Tesco firm paper

Tesco firm paper

Introduction

Tesco is a multinational firm that deals with grocery products and general merchandise. It is a British firm that has headquarters in Welwyn Garden City, Hertfordshire, in the United Kingdom. The company is one of the leading retailers, as indicated by its gross revenue. It is a multinational company since it has outlets in various countries such as; Thailand, Hungary, Ireland, the United Kingdom, and in some countries in Asia and Europe. The main aim of the company is to satisfy the needs of the company by offering quality goods at a reasonable price. Tesco offers various products and services to the customers, which include; banking, insurance, and online banking. Tesco takes part in an employee’s development to ensure that they have the appropriate skills to carry out their duties effectively. The company recognizes that motivating employees is a crucial success factor, and therefore, it improves their skills and knowledge through training and education. The paper will focus on the strategic marketing analysis of Tesco.

Mission

The mission statement of Tesco is “creating value for customers, to earn their lifetime loyalty.” The mission statement of the company is critical because it sets a goal that the firm should try to reach. The statement ensures that the staff of the company give the best services to the customers. Tesco is in business to offer quality products to the customers that will help the firm to earn the loyalty of the customers, and as a result, it will have a long- term success. The purpose of Tesco’s business is to increase the satisfaction of the customers by offering quality goods and services. Tesco strategically influences its business by creating value for the customers and giving them a priority. As a result, the customers will be satisfied, which will help in the long- term success of the firm. The desired public perception of the company is to gain acceptance from the public in society. This is the reason why the company is aiming at creating value for the clients to make them have a positive perception of the firm. A positive public perception will make the customers utilize the products of the company freely, which will increase demand. The mission statement of Tesco clarifies its strategy by putting it clears that the company earns the loyalty of the customer by creating value for them. The mission statement unifies the Tesco’s team by giving them a common goal of creating value for the clients.

Situational Analysis

PEST Analysis

Political Factors

Tesco takes part in the global market since it has various stores in different countries. Tesco’s daily operations are influenced by the political and legislative conditions of these countries, which includes the European Union. Tesco ensures that it complies with the employment legislation and laws in the counties it operates. Also, the company invests in countries that have political stability, thus creating a conducive environment for the operation of the company.

Economic Factors

The economic factors influence Tesco’s net profit since it affects the prices, costs, and demand, and therefore, it is a significant area of concern for the company. Various economic factors include high unemployment levels. The unemployment levels reduce the power of purchasing the clients, which decreases the demand for the company’s products. Also, Tesco operates in many countries where there is the availability of finances. In these countries, funds are well distributed and available among a large number of people, thus increasing the purchasing power of customers. Tesco operates in most European countries, where the rate of economic growth is high, thus increasing the purchasing power of consumers.

Social/ Cultural Factors

The clients in the British countries are moving towards bulk shopping in one- stop, which comes as an outcome of social and cultural changes in the region. To cope with this change, Tesco has increased the amount of non-food products available on the shelves for sale. Tesco has adopted a product mix that offers a variety of products to satisfy the different customer’s attitudes and beliefs. Tesco operates in a large geographic area, whereby it has many stores in many countries around the world.

Technological Factors

Technology can determine the success of the business since it affects the development and production of various goods and services. Tesco uses the following techniques. First, the company uses wireless devices to facilitate an easy and fast way of communicating with customers, employees, and suppliers. Second, it uses electronic shelf labeling technology whereby the prices of different items are updated automatically according to the prevailing market prices. Tesco uses self- checkout machine, which provides a continuous check for the number of materials on the shelves to avoid stock-outs.

SWOT Analysis

Strengths

Tesco has the following strengths. The first strength is the skilled staff. The company takes part in the development of the employees to give them the skills and knowledge they require in their daily duties. Tesco offers education and training to the staff, which increases their performance. The other strength is strong brands. The company has various brands that are recognized by the customers in different parts of the world. The additional strength is many customers. The company operates in multiple countries, which increases the number of customers.

