I INTRODUCTION

The food and drink retail sector represents the largest industry in the UK, providing employment for over three million people in primary
production, manufacturing and retailing. In 2003 retail accounted for 9% of gross domestic product (Datamonitor, 2003). In recent years
UK supermarkets have come under increased scrutiny over their treatment of suppliers, particularly of own-label products, yet the
development of strategic supply networks has been an integral part of most supermarket strategies for the past decade.

The report below provides an insight into the supermarket company, Tesco, with emphasis on its external environment analysis and
company's analysis of resources, competence and culture. Two future strategic options are suggested in regards to the resources based
strategies.

Tesco is one of the largest food retailers in the world, operating around 2,318 stores and employing over 326,000 people. It provides
online services through its subsidiary, Tesco.com. The UK is the company's largest market, where it operates under four banners of
Extra, Superstore, Metro and Express. The company sells almost 40,000 food products, including clothing and other non-food lines. The
company's own-label products (50 percent of sales) are at three levels, value, normal and finest. As well as convenience produce, many
stores have gas stations, becoming one of Britain's largest independent petrol retailers. Other retailing services offered include Tesco
Personal Finance.

2.0 INDUSTRY ANALYSIS: PESTEL FRAMEWORK

2.1 Political Factors

Operating in a globalized environment with stores around the globe (Tesco now operates in six countries in Europe in addition to the UK;
the Republic of Ireland, Hungary, Czech Republic, Slovakia, Turkey and Poland. It also operates in Asia: in South Korea, Thailand,
Malaysia, Japan and Taiwan), Tesco's performance is highly influenced by the political and legislative conditions of these countries,
including the European Union (EU).

For employment legislations, the government encourages retailers to provide a mix of job opportunities from flexible, lower-paid and
locally-based jobs to highly-skilled, higher-paid and centrally-located jobs (Balchin, 1994). Also to meet the demand from population
categories such as students, working parents and senior citizens. Tesco understands that retailing has a great impact on jobs and people
factors (new store developments are often seen as destroying other jobs in the retail sector as traditional stores go out of business or are
forced to cut costs to compete), being an inherently local and labour-intensive sector. Tesco employs large numbers of; student, disabled
and elderly workers, often paying them lower rates. In an industry with a typically high staff turnover, these workers offer a higher level
of loyalty and therefore represent desirable employees.

2.2 Economical Factors

Economic factors are of concern to Tesco, because they are likely to influence demand, costs, prices and profits. One of the most
influential factors on the economy is high unemployment levels, which decreases the effective demand for many goods, adversely
affecting the demand required to produce such goods.
These economic factors are largely outside the control of the company, but their effects on performance and the marketing mix can be
profound. Although international business is still growing (Appendix A), and is expected to contribute greater amounts to Tesco's profits
over the next few years, the company is still highly dependent on the UK market. Hence, Tesco would be badly affected by any
slowdown in the UK food market and are exposed to market concentration risks.

2.3 Social/Cultural Factors

Current trends indicate that British customers have moved towards ‘one-stop' and ‘bulk' shopping, which is due to a variety of social
changes. Tesco have, therefore, increased the amount of non-food items available for sale.

Demographic changes such as the aging population, an increase in female workers and a decline in home meal preparation mean that UK
retailers are also focusing on added-value products and services. In addition, the focus is now towards; the own-label share of the
business mix, the supply chain and other operational improvements, which can drive costs out of the business. National retailers are
increasingly reticent to take on new suppliers (Clarke, Bennison and Guy,1994; Datamonitor Report, 2003).

The type of goods and services demanded by consumers is a function of their social conditioning and their consequent attitudes and
beliefs. Consumers are becoming more and more aware of health issues, and their attitudes towards food are constantly changing. One
example of Tesco adapting its product mix is to accommodate an increased demand for organic products. The company was also the first
to allow customers to pay in cheques and cash at the checkout.

2.4 Technological Factors

Technology is a major macro-environmental variable which has influenced the development of many of the Tesco products. The new
technologies benefit both customers and the company: customer satisfaction rises because goods are readily available, services can
become more personalised and shopping more convenient.The launch of the Efficient Consumer Response (ECR) initiative provided the
shift that is now apparent in the management of food supply chains (Datamonitor Report, 2003). Tesco stores utilise the following
technologies:

* Wireless devices

* Intelligent scale

* Electronic shelf labelling

* Self check-out machine

* Radio Frequency Identification (RFID).

