Strategic Marketing of Tesco Company - Essay Example

Strategic Marketing & Planning Table of Contents Introduction 3 Discussion 4 Stakeholder Analysis and Business Purpose 4 4Ps and Competitive Advantages and Positioning 5 Global Drivers of Change 7 Industrial Structural Analysis and Developing Scenarios 9 Resource Audit 9 Understanding the Importance of Culture 10 SWOT Analysis 11 Strategic Planning 13 McKinsey 7S Framework 15 Balanced Scorecard 21 Conclusion 23 References 24 Bibliography 28 Introduction Tesco is a multinational company with headquarters in Cheshnut, United Kingdom (UK). It is one of the biggest retailing companies worldwide. Moreover, the company operates in almost 14 countries with employees of around 500,000. The vision of the company is to perform business operations with ensuring better satisfaction for customers as well as with the motive of developing the communities where the company operates its business. Moreover, it also seeks to achieve that the employees as well as shareholders are treated in a fair manner as well as with loyalty. Furthermore, the company operates with the motive of enhancing growth of the company as well as to be determined as an innovative company. Tesco majorly values customers’ needs as well as satisfaction. Furthermore, the company has devised strategies for performing business operations as one of the best retailers worldwide as well as to excel in every sector of business as in food [1] (Tesco, 2013). Strategies are formulated by companies with the motive of performing activities or operations in order to accomplish objectives as well as goals in a successful manner. Moreover, strategies enable companies to develop competency as well as competitiveness in the market. Strategic marketing is the process through which companies provide or offer products as well as services in markets with better competitiveness in comparison to their rivals (Proctor, 2000). Strategic planning is a process through which companies formulate plans and also executes those plans into actions as well as resources in an effective manner. Moreover, strategic plan assists a company in determining policies as well as procedures to perform activities in order to improve profitability and ensure sustained development (CIVICUS World Alliance for Citizen Participation, 2012). The discussion will emphasize on the strategic marketing as well as planning process of Tesco. Moreover, the discussion will also emphasize on the utilisation of strategic plan method in order to determine changes which are required to be adopted by the company to improve performance as well as to enhance development. Discussion Tesco has been performing business operations in an effective manner due to better customer services as well as for performing business operations with best practices in individual markets. The company has performed business operations with different strategies with the motive of performing businesses in local as well as in international markets successfully. Stakeholder Analysis and Business Purpose Tesco performs business operations in accordance with the stakeholders’ interests as well as with the motive of accomplishing their objectives in an effective manner. The stakeholders of the company are ensured that they are provided with best opportunities. An annual analysis is conducted about the requirements of stakeholders as well as on their future perceptions which are required to be accomplished by the company. Moreover, on the basis of the analysis, risks as well as opportunities are identified in order to make certain that the business strategies of the company are sustained. The stakeholders are involved in every aspect in order to make valuable decisions for improving the performance of the company [2] (Tesco, 2013). Tesco conducts its business with the objectives of improving the brand image of the company as well as to become the best retailing company worldwide. Moreover, the company has devised strategies to develop the communities where the company is performing business operations. The main purpose of the company is to perform activities in national as well as in international markets in an effective manner as well as with dignity [2] (Tesco, 2013). 4Ps and Competitive Advantages and Positioning The 4Ps of marketing mix are as follows: Product Tesco is a retailing company which aims at providing quality products as well as customer services. Moreover, the company also aims at improving its overall strength in other products which are in demand in those markets similar to its offered quality food products. The stores of the company in different locations plan to offer local as well as regional products in accordance with customers’ preferences in different market segments [2] (Tesco, 2013). Price The products as well as the services which are rendered in accordance with money value by the company. Moreover, prices of products are charged according to the quality. The company mostly follows a competitive pricing strategy which enables it to provide quality products at suitable prices [2] (Tesco, 2013). Promotion Tesco has adopted different promotional strategies with the objective of promoting the products which are to be provided by the company in a suitable manner. The promotional techniques are utilised by the company with the motive of developing a better brand image on a worldwide basis. The company had created ‘dunnhumby’ which is fully owned by Tesco. ‘dunnhumby’ facilitates the company in storing right products as well as in determining appropriate prices for the products. Moreover, this system also facilitates it in promotional procedures as well as in communicating offers which are available [1] (Tesco, 2013). Place The company develops stores in national as well as in international market segments which are appropriate for providing products efficiently. The stores of the company are established in an advanced as well as in enhanced manner with the intention of providing better place for customers to shop. Moreover, the stores of the company are established in places where there is an enhanced demand for local products [2] (Tesco, 2013). These marketing mix strategies are adopted by the company in order to develop better competitiveness in the market as well as to acquire a superior position in both national as well as in international markets. Moreover, the company has acquired strategies of improving the quality of products in order to hold a better position in the market. These marketing mix strategies will facilitate the company in building competitiveness in the global market segment (The DMG, n.d.). Global Drivers of Change There are six elements which are regarded to be