Tesco’s Strategy D2
Tesco strategies are to grow the UK core, be an outstanding international retailer in stores and online, be as strong in everything we sell as we are in food, put our responsibilities to the communities we serve at the heart of what we do, be a creator of highly valued brands and to build our team so that we create more value.
There are many factors depending if these targets are achievable, whether they are internal of staff going on strike or external in the change of law.
For Tesco to grow the UK core this we will look at the factors of Company law, recession, customs duty and demographic issues.
Company law will affect Tesco as they have to publish their financial situation of their profit and losses to the public and because Tesco is Public Limited Company (plc) this may influence investors and shareholders decision not to invest in Tesco. This will badly affect Tesco as they are getting less money which will mean less profit and in turn less money for reinvestment and as a result making it harder to expand the UK core.
The Recession we are currently in will make it much harder to expand the UK core as they are not receiving as much money as everyone is saving their disposable income and less money is coming into the Tesco which will mean less money to Expand as there is more costs than money available.
Customs Duty will affect Tesco from expanding the UK core as they are spending more money on bringing the products in will mean less profit will come and less money for reinvesting to expand the UK Core.
Demographic issues will bring less money as there are more people meaning more jobs are required and more spent on infrastructure for the town. This will mean less money spent on making Tesco expand the UK core.
In the future Tesco will be out of the recession, this will be good for Tesco as this will mean a higher profits as the economy will be growing again meaning that more people are in jobs and therefore have more disposable income that they will be able to spend on Tesco. This will mean higher profits as more people are willing to spend as they can afford more products. This will mean more profits will mean they will be able to reinvest back into the company and expanding the UK core.
For Tesco to be an outstanding international retailer in stores and online we will look at the factors of competition law, inflation, EU and fair trade.
Competition law will slow down and help to stop an international retailer like Tesco as it stops any business taking over 50% of any market to ensure there is competition giving a chance for other business to look better on or offline. Also company law will stop this as if there are losses there is a bad image placed on the company.
Inflation will put a bad light on Tesco if inflation is high and as Tesco are a international company they will be looked at first to lower their prices so the price of food goes down, this will lose customers and stakeholders confidence and as they rely on stakeholders being a plc, they will lose profits and not be as outstanding as a international retailer.
The EU will be a major part of Tesco being a business aboard as they allow import and export of goods and money for very little money allowing trading to new customers however if Tesco are found of doing something wrong such as the horse meat scandal then people across Europe will know about as Tesco is everywhere and will get less profit until consumer confidence is raised.
Fair trade is now becoming a major part of businesses as people are becoming more intelligent and there is more free speech and more democracy. This will affect Tesco as they have to pay more in costs to the farmers for fair trade, which will mean less profit but will look better as an international retailer.
In the future Tesco will have to move technology in terms of online shopping and even payments on to mobile phones, tablets and Iphones in order to keep up with technology and to be able to achieve their