The adoption of Electronic Point of Sale (EPoS), Electronic Funds Transfer Systems (EFTPoS) and electronic scanners have greatly
improved the efficiency of distribution and stocking activities, with needs being communicated almost in real time to the supplier (Finch,
2004).

2.5 Environmental Factors

In 2003, there has been increased pressure on many companies and managers to acknowledge their responsibility to society, and act in a
way which benefits society overall (Lindgreen and Hingley, 2003). The major societal issue threatening food retailers has been
environmental issues, a key area for companies to act in a socially responsible way. Hence, by recognizing this trend within the broad
ethical stance, Tesco's corporate social responsibility is concerned with the ways in which an organization exceeds the minimum
obligations to stakeholders specified through regulation and corporate governance. (Johnson and Scholes, 2003)

Graiser and Scott (2004) state that in 2003 the government has intended to launch a new strategy for sustainable consumption and
production to cut waste, reduce consumption of resources and minimise environmental damage. The latest legislation created a new tax
on advertising highly processed and fatty foods. The so-called ‘fat tax' directly affected the Tesco product ranges that have subsequently
been adapted, affecting relationships with both suppliers and customers

2.6 Legislative Factors

Various government legislations and policies have a direct impact on the performance of Tesco. For instance, the Food Retailing
Commission (FRC) suggested an enforceable Code of Practice should be set up banning many of the current practices, such as
demanding payments from suppliers and changing agreed prices retrospectively or without notice (Mintel Report, 2004). The presence of
powerful competitors with established brands creates a threat of intense price wars and strong requirements for product differentiation.
The government's policies for monopoly controls and reduction of buyers' power can limit entry to this sector with such controls as
license requirements and limits on access to raw materials (Mintel Report, 2004; Myers, 2004). In order to implement politically correct
pricing policies, Tesco offers consumers a price reduction on fuel purchases based on the amount spent on groceries at its stores. While
prices are lowered on promoted goods, prices elsewhere in the store are raised to compensate.

3.0 INDUSTRY ANALYSIS: PORTER'S FIVE FORCES

3.1 Threat of New Entrants

The UK grocery market is primary dominated by few competitors, including four major brands of Tesco, Asda, Sainsbury's and Safeway
that possess a market share of 70% and small chains of Somerfield, Waitrose and Budgens with a further 10%. Over the last 30 years,
according to Ritz (2005), the grocery market has been transformed into the supermarket-dominated business. Majority of large chains
have built their power due to operating efficiency, one-stop shopping and major marketing-mix expenditure. This powerful force had a
great impact on the small traditional shops, such as butchers, bakers and etc. Hence, nowadays it possesses a strong barrier for new
companies who desire to enter the grocery market. For instance, it becomes rather difficult for new entrants to raise sufficient capital
because of large fixed costs and highly developed supply chains. This is also evident in huge investments done by large chains, such as
Tesco, in advanced technology for checkouts and stock control systems that impact new entrants and the existing ones. Other barriers
include economies of scale and differentiation (in the provision of products or services with a higher perceived value than the
competition) achieved by Tesco and Asda seen in their aggressive operational tactics in product development, promotional activity and
better distribution.

3.2 Bargaining Power of Suppliers

This force represents the power of suppliers that can be influenced by major grocery chains and that fear of losing their business to the
large supermarkets. Therefore, this consolidates further leading positions of stores like Tesco and Asda in negotiating better promotional
prices from suppliers that small individual chains are unable to match Ritz (2005). In return, UK based suppliers are also threatened by
the growing ability of large retailers to source their products from abroad at cheaper deals. The relationship with sellers can have similar
effects in constraining the strategic freedom of the company and in influencing its margins. The forces of competitive rivalry have
reduced the profit margins for supermarket chains and suppliers.

3.3 Bargaining Power of Customers

Porter theorized that the more products that become standardized or undifferentiated, the lower the switching cost, and hence, more
power is yielded to buyers Porter M. (1980). Tesco's famous loyalty card - Clubcard remains the most successful customer retention
strategy that significantly increases the profitability of Tesco's business. In meeting customer needs, customizing service, ensure low
prices, better choices, constant flow of in-store promotions enables brands like Tesco to control and retain their customer base. In recent
years a crucial change in food retailing has occurred due to a large demand of consumers doing the majority of their shopping in
supermarkets that shows a greater need for supermarkets to sell non-food items. It has also provided supermarkets with a new strategic
expansion into new markets of banking, pharmacies, etc. Consumers also have become more aware of the issues surrounding fairer trade
and the influence of western consumers on the expectations and aspirations of Third World producers. Ecologically benign and ethically
sound production of consumer produce such as tea, coffee and cocoa is viable, and such products are now widely available at the
majority of large chains.

