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Question: Scenario Planning is not just important for individuals but is also vital for the success of organisations. The strategic planning process (Johnson et al 2014) provides a guide to the complex series of actions which individuals and teams in organisations need to carry out over an extended period to achieve organisational goals. Planning makes it possible to evaluate the effectiveness of action against the business aims and objectives, and also helps to establish a sense of common purpose and corporate identity.  Organisations need to continuously monitor and evaluate the factors affecting their products, services and their customers, both in terms of what is happening in the general business environment and their own internal capability to cope with these changing factors.Tesco PLC is the third largest retailer in the world by profit, and the fourth by sales revenue.  Estimates vary, but it is claimed that for every £7 spent in UK retail outlets £1 is spent in Tesco. In terms of the grocery market, Tesco has a market share of well over 30%. The company was founded by Jack Cohen, a Polish, Jewish  immigrant, in 1919, as a group of market stalls in the East End of London (Well Street Market, Hackney). The name Tesco was adopted in 1924. By the outbreak of the Second World War (1939) the company had one hundred stores around the UK. The first Tesco supermarket opened in 1956. Since the 1990’s the company has increasingly diversified into areas  such as books, clothing, furniture, petrol, software, telecommunications, financial  services, internet services and music downloads.  As well as this organic growth Tesco has also acquired other business; buying competitive supermarket chains, such as Safeway, in order to increase their market coverage.  Tesco were one of the first supermarkets to introduce a loyalty card. They have a presence in eleven countries around the world internationally including Thailand and Malaysia. They were pioneers of internet shopping.However, since 2012 the company has reported a dip in sales. New competitors, including Lidl, Netto and Aldi have entered the market, and their aggressive cut-price marketing efforts appear to be eroding Tesco’s market share.  Recently Tesco appointed a new Chief Executive Officer, David Lewis (“Drastic Dave”) who used to work for Unilever, and put Matt Davies (ex Halfords) in charge of UK operations, in a bid to reverse the downward sales trend and breathe new life into the company.These are ‘interesting’ times for Tesco.  The new CEO and his directors face challenges from a variety of sources; from competitors, from changes in customer behaviour,  and from pressures in the economic and technological environment. Your assignment will consider the strategic factors affecting the company, evaluate its current and future strategy and discuss the implementation of possible new strategic options. Task 1: Process of Strategic Planning AC1.1 Assess how the business mission, vision, objectives, goals and core competencies might inform the strategic planning in Tesco plc. Your answer may consider the competitive pressures, ownership and management, and a general overview of organizational strengths and weaknesses. AC1.2 Analyse the factors (barriers or facilitators) that have to be considered by Tesco when formulating strategic plans for the organization.  These could include issues from environmental scanning, challenges related, but not limited, to resources required, targets, stakeholders to be involved, management roles and culture, etc.AC1.3 Explain and evaluate the effectiveness of techniques used when developing strategic business plans for Tesco. Your answer may focus on strategic planning techniques such as BCG growth-share matrix, SPACE, PIMS, Scenario Planning.Task 2: Formulating a New StrategyAC2.1 Produce an organisational audit for Tesco. You should use techniques and academic frameworks such as Capability matrix (analysis of resources & competences), Value Chain analysis, SWOT analysis (strengths and weaknesses) etc. AC2.2 Carry out an environmental audit for Tesco. You should use techniques or academic frameworks such as PESTEL analysis, Porter’s 5 forces, SWOT analysis (opportunities and threats) etc.AC2.3 Assess the significance of stakeholder analysis when formulating new strategy.  Your answer should identify the key stakeholders of Tesco and explain the significance of their analysis in the formulation of a new strategy for the organisation. A stakeholder diagram (mapping) can be used to present the stakeholders and their analysis can be carried out using a power/interest matrix.AC2.4 Suggest and present a new possible strategy for AirbnbTask 3: Approaches to Strategy Evaluation and SelectionAC3.1 Analyse the appropriateness of alternative strategies relating to market entry, substantive growth, limited growth or retrenchment or turnaround for Tesco Your answer should focus on examples of alternative strategies relating to market entry, substantive growth strategies such as ‘horizontal and vertical integration; related and unrelated diversification’ as well as limited growth strategies such as ‘do nothing; market penetration; market development; product development; innovation’, and disinvestment strategies (e.g retrenchment, divestment, liquidation, turnaround strategies)AC3.2 Justify the selection of a most appropriate strategy for Tesco using a criteria such as suitability, acceptability/desirability and feasibility.Task 4: Implementing a Chosen StrategyAC4.1 Assess the roles and responsibilities of personnel who should be involved in strategy implementation for TescoYour answer should consider examples such as top management, middle management,  teams, individuals, owners, investors, strategic partners etc.  AC4.2 Analyse the resources required for implementing a new strategy for TescoYour answer should consider examples such as finance, human resources, time, materials, technology etc.AC4.3 Discuss suitable targets and timescales to be considered by Tesco in the implementation of the new strategy using techniques such the SMART method of analysis.     Answers: Introduction Khojastehpour and Johns (2014) commented on the fact that marketing strategy can be referred to as the combination of marketing plans that are comprehensively created in order to fulfill the organizational goals. Marketing strategies are thereby flexible and are created for the long term basis that can only be changed if required with the changing competition. Moreover, Gamble (2010) strategically had an opinion that in order to increase the sales as well as to achieve a sustainable growth, strategies are formulated by the organization. For the successful accomplishment of the assignment, the researcher has chosen Tesco Plc. whose marketing strategies will be widely discussed. This assignment will be discussing about the procedure of strategic planning, formulation of innovative and new strategies and evaluation of these strategies followed by selection and implementation of the chosen strategy. Tesco Plc. is one of the leading multinational retailers in the world thereby occupying fourth position with respect to sales and revenue collection. Tesco has a