important drivers of change in global context. These elements assist companies in performing business operations in international markets successfully as well as in a proficient manner. These six elements are as follows: Globalisation Companies have been performing business operations in international markets with the objective of enhancing profitability as well as ensuring its overall development. Globalisation is a process of internationalisation of business activities of a company worldwide (Wes, 1996). Science and Technology Development as well as advancement of technology has increased competitions among companies due to the demand of innovative products as well as services in both national as well as international markets. Companies are required to adopt advanced technologies in order to provide innovative products as well as services in a competitive manner (Glenn, 2012). Information Companies are required to adopt better communication procedures for sharing valuable information which may assist them in performing business operations in an effective manner. Moreover, companies on acquiring information are able to formulate strategies as well as plans to enter and to perform successfully in international markets (Lynch, 2009). Demographic Demographic is another factor of change and in accordance with this factor companies are required to evaluate the availability of workforce. Moreover, companies before entering any international market are required to determine the amount of skills as well as potentials needed for success of businesses in those market segments (Lynch, 2009). Climate Change Companies are required to perform business operations with better corporate responsibility policies in order to mitigate its detrimental affects on environment. Moreover, companies should conduct activities towards the development of societies as well as communities where they are functioning (Lynch, 2009). Financial Crisis and Recession Companies are required to analyse the economic condition of a country before entering the market segments of that country. Financial crisis as well as recession is considered as the other driver influencing companies to change or modify their business operations (Lynch, 2009). The aforementioned factors are considered to be important drivers which are required to be adopted by Tesco in order to improve potentialities of business operations in the worldwide market as well as to minimise risks and uncertainties. Moreover, these drivers will also assist the company in modifying business activities in accordance with the requirements as well as preferences of customers in those market segments. The company with the assistance of all these factors will be able to operate in an enhanced as well as profitable manner. Industrial Structural Analysis and Developing Scenarios ‘Industrial Structural Analysis’ is related to a study through which companies can determine their potentials as well as capabilities in order to perform business operations efficiently in market segments. Moreover, with the assistance of this analysis companies are able to determine proficiency of competitors. It is a process through which players in the market are analysed so that companies can enter a new market in a competent manner as well as with the notion to generate more profit (Alagse, n.d.). Tesco has developed a good position both in national as well as in international markets due to quality products as well as superior customer satisfaction along with better management practices. These factors have assisted the company to develop in an enhanced manner [2] (Tesco, 2013). Resource Audit Resource audit signifies that a company is required to maintain the resources available in an efficient manner. The resources are required to be utilised, ultimately which will facilitate a company to conduct business activities economically. The resources of a company mainly comprise financial resources, physical resources, human resources as well as intangible resources. Financial resources imply that a company should be capable of maintaining available funds as well as acquiring additional funds suitably. Physical resources of a company are related to production as well as marketing facilities which are utilised for manufacturing as well as distribution of products. Technologies which are adopted by a company for performing various activities are also regarded as physical resources. Human resources refer to people who are involved in conducting various activities of a company. An analysis is conducted on the skill as well as competency of employees according to which employees are provided with training facilities. Moreover, on the basis of this analysis companies can formulate strategies to modify their human resources. Intangible resources imply to the brand image as well as goodwill of a company in markets worldwide. These resources of a company are required be analysed in order to improve business performances as well as profitability (LAC Group, n.d.). Tesco has strategically implemented resources which include financial, human as well as technological factors in an efficient manner in order to improve the business operational performances as well as build better brand image in worldwide market. The company has utilised financial resources in activities to enhance business operations as well as for the development of communities. The company has also invested more in training facilities to improve the human resources with regard to their competencies as well as capabilities. Moreover, it has online store facility which is developed with the motive of offering better customer services. The company is also facilitated with efficient as well as economical supply chain facilities. All these resources of the company will facilitate in building brand image as well as goodwill in diverse market segments [2] (Tesco, 2013). Understanding the Importance of Culture Culture is an important aspect for companies to perform business operations worldwide in accordance with the requirements as well as needs of customers in those market segments. Therefore, cross-cultural strategy is required to be adopted by companies in order to perform business operations with better cultural perspectives in international markets (Hummel, 2012). Tesco performs business operations in international markets with cross-cultural strategy. The activities of stores of the company in international market segments are performed by local employees [2] (Tesco, 2013). SWOT Analysis A SWOT analysis of Tesco will enable in understanding the competitive position of the company. Strengths Tesco performs business operations in international markets with quality as well as innovative