3.4 Threat of Substitutes

General substitution is able to reduce demand for a particular product, as there is a threat of consumers switching to the alternatives
Porter M. (1980). In the grocery industry this can be seen in the form of product-for-product or the substitute of need and is further
weakened by new trends, such as the way small chains of convenience stores are emerging in the industry. In this case Tesco, Asda and
Sainsbury's are trying to acquire existing small-scale operations and opening Metro and Express stores in local towns and city centres
Ritz (2005).

3.5 Bargaining Power of Competitors

The grocery environment has seen a very significant growth in the size and market dominance of the larger players, with greater store
size, increased retailer concentration, and the utilisation of a range of formats, which are now prominent characteristics of the sector. As
it was mentioned above, the purchasing power of the food-retailing industry is concentrated in the hands of a relatively small number of
retail buyers. Operating in a mature, flat market where growth is difficult (a driver of the diversification into non-food areas), and
consumers are increasingly demanding and sophisticated, large chains as Tesco are accruing large amounts of consumer information that
can be used to communicate with the consumer Ritz (2005). This highly competitive market has fostered an accelerated level of
development, resulting in a situation in which UK grocery retailers have had to be innovative to maintain and build market share. Such
innovation can be seen in the development of a range of trading formats, in response to changes in consumer behaviour. The dominant
market leaders have responded by refocusing on price and value, whilst reinforcing the added value elements of their service.

4.0 CRITICAL SUCCESS FACTORS

After a close evaluation of the external analysis of the grocery industry and SWOT analysis presented in Appendix B, it is crucial to
consider internal operational effectiveness of Tesco in the form of identifying critical success factors of the company within the food
retailing sector.

4.1 Branding and Reputation

There are companies that have always understood that they were selling brands before the product. Tesco is a brand and also serves as the
core strategic advantage. The company was spreading like wildfire transforming the generic into the brand-specific, largely through
carefully branded packaging and the promotion of an “every penny counts” environment. The company has a strong brand image, and is
associated with good quality, trustworthy goods that represent excellent value.

The product and service development processes of the company have been substantially re-engineered, to facilitate better management of
product lifecycles and more efficient delivery of wide ranges of products to customers. Product activity has focused on enhancing core
ranges and introducing quality products. Tesco's innovative ways of improving the customer shopping experience, as well as its efforts to
branch out into finance and insurance have also capitalized on strong brand reputation.
The company is also very successful in terms of customer loyalty due to its loyalty cards system and its general approach to customizing
services to the needs of every customer. This is truly evident in terms of tremendous growth of on-line sales where the company has a
strong platform to further develop this revenue stream. After considering the fact the nowadays majority of people have less time for
shopping, Tesco employed this on-line systems and now became the biggest online supermarket.

4.2 IT Integration

Today companies act in an increasingly dynamic and complex environment, giving more difficulties making forecasts and adapting
themselves to the continuous changes. In order to be able to compete in this kind of world, it is necessary to innovate at an extraordinary
speed, continuously improving the products, services and processes. For Tesco operations have become necessities rather than luxuries.
Systems that control stock, keep all the stock and deliveries records and analyse business transactions are the lifelines of the company. It
can also be said that IT has risen beyond its traditional support role and taken up a central role in business strategy formulation.

Extranet system employed by the company, enables Tesco to use the Internet to create proprietary and customised information flows
between the company and its business partners. The system connects business partners online behind virtual firewalls, bringing more
flexibility, scalability, extensibility and integration across the distribution channels. Extranet also helps to extend the key information on
business partners throughout the supply chain and facilitate collaborative relationships with partners. Market exchanges hold the promise
of extending Tesco's reach, delivering buyers to their virtual doorstep from around the world. Other examples of the most efficient
technological advances that support daily business operations of Tesco are wireless devices, intelligent scale, electronic shelf labelling,
self check-out machine and radio frequency identification (RFID) systems. This technology is an effort to maintain Tesco's ability to
handle an increase in product/service volume while controlling costs; it also enables to be innovative and market oriented.