diversified product range such as electronics, grocery, books, clothing’s, internet services, furniture, telecoms along with financial services. It has expanded its business from UK to many parts of Asia as well as Europe having its market share over 30% (Barnes, 2011). Discussion and Evaluation Task 1: Process of Strategic Planning AC 1.1 Assessing business mission, vision, goals, objectives and core competencies in Tesco Plc. According to Dong (2014) Tesco Plc. is currently occupying the fourth position in the world and is also facing a cut-throat competition from new competitors such as Aldi, Lidl, Netto etc. have entered the market with a low price strategy. The mission of Tesco is creating value for its customers for earning their loyalty on a lifetime basis. The vision of this company is to serve the customer, communities who in return will be giving value to the company. Moreover, from the opinion of Kotler and Armstrong (2012) the company also aims in operating ethically with the shareholders, employees, suppliers for a sustainable growth strategy by applying the skills and knowledge globally. In addition to this, the entry of new competitors having low price strategy is a competitive pressure on the organization. The management of Tesco has been operating successfully and ethically throughout the world thereby fulfilling the customer satisfaction as well as increasing the revenue of the company. Apart from this, Mattsson (2012) also commented that the strength of Tesco is its global prestigious position, maintenance of good quality products and servicing the customers as well as handling their grievances to the maximum. In addition to this, the ethical business, following the ETI rules and regulations, transparent business and good organizational culture are the strengths of Tesco. Along with this the introduction of innovative strategies such as loyalty cards and pioneers of e-commerce are the strengths of the company. Moreover, according to the opinion of Truong and Simmons (2010) Tesco cannot compete with the low price rates of the new competitors that turned to be its weakness. Moreover, Tesco has reached a market saturation that is affecting its sales and has turned to be it’s another major weakness.   AC 1.2 Analyzing factors that consider both barriers and facilitators while formulating strategic plans for Tesco Plc. As commented by Piercy (2010) while operating globally, Tesco had to face several barriers as well as opportunities that need to be focused on while formulating strategic plans. Though Tesco is operating globally, it is still planning of expanding its business in other countries of the world by opening new offline stores. Moreover, according to the opinion of Temporal and Lee (2001) Tesco is also focused in creating new ecommerce strategies for reaching the potential customers all around the world. For that reason, Tesco needs to acknowledge the culture, customs and religious beliefs of the customers so that the sentiments of the customers are not hurt. The other factors that also need to focused on while trading globally is the low price strategy. Customers generally are inclined towards those companies that provide quality products at low prices. In addition to this, Noy (2010) also had an opinion that while operating globally, the company needs to hire employees from those areas and trainings also need to be given for making them expertise as per their requirement. Moreover, the rise of cost of raw materials, fluctuations of taxes and tough competitions from giant retailers also affect the strategic plans for Tesco. AC 1.3 Explaining and evaluating effectiveness of the techniques that are used while development of strategic business plans for Tesco Plc. Miles et al. (2014) commented on the essential fact that BCG growth matrix, PIMS, SPACE and Scenario Planning are used for evaluating the effectiveness of the business plans formulated for Tesco. Through BCG matrix, the company understands the Stars that which sectors Tesco have high market share and market growth. It also helps in understanding the Question Mark sectors of Tesco that have high growth and low market shares. Moreover, Bruhn and Georgi (2006) also had a view that Cash Cows sectors of Tesco have low growth but high prices of share. The Dog section of Tesco denotes the low market share and growth. These sectors need to be analyzed and then strategies need to be made for strengthening the strengths more and rectifying the weakness and turning the treats positively so that it becomes opportunities for the company. Moreover, PIMS which is also known as Profit Impact of Marketing Strategy helps Tesco in understanding the business environment, allocation of budget, competitive position of Tesco and the structure of the process of production. According to Eastham et al. (2001) this helps in understanding the total market scenario including the market growth, expansion and image for successfully evaluating the strategic planning techniques. Moreover, SPACE matrix also helps in analyzing the status and position of the company. In the verdict of Crick and Crick (2015) this helps in determination of the kind of strategy the company needs to undertake for a successful and sustainable business. The SPACE matrix also helps in analyzing the financial factors that includes liquidity, turnover, and cash flow along with the competitive advantages the company has over others. In addition to this, Leitner (2014) had an opinion that Scenario Planning also helps Tesco in making long term as well as flexible plans. This takes into account the time as well as scope of the analysis including the identification of important stakeholders for which the strategies will be made.   Task 2: Formulation of new strategy AC 2.1 Organizational audit for Tesco Value Chain Analysis- According to Mattsson (2010) Tesco has adopted value chain that includes the analysis of Inbound Logistics, Operations, Outbound Logistics, Marketing and Sales and Sales. Review is essential for the cost of inventory, raw materials etc. that are essential for organizational audit for Tesco. The operations also need to be concerned as it takes into account the inputs and output process. Moreover, from the opinion of Patnaik (2014) the outbound logistics is the process that is related to the storage of final products that need to be moved from one place to another. The marketing and sales department also needs to analyze for seeing the market revenues and sales. SWOT Analysis- Lunt et al. (2014) commented that the strength of Tesco is its global position, innovation of ecommerce and introduction of loyalty cards. Moreover the quality and global customer loyalty are the strengths. In addition to this, the weakness of the organization is the saturated market and falling behind the low price strategy. AC 2.2 Environmental audit for Tesco PESTEL Analysis- Tollin et al. (2014) had a view that Political factors are important to consider since the organization is operating globally and different countries have different political issues. The Economic factor includes the inflation rates, FDI rates, economic growth and interest rates that need to be analyzed before making the strategies
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