Tesco Marketing Strategy

Tesco marketing strtegy

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PART ONE STRATEGIC ANALYSIS

Managers face difficulties in trying to understand the encionment. First ¡°the environment¡¯ encapsulates many different influences; the difficulty is making sense of this diversity in a way which can contribute to strategic decision making. The second difficulty is that of uncertainty, managers typically claim that the pace of technological change and the speed of global communications mean more and faster change now than ever before.

1.Analysing the environment

1.1 Auditing Environmental Influence------PEST Analysis

As a starting point, it is useful to consider what environmental influences have been particularly important in the past, and the extent to which there are changes occurring which may make any of these more or less significant in the future for the organization and its competitors.

PEST Analysis involves identifying the political, economic, social and technological influences on an organization. It is increasingly useful to relate such influences to growing trends towards globalizations-of possible futures, to consider the extent to which strategies might need to change.

1) Political/legal

- Monopolies legislation

- Environmental protection laws

- Taxation policy

- Foreign trade regulations

- Employment law

- Government stability

2) Economic factors

- Business cycles

- GNP trends

- Interest rates

- Money supply

- Inflation

- Unemployment

- Disposable income

- Energy availability and cost

3) Socio cultural factors

- Population demographics

- Income distribution

- Social mobility

- Lifestyle changes

- Attitudes to work and leisure

- Consumerism

- Levels of education

4) Technological

- Government spending on research

- Government and industry focus on technological effort

- New discoveries/development

- Speed of technology transfer

- Rates of obsolescence

1.2 The Competitive Environment-------Five Force Model

The next step in environmental analysis is moves the focus towards an explicit consideration of the immediate environment of the organization-for example, the competitive arena in which the organization operates.

Five-force analysis provides a means of identifying the forces which determine the nature of the competitive environment, especially in terms of:

1) Barriers to entry.

2) The power of buyers.

3) The power of suppliers.

4) The threat of substitutes.

5) Other reasons for the extent of competitive intensity.

1.3 Identifying The Organization¡¯s Competitive Position---------Strategic Group Analysis

STRATEGIC GROUP ANALYSIS

The next major step in environmental analysis is analysis the organization¡¯s competitive position that is how it stands in relation to other organizations competing for the same resources, or customers, as it.

One problem in analyzing competition is that the idea of the ¡°industry¡± is not always helpful because its boundaries can be unclear and are not likely to provide a sufficiently precise delineation of competition.

Strategic group analysis aims to identify organizations with similar strategic characteristics, following similar strategies or competing on similar bases.