4.3 Supplier Management

Tesco, like many other grocery chains companies, sources its goods from overseas manufacturers who are more competitive on price and
volumes. For many years Tesco has been supporting British jobs and expertise by encouraging large branded suppliers to develop
exclusive production facilities. But in recent years the company has realised the need to look abroad for products no longer available in
UK, bud tried to do it through long-established UK partners. The foods continued to be heavily UK-based due to the very successful
range of prepared foods.

As a major retailer selling diverse product range, they work with many different suppliers around the world, with employees from many
different cultures and ethnic groups. Therefore, it is the company policy and company's main approach to have unique relationships with
suppliers. Applying advanced technology in its communications and cooperation with the suppliers, the company aims to control the
work of its suppliers and heavily relies on their efficiency. The direct suppliers use a number of sub-contracted suppliers, selected to be
best in class in their country. Tesco has established close relationships with the contractors believing that regular and long term orders
promote the investment necessary to improve conditions in the supply chain.
Being an international company, Tesco develops various supplier management programmes to survey key suppliers and franchisee
satisfaction. The company also takes part in the Ethnical Trading Initiative.

The table presented below gives a strategic comparative analysis, comparing Tesco's successful factors discussed above with the same
factors of the main competitors' in the UK grocery industry. The scores have been give with the scale from 0 to 5

CSF Sainsbury's Asda Safeway

Branding

3.5

IT Integration

4
3

Supplier Management

Total

14

10.5
11

The results highlight that the main threat is potentially coming from Sainsbury's that possesses a strong brand name and is carefully
selects and controls its suppliers.

5.0 ANALYSIS OF RESOURCES, COMPETENCE AND CULTURE

5.1 SWOT Analysis

Tesco is the top grocer and leading retailer in its home market of the UK. Pitched at the broad middle mass-market, it has maintained its
position through a clear focus, well targeted product offer and excellent record both in product and format innovation. Tesco also leads
the world in online grocery retailing. In the UK the company concentrates on running grocery superstores, c-stores and an online service.
Elsewhere the focus is usually on hypermarkets. In 2003, the group's trading record around Europe and UK has been outstanding.

The full SWOT analysis of Tesco is presented in Appendix B, summarizing the key issues from the business environment and the
strategic capability, including resources and competence, of the company that are most likely to impact on strategy development

5.2 Core Competence

Superior performance, according to Johnson and Scholes (2003), has to be determined by the way in which company's resources are
deployed to create competence in the organisational activities. Core competencies are activities or processes that critically underpin the
company's competitive advantage. The primary target for the company is to recognize that competition between businesses is as much a
race for competence as it is for market position and market power. Therefore, the goal for Tesco management is to focus the attention on
competencies that really affect competitive advantage.

The competence leads to levels of performance from an activity or process that is significantly better than competitors. Benchmarking
may help in understanding performance standards and what constitutes good or bad performance. However, it will be crucial for Tesco to
look at the generic level. Core competences may be embedded deep in Tesco at an operational level in the work routines. The framework
developed by Prahalad and Hamel in the 1990s suggests that over time companies may develop key areas of expertise which are
distinctive to that company and critical to the company's long term growth (Drejer, 2000; De Toni, and Tonchia, 2003). In the case of
Tesco the areas of expertise are most likely to develop in the critical, central areas of the organisation where the most value is added to its
service and its delivery. For example, trust in the Tesco brand lies at the heart of these services and in 2003 the number of retail service
accounts rose by 36%. Some 50,000 new service accounts per week are being opened and Tesco sees these areas as long term businesses
with the potential to build real scale. Financial services have also been launched internationally in for example Hungary and Korea
(Datamonitor Report, 2003; MarketWatch, 2004).

Through a long period of operations, core competencies of Tesco have to be rather fixed. Prahald's and Hamel's approach states that core
competencies should change in response to changes in the company's environment and be flexible and evolve over time. Therefore,
Tesco needs to adapt to new rapidly changing circumstances and opportunities, so its core competencies will have to adapt and change.
The example of this was when the company has launched its loyalty card and went into banking.

Core competences framework suggests three factors, which can help to identify core competences:

Provide potential access to a wide variety of markets: enables the creation of new products and services. Fro instance, Tesco has
established a strong leadership in food retailing industry. The core competence that enabled Tesco to enter retailing of food and non-food
products was a clear distinctive brand proposition that had a focus on a properly define market segment. Tesco is recognized as the
company, providing the most customized and efficient service, based on a good customer relationship management.

