Strategic Planning Assignment Sample

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Introduction: Strategic Planning

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Strategic planning is a procedure in which an organization's leader presents their vision regarding the future plans upon organizational goals and objectives. Strategic planning involves establishing the process or sequences in which the goals and objectives should be realized by that an organization can reach its desired vision (Brysonet. al. 2018).

Strategic planning signifies mid-term to long-term goals for an organization with a life of three to five years. Strategic planning is so different than business planning which mainly focuses on a short-term strategic goal. The organization usually performs strategic planning periodically. Every organization usually conducts strategic planning periodically basics for considering the effect of changing business environment, industry and regulatory conditions (Bryson, 2018). A strategic plan is flexible as it can be updated and revised when required and also when there is a change in external environmental activities.

Understanding strategic planning with effects on internal and external planning reports is considering Tesco as a case company. Tesco Plc is a popular retailer company of common general products. Company’s headquarters are in Welwyn Garden City, Greater London, the UK (Aielloet. al. 2020). The company runs business by multi outlet and also on online platforms. Tesco focuses on operating stores in several set-ups distinguished by the range and size of products sold in stores. Tesco offers a wide arrange of food products and also a product that is not related to food like household goods, grooming, cosmetics, consumer electronics, clothing, pets products, bakery products, etc. The company also deals in providing consultancy services, insurance services, and retail banking through Tesco Banks established the UK. Tesco is dealing across the UK and European countries.

External and internal environmental factors which impact company’s strategy

External factors

External factors are the factors that are outside the business which have a huge impact on the working of the business and its success. The impacts of external factors are of both kinds positive as well as negative. The business has zero control over the external factors, all it can do is plan strategies to face them and make decisions accordingly (Muscaluet. al. 2106). For measuring the effect of external factors organization uses PESTEL analysis which comprises political, and economic, Social, technological, environmental and Legal external factors which have an impact on organization are as follows:

• Markets (customers):socio-cultural considerations and demographic considerations, like who the customers are and what are their needs, and what they think and believe are serious factors for seizing market share for every organization. Considering the needs, pReferences and demands of the target markets is very important for providing customers desired products and services (Pietrzakand Wnuk-Pel, 2015).
• Competition: the major external factors that affect the organization the most are its competitors. Getting information about the competition, what quality they are producing, what is their price range, and promotional strategies are important factors that affect the organization. The organization needs to make sure of the feasibility of entering the market.
• Technology:Technological is the most important external factor which directly routes towards the success of the organization. The manufacturing process of the product needs to have usage of new technologies which are helpful in efficient production. Organizations needs to focus on disruptive technology filling the needs that are required.
• Supplier markets:The suppliers have power by which they control all the necessary and required efforts in an organization's operational planning and procedure. This external factor affects the operational management of the organization as supplies of material which are essential for production. These suppliers have the power to raise the prices of the product by controlling the supplies of the material. 
• Labour markets:it is very important to hire a skilled and talented workforce which helps in increasing productivity with their working skills. But gaining key talent and satisfying employees is very critical for attaining success of the organization. These external factors require a detailed understanding of labour unions and laws in areas of operation (Ombaka al. 2015)
• The economy: Economical factors affect the most; these factors are uncontrollable for the organization. Economy recessions and inflations change expenditure habits drastically. While most organizations suffer during the economic recession period, some organizations thrive. Every organization needs to understand which economic factors offer opportunities and which are threats.

Internal factors

The internal factors of an organization comprise factors that are present within the organization and which impact the success and goals of the organization (Bilomistniyet. al. 2017). Organization has full control over these factors, so an organization needs to make a strategy for managing these factors.

• Organizational and operational procedures – this is part of internal factors that deal with the administrative procedures and operational process. Disorganized and inaccurate record-keeping of data and information affects the organization's end goals. If an organization is not able to overcome these factors then the customers may picture the organization as unreliable.
• Strategic risks – the risk affects the firm's ability to achieve its goals, these are due to the effects of changes in customer demand or technological change in the market (Zinovieva al. 2016) Strategic risk includes internal factors which poses threats of creating poor image in front of customers from which they may think that product is outdated and dull.
• Innovation – every organization requires innovation to compete in market with its competitors. It is very important to be one step ahead in advance of competitors. It can be done through promotion activities, staff training. Acceptance of new technology is the best method to keep up with technological progressions and also control the internal factors that affect the organization. A lack of innovation might reflect a huge risk in every budding business; the organizational environment will be dull, irrelevant, and motionless.
• Financial risk – the financial risk in the organization is full depended on a financial structure which is an internal factor controllable by the proper strategic planning. It is also dependent on financial systems and business dealings that affect the organization.
• Employee risks – employees are critical factors as the success of the business is associated with the employees. Employees can affect the organization in many ways like strikes, unskilled labour hired, etc (Stoyanova and Angelova, 2018).

Critically review of the organization's strategic plan

Tesco is the prime supermarket in the UK, started in 1929 by opening its first store in Edgware, North London. Tesco's strategic planning is to focus on increasing its business by focusing on the four major parts –making UK core business strong, non-profit, providing international facilities, and retailing services by keeping focus on the improvements to know what they need to offer for consumers. The main focus for strategic planning of Tesco is as follows:

• The company tries to make consumer shopping tours very easy.
• The company is focusing on trying to reduce prices to help those people who are not financially strong and cannot spend more (Lon?ar, 2017).
• The main focus is on providing a good facility to all stores either large or small.
• Offering customers a good saving benefits and encourages buying more.

