Strategic Planning Assignment Sample

Strategic Planning Assignment Sample: Understanding Tesco's Strategic Management

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Introduction of Strategic Planning Assignment Sample

Strategic planning is a procedure in which an organization's leader presents their vision regarding the future plans upon organizational goals and objectives. Strategic planning involves establishing the process or sequences in which the goals and objectives should be realized by that an organization can reach its desired vision (Brysonet. al. 2018).

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The report highlights the detailed understanding about the strategic management and its importance in planning in organization. The key point of this report is critical assessment of the process used by the organization for determining its strategies regarding planning for achievements of goals and objectives. The report also discusses about the strategic planning process used by organization to develop a perfect strategic plan for achieving goals. Report also provides critical evaluation of the impacts of internal as well as external environmental factors that effect strategic planning and management of organization.

Understanding strategic planning with effects on internal and external planning reports is considering Tesco as a case company. Tesco Plc is a popular retailer company of common general products. Company's headquarters are in Welwyn Garden City, Greater London, the UK (Aielloet. al. 2020). The report also recommends important factors and SMART action plan which company needs to consider before making strategic plan.

Definition of strategic management

Strategic management is management of organization's resources for achievement of objectives and goals. Strategic management includes analyzing the internal and external environment, evaluating strategies, and also making sure that management rolls out the strategies all over the organization. strategic management is divided on several thought, perspective approach of strategic management shows how strategies are need to developed and on the other hand descriptive approach focuses on how strategies are converted into practices.

Strategic management plays an important role in helping company in finding its ways to be more competitive. By putting strategic management into practice is the most essential aspects of planning of organizations goals and objectives. Strategic management is important for every organization because it allows company to analyze the areas for operational improvement.

Critically review of the process used by organization for determining its strategies

strategic planning process

strategic process plan

Figure 1: strategic process plan

(Source: Chamber and Assosicates, 2022)

The above figure shows the process plan which includes steps that helps the organisation determine their strategy

  • Describing the problem – this step involves the identification of the problem associated with strategic planning. For this, the organization can use of SWOT analysis.
  • Setting goals – in this step, after identifying the problem and solving it, the organization focuses on setting a mission and vision for the achievement of its desired goals.
  • Identification of priorities – the most important step of the process is to identify the priorities for the organization for fulfilling the requirements to achieve set goals. In this step, only those factors are involved which are important for the strategic planning of the organization are.
  • Developing interventions – after identification of priorities now it is time to develop interventions and formulate plans and strategic action for further action.
  • Evaluate the strategic plan – after identifying and selecting the suitable actions and strategies for execution, it is very important to evaluate these actions and strategies before implementing them in the organization.
  • Implementation – the last step in the process is to implement the strategic plan and measure the outcome and work on their improvement.

The process used by the organization to determine the strategy

For determining the strategy planning on making decisions regarding goals and objectives Tesco is using SWOT analysis which includes all the points to be considered during strategic planning. SWOT analysis is very necessary because the company is looking forward to planning on reaching the desired goals. A company needs to ponder what the company is going to do and what is needed for that. A goal of a company is impossible to be achieved without preparing a strategic plan. SWOT analysis assists to test every internal and external factors of organization. SWOT analysis of company can help in finding the strength of Tesco. This analysis focuses on all the factors in the organization.

Strength

Strength refers to the positive things of an organization; it helps to compete with the competitors of the organization. Company's strength might attract customers (Sharmaa et. al. 2020). This strength provides a good profit and also helps the company to retain for a longer time in market. Tesco has a very upright strength which brings the company in a decent position in the market. The strength of Tesco are:-

  • A massive parking space
  • Gives good offer
  • Cheap price product
  • Good Infrastructure
  • Graceful to accusable
  • Online Shopping available
  • Available all over
  • Club card system
  • Self Check out machines

Weakness

Things that competitors have but the Tesco doesn't and is not able to use, which can be a weakness and the factors that affect negatively to business. Therefore, an organization needs to find out its weakness and work on them to achieve goals and to run a smooth business. Tesco's key weaknesses are:

  • the use of technology
  • Unskilled Staff
  • Poor Infrastructure

Opportunities

SWOT analysis provides a company to find out the opportunities within the market as well as in the organization. It provides a clarified vision of the company's particular state (Moura, 2021). So it is very easy to plan on making strategies regarding decision-making for the achievement of the desired goal for the company the main opportunities for Tesco are as follows:

  • Expansion in various regions of overseas countries like the US provides great opportunities to expand the company's business
  • Globalization provides all the opportunities by covering all untouched areas of the world.
  • Online platforms are the best opportunity for Tesco as the company can sell its products everywhere.

