Tesco PLCs Environmental Audit - Coursework Example

? Management Report Environmental Audit. Table of Contents Executive Summary 3 Introduction 3 External Business Environment Analysis 4 Political 4Economical 4 Social 5 Technological 5 Environmental 6 Legal 6 Internal Business Environment Analysis 6 Critical Evaluation of Strategic Position 8 Conclusion 9 References 10 Executive Summary Leading global business organizations are trying to implement unique and effective strategies in order to reduce several threats like intense market competition, economic and social challenges. The study is all about Tesco Plc. UK retail market is highly competitive as several leading organizations are competing with each other. Tesco is one of the leading global retail chains. Tesco has implemented several unique strategies to secure market share and maintain continuous business growth. The research will evaluate the impact of external and internal environmental factors on the business performance of Tesco. Moreover, a strategic position of Tesco has been developed based on the internal and external environmental analysis. Introduction Tesco PLC is the popular British global grocery merchandise retailer headquartered in Hertfordshire. Tesco is the second largest retailer in the world considering business profit. In addition, Tesco PLC is the third largest global retailer in terms of business revenue. The organization has expanded its business practices in 14 countries. Employee strength of this organization is 537,784. The organization is one of the most popular brand names among the customers. Tesco implemented several unique strategies in their business processes in order to achieve significant competitive edge. Effective product differentiation and competitive pricing strategy increased the brand value of Tesco. The study will evaluate the impact of several internal and external environmental factors on the business performance of Tesco. External Business Environment Analysis External environmental analysis helps an organization to identify various external environmental opportunities and threats that can have significant impact on the business performances of the organization. PESTLE analysis framework has been implemented in this study to determine the impact of the external environmental factors on the business performance of Tesco. Political Political environment of UK is quite stable. Government generally encourages several retail chains to provide several kinds of job opportunities like flexible job opportunities, high-skilled job opportunities, locally based job opportunities, lower paid job opportunities, centrally located job opportunities and higher paid job opportunities. UK economy is suffering from high unemployment rate. Tesco realized that retailing has a significant impact on several demographic factors (Hart, 2003, p.13). Government of UK motivates and supports the business operations of retail houses as retail industry is considered as the major economic growth driver. The organization employs large number of skilled senior and young employees to achieve the support of government and several political opportunities. Economical Economic recession and recent financial crisis affected the economic structure of UK. People are trying to limit their consumption activities due to the low disposable income and limited purchasing power. Moreover, high unemployment rate decreased the demand of several goods. Therefore, it can be stated that the organization needs to implement competitive low pricing strategy in order to support the purchasing power of target customers. The organization needs to develop several future strategies for the UK retail market. The organization needs to implement cost leadership strategy by reducing the cost of business operation (Jobber, 2012, p.292). This strategy will help Tesco to implement revised competitive pricing strategy. Social British people are gradually adopting the bulk shopping concept. It is true that, people prefer this shopping concept due to their daily busy work schedule. Moreover, customers can choose various products in a giant retail outlet. Moreover, people can get value added products and services from these retail outlets. Tesco understood the current market demand and customer’s preferences. Therefore, they implemented differentiation strategy in their business process. This strategy helped the organization to provide differentiated products to the customers according to the demand of the customers. For example, the organization is providing organic foods to the health conscious customers in order to meet the particular market demand. Effective, product mix strategy helped Tesco to satisfy the needs of customers. Technological Leading organizations around the globe are trying to capitalize on the potential opportunities that developed due to the technological revolution in order to enhance the business operation. Adoption of advanced technology in business processes can reduce the time and cost of total supply chain management. Tesco implemented online marketing strategy by integration of advanced technology in business process. Now-a-days, potential target customers of Tesco can place orders and make payment through the company website. This strategy helped the organization to meet the market demand (Baker, 2004, p.89). Moreover, social media marketing strategy increased the brand awareness of Tesco across UK. The organization implemented advanced technology in their logistics to reduce the operation time. Introduction of PDA and advanced navigation software reduced inventory management logistics time. Environmental UK retail market is highly competitive. Several business activities, such as higher