GLOBAL BUSINESS STRATEGY

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 TABLE OF CONTENTS

INTRODUCTION ......................................................................................................................1

ACTIVITY 1 ..............................................................................................................................1

A) Techniques to analyze the Environment and their Suitability ..............................................1

B) Analysis of Micro and Macro Environment of Tesco ..........................................................3

Micro Environment Analysis ...............................................................................................3

Macro Environment Analysis ..............................................................................................4

C) Impact of International Business Environment on Tesco .....................................................6

D) Benefits, Opportunities and Challenges of Globalization to Tesco ......................................7

E) Extent of Globalization on Tesco ...................................................................................... 10

F) Structure of Different International Organizations ............................................................. 11

ACTIVITY 3 ............................................................................................................................ 12

Evaluation of International Operations of Tesco .................................................................... 12

CONCLUSION ......................................................................................................................... 13

REFERENCES ......................................................................................................................... 15

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INTRODUCTION
With the change in time, competition in the market place has been increased up to a
great extent and with this situation, it is required to incorporate sound business strategy so that
firm can be able to attain their set objectives in a desired manner. In this context, business
strategy can be understood as a strategic tactics that supports organization inn determining ways
from which they able to reach the set objectives over a period of time and hence attain it in a
desired format. Apart from this, it is also being observed that globalization also possess influence
over the business activities of organization and therefore it is require to set strategies by
considering it (Eshun, 2009). Beside this, firm being a profit making organization operates
within society and therefore it is required that they must be incorporated CSR (Corporate
Social Responsibility) practices with a motive to safeguard the interest of society at large. In this
respect, present report is prepared in order to attain deep insight of global business strategy along
with discussing the importance of CSR activities on business organization. For this purpose,
Tesco is being taken into account which is one of the retail giant of UK retail sector and possess
highest market share and profit margin (Immordino, 2009). Company posses their operations in
12 countries across North America, Asia and Europe.

ACTIVITY 1
A) Techniques to analyze the Environment and their Suitability
It is essential to analyses the business environment of an organization with a motive to
reframe strategies and tactics so that most effectual results can be attained through it. Same is
required by Tesco so that they are able to sustain in market for longer and can also strengthen
their activities in a desired manner. In order to analyze the environment of Tesco, tools like
PESTLE, five force analysis and organizational audit can be done so that they able to gain
information from every perspectives (Allio, 2006). PESTLE analysis possess huge scope in it as

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it aids in assessing the macro environment of Tesco. This involves analysis of firm on grounds
like political, economical, social, technological, environmental and legal. These are the factors
that possess high amount of influence over the business enterprise and also one is not in a
situation to control it in any manner. However, Tesco is able to frame their strategies in a
manner through which they are able to gain opportunities that lies in external environment
(Rowley, 2002). It is suitable in analyzing environment for Tesco because it offers information
of every nature which is utmost required while framing new strategies and practices for their
operations.
Apart from this, five force analysis aids in gaining information about the industry
competitiveness from which Tesco can be able to assess their strategies position within the
industry and hence on the basis of it, better practices can be entailed by them. It is suitable
because it delivers information over the industry attractiveness and hence they are able to take
strategic decision in a desired manner (Johnson and Scholes, 2002). Further, it also supports in
deciding whether to invest in certain activities or not and hence aids in assessing the feasibility of
any plan. This analysis tools along with PESTLE analysis offers fair ideas about the business
environment and areas that are influence organization majorly. Both activities essentially aids
in redrafting strategies that are appropriate for current business environment.
In addition to it, organizational audit assist in identifying the areas that requires
addressing and also it supports in matching standards that are required as per the external
environment. With this, Tesco is able to assess their organizational competency and weakness
so that they able to frame strategies in order to gain opportunities and benefits from external
business environment (Simmons and Lovegrove, 2005). It is suitable because this aids in
matching findings of the external environment than that of organizational setting from which
deviation can be rectified in a desired manner and also efficiency can be attained in this context.

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B) Analysis of Micro and Macro Environment of Tesco
Micro Environment Analysis
This can be articulate as small scale environment of a business enterprise that are under the
control of management and hence can be altered in a desired manner. For conducting micro
environment analysis, organizational audit is taken into account for Tesco. This majorly involves
customers, employees, competitors, suppliers and few others. Tesco offers quality products and
services that are being generally demanded by their retarget customer so that they are able to
gain loyalty from their side and hence retain majority of them on their side (Li and Solis, 2013).
With this practice, they able to enhance their market share in a significant manner and also able
to attain an edge over their rivals.
Moreover, they offer fair working environment to their employees in order to boost their
morale and productivity. This essentially supports a firm in gaining high amount of commitment
from their employee base and at the same time they are able to enhance their competency up to
a great extent.

