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Question: LO1 Understand the process of strategic planning, 1.1 Assess how business missions, visions, objectives, goals and core competencies inform strategic planning 1.2 Analyse the factors that have to be considered when formulating strategic plans 1.3 Evaluate the effectiveness of techniques used when developing strategic business plans LO2 Be able to formulate a new strategy 2.1 Analyse the strategic positioning of a given organisation by carrying out an organisational audit 2.2 Carry out an environmental audit for a given organisation. 2.3 Assess the significance of stakeholder analysis when formulating new strategy 2.4 Present a new strategy for a given organisation LO3 Understand approaches to strategy evaluation and selection 3.1 Analyse the appropriateness of alternative strategies relating to market entry, substantive growth, limited growth or retrenchment for a given organisation 3.2 Justify the selection of a strategy LO4 Understand how to implement a chosen strategy. 4.1 Assess the roles and responsibilities of personnel who are charged with strategy implementation 4.2 Analyse the estimated resource requirements for implementing a new strategy for a given organisation 4.3 Evaluate the contribution of SMART targets to the achievement of strategy implementation in a given organisation. Answer: Introduction As a member of the Strategic Management Team (SMT) of Tesco PLC, a report is framed for the company to remain competitive. The aim of this report is to help Tesco address the consumer needs and demands with the changing preferences and competitiveness in the future. Strategic planning is beneficial for any organization. Assessment of Business Strategy Business Mission and Vision Tesco is a global grocery and merchandise retailer headquartered in UK. The business is spread in more than 11 countries with over 480,000 colleagues (Tesco plc 2016). The mission statement of Tesco is to create value for its customers and earn their lifetime loyalty. The vision is to be most highly valued by the customers, communities, loyal and committed staff and shareholders. Tesco also aims to be a growth company through its modern and innovative skills (Tarata 2013). Goals and objectives Tesco has a few goals and objectives such as: To become a healthy place to work for its employees. It targets to be the champion for its customers by providing them a better quality of life. The company aims to understand its customers, earn respect for their values, recognize customers, upgrade existing stores and increase profitability (Tesco plc 2016). Core competencies Firstly, Tesco is renowned for its customer focused strategy. Tesco has a club card reward scheme that helps in understanding the customers well. Tesco provides quality products at a low price. Secondly, Tesco has efficient supply chain systems through online as well as retail stores. Thirdly, Tesco has high values and commitment towards the employees. It establishes strong leadership in the food retailing industry (Zhao 2014). Analysis of factors Various factors must be considered by Tesco to formulate a suitable strategic plan: Engagement: All levels of the employees in the organization needs to be engaged for additional input and increasing the success rate of strategy execution. Communication: The top level management must communicate the strategic plans and receive their views by the way of meetings or feedback surveys. Innovation: It is necessary to initiate innovative processes to reshape the organization. Project Management: The strategy needs to be identified and prioritized so that efficient execution of the strategy can be done. Culture: The culture of Tesco is the common beliefs, attitudes and behaviours of the employees. If the employees consider the change to be in their favour, they will support change and growth can occur easily (Beringer, Jonas and Kock 2013). Evaluation of effectiveness of techniques Various factors would affect the effectiveness of techniques when developing strategic business plans of Tesco. According to the current strategic business plan of Tesco, different market strategies would be required to satisfy different market segments. Significant market research in the context of consumer behaviour, competitive environment and buying pattern needs to be analysed. There is a requirement of a large amount of finance and personnel. For establishing value addition centre for Tesco, various difficulties would be faced. The personnel need to be continuously trained so that efficient operations run in Tesco (East, Wright and Vanhuele 2013). Formulation of New Strategy Enclosed Presentation Approaches to Strategy Evaluation and Selection Analysis of strategies Various strategies are analysed in this section as alternative options for Tesco. The best strategies out of every approach are selected. Market entry- There are various possible market entry strategies such as a merger, strategic alliance, franchising, licensing, organic growth or acquisition. Out of the available options, Tesco can opt for franchising and strategic alliances. These strategies would help Tesco in creating a presence in foreign markets. Through the strategic alliance, Tesco could gain knowledge of overseas market (Lowe, George and Alexy 2012). Substantive growth- There are various possible strategies for substantive growth such as vertical integration, horizontal integration, related diversification or unrelated diversification. Out of the above-stated strategies, Tesco may adopt vertical integration as Tesco has its