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03/28/2012

STRATEGIC PLANNING AND IMPLEMENTATION: CASE STUDY OF TESCO


STRATEGIC PLANNING AND IMPLEMENTATION: TESCO

 

 

Introduction

It is important to take note that successful strategy enables business to be differentiated with its competitors, at the same time, offers the impetus for great success. On the other hand, a poor or misunderstood strategy can cause a company to be out of the business. Therefore, considering the components and factors involved in the process of creating a high performance organization.

Strategic planning and implementation is considered as the heart of center of how to make changes of any kind to happen inside the organization (Heathfield 2010). In the current highly competitive business environment, budget-oriented planning as well as forecast-based planning are not enough for large companies to survive and grow. It is vital for these companies to focus on strategic planning that will clearly define the objectives, at the same time, assess both the internal and external situations in order to create strategy, implement the strategy, evaluate the progress and growth and make necessary adjustments in order to maintain the performance of the company (QuickMBA n.d.). As a result, strategic planning had become a planned process in which top executives periodically formulate the strategy of the company, at the same time, focuses on communicating down the organization for the implementation process (NetMBA n.d.) (see Appendix A).  Based on this, strategic planning is all about making choices focusing on the process of designing in order to support the leaders to be intentional regarding their goals and the methods to be implemented in order to achieve their goals (Allison & Kaye 2005, p. 1). This can help companies to focus on the different strategies to be done in order to come up with the changing environment, which affect the entire performance of the company.

This paper will focus on constructing management strategy, developing vision, mission, objectives as well as measures and planning for the implementation of the strategy of TESCO. Different online and offline resources were used in order to come up with the different information used in this paper. Textbooks and journals as well as online articles were considered in order to focus on the different theories that are related with strategic planning and implementation. The same resources were used in order to gather information about the performance of TESCO.

 

TESCO was founded by Jack Cohen by selling surplus groceries from a stall in the East End of London. The first day’s profit was £1 and sales £4 (TESCO 2009). Currently, TESCO is considered as one of the largest retailers in the world, operating about 2,300 supermarkets and convenience stores, and employing 326,000 people. The core business is in Britain, and considered as the largest private sector employer in the UK and the largest food retailers, operating about 1,900 stores. In addition, the company is also operating in the continental Europe, which includes Czech Republic, Hungary, the Republic of Ireland, Slovakia and Turkey. Furthermore, the company is also operating in Asian countries including Japan, Malaysia, South Korea, Taiwan and Thailand. As part of the company’s strategy, TESCO has the Tesco.com, which ranks as the largest online supermarket in the world (Funding Universe n.d.). However, there are different changes in the political, economic, social and technological aspect of the environment where TESCO is operating. Based on this, it is vital for the company to focus on strategic planning in order to maintain its current position in the market.

 

Management Strategy

Structure to Ensure Appropriate Participation

            In any change or strategy to be implemented in any organization, it is important to focus on the stakeholders that are connected with the company that might be affected. Stakeholders are those individuals or groups that can affect or influence the strategies and operations of the company in either direct or indirect manner. In addition, they are those people or groups that can be affected by any actions, operations and performance of their respective company. The employees are considered as the internal stakeholders, because they have the huge impact over the result of any actions and performance of the company. On the other hand, those people or groups that are outside the organizations are considered as external stakeholders, which include the suppliers, partners, government the consumers etc (Sims 2003).

            In the process of ensuring the participation of the appropriate stakeholders in the strategic planning and process, it is important to focus on the different steps and procedures to be done. According to Bryson (2004), there are different steps that can be done in order to focus on the issue of ensuring the appropriate participation for the management strategy. First, it is vital to recognize the different stakeholders that will have an impact on the strategic plan. This can be done by brainstorming and listing the potential stakeholders. In doing this, the use of stakeholder influence diagram can be used, which will help in order to show how the stakeholders on a power-versus-interest grid can affect one another. Second, it is important to focus on the participation of the stakeholders in the process of strategic planning and implementation. With this, the participation planning matrix can be used as a tool. It enables the planners to think regarding the engagement of the stakeholders in different ways regarding the strategy change effort (Crosby & Bryson 2005). With this, the stakeholders will be informed regarding the level of their participation in the process of giving the final decision.

