Assignment title Strategic Planning and Formulation of New Strategy

In this assessment, you will have opportunities to provide evidence against the following criteria.
Indicate the page numbers where the evidence can be found.

Learnin Learning Assessme In this assessment you will have the Tas
g outcome nt opportunity to present evidence that shows k
Outcom Criteria you are able to: no.
Assess how business missions, visions,
1.1 objectives, goals, and core competencies inform 1
strategic planning
Understand
the
LO1 process of Analyse the factors that have to be considered
strategic 1.2 1
when formulating strategic plans
planning
Evaluate the effectiveness of techniques used
1.3 1
when developing strategic business plans

Analyse the strategic positioning of a given

2.1 organization by carrying out an organizational 2
Audit

Carry out an environmental audit for a given

Be able to 2.2 2
organization
LO2 formulate a
new strategy Assess the significance of stakeholder analysis
2.3 2
when formulating new strategy

2.4 Present a new strategy for a given organisation 2

Assignment Brief

Qualification Master of Business Administration (MBA)

Course Strategic Management
Instructor’s name Dr. Bogale Alemu
Date issued Dec. 18/2022
Hand in deadline Final Exam Date

Page 1 of 9
Assignment title Strategic Planning and Formulation of New Strategy

Scenario

Tesco was founded in 1919 by Jack Cohen from a market stall in London’s East End. Today it
is one of the largest retailers in the world. Tesco’s core business is retailing in the UK, which
provides 60% of all sales and profits. Tesco has the widest range of food of any retailer in the
UK. Its two main food brands are its Finest and Everyday Value ranges, each sell over £1
billion per year.

The position of Tesco as a leading global brand is clearly illustrated by its expansion of
operations into 12 countries including China, Czech Republic, India, Malaysia, Ireland,
Hungary and Poland. In 2013 Tesco employed in excess of 530,000 colleagues. This level of
success does not happen by chance. Tesco’s leaders have always set high standards and clear
goals, never settling for anything less than the best.

Tesco’s ‘Every Little Helps’ philosophy puts customers, communities and employees at the
heart of everything it does. It prides itself on providing a great shopping experience for every
customer it serves, whether in stores, online or in its many other service provisions.

Core Values

Tesco’s core values include a commitment to using its scale for good by being a responsible
retailer. In 2010, it opened the world's first zero-carbon supermarket in Ramsey,
Cambridgeshire and was awarded Green Retailer of the Year at the Annual Grocer Gold
Awards 2012. Tesco aims to be a zero-carbon business by 2050.

Tesco’s continuing success depends on it reassessing and formulating clear business strategies.
Tesco aims to improve customer loyalty and its core UK business in order to help it develop
the shopping experience for its customers. It committed £1 billion to an investment programme
to achieve this. Strategies to improve competitiveness were then developed. The driving forces
behind these strategies are price, quality, range and innovation as well as delivering great
multichannel customer service, for example, through its ‘Click & Collect’ service.

This case study examines Tesco strategies, the reasons behind each component and how
vision, aims and cultural value interrelate to make the strategies successful.

Vision and Mission

Companies, like Tesco, that enjoy long-term success, are focused businesses. They have a core
vision that remains constant while the business strategies and practices continuously adapt to a
changing world. In an increasingly competitive global environment, without a clear vision a
business will lack direction and may not survive. Tesco has a seven part business strategy to
help it achieve its vision.

Page 2 of 9
A vision is an aspirational view of where the business wants to be. It provides a benchmark for
what the business hopes to achieve. Tesco is a company built around customers and
colleagues. Its vision guides the direction of the organisation and the strategic decisions it
makes. Tesco’s vision is:

‘To be the most highly valued business by: the customers we serve, the communities in which
we operate, our loyal and committed colleagues and of course, our shareholders.’

Tesco’s vision has five elements

Tesco’s vision has five elements which describes the sort of company it aspires to be. These
are to be:
 wanted and needed around the world
 a growing business, full of opportunities
 modern, innovative and full of ideas
 winners locally whilst applying our skills globally
 inspiring, earning trust and loyalty from customers, our colleagues and communities.

The vision, mission statement and goals are interrelated and state what an organisation is
seeking to achieve whereas the strategies and tactics show how it will achieve them. Tesco’s
core purpose (mission) is simple:

‘We make what matters better, together.’

