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Tesco has a well-established and consistent strategy for growth, which has allowed us to strengthen our core UK business and drive expansion into new markets.
Here we are looking at three distinctive three stages in order formulate
Strategic evaluation and control
Our views: strategy is a long term plan which relates to company policy , planning and implementation .
According to porter:
Strategy is choosing to perform activities differently than rivals do .
According to wheelen and Hunger:
Strategy :a strategy of a corporation forms a comprehensive master plan stating how the corporation will achieve its mission and objectives. It maximizes competitive advantage and minimizes competitive disadvantage.
Johnson and Scholes (Exploring Corporate Strategy)Â define strategy as follows:
"Strategy is theÂ directionÂ andÂ scopeÂ of an organisation over theÂ long-term:Â which achievesadvantageÂ for the organisation through its configuration ofÂ resourcesÂ within a challengingenvironment, to meet the needs ofÂ marketsÂ and to fulfilÂ stakeholderÂ expectations".
Strategic position according to porter : strategic position can be based on customers' needs accessibility or variety of a company's product or services
Figure :Market analysis, planning, implementation and control
The Strategic Plan
The strategic plan contains several components: the mission, the strategic objectives,
the strategic audit, SWOT analysis, portfolio analysis, objectives and strategies. All of these feed from and feed into marketing plans.
Strategy formulation is the development of long-range plans for the effective management of environmental opportunities and treats, in light of corporate strengths and weaknesses. It includes defining the corporate mission, specifying achievable objectives, developing strategies and setting policy guidelines,
Here a company develops long term plan for environmental screening(opportunities and threats) in the essence of company strength and weaknesses which effects company mission, objectives formulation of strategies to achieve competitive advantages.
Â Mission: mission statement defines the fundamental,unique purpose that sets a company apart from other firms of its type and identifies the scope of the company's operation in terms of product offered and markets served.
Objectives are more than mission. Objectives are the end results of planned activity, they state what is to be accomplished by when and should be quantified if possible .the achievemnt of corporate objective should result in the fulfilment of a corporate mission
Some of the areas in which a company might establish its goals and objectives:
Utilisation of resources
Contribution to employees
Contribution to society
Personal needs of top management
Strategies : Strategy :a strategy of a corporation forms a comprehensive master plan stating how the corporation will achieve its mission and objectives. It maximizes competitive advantage and minimizes competitive disadvantage.
The typical business firms usually considers three types of strategy:corporate,business and functional .
Corporate strategy: describes a company's overall direction in terms of its general attitude towards growth and the management of its various business and product lines . Corporate strategies mainly fit within the three main categories of stability, growth and retrenchment.
Business strategy: usually occurs at the business unit and product level, and its emphasizes improvement of competitive advantages of a corporations products or services in the specific industry or market segment served by that business unit.
Functional strategy : is the approach taken by a functional area to achieve corporate and business units objectives and strategies by maximising resource productivity. It is concerned with developing and nurturing a distinctive competence to provide a company and business unit with a competitive advantage.
Strategy implementation: is the process by which strategies and policies are put into action through the development of programs, budget and procedures. This process might involve changes within the overall culture, structure, and /or management system of the entire organization. Except
Refferencing : Harvard business review november december 1996
What is strategic analysis for Tesco laptop?
Strategic analysis is about looking at what is happening outside your organization now and in the future. And our company asks two questions:
How might what's happening affect tesco laptop?
What would be your response to likely changes?
tesco laptop strategic: because it's high level, about the longer term, and about your whole organization.
tesco laptopÂ analysis: because it's about breaking something that's big and complex down into more manageable chunks.
tesco laptop focus onÂ external: because factors outside your organization have a powerful influence on it. Increasingly organizations appreciate that they can learn to manage their response to those influences, rather than assume there is nothing they can do.
Strategic analysis boosts organisational effectiveness
Strategic analysis helps to tesco laptop:
Anticipate what might happen
Evaluate how likely it is to happen
Prepare for it happening
Strategic analysis will lead to clearer more relevant goals, better quality decisions, and a more secure future as you are better prepared for what will happen.
Otherwise known as "external environmental analysis" it is a key step in strategic planning. It is the link between getting your overall direction right and making the right decisions. Tesco laptop will make better decisions if you understand the influences from the outside world to which you might have to respond in the future.
Strengths, Weaknesses, Opportunities and Threats (SWOT).
SWOT analysis is a tool for auditing an organization and its environment. It is the first stage of planning and helps marketers to focus on key issues. SWOT stands for strengths, weaknesses, opportunities, and threats. Strengths and weaknesses are internal factors. Opportunities and threats are external factors.
A SWOT analysis measures a business unit, a proposition or idea; a PEST analysis measures a market. A SWOT analysis is a subjective assessment of data which is organized by the SWOT format into a logical order that helps understanding, presentation, discussion and decision-making. The four dimensions are a useful extension of a basic two heading list of pro's and con'sÂ (advantages and disadvantages)
We can respond very quickly as we have no red tape, no need for higher management approval.
We can give really good customer care, as the current small amount of work means we have plenty of time to devote to customers.
Our lead consultant has strong reputation within the market.
We can change direction quickly if our approach isn't working.
We have little overhead, so can offer good value to customers.
Our company has little market presence or reputation.
We have a small staff with a shallow skills base in many areas.
We have lots of competitor Ex: Apple, Dell, Sony
Our cash flow will be unreliable in the early stages.
Our business sector is expanding, with many future opportunities for success.
Local government wants to encourage local businesses with work where possible. Dell encourage student, Apple it is very costly then government cannot buy this,
Our competitors may be slow to adopt new technologies.
Will developments in technology change this market beyond our ability to adapt?
A small change in focus of a large competitor might wipe out any market position we achieve.
Value Chain Analysis:
Value Chain Analysis describes the activities that take place in a business and relates them to an analysis of the competitive strength of the business. Influential work by Michael Porter suggested that the activities of a business could be grouped under two headings:
(1)Â Primary ActivitiesÂ - those that are directly concerned with creating and delivering a product (e.g. component assembly)
(2)Â Support Activities, which whilst they are not directly involved in production, may increase effectiveness or efficiency (e.g. human resource management). It is rare for a business to undertake all primary and support activities.
Those are very valuable for our company
Sales and Marketing
New Product Idea Generation
Identify value chain analysis:
Look for discrete activities
These create value in different ways. They will include different costs, different cost drivers, separable assets, and different personnel involved.Â Â For example, contrast product design activities with advertising activities.
Identify structural, procedural, and operational activities.Â
Structural activities determine the basic economic nature of the company.Â Â Procedural activities include all aspects of the firm's operations and reflect the company's ability to carry out the processes efficiently and effectively.
Focus on structural and procedural activities.
Â Most companies emphasize operational activities, but proponents of value chain analysis say that focus is too narrow and only deals with the short run and will not be able to give the company an overall competitive advantage
Determine which activities are strategic
To determine which activities are strategic a company must identify which product characteristics are valued by existing customers.
A company should then find characteristics that it can exploit, and thereby create value for future customers.Â Â Examples of these characteristics are quality, service, or any tangible or intangible product features.
Trace costs to activities:
The company needs an accounting technique that traces costs to different value chain activities.Â Â This is important for a company to focus on these value-added processes, so they will be able to manage them more efficiently.
Improve management of value chain activities:
To achieve a competitive advantage a company must manage their value chain better than their competitors. This means reducing a company's total cost while enlarging the competitive advantage.Â Â This does not however mean that all costs have to be reduced; it means that all costs that do not adversely affect the competitive advantage can and should be reduced. we are spending more money in marketing.