 

Criteria for Reviewing Potential Options 

            The different issues and factors that are related with the company must be analyzed in the process of generating potential options. Therefore, it is important for the company to assess the different potential options, at the same time, set short- and long-term priorities. It is vital for the company to prioritize and assets the strategic options because it can help in order to minimize the time and effort which will be spent in the process of implementing the changes and actions. Nijssen & Frambach (2000) stated that a good evaluation of different strategic options use a different range of criteria, which include the acceptability of the alternative or option for the stakeholders of the company, the current competencies or strengths of the company as well as the different opportunities that the internal and external environment is offering.

            On the other hand, the most important factor or reviewing tools to be included is the economic or financial condition of the company. Return on Investment (ROI) is considered as the most common evaluation tool in understanding the value of the strategic option (Barksdale & Lund 2006). Basically, the concept of ROI is ration, where in it is equal to the increase in performance or savings of time and money divided by the total investment in time and money. The cluster of the criteria can be used in the process of evaluating options that will be included, which are suitability, feasibility and acceptability. Suitability criteria pertain on how the option will enable the organization to accomplish and realize its strategic objectives. The feasibility criteria pertain on the level of the possibility of the options to be implemented and managed. Above all, the acceptability criteria pertain on how option is accepted by the stakeholders (Campbell 2002).

 

The Strategy

            The propose plan is the implementation of the Gourmet Food Section and Delicatessen at TESCO Stores. This is because of the increasing demand for gourmet product and specialty foods in the UK. It will include the following:

  • groceries – the Gourmet Food Section and Delicatessen will be focusing on high quality grocery items from different parts of the globe including Italy, Australia, New Zealand, France, Japan and the United States, together with other parts of Asia and Europe. This will include spices, oils, meats, pasta, cheese and other native delicacies;

  • gift items – will be made available for the shoppers including items that will compliment the international theme of the section; and

  • delicatessen – the section will also offer excellent international cuisine and menu for breakfast, lunch and dinner with 20 sitting capacity.

Regarding the financial capital, the proposed Gourmet Food Section and Delicatessen will use £76,000 for the start-up. This will be used to pay for insurance, utilities, acquisition of long-term assets and the salaries of the employees. Because the said section will include small eating area for 16 people, intellectual and physical resources will be used.

 

Vision, Mission, Objectives and Measures

PESTLE Analysis

Political

            In the UK, government demands that TESCO hire local employees, together with the working students, parents and older workers. With this, it is vital for TESCO to focus on the human resource aspect of the company. It can help if the said unit of the TESCO stores will focus on employing students and older people. This will help the company to focus on the different labor rules and laws, at the same time, focuses on social responsibilities, by giving financial income and aid for the students and older people.

 

Economic

            One of the biggest economic threats and challenges to be faced by this strategic movement by TESCO is the decline or slowdown in the economy of the UK. According to the Office for National Statistics (ONS), the economy of the UK had slumped 5.6% since the second quarter of 2008, the biggest fall since its records began in 1955 (Mirror.co.uk 2009). As a matter of fact, according to Alistair Darling, the chancellor, Britain is currently facing the worst economic downturn in 60 years and it will be more profound and long-lasting, than what the people had expected (Watt 2008). This will have an effect over the performance of the company, particularly towards the buying behavior of the customers.

 

Social

            Currently, consumers in the UK are more supportive of the one stop shopping due to the changes in the social sphere. This is particularly because of the fact that people in the UK are giving more importance to their time and effort, thus, one stop shops give them convenience. In addition, it is also important to focus on the increasing number of women in the labor force, which influence, how parents manage their home, particularly regarding their food. Over the past four decades, the proportion of women in employment has grown rapidly. During the start of 1971, the employment rate for women was 56% compared with the 70% in the September of 2008, while, the employment for men decreased from 92% to 78%. As a matter of fact, the employment rate for women was not affected that much by the economic downturn compare with men (Office for National Statistics 2008). Aside from that, consumers are becoming more and more aware of the environment and health.