Makes a significant contribution to the perceived customer benefits of the outcome: delivers a fundamental customer benefit. In order to
identify core competences in a particular market, the question of - why is the customer willing to pay more or less for one product or
service than another- needs to be addressed. For example, Tesco have been very successful in capturing the leadership of the retailing
market. This shows that Tesco designs and implements effective supply systems and deliver an efficient "customer interface". Tesco was
the first UK grocer to launch a loyalty card and has been the most effective. Palmer (2004) claims that until recently, it was the only
grocer to use the information to mail customers every month.
Difficult for competitors to imitate highlights the need for a core competence to be competitively unique. This indicated the importance
of product differentiation. For example, for many years up to 2003 (In 2003 Tesco has been recognised a leading UK food retailer) Tesco
had a very strong position within the retailing industry. It had a different approach to the service concept, providing good corporate
reputation and introducing new premium quality products (MarketWatch, 2004).

Applying this framework to Tesco shows that the company in order to be successful has to base its business strategy on these capabilities.
Capabilities result from Tesco's ability to combine and exploit these resources in uniquely different ways. In the external environment,
the intensity of competition is not completely under the retailer's control, however, to compete effectively Tesco have to identify its core
competences and use them for company's advantage.

5.3 Cultural Web

Cultural web theory application (The cultural web theory is also an effective analysis for management in order to represent the
underlying assumptions linked to political, symbolic and structural aspect of the company) is a useful tool in considering the cultural
context for Tesco's business. Culture generally tends to consist of layers of values, beliefs and taken for-granted actions and ways of
doing business within and outside the company. Therefore, the concept of cultural web is the representation of these actions taken for
granted for understanding how they connect and influence the strategy (Veliyath and Fitzgerald, 2000; Johnson and Scholes, 2003). It is
also useful to understand and characterise both the company's culture and the subcultures in adaptation of future strategies.
Culture can be analysed through the observations of how the company behaves, including routines, rituals, stories, structures and
systems. This presents the “clues” about the taken-for-granted assumptions. Tesco has a very friendly and supporting approach in the
routine ways that staff at Tesco behave towards each other, and towards those outside the company that can make up the ways people do
things. The control systems and measurements are constantly under the management review to monitor the efficiency of the staff and
managers' decisions. The rituals of the company's life are the special events, corporate gatherings, which Tesco emphasises what is
particularly important and reinforce the way things are done. On-going meetings and communication at every level of the company's
hierarchy represent a strong internal environment.

6.0 TESCO'S STRATEGIC OPTIONS: GENERIC STRATEGIES

Generic Strategies are characterised by an individual retailer's response to the industry structure. For a giant retailer, such as Tesco, to
obtain a sustainable competitive advantage they should follow either one of three generic strategies, developed by Porter.

The first strategy of cost leadership is one in which Tesco can strive to have the lowest costs in the industry and offer its products and
services to a broad market at the lowest prices. This strategy will be based on the Tesco's ability to control their operating costs so well
that they are able to price their products competitively and be able to generate high profit margins, thus having a significant competitive
advantage. If Tesco uses another strategy of differentiation, than it has to try to offer services and products with unique features that
customers value. Tesco will be able to create brand loyalty for their offerings, and thus, price inelasticity on the part of buyers. Breadth of
product offerings, technology, special features, or customer service are popular approaches to differentiation.
The last strategy of focus can be either a cost leadership or differentiation strategy aimed toward a narrow, focused market. In pursuing a
cost leadership strategy Tesco focuses on the creation of internal efficiencies that will help them withstand external pressures. Therefore,
it appears reasonable to think that Tesco will have frequent interactions with the governmental/regulatory and supplier sectors of the
environment. In accordance to this framework, while both overall cost leadership and differentiation strategies are aimed at the broad
market, Tesco may also choose to confine their product to specific market areas or may choose to offer a smaller line of products to the
broad market, thus pursuing a strategy of focus or niche (Porter, 1980). In other words, Tesco pursues a strategy of cost leadership or
differentiation either in a specific market or with specific products.

The danger some organisation face is that they try to do all three and become what is known as stuck in the middle. In case of Tesco it is
not appropriate, as they do have a clear business strategy with a clearly defined market segment.

