SIGNIFINANCE OF BUSINESS STRATEGY TO STAKEHOLDERS TESCO

Submitted to: Jerry K Lawrence Submitted by: Ganesh Giri Course: ADBM Subject: Business strategy Assignment no: 1 Date of submission: 21-10-2010

LYCEUM ACADEMY

Business strategy It is a foundation of successful business, a long term plan of action to achieve a particular goal of an organisation. According to Johnson and Scholes "Strategy is the direction and scope of an organisation over the longterm: which achieves advantage for the organisation through its configuration of resources within a challenging environment, to meet the needs of markets and to fulfil stakeholder expectations". From this definition strategy is to achieve future direction of a organisation in which business success. To get success in this challenging environment, what advantage from other competitor weakness should be analyzed and what tangible, intangible etc are required to complete to fulfil stakeholder expectation. Stakeholder Stakeholders are the groups or individuals that have an interest in the well being of the company and/or are affected by the goals, operations, and activities of the organisation. In an organisation, stakeholder are classified as 1) Internal stakeholders E.g.: employees, manager 2) Connected stakeholders E.g.: shareholder, customers, suppliers, financers 3) External stakeholder E.g.: government, the community, pressure group The main stakeholders in any organisation are Shareholder Employees Customers Suppliers Creditors Society Competitors The government There are various stakeholder varies with the size of a company. I have chosen Tesco plc because of its large size. Tesco should keep all its stakeholder

satisfaction. Each stakeholder wants different things, for e.g. Shareholders want profit maximization but a customer wants a quality product in a cheap price. Tesco is the world third largest grocery retailer, with a well established and consistent strategy for growth. They are a market leader not only in UK but aboard also. The stakeholder objective and their power and influence Shareholder They look for high profit, high dividend, and long term growth Power & Influence: Election of direction Employees They look for Secure, attractive salary with fair terms and condition, job satisfactions, wanted helpful manager. Power & influence: Make another decision; have detailed information, staff turnover, and strike Tesco termed Employees as ambassador for our community & environmental cause Customer Customer look for a good neighbour & provide a good shopping trip, fair, quality, honest including sustainable, healthy & affordable products. Power & Influence: Revenue is derived from customer. Suppliers Suppliers want a long term relationship and opportunities for growth with a fair & honestly. Power & influence: Pricing & Quality Creditors Creditors want interest & principal to repaid Power & influence: They enforce loan covenants Society They want job opportunities especially in current economic climate, healthy regenerated community. Safeguarding the environment Power & influence: Indirect via local planning & opportunities

Government Government want friendly job opportunities; provide secure family & good quality trading. Except Tesco to comply with the law, tax receipt, support on various intimates such as those related to health policy. Power & influence: Regulation, Subsidies, Taxation planning. NGOS Leadership on CR issues from climate, change policy to ethical theory.

3 Level of business strategy

1)Corporate level strategy
It is the initial level usually done by investors which is concern with the selection of business, decision making or overall performance to meet stakeholder expectation. It is concern with reach competitive contact, managing activities & management practice. 2)

Business unit strategy

It is concern for strategic decision about creating new opportunities, choice of a product, analysing the needs of customers, gaining advantages from competitors. 3)

Functional / Operational level strategy

It is related to business process and the value change to deliver the corporate and business unit level strategic process.

How business strategy is managed

The 3 main components are 1) Strategic analysis 2) Strategic choices 3) Strategic implementations

Strategic analysis is to analysis the business and understand the important that may influence the position of business. Tools for strategic analysis are PESTEL, SWOT, SCENARIO, 5 FORCES ETC. After analysis strategic selection or choice is done by identifying strategic options and stakeholder expectation. After selection a last task is to translate it into organisation action. Interests of stakeholder 1) Common Interest Example: Shareholder and employees: They have a common interest in the success of a business. High profit means they have a high level of profit & security of job. 2) Conflicting interests Example: Wages rise means expenses of dividend Growth of an organisation means expenses of the local community and the environment. Conclusion Tesco a successful international retailer has grown the core UK business by understanding all stakeholder expectation. From above example all stakeholders are not satisfied at a same time. References www.tescoplc.co.uk(21-10-2010) www.tutor2u.net (21-10-2010) Class handouts