Case Application: Tesco’s Case Analysis

1. Question 1: Based on what you have read in the case, does it pay to plan? Which
parts of the strategic management process were mainly illustrated in this case?

Based on what I had read and understand, it’s always pays to have a plan. In my
opinion, all the businesses however big or small should always have a plan. Planning
helps managers anticipate inevitable and adverse situations that may arise. It will help
them think, formulate, and take precautionary actions as needed in the situation, it will
also make them predict and understand upcoming market trends that will help them
prepare strategies to keep up with client’s needs and wants while reaching their long-
term goals at the same time.

The strategic management processes that Tesco did are as follows:

1. They did identify the company’s goal and it is to do an aggressive expansion

both locally and internationally. They also make it a point to engage to different
types of customers, that is the reason they came up with the “value” and “finest”
products to be able to capture both high, middle and price sensitive markets.
Capturing all the markets is a must for any business, it will give them more
opportunity to engage with various types of customers, and it can also be a form
of free marketing by word of mouth which is a very powerful tool for a company’s
promotion. A customer sharing his/her personal experience whether good or bad
is a publicity for the company, and it was

2. Based on my opinion at first, they failed to conduct a proper SWOT analysis and
missed potential threats caused by the rise of ALDI & LIDL, they also focused more
on their international market that led them to give less attention with their local
markets. Analyzing the internal and external factors is critical because we can
overlook certain things and we will not be able to have a backup plan that can
cause a business to fail.

3. Tesco formulated and implemented strategies like cost cutting methods, mass
lay-offs for workers for both local and international stores, they had reviewed their
current prices and focused more in improving their customer service experience. I
think they focused too much on expansion that they forget to look if all the
employees are vital for their positions and didn’t caused redundancy. They also
overlooked if their prices are competitive with LIDL and ALDI. It is also possible
that when they introduce a lot of products some of these were not priced well and
became a dead stock in their inventory that gave them additional costs as well.

4. Lastly as an evaluation for the actions they had done, Tesco’s sales went up and
even achieved its highest growth in seven years. It can be considered as an almost
total revamp of their operation. They had everything looked at and they took the
 measures that could have been avoided in the first place if due diligence were
made beforehand.

2. Question 2: Based on what you have read in the chapter, which strategic
weapons is Tesco relying on here?

Is this case study it showed the humble beginnings of Tesco how they grew and how
they suffer losses and how they can capture back the market and be able to perform
better in the last seven years, the following were the strategic weapons what I thought
they used:

1. Under the corporate strategy they used the growth strategy, they had greatly
expanded the variety of products they offered the market, from a selling to store to
an ultimate store where consumers can buy all they need and want. Telco also
used the growth strategy to expand both locally and internationally, although their
international expansions didn’t favor them as they hoped for. As for their local
expansions they had offered the Express stores, E-commerce websites and they
also ventured in different types of business. Still under corporate strategy they had
also used the renewal strategy, this strategy had helped them to focus more and
re-evaluate their current position, review existing policies, formulate short term
strategies for the betterment of the company.

2. The next strategy that Tesco relied on was the cost leadership strategy under
competitive strategy, Tesco had tried to offer the lowest price they can give to
attract price sensitive consumers but in the long run it also backfired on them that
it also affected their profits.

3. The last strategy that Tesco relied on was the functional strategy where they
focused on customer service satisfaction, and benchmarking where they tried
certain practices for their advantage.

3. Question 3: Do you believe gathering information is important for Tesco to win

markets? Why or why not?

Yes, it is. I for myself believe that data gathering is one of the most important factors
that should be considered by both consumers and businesses. For the consumers
point of view, it will help us to consider what should we buy based on the
specifications, price, quality, and feedback that we will learn upon data gathering. Is
this the right product for me? Do I have another option? Are the customer service and
after sales support good? Does this product have a good value for money? A customer
can answer all these important questions if he/she did a good data gathering.

This also goes the same in businesses. Every business must consider what are the
needs and wants of their potential and existing customers would want to find with
them. It is not enough that you carry a big and well-known company name, just like in
marketing we must consider the demographics, geographical location, the lifestyle and
buying behavior of the market that you want to penetrate. Data gathering will also help
the business to figure out if the long-term goals that they set, are attainable based on
current and future market trends that can be somehow predicted if they have enough
data. Data gathering also helps businesses to consider possible losses and think of
ways of how to avoid it.

Tesco is not an exemption for this, Tesco’s goal is to expand internationally but they
had overlooked to make enough effort to gather the data that they need, and there is
a big possibility that they established their international market setup based on their
local one’s, they haven’t considered that the needs and wants of customers also
differs from one another. It doesn’t necessarily mean that if one thing is a success
locally it will have the same success internationally, and the logistical requirements
are the same.
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