Once aims are established, functional areas within a business then devise department-based
strategies to ensure goals are achieved. The vision drives the business and the values are
embedded throughout the strategic planning process.

Whilst a vision outlines the aspirations of senior managers, a mission statement is a general
expression of the overall purpose of the business. It communicates the goals of a company to
all stakeholders. The vision should inspire all stakeholders and motivate employees towards
achieving its stated objectives. If well prepared, it should convince customers, suppliers and
external stakeholders of its sincerity and commitment to them.

Tesco’s management recognise the key role that its mission, vision and strategies play in its
success and use a range of key performance indicators (KPIs) to monitor and evaluate its
performance. These are explored in detail later in the case.

Values

Whilst a vision is important, without values a business such as Tesco would struggle to remain
competitive. Tesco’s values are:
 No one tries harder for customers.
 We treat everyone how we like to be treated.
 We use our scale for good.

Page 3 of 9
Tesco’s values are vital to its success, as shown in the quote below from Group Chief
Executive Officer (CEO) Philip Clarke:

‘The Tesco values are embedded in the way we do business at every level. Our values
let our people know what kind of business they are working for and let our customers
know what they can expect from us.’

Tesco is a community-focused global business. Corporate Social Responsibility (CSR) is at the

heart of its operations. This commitment is referred to as ‘Tesco in Society’. In the competitive
retailing world Tesco’s success relies on its values. They are not just a list of ‘good attitudes’
but the means to on-going success.

Tesco’s approach to working with communities helps it stand out from its rivals. Its
commitment to using its scale for good is demonstrated by Tesco’s ‘Three Big Ambitions’:

 To create new opportunities for millions of young people around the world.
 To improve health and through this help tackle the global obesity crisis.
 To lead in reducing food waste globally.

These are underpinned by what Tesco calls ‘The Essentials’:

 We trade responsibly.
 We are reducing our impact on the environment.
 We are a great employer.
 We support our local communities.

Philip Clarke summarises Tesco’s commitment to ‘living’ these values in the following
statement:

‘Tesco is an environment based on trust and respect...If customers like what we offer,
they are more likely to come back and shop with us again. If the Tesco team find what
we do rewarding, they are more likely to go that extra mile to help our customers. By
living the values we create a good place to work where great service is delivered.’

These values drive everything Tesco does at every level and help make it different from its
competitors.

Strategy

A strategy is a plan which sets out how a business deploys its resources to achieve its goals.
The company’s values set the tone for the decision-making process. In May 2011, Tesco
committed £1 billion capital and revenue investment to improve the shopping trip for
customers. It set out a seven part strategy designed to achieve its goals of being highly valued
by customers and enjoying strong long-term growth. The table shows the main elements of this
strategy.

Page 4 of 9
Monitoring and Evaluating Performance

Strategy, vision, values, aims and objectives are meaningless if their impact is not monitored
and evaluated. Tesco uses a range of methods to collect data and evaluate progress against
targets. It uses its Clubcard scheme, along with telephone based research and an online panel
of customers, to determine what customers want and how satisfied they are with Tesco’s
performance.

Its Executive Committee assess the progress of large-scale strategies. All of its business units
have ‘stretching targets’ which are aspirational targets for certain KPIs. The performance of all
business units is monitored continually and reported monthly to the board of directors. The
following table shows how Tesco monitored its performance against targets using KPIs for the

Page 5 of 9
2012/13 period.

These KPIs are used to assess current performance, make comparisons with previous
performance and help managers respond when targets are not being met. For instance,
following investigation, an explanation for narrowly missing the staff training target was
given:

‘Although narrowly missing this target, Tesco have also heavily invested in our

Page 6 of 9
 colleagues in the UK this year through our ‘Building a Better Tesco’ plan. More than
250,000 colleagues in-store have received customer service training, with additional
technical training for 36,000 colleagues.’

Monitoring healthy options for customers and colleagues supports Tesco’s commitment to
helping employees and customers make healthy choices and lead healthier lives. In a
revolutionary scheme, using data from its Tesco Clubcard, it has developed a 'healthy little
differences' tracker. This measures the health profile of a 'typical' shop by measuring the
nutritional value of what customers buy. This will be used to set targets to improve customers'
health by comparing how the profiles vary across different groups in society and how healthy
initiatives impact on customers' shopping over time.

