2.1 Describe the business model and strategies of Tesco by taking on strategy and discuss with evidences cited from the case how it is consistent with corporate objective of maximizing shareholder wealth.
Tesco’s business model is for the company to what matters better together as it deliver its core purpose to customers. The core retail activities of insight, buy, move and sell are what the company tries to make better as supported by its strategies, among others, of building the Tesco Brand, Leveraging Group skill and scale, operating responsively, establishing multichannel offer for customers. The financial results measure the performance on how the company was able to accomplish its strategies and objective of wealth maximization.
The business model of Tesco includes those made from the perspective of strategic choices. The strategies being used in relation to its business model including that of operating responsibly which include maintaining its good profitability, efficiency management of its assets, acceptable liquidity, balanced gearing ratio and responsive investment ratios.
As to whether the strategies are consistent with the corporate objective of maximizing shareholder wealth, it could be said that there is good amount of evidence. The results of the company’s profitability, liquidity, good Solvency , and good investment ratios provide good pieces evidence of meeting the financial objectives of the and which are consistent with the objectives of maximizing wealth of shareholders.
Making good strategic judgements has a good way to determining the company’s prosperity and building value for its shareholders over the coming decade. Building shareholder value cannot be done in instant or in short-term. It is actually long-term as it may even be sacrificing in the short-run in order to attain the