 

Technological

            Technology is an important aspect in the entire operation of the company because it enables TESCO to make use of technology in order to offer high quality of products and services. This will be helpful in the process of disseminating information about the new strategy of the company.

 

Legislative

            It is important for TESCO to focus on the different legislations and policies that are being implemented by the UK government. Thus, it is important to focus on the different machines and systems to be used in the new strategy, at the same time, focuses primarily on the safety of the food and the rights of the employees.

 

Environment

            Different groups are focusing on pressuring small and huge companies regarding their responsibilities towards the society and the environment. Based on this, it is important to focus on using machines and methods that are tested to be harmless to the environment as well as the health of the consumers.

 

Vision and Mission Statements

            The mission statement of TESCO is “creating value for customers to earn their lifetime loyalty.” With this, it is important to align the vision and mission statements of the company in order to come up with the different actions to be done in order to implement the proposed strategy. The mission of the company in implementing this strategy is to improve the efficiency of service of TESCO by offering another service area in each store that will help customers to save time. The main mission is to offer a holistic and one-stop shop for the consumers. This will help to improve relationship and commitment between the company and the customers.

            The vision of the company is to become the most loved one-stop shop in the UK, by offering the customers with the intensive services and time efficiency.

            The objectives of the company focuses on the philosophy that if they look after their customers and operate in efficient and effective manner, the interest of the shareholders will always be best served by the inevitable outputs including the sales, profits and ROI. Therefore, the main objectives focus on increasing the sales, profits and ROI; satisfying the customers and motivating loyalty; and satisfying shareholders (TESCO 2009). The Key Performance Indicators (KPIs) include: market share, employee retention and reduction of carbon dioxide emissions (TESCO 2009). With this, balance scorecard will be used in order to focus on the cause and effect relationship between the outcomes and the drivers that help to achieve the desired outcomes (Kanji 2002) 

 

 

Implementation of the Strategy

Timetable for Implementation

            The proposed Gourmet and Delicatessen section of TESCO is expected to be done in 6 months. The project will start in February 2010 and will be finished in June 2010. The following are the activities to be done within the said period of time:

 

Task

February

March

April

May

June

1. Securing Documents and legal papers, compliance certificate

 

 

 

 

 

 

 

 

 

 

2. Site preparation (Acquisition of the materials)

 

 

 

 

 

 

 

 

 

 

3. Construction

 

 

 

 

 

 

 

 

 

 

4. Structure building and accomplishing the behind the wall works

 

 

 

 

 

 

 

 

 

 

5. Wall finishes, carpentry, architectural works and electric works

 

 

 

 

 

 

 

 

 

 

6. Human resource and designing of menu

 

 

 

 

 

 

 

 

 

 

7. Opening

 

 

 

 

 

 

 

 

 

 

 

Dissemination Process

            In the dissemination process, the tools that will be used are Project Milestone Schedule (PMS), Work Breakdown Structure (WBS) and Project Progress Reporting.

            The PMS is a framework that is used in order to focus on the timing of the project, at the same time, focuses on offering a structure for the detail of the project schedule. It enables to offer guidance by definition of the time windows into which the task scheduling will attempt to fit (Levine 2002). On the other hand, the WBS helps to identify all the tasks that are required in order to build the specific deliverables or tasks. This will help in order to identify the boundaries of the project (Verzuh 2008).  In addition, WBS can also help in order to identify the different possible defect or risks which can be encountered during the implementation of the project (Kendrick 2003). On the other hand, the project progress reporting will be used in order to inform all the stakeholders of the project regarding the different steps, procedures and changes that will be implemented in the entire project. Progress reporting is considered as the vital element of managing projects because it enables to inform all the stakeholders involved in the project regarding what is going on.

            The process of dissemination will start during the initiation meeting; where in all of the stakeholders will be offered with information that are gathered for the initiation phase. The initiation plan will be distributed towards the stakeholders, together with the kick off report in order to inform the stakeholders regarding the roles and responsibilities in the entire implementation of the projects, at the same time, inform them regarding their responsibilities and roles to be done after the opening of the store.