The main elements of Tesco’s strategic plan are as follows:

• Demographic Changes–according to the strategic planning Tesco has divided its stores in the UK into five different formats, which are further differentiated by size and range of products offered.
• Brand image strategy – Tesco uses a brand image strategy in which the company sells its good quality and cheap price products by using its brand . This is a very good strategy for building brand image because people know Tesco with its product.
• Globalization Strategy – Tesco's good performance in the international market helps it to enter in US market also (Hübneret. al. 2016). Company's strategic plan is to open 100 new fresh and convenient stores in California, Nevada, and Arizona. It was a very challenging and costly process for all well-settled companies in the international market.

Critical assessment of the process used by the organization to determine the strategy

For determining the strategy planning on making decisions regarding goals and objectives Tesco is using SWOT analysis which includes all the points to be considered during strategic planning. SWOT analysis is very necessary because the company is looking forward to planning on reaching the desired goals. A company needs to ponder what the company is going to do and what is needed for that. A goal of a company is impossible to be achieved without preparing a strategic plan. SWOT analysis assists to test every internal and external factors of organization. SWOT analysis of company can help in finding the strength of Tesco. This analysis focuses on all the factors in the organization.

Strength

Strength refers to the positive things of an organization; it helps to compete with the competitors of the organization. Company’s strength might attract customers (Sharmaa et. al. 2020). This strength provides a good profit and also helps the company to retain for a longer time in market. Tesco has a very upright strength which brings the company in a decent position in the market. The strength of Tesco are:-

• A massive parking space
• Gives good offer
• Cheap price product
• Good Infrastructure
• Graceful to accusable
• Online Shopping available
• Available all over
• Club card system
• Self Check out machines

Weakness

Things that competitors have but the Tesco doesn't and is not able to use, which can be a weakness and the factors that affect negatively to business. Therefore, an organization needs to find out its weakness and work on them to achieve goals and to run a smooth business. Tesco’s key weaknesses are:

• the use of technology
• Unskilled Staff
• Poor Infrastructure

Opportunities

SWOT analysis provides a company to find out the opportunities within the market as well as in the organization. It provides a clarified vision of the company's particular state (Moura, 2021). So it is very easy to plan on making strategies regarding decision-making for the achievement of the desired goal for the company the main opportunities for Tesco are as follows:

• Expansion in various regions of overseas countries like the US provides great opportunities to expand the company’s business
• Globalization provides all the opportunities by covering all untouched areas of the world.
• Online platforms are the best opportunity for Tesco as the company can sell its products everywhere.

Threats

Threats refer to the factors that can cause a problem for the company. Threats of the Company Tesco include:

• competition,
• leakage of information,
• Mismanagement,
• less production than demanded in the market is also bug threat for the company,
• and fluctuation in the exchange rate is also a threat for the company.

Recommendation

Action plan for the organization on basis of changes in the internal and external environment

According to the above information mentioned the report recommends some factors on which Tesco needs to focus before strategic planning and also for better results. The factors or key points are as follows:

• Strategy Management: – it is very important to make strategic management part of strategic planning (Lyngso, 2017). It refers to that company must appoint a manager who should take responsibility for the whole planning and further activities related to the project. The manager and their team need to keep eye on every part of the planning and execution.
• Communication- Communication plays very important role in strategic planning because it is very essential to update every member of the management team about the planning. Communication can be verbal or virtual by sending an email.
• Frequency in the meeting –refers to the mix of communication and accountability, the manager of the project should organize meetings including all the members of the project, this meeting should be organized frequently may be monthly base or quarterly base (Alhawamdeh and Alsmairat, 2019).It will help in finding out all the problems at a small level and also it will help in achieving the goal in a given time.

The action plan recommended for Tesco is as follows:

SMART action plan

• Specific- it was quite clear that the company has seen a minor increase in the staff accident rate in the distribution department. This is what company needs to focus on handling the situation and be confident regarding its management techniques. It will help the company about what its exact target is and work on improving it.
• Measurable–a company needs to measure its ups and down, which will further help the company to focus on weak sections. The company should measure the information by collecting data and maybe by survey methods (Time, 2021).
• Agreed - Tesco needs to make sure that all the employees of the company are aware of the aims and objectives of the company. This information should also involve what Tesco is doing to achieve its aim, what kind of policies and plans are implemented, and whether all employees are agreed on those planning.
• Realistic - Tesco needs to know what the real aim is. The increase in accidents and chaos between customer and staff in stores is increasing because of lack of information and unorganised inventory spread in the store. So Tesco needs to realize to reduce injury in the distribution sector by providing extra precautions at the workplace.
• Time -Tesco needs to set a timeline under which they need to complete a particular task or achieve a particular aim.

Conclusion

This report concluded the reputation of strategic planning in an organization. Strategic planning is very important in every business organization whether small or big, national or international. It is quite difficult to run a business with lack of a plan, plan provides a mission and vision for future objectives and aims to be achieved.

The case company of the report Tesco’s strategic plan help to understand the importance of strategic planning. The company's strategic plan focuses on globalization and the expansion of its business in the U.S. and other countries. The report also recommends some important points which the company should involve in its strategy plan since a single mistake can results in delay in work of the company. The best method to do a business includes dividing work into small goals which help in problem-solving for the company.

Reference

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