Tesco is one of the largest retailers in the world. This success has not come about by chance
but is the result of effective leadership and management. The setting of a clear vision is central
to Tesco’s success, supported by a commitment to establishing and monitoring specific
objectives and devising strategies to ensure these are achieved. All aspects of the business are
regularly monitored and, when necessary, plans are adapted to ensure targets are ultimately
met. At the heart of all Tesco does is a commitment to being a responsible retailer. This is
demonstrated through its focus on its ‘Three Big Ambitions’ and ‘The Essentials’ to show how
it is using its scale for good. Every decision taken considers these areas to ensure customers,
communities, suppliers, and staff are treated fairly and with respect. Tesco’s values underpin
all that Tesco does and, in turn, keeps customers satisfied with their shopping experience and
loyal to the brand.

Source: © Business Case Studies LLP 2016

Task 1 (LO 1: 1.1, 1.2, 1.3, and M1, M3, D1, D2)

The above is a Tesco case study. Further information about Tesco PLC is widely available.
Carry out research and analysis on Tesco and produce a report which addresses the points
below:

Using Tesco as an example, assess how business missions, visions, objectives, goals, and
core competencies inform strategic planning. Analyse the factors that Tesco needs to
consider when formulating its strategic plans. Evaluate the effectiveness of the techniques
Tesco could use when developing strategic business plans.

To achieve M1, you will make effective judgments about the value, Tesco’s mission
statements, vision statements, publicly stated goals, and core strategies.

To achieve M3, the work you present will be presented in suitable business formats and will
use business terminology accurately.

To achieve D1, you will have used defined criteria to evaluate the effectiveness of different

Page 7 of 9
 strategic planning techniques such as BCG growth-share matrix; directional policy matrices;
SPACE, or PIMS.

To achieve D2, you will have demonstrated an effective approach to independent research and
study and will have met the deadline to submit the tasks and achieve the unit assessment
criteria.

Task 2 (LO 2: 2.1, 2.2, 2.3, 2.4, and M2, M3, D2, D3)

You are also required to:

Analyse the strategic positioning of Tesco by carrying out an organizational audit. Carry
out an environmental audit for Tesco. Assess the significance of stakeholder analysis when
formulating a new strategy. Present a new strategy for Tesco.

To achieve M2, you will have applied relevant theories to assess the significance and benefits
of stakeholder analysis to business organizations such as Tesco when formulating new strategy.

To achieve M3, the work you present will be presented in suitable business formats and will
use business terminology accurately.

To achieve D2, you will have demonstrated an effective approach to independent research and
study and will have met the deadline to submit the tasks and achieve the unit assessment
criteria.

To achieve D3, you will have generated your own ideas based upon organizational audit,
environmental audit, and stakeholder analysis, to present and justify a new strategy for Tesco.

Evidence Evidence
Summary of evidence required by students
checklist presented

Task 1 A report that elaborates about the process of strategic planning.

A report that involves organizational audit, environmental audit,

Task 2
and stakeholder analysis and thereby formulating a new strategy.

INSTRUCTION

1. This is a group assignment.

2. The assignment should have a cover page that includes the assignment title, assignment
number, course title, Instructor’s name, and candidates’ names.
3. Table of content /content sheet with a list of all headings and page numbers.

Page 8 of 9
4. A fully typed up professionally presented report document. Use 12-point Arial or Times New
Roman script.
5. Your assignment should be word-processed and should not exceed 2,500 words in length
6. Use the Harvard referencing system.
7. Exhibits/appendices are outside this limit.
8. The assignment should contain a list of any references used in the report and submitted in
hard copy.

NOTES TO STUDENTS FOR SUMMISSION

 Check carefully the submission date and the instructions given with the assignment. Late
assignments will not be accepted.
 Ensure that you give yourself enough time to complete the assignment by the due date.
 Do not leave things such as printing to the last minute – excuses of this nature will not be
accepted for failure to hand-in the work on time.
 You must take responsibility for managing your own time effectively.
 Take great care that if you use other people’s work or ideas in your assignment, you
properly reference them in your text and any bibliography.
 NOTE: If you are caught plagiarising, the University policies and procedures will
apply.

Page 9 of 9