The Main Objective of Tescos Business Model - Case Study Example

Case Study Answer Contents Key features of not for profit organizations 7 Stakeholder analysis of London South Bank 7 Key features of private organization 8 Stakeholder analysis of IKEA 8 Factors contributing in successful strategic alliances of IKEA 9 Mergers and acquisitions as popular option 9 Reference 10 Answers 1a. Tesco’s business model involves in the process of buying good by the company and selling those products to its customers by using customer insight. The core activities of this model are insight, buy, move and sell. The key success factor of Tesco is the company control all its cost in such a way that it can offer its products at a very low price. The strengths of the company are it holds a leadership position in UK. The firm has strong marketing strategies. The major weakness of Tesco is it has a strong dependency in its home market, its competitive advantage can be imitated easily and they are not sustainable. The recommendation for this business can be expand its business to many other countries of the world and make new business strategies for having greater competitive advantages. 1b. the biggest step taken by Tesco in its strategic planning is becoming an International operator. The advantageous strategic position of the company has made it a multinational operator. The company has the ability to retain and acquire more customers in the new market environment. Tesco’s expansion in the US market is also an important strategic decision. This strategy has contributed in the success of the firm in USA. The strategy of Tesco’s store operation of small format has positioned the brand in such a way that it threatens other retail firms. To hold its position in the competitive environment of the retail industry Tesco can make alliance with different international business for its business expansion. 2. The main strategic evaluation criteria are involved in understanding the goal of the company, its mission and vision. The growth of the business by implementing those strategies helps to evaluate the effectiveness of the business strategies. Tesco has set up different evaluation criteria for its different business strategies. The strategic decision of the company to expand in USA and South Korea helped to achieve huge success in its business. In this case the main strategic evaluation criteria are to generate a certain amount of revenue from those places which will help to generate a huge amount of profit. Tesco has a strategy of selling its product at a very low price. This strategy is evaluated on the basis of the amount of goods sold in its stores. The main objective of the company is to become the largest retail company of the world. The company’s strategy of offering value added services and products in its business operation helps to increase the growth of the business. The firm has introduced different strategies of customer loyalty schemes which help to retain more customers. The strategy of online selling of products increased the customer base of the company. 3. The competitive advantage of Tesco helps in the development of its low price retail stores having high quality of product serving different types of customers. The company launched Efficient Consumer Response system which provides shift in the business which is apparent in the chain of food supply management. The company has also launched Clubcard and indicate the rise of customer satisfaction for enhancing its personalised service and making the shopping more convenient. The technological competency of the firm like using wireless devices and various electronic instruments helps in the business operational process of the company. The IT system of the company is very well developed which acts as an advantage of the business. Tesco’s human resource system is very well organised. It retains and attracts good people in the organization which improves its workforce and develops different process and systems of the organizations. The strategic Hr system of Tesco adds value by creating many opportunities of organic learning, intellectual development and enhancing the competency of the employees. The main power of the company lies in the effective allocation of its resources. Its customised and efficient service maintains good relationship with the customer. Tesco’s significant contribution in benefiting the customers has a strong advantage in competitive policies. The capability of the firm in differentiating its product by introducing premium quality of goods and maintaining good corporate bonding become advantageous for the business. 4. The strategies of Tesco for entering in to the foreign market contributed a lot in the growth of the company. For this expansion strategy the firm acquired many small medium companies. In many places Tesco started its business by doing joint ventures with the local partners. It established its business in Asian countries like Thailand, South Korea etc with the help of its different business strategies. The expansion strategies of the firm pushed its growth in a higher level. The company developed the concept of new stores like Tesco Metro. The store format is small and it is for the local shoppers. The firm made the strategy of selling petrol through its store Tesco Express. This made a huge contribution in the growth of the company. The strategic partnership of Tesco with Samsung offered many advantage to the company. Tesco gained knowledge about regulatory conditions of the local business of South Korea which contributed in the company’s growth. The diversification of Tesco helped to reduced its risk and promote the growth of the company. Reputational risk is associated with the diversification of the business. The main objective of Tesco’s diversification is to develop its business and attracts more customers. Its strategy of diversification and growth involves in sustainable growth of the company. The long term goal of Tesco is accomplished by the growth strategies of the company. 