 

Monitoring and Evaluation Systems

            The process of monitoring the project will start at the beginning of the planning state and will continue up to the entire process of the project. Evaluation will happen in regular meetings which will be held by the entire management. On the other hand, the project reports as well as meetings will be done in synchronize manner, together with the status collection, at the same time, the reporting process will be done in weekly manner. In order to come up with this activity, it will be vital to focus on the systems to be implemented in monitoring and evaluating the entire project. The Project Status and The Status Cycle will be implemented. The monitoring will depend on a four-stage cycle that repeats in monthly in the entire project.

            It is important to focus on the different stages to be implemented including the inbound communication and collection of the project status information. Then, the status of the project will be compare with what was planned and evaluates the metrics and analyze any differences or dissimilarities. Next stage will focus on the process of responding to any issues that have been detected, and the final stage pertains on the outbound communication which will help to keep the people aware regarding what is happening about the project (Kendrick 2003).

Conclusion and Recommendation

            TESCO is considered as one of the largest companies in the world, at the same time, considered as one of the most popular brand name. The main mission of the company is to maintain the loyalty of the customers towards the brand, which will help to maintain its performance and position in the market. Based on this, together with the changing social behavior of the customers, including the popularity of one-stop shop and the growing number of women in the labor force, indicates a change for the company. It is important to take advantage of this change, by focusing on creation of a Gourmet Food Section and Delicatessen at the stores of TESCO. However, it is important to take note that changes signifies risks and threats towards the performance of the company, therefore, it is important to focus on implementing or using different tools and techniques which can help in order to ensure that all of the actions and tasks to be done are properly planned, thus, it is vital to pertains on the resources that are involved including the financial capital and the human resource.

 

 

Reference and Bibliography

Allison, M & Kaye, J 2005, Strategic Planning for Nonprofit Organizations: A Practical Guide and Workbook, John Wiley and Sons.

Campbell, D et al 2002, Business Strategy: An Introduction, (2nd ed), Butterworth-Heinemann.

Crosby, B & Bryson, J M 2005, Leadership for the Common Good: Tackling Public Problems in a Shared-Power World, John Wiley and Sons.

Funding Universe, TESCO PLC, http://www.fundinguniverse.com/company-histories/Tesco-plc-Company-History.html [Accessed February 1, 2010].

Heathfield, S 2010, Make Strategic Planning Implementation Work,About.com, http://humanresources.about.com/od/strategicplanning1/a/implement_plan.htm [Accessed February 1, 2010].

Kendrick, T 2003, Identifying and Managing Project Risk: Essential Tools for Failure-Proofing Your Project, AMACOM Div American Management Association.

Lavine, H 2002, Practical Project Management: Tips, Tactics and Tools, John Wiley and Sons.

Mirror.co.uk 2009,Economic Slowdown Worse than Feared, http://www.mirror.co.uk/news/latest/2009/07/24/economic-slowdown-worse-than-feared-115875-21545642/ [Accessed February 1, 2010].

Nijssen, EJ and Frambach, RT 2000, Creating Customer Value Through Strategic Marketing Planning: A Management Approach, Springer.

NetMBA, The Strategic Planning Process, http://www.netmba.com/strategy/process/ [Accessed February 1, 2010].

Office for National Statistics 2008, Women in the Labour Market: Impact of Downturn, http://www.statistics.gov.uk/cci/nugget.asp?id=2145  [Accessed February 1, 2010].

QuickMBA, Strategy Planning, http://www.quickmba.com/strategy/strategic-planning/  [Accessed February 1, 2010].

Sims, RR 2002, Ethics And Corporate Social Responsibility: Why Giants Fall, Praeger, Westport CT.

TESCO 2009, TESCO, http://www.tescoplc.com/plc/about_us/tesco_story/# [Accessed February 1, 2010].

Verzuh, E 2008, The Fast Forward MBA in Project Management, John Wiley and Sons.

Watt, N 2008, Economy at 60-Year Low Says Darling. And It will Get Worse, http://www.guardian.co.uk/politics/2008/aug/30/economy.alistairdarling [Accessed February 1, 2010]. 

 

 

Appendices

Appendix A: Strategic Planning

 

Source:( NetMBA n.d.)

 

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