products. Moreover, the company performs business operations with the motive of providing better customer satisfaction. The stores of the company in international markets are operated with the assistance of local employees. The company has developed a superior brand image both in national as well as in international market segments. Furthermore, Tesco is one of the leading retailing companies worldwide. The supply chain of the company is also efficient as well as competitive which adds to the strength of the company (Scribd Inc., 2013). Weaknesses Tesco fails to operate in major locations of market segments in international markets, which is a major weakness of the company. Moreover, the company also lacks efficient marketing approaches (Scribd Inc., 2013). Opportunities The demand for local as well as regional products has increased to a great extent among consumers both in national as well as in international levels. This factor adds to the opportunity of the company as it provides these products in its stores. Moreover, the company also has the opportunity to diversify its business segments among other markets successful due to developed brand image (Scribd Inc., 2013). Threats Tesco may face threats from companies entering markets with low priced substitute products. Moreover, new companies will also intensify competitions in the market. Financial crisis as well as recession may pose threat for the company as it may affect the financial performance of the company in those market segments (Scribd Inc., 2013). Strategic Planning Where Are We Now? Where Should We Be? How Will We Get There? Strategic Analysis A strategic analysis is a process of determining strategies which are necessary for conducting business operations that are identified. It involves an analysis of both the internal as well as external environmental factors affecting the operations of Tesco. Moreover, in this analysis the competitive position of the company is identified. On the basis of this analysis, strategies are determined which will assist the company to perform business operations successfully (The Institute of Chartered Accountants of India, n.d.). Strategic Choice Strategic choice is process of determining strategies which will be appropriate for the Tesco in order to perform business activities in an enhanced manner both in national as well as in international markets. The strategies which are selected are based on the internal as well as external analysis along with the competitive position of the company. The strategies which are selected will assist it to improve profitability as well as will facilitate in expansion of business operations (Oxford University Press, 2012). Strategy Implementation Strategy implementation is a process through which selected strategies are implemented. The appropriate strategies on recognition are required to be implemented on the basis of financial support to be vested as well as they depend on the organisational structure. These strategies on implementation will aid Tesco to acquire better competitiveness as well as to enhance business performances. Moreover, it also assists the company in identifying any changes or modifications required in order to enhance business operations (Christensen & Donovan, 2013). McKinsey 7S Framework Source: [1] (VectorStudy, 2013) McKinsey Framework McKinsey 7S framework is formulated with the aim of determining that all the activities of a company are conducted as well as performed effectively and in harmony. The McKinsey 7S framework assists a company in analysing internal conditions in order to determine strategies as well as plans to improve its performance. The major objectives of this framework are to enhance performance as well as to identify changes and their effects which are required to be implemented. Moreover, this framework also aids a company in executing determined strategies in an efficient manner [1] (VectorStudy, 2013). The 7S of the framework are as follows: Structure The structure of a company relates to the procedure through which the business segments as well as parts of a company are segregated. It also depicts the hierarchical structure of the company. Moreover, structure signifies the process through which activities of the various departments are coordinated. This framework also assists a company in identifying decision making as well as controlling process, whether it is decentralised or centralised [1] (VectorStudy, 2013). Tesco usually follows a decentralised method of decision making which signifies that each store of the company is managed by individual managers. Moreover, managers of these stores are entrusted with the task of making decisions which are related with the activities of those stores (Lewis & Trevitt, 2000). Strategy Strategy in the framework signifies the approaches which are to be formulated by a company in order to improve business operations as well as performance. Moreover, strategies are formulated with the intention of accomplishing mission as well as objectives of a company in an effective manner. The strategies will also assist a company in building competitiveness to perform business operations in the market efficiently [1] (VectorStudy, 2013). Tesco has devised strategies with the motive of improving business operations as well as growth in the UK. The company has devised strategies to develop retail stores as well as online store facility worldwide. Moreover, the well-crafted strategies of the company aim at developing the communities where it is operational as well as in developing brand value of the company [2] (Tesco, 2013). Systems Systems in the framework determine the systems on the basis of which a company is conducting its activities. The various systems which are involved with a company are financial as well as human resource (HR) systems. Moreover, systems of a company are also related to communication process as well as the process of storage of valuable information [1] (VectorStudy, 2013). In Tesco, the financial as well as HR system are developed effectively with the motive of developing better committed as well as loyal staff or employees. The company has adopted ‘key performance indicators’ with the intention of evaluating its financial performance [2] (Tesco, 2013). Shared Values The shared values of a company depict the principles as well as the standards which are adopted by it to perform business operations in an ethical manner. Moreover, shared values bring out the corporate culture of a company. It also signifies the values which are mostly desired by a company in order to enhance business performances [1] (VectorStudy, 2013). The major values which are adopted by Tesco are to offer superior