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 This gradually supported Tesco in emerging as a retail giant. Cited organization also
incorporates ethical practices while dealing with competition so that they able to retain their
brand image and also able to develop healthy relations with their competitors (Ireland, Hoskisson
and Hitt, 2010). Beside this, they make timely payment against their orders to the suppliers so
that a healthy bond can be developed between them. This aids Tesco in offering varied range of
products to their customers at the time of requirement and hence able to attain an edge over their
rivals. With this, it can be articulate that Tesco possess high amount of competitiveness in their
operations which certainly supports them in gaining high amount of benefit from their
operational market place and also they are able to boost their competency in a significant
manner (Hill, 2001).

Macro Environment Analysis

In order to conduct Macro environment analysis of Tesco, Pestle and five force analysis are
being taken into account so that better inferences can be drawn through it. These are as follows:
Pestle Analysis
Political and Legal factors: Company is highly being influenced by local and national
laws in the countries in which they possess their operations. This requires them to
redevelop their strategy in every operational market so they able to sustain them in a
effectual manner. Further, they also being influenced by employment laws of fair
working condition, fair remuneration and other related guidelines in order to ensure that
they are safeguard from several penalties imposed by government bodies (Wacker and
Lummus, 2002).
Economic and Environmental factors: Company are highly influenced with this factors as
they possess their operations in distinct market that lies under distinctive economic
setting. Also, deviation rised in operations at the time of recession in UKand this

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 certainly makes an impact over their profit margin also (Singer and et. al. 2008). Beside
this, inflation and change in foreign exchange is another area that affects the effectiveness
of an organization.
Social factors: With the change in demographic factors of their consumes and also due to
deviations in the consumer behavior, demand of different set of products got shifted. For
instance, now a days demand of ready to eat food got increased with the rise in ratio of
working customers. This requires them to enhance their product portfolio so that different
needs of customers can ne fulfilled (Oetinger, 2004).
Technological Factors: Company is highly adhere to technological factors and hence they
able to gain benefits in this regard. They are able to serve their customers in a desired
manner and hence also able to gain loyalty from their customers.

Five Force Analysis

Threats of New Entrants: Moderate- It requires high capital in starting a new retail
chain but by seeking lucrativeness of retail sector, few of the participants can enter in this
sector (Kourdi, 2010). Further, there exist low product differentiation and also possess
very nominal switching cost which signifies the situation that Tesco can loose their
customers with the entry of new players.
Threat of Substitute Products: Low- As such there is no substitute to grocery products
and this signifies that there is a low threat from substitute products.
Bargaining Power of Suppliers: High- This industry works due to suppliers especially for
farm products and this replicates that supplier possess high bargaining power. This
affects the profitability of the firmtoo (Howell, 2009).

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 Bargaining Power of Customers: Moderate- There exist wide range of buyers but has low
buying volumes. Also, there is standardized products which leads to moderate bargaining
power of customers.
Extent of Rivalry: High- There exist wide range of companies in retail sector that leads to
a cut throat competition within the industry (Steiner, 2010). With this, Tesco reframe
their strategies on regular basis so that they are able to attract large set of audience of
their side.
With this analysis, it is being found that company owns a strategic position in their
operational markets and hence able to manage their business operations in a highly dynamic
environment. However, there are few areas that needs to be addressed by Tesco in order to
ensure that they are able to sustain in market for longer. For this, they must offer products and
services as per the needs and wants of the customers in order to gain loyalty from their side.

C) Impact of International Business Environment on Tesco

International business environment possess high amount of uncertainty in their scope and
this certainly makes an impact over the business activity, same is the scenario with Tesco and
hence they have to frame appropriate strategies in this context so that they able to gain their
objectives in an effective manner. Company possess their operations in Asia, North America and
Europe that owns high deviation in cultural, political and legal settings. With this, they have to
frame different strategies for different operational market so that theyare able to run their
business in an effective manner (Simerson, 2011). This deviation affects their effectiveness and
also hampers their profit margin. Further, they have to reframe their organizational rules and
regulations in order to ensure that they are able to meet out with regional requirements in a
desired manner. Further, political situation also makes an impact over the business activity of
Tesco and hence they have to frame their working format in a manner through which are able

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to operate those markets effectively. For instance, in Singapore they have to adhere to legal
requirement in the context of employment and profit sharing up to a great extent which certainly
affects their profitability and hence they have to develop different set of strategies for this
purpose (Kambil, 2008).
Further, every country holds different types of apex bodies that aids in enforcing rules
and regulation regarding employment, competition, pricing strategy, procurement of materials
and disseminate of profits. In this context, Tesco needs to abide every rules and regulations so
that better results can be attained through it. With this situation, they have to make changes in
their operational settings and working criteria that may impact in terms of deviation in their
operational efficiency. Further, economic situation is another aspect that cause an impact over
the operations of Tesco (John, 2005). Recently, recession in Europe affects its sales and hence
their profit margin declined up to a great extent. With this discussion, it can be articulate that
international business environment certainly makes an impact over the efficiency of the
organization and at the same time influences them in making continuous improvement in their
operational strategies and practices (Griffith, 2012).