Threats

Threats refer to the factors that can cause a problem for the company. Threats of the Company Tesco include:

  • competition,
  • leakage of information,
  • Mismanagement,
  • less production than demanded in the market is also bug threat for the company,
  • and fluctuation in the exchange rate is also a threat for the company.

Critical Evaluation of External and internal environmental factors which impact company's strategy

External factors

External factors are the factors that are outside the business which have a huge impact on the working of the business and its success. The impacts of external factors are of both kinds positive as well as negative. The business has zero control over the external factors, all it can do is plan strategies to face them and make decisions accordingly (Muscaluet. al. 2106). For measuring the effect of external factors organization uses PESTEL analysis which comprises political, and economic, social, technological, environmental and legal external factors which have an impact on organization are as follows:

  • Markets (customers):socio- cultural considerations and demographic considerations, like who the customers are and what are their needs, and what they think and believe are serious factors for seizing market share for every organization. Considering the needs, pReferences and demands of the target markets is very important for providing customers desired products and services (PietrzakandWnuk-Pel, 2015).
  • Competition: the major external factors that affect the organization the most are its competitors. Getting information about the competition, what quality they are producing, what is their price range, and promotional strategies are important factors that affect the organization. The organization needs to make sure of the feasibility of entering the market.
  • Technology:Technological is the most important external factor which directly routes towards the success of the organization. The manufacturing process of the product needs to have usage of new technologies which are helpful in efficient production. Organizations needs to focus on disruptive technology filling the needs that are required.
  • The economy: Economical factors affect the most; these factors are uncontrollable for the organization. Economy recessions and inflations change expenditure habits drastically. While most organizations suffer during the economic recession period, some organizations thrive (Ombaka al. 2015). Every organization needs to understand which economic factors offer opportunities and which are threats.

Internal factors

The internal factors of an organization comprise factors that are present within the organization and which impact the success and goals of the organization (Bilomistniyet. al. 2017). Organization has full control over these factors, so an organization needs to make a strategy for managing these factors.

  • Organizational and operational procedures – this is part of internal factors that deal with the administrative procedures and operational process. Disorganized and inaccurate record-keeping of data and information affects the organization's end goals. If an organization is not able to overcome these factors then the customers may picture the organization as unreliable.
  • Strategic risks – the risk affects the firm's ability to achieve its goals, these are due to the effects of changes in customer demand or technological change in the market (Zinovieva al. 2016) Strategic risk includes internal factors which poses threats of creating poor image in front of customers from which they may think that product is outdated and dull.
  • Financial risk – the financial risk in the organization is full depended on a financial structure which is an internal factor controllable by the proper strategic planning. It is also dependent on financial systems and business dealings that affect the organization.
  • Employee risks – employees are critical factors as the success of the business is associated with the employees. Employees can affect the organization in many ways like strikes, unskilled labour hired, etc (Stoyanova and Angelova, 2018).

Strategic planning of case company

Tesco is the prime supermarket in the UK, started in 1929 by opening its first store in Edgware, North London. Tesco's strategic planning is to focus on increasing its business by focusing on the four major parts –making UK core business strong, non-profit, providing international facilities, and retailing services by keeping focus on the improvements to know what they need to offer for consumers. The main focus for strategic planning of Tesco is as follows:

  • The company tries to make consumer shopping tours very easy.
  • The company is focusing on trying to reduce prices to help those people who are not financially strong and cannot spend more (Lon?ar, 2017).
  • The main focus is on providing a good facility to all stores either large or small.
  • Offering customers a good saving benefits and encourages buying more.

The main elements of Tesco's strategic plan are as follows:

  • Demographic Changes– according to the strategic planning Tesco has divided its stores in the UK into five different formats, which are further differentiated by size and range of products offered.
  • Brand image strategy – Tesco uses a brand image strategy in which the company sells its good quality and cheap price products by using its brand name. This is a very good strategy for building brand image because people know Tesco with its product.
  • Globalization Strategy – Tesco's good performance in the international market helps it to enter in US market also (Hübneret. al. 2016). Company's strategic plan is to open 100 new fresh and convenient stores in California, Nevada, and Arizona. It was a very challenging and costly process for all well-settled companies in the international market.

Critical review and Recommendation

Action plan for the organization

According to the above information mentioned the report recommends some factors on which Tesco needs to focus before strategic planning and also for better results. The factors or key points are as follows:

  • Strategy Management: – it is very important to make strategic management part of strategic planning (Lyngso, 2017). It refers to that company must appoint a manager who should take responsibility for the whole planning and further activities related to the project. The manager and their team need to keep eye on every part of the planning and execution.
  • Communication- Communication plays very important role in strategic planning because it is very essential to update every member of the management team about the planning. Communication can be verbal or virtual by sending an email.
  • Frequency in the meeting –refers to the mix of communication and accountability, the manager of the project should organize meetings including all the members of the project, this meeting should be organized frequently may be monthly base or quarterly base (Alhawamdeh and Alsmairat, 2019).It will help in finding out all the problems at a small level and also it will help in achieving the goal in a given time.

