Analysis of Tesco's strategy as of October 20061.IntroductionTesco Plc employs over 326,000 people and operates in 2,318 stores throughout 12 countries around the world. The company made a profit of ÃÂ£2,029m in 2005 and continue to show increased sales revenue. This report will give a critical and insightful analysis of Tesco's current strategy in order to discover what makes them so successful. It will analyse the relevant theories of corporate strategy and review how they are used by Tesco's strategic management.
2. Strategy - Theoretical Perspectivesa. Strategic management relates to the managerial decisions that deal with the long term performance of the corporation. It determines the overall vision and direction of the company. Before management can implement a strategic option it is essential they understand its suitability. Suitability relates to how appropriate the option is to the organisation, firstly they must consider their strategic position. A number of concepts have been devised by theorists and managers can use them to give insight to their current position.
i.PESTEL - This is a technique that is generally used to assess the external factors on the business. By considering the political, economic, sociological, technological, legal and environmental factors it can help with understanding of the opportunities and threats that the environment poses. Together with a SWOT analysis the company can begin to identify how they could exploit the opportunities and avert threats. The problem with this technique is that it only assesses the current situation and does not consider how the environment may change in the future.
ii.Porter's Five Forces - This is a concept devised by Michael Porter, it is used to gain an understanding of the current state of the industry that the company is operating in. The five forces are; the threat of new entrants, bargaining...