D) Benefits, Opportunities and Challenges of Globalization to Tesco

Globalization can be understood as a framework that supports in integrating economy of one
country with that of global economy. With this rise in time, globalization increased up to a great
extent from which different set of benefits and advantages being attained by organization
throughout globe (Bryson, 2011). In this context, benefits that are attained by Tesco from
globalization are as follows:
Free trade: This certainly supported Tesco in conducting free trade among different
countries from which they able to enhance their customer base in a significant manner.
Moreover, it aids in reducing the price of goods that are being imported from other

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 countries with the help of globalization (Neely, 2007). They are also able to strengthen
their producst portfolio with this practice that certainly supported in meeting out with the
diverse needs of customers.
Free movement of labor: Further, company able to involve wide range of individuals that
belong to other nations and this setting aids them in framing strategies and practices
through which they are able to frame strategies as per the needs of varied customers
(Carlsson, 2003). Moreover, this situation aids them in developing a diverse employee
base which assist them in addressing external factors in an effective and efficient manner.
Increased Economies of Scale: With this, Tesco is able to boost their economies by
procuring goods from the source that cost them least and this particular setting supported
them in attaining higher operational efficiency. Additionally, profit margin of Tesco also
gets boosted with globalization and hence they able to sustain in an effective manner
(Linn, 2008).

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Global Business Strategy
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Besides benefits, there are various opportunities that are being attained by Tesco from
globalization. These are as follows:
Expansion: Globalization offers an opportunity to expand the business operation of Tesco
in different regions of the world in order to gain benefits that lies in different market
place. With this, Tesco possess an option in boosting their market share further by
entering in market that are unexplored by them (Delaney, 2004). This aids them in
attaining an edge over their rivals in a significant manner.
Technological Advancements: Further, Tesco is able to incorporate technological
advancements in their operations that essentially helped them in attaining different set of
opportunities that lies in foreign market.
Better product development: Tesco with the help of globalization is able to develop
their products and services in a desired manner from which they are able to attract large
set of audience on their side (Turki, 2011). Moreover, it assisted in offering services to
different customer as per clients requirement and this aids in attaining loyalty from their
side. This also emerged as an opportunity from globalization.

On the other hand, there are various challenges that are being faced by Tesco with the rise of
globalization and hence affected their operations. These are as follows:
High competition: Globalization opens the door for foreign players and also supported in
developing a platform from which one is able to make trade activities without any
restriction from local bodies. With this, wide range of organization entered into a specific
market and hence this leads to high amount of competition for Tesco (Chiware, 2010).
This also affected the marketing efficiency of cited organization.
Cultural Diversity: Tesco being a British firm are familiar with the culture of Britain but
when they enter into another operational market, then they have to frame strategies

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 through which they are able to meet the cultural settings of different regions. This
certainly affected their operations and also makes an impact over their efficiency
(Klebanoff, 2012).
Technical development: Further, every countries possess different set of technical
assistance and hence this affects the operations of Tesco in procuring goods of varied
nature. With this, they are not able to manage their operations in a desired manner and
hence it affects their productivity.
E) Extent of Globalization on Tesco
Globalization gradually increased up to a great extent in modern era and this has supported
firms like Tesco in boosting their market share and also in attaining different set of benefits from
different operational markets. With globalization, Tesco is able to make free trade among
different countries of Asia, North America and Europe. With this, they are able to develop their
own distinctive image in front of target audience and hence able to enhance their sale volume up
to a significant level (Valvi and Fragkos, 2013). Moreover, it supported them in procuring goods
from different regions so that ultimate needs of customer can be satisfied in an effectual manner.
Moreover, globalization aided in making free labor movement within the operational areas of
Tesco and this supported firm in getting rid from labor shortage. Also, this assisted firm in
developing a team with diverse employees through which they able to frame strategies as per the
needs and wants of the customers (Carlsson, 2003). Globalization also aided in exchanging the
culture through which company able to sustain in every region without any deviation. With this,
better development of products and services can be done and hence overall efficiency of
operations get increased. Company now able to operate effectively in different regions and now
also able to boost their sales volume in a significant manner. Apart from this, Tesco is being
viewed as high technologically developed organization that possess both physical as well as
online stores in order to meet out with diverse needs of customers (Kourdi, 2010). This is the

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situation with the extent of globalization and hence they are able to meet out with diverse
needs of customers in a significant manner. Additionally, they able to offer quality services to
customers and hence able to gain loyalty from their side. Beside this, they are able to call for
capital from foreign investors also in order to meet out their financial needs (Ireland, Hoskisson
and Hitt, 2010). This helps in boosting their image in international context and hence their brand
value gets increased with the help of globalization.