The action plan recommended for Tesco is as follows:

SMART action plan

  • Specific- it was quite clear that the company has seen a minor increase in the staff accident rate in the distribution department. This is what company needs to focus on handling the situation and be confident regarding its management techniques. It will help the company about what its exact target is and work on improving it.
  • Measurablea company needs to measure its ups and down, which will further help the company to focus on weak sections. The company should measure the information by collecting data and maybe by survey methods (Time, 2021).
  • Agreed - Tesco needs to make sure that all the employees of the company are aware of the aims and objectives of the company. This information should also involve what Tesco is doing to achieve its aim, what kind of policies and plans are implemented, and whether all employees are agreed on those planning.
  • Realistic - Tesco needs to know what the real aim is. The increase in accidents and chaos between customer and staff in stores is increasing because of lack of information and unorganised inventory spread in the store. So Tesco needs to realize to reduce injury in the distribution sector by providing extra precautions at the workplace.
  • Time -Tesco needs to set a timeline under which they need to complete a particular task or achieve a particular aim.

Conclusion

This report concluded the reputation of strategic planning in an organization. Strategic planning is very important in every business organization whether small or big, national or international. It is quite difficult to run a business with lack of a plan, plan provides a mission and vision for future objectives and aims to be achieved.

The case company of the report Tesco's strategic plan help to understand the importance of strategic planning. The company's strategic plan focuses on globalization and the expansion of its business in the U.S. and other countries. The report also recommends some important points which the company should involve in its strategy plan since a single mistake can results in delay in work of the company. The best method to do a business includes dividing work into small goals which help in problem-solving for the company.

Reference

  • Aiello, L.M., Quercia, D., Schifanella, R. and Del Prete, L., 2020. Tesco Grocery 1.0, a large-scale dataset of grocery purchases in London. Scientific data, 7(1), pp.1-11.
  • Alhawamdeh, H.M. and Alsmairat, M.A., 2019. Strategic decision making and organization performance: A literature review. International Review of Management and Marketing, 9(4), p.95.
  • Bryson, J.M., Edwards, L.H. and Van Slyke, D.M., 2018. Getting strategic about strategic planning research. Public management review, 20(3), pp.317-339.
  • Chmabers& Associates, 2022. Critically review of the organization's strategic plan. Strategy Development. [Online]. Available through :<https://www.chambersandassociates.ca/site/strategy-development>. [Accessed on 12/11/2022].
  • Hübner, A.H., Kuhn, H. and Wollenburg, J., 2016. Last mile fulfilment and distribution in omni-channel grocery retailing: a strategic planning framework. International Journal of Retail & Distribution Management, 44(3).
  • Lon?ar, M., 2017. The impact of strategic management and strategic thinking approaches on business performance of companies operating in the retail industry. European Project Management Journal, 7(1), pp.85-98.
  • Lyngso, S., 2017. Agile strategy management: Techniques for continuous alignment and improvement. CRC Press.
  • Moura, M.B.L.D., 2021. Equity Research in Food & Retail Industry-TESCO PLC (Doctoral dissertation, Instituto Superior de Economia e Gestão).
  • Muscalu, E., Iancu, D. and Halmaghi, E.E., 2016. The influence of the external environment on organizations. Journal of Defense Resources Management, 7(2), p.133.
  • Ombaka, B., Machuki, V.N. and Mahasi, J., 2015. Organizational resources, external environment, innovation and firm performance: A critical review of literature. DBA Africa Management Review, 5(1).
  • Pietrzak, ?. and Wnuk-Pel, T., 2015. The roles and qualities of management accountants in organizations–evidence from the field. Procedia-Social and Behavioral Sciences, 213, pp.281-285.
  • Sharmaa, A., Jain, R. and Pajni, N.S., Risk Identification Techniques in Retail Industry: A case study of Tesco Plc.
  • Stoyanova, T. and Angelova, M., 2018, June. Impact of the internal factors on the competitiveness of business organizations. In 2018 International Conference on High Technology for Sustainable Development (HiTech) (pp. 1-3). IEEE.
  • Time, A.S.M.A.R., 2021. SMART Action Plan 2020/21. Policy.
  • Zinovieva, C.G., Kuznetsova, M.V., Dorfman, T.V., Limarev, P.V. and Limareva, J.A., 2016. Study of external and internal factors affecting enterprise's stability. Advances in Systems Science and Applications, 16(1), pp.62-71.
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