Weaknesses

The company has the following weaknesses. The first weakness is stiff competition. Tesco operates in the global market, where there are other competitive firms. These firms offer substitute products, which increases the level of competition in the market. The second weakness is the cost of operation. The cost of operation of Tesco is high since it takes part in the international market.

Opportunities

Tesco has the following opportunities. The first opportunity is to venture into health and beauty products. Tesco can expand its operations and start offering products related to health and beauty. As a result, it will increase the gross profit of the company. The second opportunity is further international growth. Currently, Tesco is now operating in the UK, Europe, and Asian countries. The company can expand its operations to other countries, which will increase the net sales of its products.

Threats

The first threat is that the returns from foreign markets could fall. The success of Tesco comes as a result of international investments, which brings a good profit since all the countries move past critical mass. The global investment may fall because of various reasons, such as changes in the economic conditions and stiff competition. The other threat is international expansion. Growing the company to reach international levels is very expensive. Tesco requires massive investment to open new global markets with new brands of products. The investment involves areas such as marketing expenses, operational and distribution expenses.

Marketing strategy proposal

Tesco has various strategic options available to gain future success and sustainability. The strategic options include the following. The first option is the diversification of the products. Tesco can diversify its product range by offering more products to the national and international markets. The company can start offering health and beauty products to its customers. The second strategic option is to improve its technology continuously. In the current world, technology keeps on changing. Continuous improvement of technology will enhance the operation of the company, and therefore it will be able to achieve long- term success and sustainability. The third strategic option available for the company is to take part in international market research. This research will enable the company to understand the various factors which influence the global market. Therefore, the company will be able to offer appropriate products that satisfy the needs of global customers.

The most appropriate and critical strategic option is the diversification of products. Tesco can diversify its product range by introducing health and beauty products into the market. The target customers of the new health and beauty products will be women between the age of 18 and 45. The business need which I will address is the lack of stable firms that offers quality beauty and health products. Tesco will ensure that the customers are satisfied by providing quality products. The market segmentation will depend on the level of income of the customers. The company will offer these products at various prices, depending on the income of the clients. The target subgroups are low, middle, and high-income earners.

The following is the profile of the target customers. The target customers will be women who are between 18 and 45 years. They should have a regular income, which will increase their purchasing power. The products will be offered in the major towns of the country, but they will be introduced into the international market later. The purchasing habit of the customers is those who like purchasing beauty products frequently.

The market opportunity is viable because there are no stable firms that offer quality health and beauty products into the market. Therefore, the company will get ready customers who are willing to spend their income to buy these products. The following are the goals of the firm.

• To increase the revenue of the firm by 15% within the next year.
• To venture into the markets of two new countries in the next two years.
• To employ 100 new employees in the production process of the latest products.
• To reduce the cost of operation by 20% in the next year.

Developing Marketing mix decisions

Tesco will use the 4Ps of marketing, that is, the product, price, promotion, and place. The products which will be offered by the company are health and beauty products. Tesco will choose to provide these products because there is a business opportunity in the market. Tesco will charge a fair price to these products. The prices will range from $5 to $50, depending on the level of income of the client. The company will adopt various promotional strategies to market these products. Tesco will use social media and advertising through radio and television. These promotional strategies will increase the awareness of the customers, thus increasing the demand. In terms of place, Tesco will start by offering these products in some of the markets in the major towns of the country.

Conclusion

Tesco is one of the leading multinational retailers, as indicated by its gross revenue. The mission statement of Tesco is “creating value for customers, to earn their lifetime loyalty,” which helps the firm to remain focused on achieving its goals. The analysis of the internal and external environment of the company shows that there is a business opportunity for health and beauty products. The market opportunity is viable because there are no stable firms that offer quality health and beauty products into the market. Therefore, it can be concluded that venturing into this new business opportunity will add the profit of the company.