services to customers as well as to suitably meet the needs of the consumers in an appropriate and efficient manner. Moreover, the company also aims at performing business operations as a team as well as with trust [3] (Tesco, 2013). Style Style in the framework signifies the management style which is adopted by a company. It also determines the leadership style which is followed by leaders of a company as well as evaluates the effectiveness of such leaders. Moreover, it recognises the behavioural aspects of employees while performing business operations [1] (VectorStudy, 2013). Tesco is a customer oriented company which aims to provide best services to customers. The objective of the company is to meet the requirements of the customers in an effective manner. In Tesco, transformational leadership style is followed with the motive of encouraging employees as well as with the intention of sharing valuable information with employees. All these aspects facilitate employees in developing trust and morale towards the management. It would also motivate employees to accomplish objectives of the company effectively (Nwagbara, 2010). Staff Staff in the framework signifies employees who are involved with a company. The positions of employees are identified as well as gaps are recognised which are required to be filled. Moreover, competencies of employees which are required should be identified as well as incorporated in order to improve the performance of a company [1] (VectorStudy, 2013). In Tesco, the staffs of the company are encouraged to perform activities in a proficient manner in order to accomplish the long-term objectives of the company successfully. The company invests considerably in recruitment as well as training processes in order to enhance skills and motivation level of the staff [2] (Tesco, 2013). Skills In the framework, skills determine the proficiency with which the employees or staffs are required to perform activities. The aspect of skills also enables to determine the deficiencies prevalent among the present level of skills of the employees so that their working abilities can be enhanced [1] (VectorStudy, 2013). Tesco performs business operations in accordance with the group skill as well as practice. The company applies group skill with the motive of performing business operations in a simpler and economical manner. Moreover, it identifies the best practices which are required to be implemented in order to perform business operations in individual markets [2] (Tesco, 2013). The components of the 7S framework are segregated into two parts such as hard and soft components. The hard components comprise structure, strategy as well as systems. These hard components can be easily recognised as well as modified in accordance with the requirements of Tesco. The remaining components of the framework are the soft components which are harder to be recognised as well as rigid to change. The framework has assisted in understanding the changes which are required to be implemented in order to improve the performance of the company in each market segment. The aforementioned strategic planning as well as McKinsey 7S Framework would assist Tesco in determining the changes as well as modifications which are required to be implemented. Moreover, the company is required to formulate ‘Integrated Marketing Strategy’ (IMS) in order to promote its offered quality products as well as to inform about various promotional offers. Moreover, the company can acquire ‘Merger and Acquisition’ (M&A) strategy in order to expand business operations as well as segments in other sectors. All these will facilitate Tesco in performing business operations effectively as well as proficiently. Balanced Scorecard Source: (VectorStudy, 2013) Balanced Scorecard A balanced scorecard signifies a strategic planning tool which assists companies in accomplishing objectives as well as goals in an effective manner. Moreover, it is a management tool which assists a company in performing business operations in accordance with the vision as well as mission (Balanced Scorecard Institute, 2012). There are four perspectives which are as follows: The Learning and Growth Perspective In this perspective, the focus is on conducting training activities and on providing better cultural environment in order to improve the performance of a company (Balanced Scorecard Institute, 2012). Tesco has invested a lot in training as well as recruitment process to improve competency of employees as well as their capabilities to accomplish objectives of the company in an effective manner. The Business Process Perspective This perspective allows management of a company in evaluating its performance (Balanced Scorecard Institute, 2012). The management of Tesco seeks that the shareholders’ requirements are meet in an effective manner. It has been observed that Tesco has been performing operations both in national as well as in international market proficiently. The Customer Perspective In this perspective, it is evaluated that customers of companies are provided with quality products that meet their requirements (Balanced Scorecard Institute, 2012). Tesco provides quality as well as locally preferred products to customers which are demanded in markets. The Financial Perspective This perspective signifies that a company is required to maintain proper data of financial transactions as well as ensure proper inflow of requisite funds that are necessary for enhanced performance of the business (Balanced Scorecard Institute, 2012). Tesco prepares an annual report as well as financial statements in order to monitor performance of the company. Conclusion Tesco is multinational retailing company which provides quality products to customers. The major objective of the company is to develop its business in the UK as well as to enhance its brand image. The company has formulated strategies with the objective of developing more value of the products which are to be offered to customers along with taking initiatives towards the development of communities where the company performs business operations. The company aims at providing enhanced services as well as quality products to customers. The missions as well as the values along with competitive position of the company have been deciphered. A strategic planning has been formulated with the intention of building better strategies which will assist the company in improving business performances as well as in expanding its business operations. A strategic planning as well as McKinsey 7S Framework will assist the company in monitoring changes as well as modifications which are required to be implemented. 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