulate new strategy

Stakeholder analysis helps to identify who are the stakeholders and what is their knowledge, interests,
positions etc. and is really useful when conducted before changing or implementing new policy or
starting new project etc. so managers can then detect and prevent potential misunderstandings. The
analysis is also useful to conduct in a company to find out whether is treating stakeholders
accordingly (Schmeer, 1999).
Stakeholder analysis is the review and consideration of the impact stakeholders have on your
business. This has becoming increasingly important in the early 21st century, as non-shareholder
entities, including customers, employees, communities and business partners, have become more key
to business success. Companies need to understand the interests of each stakeholder and strategize on
how to address them in business practices (Bart, C. K., & Baetz, M. C., 1998).

There are several reasons to conduct a stakeholder analysis to formulate new strategy

1. Development of Trust and Credibility

Regular interaction with stakeholders will increase their faith in organization.

2. Assists in Developing Effective Tactics

Understanding stakeholders, including possible detractors and champions, vary from

project to project and aids in developing a strategic engagement stakeholder analysis
model.

3. Assists in Gathering Critical Information

Prioritizing important stakeholders based on their interests and impact can help Tesco to
build the appropriate procedures and evaluation criteria for obtaining their opinion.

4. Gets Undue Important Tasks Done

Tesco manage stakeholders properly and know their strengths to use them effectively, Tesco be in
for a treat. Identify the most hardworking stakeholder in the group, and they will do it for you in
no time. Give them work to complete that revolves around their risks and interests so that they do
it with an extra touch of personal passion along with the right amount of professionalism.

Steps of stakeholder analysis for Tesco are given below:

Step-1: - The first step of stakeholder analysis is to figure out people who are involved and
affected by its business operations.

Step-2: - The next step of stakeholder analysis is to identify the power, interest and influence
of stakeholders.

 High power, high interested stakeholders make the greatest effort to satisfy, influence
strategies and promote product.
 High power, low interested stakeholders also influence the strategies but they become
bored with the company early.
 Low power, high interested stakeholders should be kept informed because they are very
helpful for the company.
 Low power, less interested stakeholders have not much influence over the organization so
that company should give minimum effort to monitor them.
Step-3: - The final step of stakeholder analysis is to develop a good understanding of the most
important stakeholders for the company in order to get their feedback and sufficient support.

2.4 new strategy for a given organisation

Tesco should formulate these new strategies to improve its competitive advantage

1. Use differentiated brand

A strong and differentiated brand creates long-term value for every stakeholder in Tesco business.
Tesco purpose, to serve shoppers a little better every day, is at the heart of what our brand stands for.
Tesco continue to focus on new products and services which make the Tesco offer unique.

2. Reduce operating costs

Tesco must continue to simplify a business and reduce costs. Tesco must review every aspect of
operation to identify opportunities for savings with a particular focus on store operating model.

Tesco will encourage a cost-conscious culture, finding savings so that Tesco can reinvest for the
benefit of customers. Tesco have also simplified the shopping experience for customers, at the same
time as reducing costs.

3. Generate cash from operations

Tesco must focus on free cash generation, and work on Retail cash generate from operations to
increase by improving profitability and strong working capital management.

4. Maximise value from property

Tesco property portfolio across the Group is significant, and Tesco are looking at opportunities to
better use space for the benefit of customers. Tesco try to create value for customers by using space
in new ways

5. Innovation
Tesco shoppers serve a little better every day, its important Tesco listen and respond to their needs,
with innovation across every aspect of Tesco offer, and a strong pipeline of ideas to come to market.
Tesco must try to innovate in his product ranges.

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