5. Tesco is a multinational company. It sells various types of products in different countries. The company have implemented various strategies for positioning itself as a one stop shop for every type of products. The strategic moves of the company are to develop various small format and large format stores in different places of its operating countries. In 2005 the firm launched its non-food Homeplus store in UK. The company made another important strategic decision of launching world’s first virtual store with Samsung. This store displayed more than 500 products which are very much popular in that market segment. The company implemented the strategy of delivering its product directly to the home of the customers. Tesco opened fresh and easy store in the countries like South California. These stores sell chilled and fresh meal products having a range of 3500 products (Haerifar, 2013). The chains of small format food stores of Tesco have many food products and are located in the highly attractive areas of the country which attracts more customers. Not only food by the company also has started to sell petroleum in many of its stores to justify its position of one stop store for everything. Some of the big stores of Tesco have restaurants, cafes and even gyms. 6. The key stakeholders of Tesco are customers, employees, suppliers, communities, government and regulatory body and different non government organization. These stakeholders affect and influence the business and its values. The mapping of the stakeholders identifies the expectation of them and helps them to establish their priorities. The stakeholder’s expectation contributes a lot in forming the strategies of the company. The power/interest matrix shows and establishes the relationship of the stakeholders with the organization and its strategies. It is a useful tool to analyse and asses the political facilities and difficulties of Tesco’s strategies. This matrix also helps in planning strategic changes and its political dimensions. The power of the stakeholders is low and high. The low power of Tesco’s stakeholders has can use minimal power in the decision making process where as the stakeholders having high power always satisfied by the companies and the strategies and policies of the company are formed by taking opinion from them. The interest level of the stakeholders of the company is reflected in governing the corporate organization. The low tax payment of Tesco helped in gaining more profit by the stakeholders. But in other way it hampered the economic growth of UK. The low tax payment of the company contributed less in the economic development of the country. Here the stakeholder’s of the firm fulfilled their own interest by exerting their power. Key features of not for profit organizations The not for profit organization is established for not only making profits but also to help and provide benefits to the public which are considered under the federal laws of the state. The important feature of this organization is to perform the activities which are not only concerned with profit. The share of this type of company cannot be owned by any single individual. The income and the property of non profit organization are not distributed to any owner rather it is used for public benefit. This organization is owned by public. The control of non profit company is done by the board of directors. These companies are accountable to public and flies annual information to the state government. Stakeholder analysis of London South Bank University The stakeholders of the London South Bank University affect the business process and had a huge contribution in the policy and strategy formation of the organization. The stakeholder analysis of this organization explains the interest of its stakeholders. The major stakeholders of this organization are student, alumni, parents, different schools and colleges, research firms etc. In their power matrix these stakeholders have low power to control the organisational process. They work for the betterment of the public. Theses stakeholders cannot fulfil their own interest by exerting their power. Key features of private organization The main feature of private organization is to earn profit. The companies are owned by private party or single individual person. They often contribute a large amount of money in the business for its growth. The private organization runs its business by sole proprietorship, partnership or by joint stock of companies. In case of partnership and joi8nt stock the profit is distributed among the partners according to their percentage. The owners of this organization manage the business process. In case of the joint stoke companies the board of directors, shareholders and the elected representatives of the business look after this process. Stakeholder analysis of IKEA The stakeholders of IKEA directly and indirectly affect the actions of the organization. The company has high interested, high power, low interested and low power stakeholders. These four types of stakeholders contribute in different issues of the business. The opinions and decision of the stakeholders having high interest and power plays a significant role in the business. The Business managers of IKEA give more importance to the stakeholders as they have the power to control the major decisions of the business. The major stakeholder5s of the company are its customers, employees, suppliers and its owners. IKEA stakeholders who have low power and low interest have less contribution in the business process. They get a low amount of profit. Factors contributing in successful strategic alliances of IKEA The strategic development of IKEA helps in forming different strategic alliance with different companies. The organization has high quality of resources which helps in determining the appropriate strategies for making effective alliances with other companies. The managers and employees of the firm are competition enough to manage and developed various strategies for the company. Another important factor of successful strategic alliance of IKEA is the competitive advantage of the firm which enhance its capabilities. Mergers and acquisitions as popular option Different acquisition and mergers are still considered as an important option in the business of IKEA. The reason is by doing merger with other business and companies IKEA can expand its business in different parts of the world. By this process it becomes easier for the company to access new markets. Acquisition of small and medium companies benefits IKEA to increases its different resources and capabilities. Both of these issues are different for not for profit companies. The reason for this is the not for profit companies are not involved in strategic alliances. Only earning profits are not the main goal of this type of business. That is why fewer amounts are merger and accusation occurs in non profit companies. Reference Haerifar. P., 2013. Knowledge Management Within Tesco. Santa Cruz: GRIN Verlag. Read More