ENTP40075 Management Skills

Introduction

Strategic management helps in achieving the goals and objectives of the company by encompassing effective planning, analyzing, and monitoring. The business environment is changing frequently so several factors affect the success of the company (Majumdar, et al., 2020). The decision-making process of the company gets impacted by the different factors of the external environment and therefore, this report outlines those significant external factors in contexts with Tesco company.

Introduction of the company and its industry

Tesco Company deals in the retailing industry and was established in the year 19191 by Jack Cohen. The company is the third-largest retailer company in the world in terms of gross revenues. Ken Murphy is the chief executive officer of the company.  The competition in the supermarket industry is increasing which is affecting the profitability of the companies.

Critical discourse on the strategic external environment that the company faces

Brexit has brought the recession in the economy and it has majorly impacted UK companies. The company Tesco has a major impact on Brexit as the investment in the economy has reduced and there was a shortage of skilled workers which has, in turn, affected the growth of the company (Schnack, et al., 2019).

The major impact of Brexit has been seen on the trade association as the European Free Trade Association is not the part of the UK but they can participate in the customs unions. In the economy, the GDP growth of the country UK has declined with Brexit consequences. Tesco company deals in grocery supermarkets so 79% of the food is imported from the EU, 9% via bilateral agreements, and 12% with other things (Chang, 2018).

The productivity of the employees gets lower down due to the Brexit and even the opportunities for employment in the country have reduced. This relates to one of the major external factors which have affected the decision-making process of the company. The current situation of the company has also get impacted by EU treaties, custom union, EFTA, etc. The aggregate demand of the company Tesco gets reduced due to the Brexit which has affected the economy of the UK.

Covid-19

Covid-19 is one of the major external factors which has not only impacted global health but has created many crises in the economy. The lives of the people are at risk during the pandemic so several challenges were faced by communities, families, etc. Being the CEO, it is important to take care of the employees as well as the customers of the company so the by understanding the situation of Covid-19, the senior authority has acted promptly (Xie and Allen, 2013).

As there were several restrictions on roaming outside during the pandemic so the companies have faced the major issue of declining their revenues which has also impacted the profitability of the company (Majumdar, et al., 2020). Covid-19 has created many uncertainties in the economic environment as well as affected the public health measures, increases mortality rates, etc.

About Tesco, the Covid-19 pandemic factor has created a positive impact as the demand for food and grocery has increased which results in an increase in the sales and profitability of the company. People are making food at home mostly and re-avoiding the food outside and this makes the company indirectly increase its revenues (Osborn, et al., 2020). The CEO of the company has decided that during the crisis they will serve the grocery products online so that their revenues can be increased and the customers' demand can be fulfilled more conveniently.

Technology

Technology is changing rapidly so it has both positive as well as negative impacts on the company Tesco. Due to progress in terms of technological development, the company has started selling its products and services online which helps in dealing with the Covid-19 situations. Although technology is changing rapidly so the company has to make a huge investment that will impact the company's future investment and retained earnings (Baldwin and Tomiura, 2020). The CEO of the Tesco Company has started investing in the adoption of the new technologies so that their business process and operations can be done more efficiently.

In addition, the world has become more digitalized and so this technology factor helps in engaging the food shopper in the retail facilities. The CEO of the company has also decided to further invest in technology adoption as it helps in enhancing the customer experience with further improvement in effective supply chain and logistics (Moschieri and Blake, 2019). More specifically, adopting the same will help Tesco to track the inventory properly and even record the data simply and more effectively.

Technology has a great impact on the supermarket and the grocery store as it with the help of CCTV cameras the company can review and monitor their customers and employees as well. Technology has made the operations and the functions of Tesco company easier as with the technology the company can record all the data in a computerized manner instead of the manual work.

Conclusion

From the above analysis, it has been evaluated that the strategic external environment is dynamic and uncertain so it has a great impact on the company. The major current factors which have affected the company are Brexit, Covid-19, and the technological progress which has been explained in this report. The company Tesco should use the tools of strategic management so that an effective decision in the company can be taken and the problems which the company faces can be encountered and can be effectively dealt with.

References

Baldwin, R. and Tomiura, E., 2020. Thinking ahead about the trade impact of COVID-19. Economics in the Time of COVID-19, 59.

Bloom, N., Bunn, P., Chen, S., Mizen, P., Smietanka, P., Thwaites, G. and Young, G., 2018. Brexit and uncertainty: insights from the Decision Maker Panel. Fiscal Studies, 39(4), pp.555-580.

Chang, W.W., 2018. Brexit and its economic consequences. The world economy, 41(9), pp.2349-2373.

Majumdar, A., Shaw, M. and Sinha, S.K., 2020. COVID-19 debunks the myth of socially sustainable supply chain: A case of the clothing industry in South Asian countries. Sustainable Production and Consumption, 24, pp.150-155.

Moschieri, C. and Blake, D.J., 2019. The organizational implications of Brexit. Journal of Organization Design, 8(1), pp.1-9.

Osborn, M., Lucas, S., Stewart, R., Swift, B. and Youd, E., 2020. Briefing on COVID-19. Autopsy practice relating to possible cases of COVID-19 (2019-nCov, novel coronavirus from China 2019/2020).

Schnack, A., Wright, M.J. and Holdershaw, J.L., 2019. Immersive virtual reality technology in a three-dimensional virtual simulated store: Investigating telepresence and usability. Food Research International, 117, pp.40-49.

Xie, Y. and Allen, C., 2013. Information technologies in retail supply chains: a comparison of Tesco and Asda. International Journal of Business Performance and Supply Chain Modelling, 5(1), pp.46-62.

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