F) Structure of Different International Organizations

International market possess wide range of activities that needs to be performed in a timely
manner so that business objectives can be attained in a particular manner. For this purpose, it is
required that organization must incorporate different set of structures so that better managing of
activities can be attained. In this context, there are different set of structures that are being
followed by international firm in order to run their global operations in a desired manner. These
are functional, divisional and matrix structure. Under functional, each set of uniform activities
are being grouped together in order to frame a department so that operations can be conducted in
a desired manner (Simmons and Lovegrove, 2005). Under this, marketing team, research team,
sales team, operations teams and other related works as a department so that each task can be
accomplished in a desired manner. This is being followed by organizations like Nike, Marriott,
Nokia and other with a purpose to attain their organizational objectives in a desired manner.
Another set of organizational structure is divisional structure which is usually being
followed by giant organization that are spread on different geographical areas. Under this, each
unit works as a system without any influence from head office. This is the structure which is
being followed by Tesco, Wall Mart, Apple, Microsoft and others. This aids them in
maintaining standardization in their bushiness activity and also be able to achieve their targets
in a significant manner (Valvi and Fragkos, 2013). Also, this set of structure possess formal

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communication in their operations in order to ensure that each set of activity is being executed in
a desired manner. Further, matrix can be articulated as hybrid structure that involves both
divisional and functional structure. This is the system that possess high amount of flexibility so
that better organizational activities can be attained. It is the system that is majorly being
followed by international production unit such as Ford, Chevrolet, Yamaha, Honda, steel
manufacturing firm and other production unit (Linn, 2008). With this model, firm can be able
to alter their structure at any point of time as per the needs and wants of management and hence
aids in attaining organizational effectiveness.

ACTIVITY 3
Evaluation of International Operations of Tesco
Tesco being a multinational retail organization able to manage their operations in more than
12 countries throughout globe and hence able to enhance their market share significantly.
Company possess different set of products and services that are standard in every outlet that is
gradually supporting them in meeting out the needs of customers in a desired manner. Further,
they offer products from both physical as well as from online stores in order to ensure that they
deliver high amount of comfort to their customers (Eshun, 2009). With this, sales volume of
Tesco certainly increased up to a great extent in every region and hence they are able to attain
an edge over their rivals like ASDA, Morrison, etc.
Further, it is also being observed that they possess technological advanced services in
their operations with a motive to ensure high customer loyalty. Also, it aids in acquiring
customers of other brands also and hence it gradually leads to boosting of their operational
efficiency. Contrary, they seek that each set of cultural requirement meets in a manner so that
sympathy from customers can be attained that assist them in boosting their sales volume. It is
also being viewed that they offer products as per the needs and wants of customers and this

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particular practice of Tesco supports them in attaining an edge over their existing rivals of
different region (Oetinger, 2004). Additionally, they abide rules and regulation of every region in
a required manner which aids them in sustaining efficiently in international markets and also
supports them in gaining opportunities of different market place. Also, they possess sound
segmentation and targeting criteria through which they able to boost their sales volume and also
it helps in achieving their short term goals in an effective manner (Wacker and Lummus, 2002).
However, it is being required by the firm that they must expand in different regions for the
purpose of boosting their efficiency further. It is required that they must enter into market like
Middle East, Gulf region, India and other related so that they are able to boost their operations
in much effective manner (Li and Solis, 2013).

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Global Business Strategy
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CONCLUSION
Hence, with the help of this strategy it can be articulate that business strategy is one of key
elements that supports organization in attaining their objectives in a significant manner and also
it acts as a path through which operational efficiency can be increased. Tesco being a retail giant
is able to incorporate different set of strategies in their operations through which they are
able to boost their competency and efficiency in a desired manner. Further, it acts as a path for
boosting their market share and also to retain majority of customers on their side.

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Eshun, P. J., 2009. Business incubation as strategy. Business Strategy Series.

Hill, L., 2001. Resources, Resistances, and Economic Growth. International Journal of
Social Economics.

Howell, T. M., 2009. Critical Success Factors: The Measurable Path to Success. Taylor and
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Immordino, M. K., 2009. Organizational Assessment and Improvement in the Public Sector.
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Ireland, D. R., Hoskisson, E. R. and Hitt, A. M., 2010. Understanding Business Strategy
Concepts Plus, 3rd ed. Concepts Plus. Cengage Learning.

John, R., 2005. Global Business Strategy. Cengage Learning EMEA.

Johnson, G. and Scholes, K., 2002. Exploring Corporate Strategy. Prentice Hall.

Kambil, A., 2008. Purposeful abstractions: thoughts on creating business network

models. Journal of Business Strategy.

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