energy consumption and increasing carbon emission are resulting rapid global climate change. Therefore, the government has developed several policies for the organizations in order to reduce the level of carbon emission. Tesco is trying to implement green business strategy in order to avoid several environmental and legal issues. The organization maintains zero solid waste in order to reduce the consumption of natural raw materials. Moreover, the organization uses fuel efficient big logistic trucks in order to maintain the environmental sustainability. Legal Several government policies and legislations have direct impact on the business performances of the retail chain industry. Violation of food standard and employment rules and regulations can create several challenges for the organization. Tesco always follows legal regulations and government policies to avoid legal issues. Moreover, they follow transparent and effective business ethics in their business operation. Employee engagement, employee motivation and providing significant employee benefits are the major competencies of Tesco. It helps the organization to maintain effective workforce and reduce several organizational work conflicts. Internal Business Environment Analysis Internal environment analysis reflects an organization’s internal strengths, weaknesses and external opportunities, threats. Following SWOT analysis will help to determine Tesco’s internal strengths, weaknesses and external opportunities, threats. Strengths Strong and recognized global brand name. Effective implementation of cost leadership and differentiation strategy. Skilled and motivated workforce. Effective cost and quality control. Implementation of green business strategy. Implementation of online marketing and promotional strategy helped the organization to meet market demand (Haerifar, 2011, p.12). Weaknesses Management uncertainty. Non-food exposure and hyper marets. Opportunities Implementation of low pricing strategy through reduction of business operation cost. Introduction of healthy food products to satisfy customer’s needs (Chaffey and Dave, 2008, p.207). Adoption of substitute energy sources to bring sustainability in environment and business process. Targeting people of middle class income level can increase the profit. Introduction of workplace diversity to improve the flexibility of working environment. Threats Limited disposable income and low purchasing power of people due to economic slowdown (Pride and Ferrell, 2010, p.27). Intense market competition and saturated business market. Havoc energy consumption can reduce the reputation of the organization. Critical Evaluation of Strategic Position UK retail industry has become highly competitive due to the presence of several potential retail chains. Tesco is one of the leading and most popular retail chains in the UK and global market. The organization is going to implement cost leadership strategy in their business process. It will be quite effective for the organization as the economic slowdown reduced the purchasing power. The organization can motivate the people of middle class income level through this strategy. Moreover, effective product and service diversification and differentiation strategy helped the organization to meet the market demand and customer preference. Tesco always provides products of superior quality. The organization is maintaining strong business ethics in their business operations. It helped the organization to avoid several legal challenges. The organization provides several employment benefits to its young and senior customers. Moreover, employee engagement in the decision making process helps the organization management to motivate the employees. It is known to all that the retail organizations are focusing on effective customer services in order to develop a potential customer base. However, several unique and competitive strategies like online marketing and promotion increase the brand awareness of the organization (Tolga, 2010, p.75). The organization offers exclusive online consumption facility to its customers to meet market demand and customer preference. Last but not the least; implementation of green strategy increased the brand reputation of Tesco across UK. Conclusion Tesco is one of the leading UK based retail chains. The organization has its business presence in several countries. The organization is popular for its extensive product differentiation and diversification process. Tesco is trying to implement cost leadership strategy in order to achieve competitive edge. Moreover, they are implementing competitive pricing for the products in order to secure existing market share and customer base. However, this strategy will motivate the customers to consume products. Global economic recession and financial crisis reduced the purchasing power and disposable income of people. This pricing strategy will support the purchasing power of people. Tesco needs to focus on social and environmental sustainability as these can provide effective future business opportunities. However, they need to maintain significant relation with government, suppliers, shareholders and investors to achieve effective business growth. References Baker, S., 2004. New Consumer Marketing. New Jersey: John Wiley & Sons. Chaffey, D., and Dave, C., 2008. Internet Marketing. New Jersey: Pearson. Haerifar, P., 2011. Performance Management in Tesco. Berlin: Grin Verlag. Hart, S., 2003. Marketing Changes. Stamford: Cengage Learning. Jobber, V., 2012. Foundations of Marketing. New York: McGraw-Hill. Pride, W., and Ferrell, O., 2010. Foundations of Marketing. Stamford: Cengage Learning. Tolga, A., 2010. The Last Retail Revolution. London: Routledge. Read More