7.0 MARKET OBJECTIVES AND STRATEGIES IMPLEMENTATION

Strategy frameworks and structuring tools are key to assessing the business situation. Risk and value trade-offs are made explicit, leading
to concrete proposals to add value and reduce risk. Explicit plans for action, including effective planning need to be developed by Tesco
as the strategic alternative.

From the generic strategies discussed above, Tesco is likely to employ two strategic options that are also likely to be primary market
objectives of focus on market development though partnerships and diversification through new product development.
Market Development Strategy: Joint Developments and Strategic Alliances

By entering new markets like China and Japan it can serve as a key growth driver of the company's revenues and expansion strategy.
Tesco's interests in Japan are likely to continue growing in due course, as Asian markets are showing an increase in consumer spending
and increased trend towards retailing. These new markets are also demographically high opportunity markets.

In the case of Tesco, one of the suggested strategic options is in international alliances with the local retailers in Asian markets. It will be
considered as a method of development and may be formed to exploit current resources and competence. By entering into joint ventures
or partnerships, in order to gain a larger economy of scale and larger market presence, Tesco will draw on the extensive local knowledge
and operating expertise of the partner whilst adding its own supply chain, product development and stores operations skills to deliver a
better shopping experience to customers. However, given the huge scale, potential and complexities of these markets, Tesco may feel that
being the first mover is not necessarily an advantage. The success of the partnership will be related to three main success criteria:
sustainability, acceptability and feasibility. Sustainability will be concerned with whether a strategy addresses the circumstances in which
the company is operating. It is about the rationale of this expansion-market development strategy. The acceptability relates to the
expected return from the strategy, the level of risk and the likely reaction of stakeholders. Feasibility will be regarded to whether Tesco
has the resources and competence to deliver the strategy.

Product Development: Diversification

Johnson and Scholes (2003) believe that changes in the business environment may create demand for new products and services at the
expense of established provision. Ansoff's matrix also suggests that if new products are developed for existing markets, then a product
development strategy has to be considered by the management level of a company. In expanding and diversifying Tesco's product mix, it
is also crucial to implement internal development when new products are developed. The nature and the extent of diversification should
also be considered in relation to the rationale of the corporate strategy and the diversity of the portfolio. By following the changing needs
of the customers Tesco can introduce new product lines. This may require more attention to R&D, leading to additional spending.

The retailing industry is experiencing overcapacity and innovative services and products being the major competitive advantage.
Therefore, innovation has to be a major driver for Tesco's product development. For example, Tesco can develop a portfolio of different
store formats in the UK, each designed to provide a different shopping experience. While the majority of Eastern European and Far
Eastern outlets are hypermarkets, Tesco can also develop different store types in these markets as well. This value added by the
uniqueness will eventually lead Tesco to command a premium price. The management of technological innovation is increasingly
involved in strategic decision-making. Tesco have to exploit their internal strengths and minimise their internal weaknesses in order to
achieve sustained competitive advantage (Although a competitive advantage is the goal innovators want to achieve, the ability to create
platform(s) depends on how they could manage the innovation. Nevertheless, it does not mean that the innovator has to possess all
requisite capabilities, the important thing is the ability to organise and use the capabilities of others in order to create a business
platform).

8.0 CONCLUSION
The success of the Tesco shows how far the branding and effective service delivery can come in moving beyond splashing one's logo on
a billboard. It had fostered powerful identities by making their retiling concept into a virus and spending it out into the culture via a
variety of channels: cultural sponsorship, political controversy, consumer experience and brand extensions.

In a rapidly changing business environment with a high competitors' pressure Tesco have to adopt new expansion strategies or diversified
the existing in order to sustain its leading market position in an already established retailing market. The company must constantly adapt
to the fast changing circumstances. Strategy formulation should therefore be regarded as a process of continuous learning, which includes
learning about the goals, the effect of possible actions towards these goals and how to implement and execute these actions. The quality
of a formulated strategy and the speed of its implementation will therefore directly depend on the quality of Tesco's cognitive and
behavioural learning processes.

In large organizations as Tesco strategy should be analysed and implemented at various levels within the hierarchy. These different levels
of strategy should be related and mutually supporting. Tesco's strategy at a corporate level defines the businesses in which Tesco will
compete, in a way that focuses resources to convert distinctive competence into competitive advantage.

Figure 1