logistics. Tesco can consider developing their packaged brand (Gabrielsson and Gabrielsson 2013). Limited Growth- There are four main strategies for limited growth- market development, market penetration, innovation and product development. Tesco may consider adopting for product development and innovation strategy. Tesco may consider developing new product line for lifestyle products as it is used by consumers every day. As innovation strategy, Tesco needs to adopt technology that may reduce the requirement of personnel at retail stores (Bhatnagar, Nikolaeva and Ghose 2014). Retrenchment- There are three retrenchment strategies such as divestment, turnaround or and liquidation. Tesco may adopt these strategies for slashing cost and enhancing economies of scale (Gabrielsson and Gabrielsson 2013). Justification of Strategy Depending upon the new strategy for developing Tesco a strong brand globally, Tesco may consider getting into urban markets as small size stores. Establishing stores as small size, new market segments can be targeted that do not exist in Tesco portfolio yet. Strategic alliances can be formed through local retailers for enhancing their presence with small size areas. Tesco must aim to understand the feedback from consumers in the newly opened small size urban stores. If there is a positive response from consumers, Tesco may adopt such model in the long run. There is a need to develop new goals with the small size urban store concept while strengthening brand image. These strategies would increase sales revenue and profitability at the same time (Gabrielsson and Gabrielsson 2013). Implementation of Chosen Strategy Based on the suitable strategy selected in the previous sections, a detailed discussion is made on the roles and responsibilities. Assessment of roles and responsibilities The management comprising of Board of Directors play a primary role as they allocate roles and responsibilities. The market researcher must focus on meeting newly defined strategies. The manager is responsible for looking at the various strategic groups in Tesco. The key demands of customers must be identified. The market researcher must research specific demands or trends prevalent in the market and report to the manager. The manager is responsible for assigning goals and targets to the employees based on this research. There are various departments at Tesco responsible for managing operations, finance, human resources and marketing. The finance controller is responsible for making a budget for the defined market entry or development strategies. The marketing department must devise innovative marketing campaigns for gaining the attention of consumers and increasing sales revenue (Meredith and Mantel 2012). Analysis of estimated resource requirements Tesco needs to make an estimate of resources for implementing the new strategy. Cost evaluation would help in assessing gains and losses for execution or implementation of strategy. Large amounts of financial, human and tangible resources are required for implementation of strategy. The financial resources would be required in form of cash, equity and bank loans. These financial resources would be used to meet direct costs for personnel and physical resources. The human resources would be required for functioning and expanding the store locations. The human resource can be outsourced in the local areas for the establishment of small size stores. The physical resources include IT system, furniture and fixtures, building. The finance would also be used to pay staffing, electricity, property tax, maintenance, telephone, stationery and other costs required for the new strategy (Armstrong and Armstrong 2011). Contribution of SMART targets The SMART targets of Tesco are stated as under: To develop more than 700 stores within the next year for expansion in market To improve brand reputation with integrated marketing communications within six months The timescale has been framed for Tesco to achieve targets as under: Quarter 1- Tesco must bring its new strategy for implementation and frame the potential outcomes. The concept of small size stores can be assessed through consumer feedback thereby improving brand reputation at the same time. Quarter 2- Tesco needs to develop its products through innovation and penetrate into new markets. The success of stores can be monitored through the difference in sales revenue (Evans and Mason 2015). Quarter 3- Tesco needs to assess the expected and actual outcomes of the newly implemented strategy. The gap in expectations and outcomes must be recognized. Quarter 4- Tesco must conduct training sessions for its employees to meet the organizational goals, objectives and mission. Quarter 5- Finally, the strategies that need to be modified based on the year result must be conducted at this stage (Evans and Mason 2015). Conclusion The above paper explores the business strategy for Tesco to maintain its competitive position in the market. The importance of strategic planning through identification of mission, goals and objectives are determined. The importance of stakeholders is further identified. The new target of Tesco is recognized as development of small size urban stores to attract new consumer market segment. References Armstrong, M. and Armstrong, M., 2011.Armstrong's handbook of strategic human resource management. London: Kogan Page. BBC News, 2012.Tesco unveils profits rise and 1bn investment in UK - BBC News. [online] Available at: https://www.bbc.com/news/business-17752194 [Accessed 3 Mar. 2016]. 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