Contents Executive Summary 2 Introduction 4 Analysis 4 PESTLE Analysis 4 Porter’s Five Forces 6 Internal Strategic Analysis 7 Financial Appraisal 7 Resource Appraisal 9 Value Chain Analysis 10 Business Ethics 10 Strategies and Recommendations 13 Reference List 16 Introduction In any modern industry, competition is becoming more intense as rivals are continuously changing their strategies to gain competitive advantage over one another. This implies that development of strategies, that will provide sustainable competitive advantage, is of paramount importance to firms. This situation also holds true for the food retail industry in U. K. According to works of researchers like, Uncles, (1998) and Turock (1999), the food retail industry represents a dynamic field for generation of persistent competitive advantage (Obitz, 2008).
The purpose of this paper is to analyze strategic practices that have been adopted by Tesco, which has made the company a leader in the market. The first part of the report consisting of external analysis focuses on those factors, which impact the food retail sector of U. K. as a whole by employing the PESTLE framework. This part is followed by analysis of the food retail industry using Porter’s competitive forces. The next part of the report deals with internal strategic analysis of Tesco in order to comprehend internal capabilities and core competencies of the firm, which has provided the organization with competitive advantage.
The financial performance of the company has also been evaluated in this section. The value chain analysis of Tesco concludes this section. This section is followed by business ethics and CSR practices adopted by Tesco. The final section deals with recommendations that can be used by the company for maintaining its position in the market in forthcoming years. Analysis There are basically two types of environmental influence, which are important in influencing business of an organization, namely external environment or macro environment and industry or competitive environment.
In the literature of strategic management, PESTLE analysis is useful for conducting analysis of the macroeconomic environment and Porter’s five forces is a staple for determining the industry environment (Thompson, 2002). PESTLE Analysis Political: Retailers as well as shoppers are affected by the political factors of a nation. The major political factors to influence the retail food market in U. K. are stringent regulations regarding hygiene and health conditions of the population.