Tesco PLC: Fresh & Easy in the United States SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
Sales & Marketing
Strategy / MBA Resources
Case Study SWOT Analysis Solution
Case Study Description of Tesco PLC: Fresh & Easy in the United States
To maximize their effectiveness, color cases should be printed in color.Tesco, the world's third largest retailer, is facing problems with its launch of a new retail chain in the U.S.A.
Swot Analysis of "Tesco PLC: Fresh & Easy in the United States" written by John A. Quelch includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Color.tesco U.s.a facing as an external strategic factors. Some of the topics covered in Tesco PLC: Fresh & Easy in the United States case study are - Strategic Management Strategies, International business and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Tesco PLC: Fresh & Easy in the United States casestudy better are - – wage bills are increasing, geopolitical disruptions, digital marketing is dominated by two big players Facebook and Google, talent flight as more people leaving formal jobs, banking and financial system is disrupted by Bitcoin and other crypto currencies, increasing household debt because of falling income levels, increasing commodity prices,
increasing energy prices, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Tesco PLC: Fresh & Easy in the United States
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Tesco PLC: Fresh & Easy in the United States case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Color.tesco U.s.a, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Color.tesco U.s.a operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Tesco PLC: Fresh & Easy in the United States can be done for the following purposes –
1. Strategic planning using facts provided in Tesco PLC: Fresh & Easy in the United States case study
2. Improving business portfolio management of Color.tesco U.s.a
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Color.tesco U.s.a
Strengths Tesco PLC: Fresh & Easy in the United States | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Color.tesco U.s.a in Tesco PLC: Fresh & Easy in the United States Harvard Business Review case study are -
Innovation driven organization
– Color.tesco U.s.a is one of the most innovative firm in sector. Manager in Tesco PLC: Fresh & Easy in the United States Harvard Business Review case study can use Clayton Christensen Disruptive Innovation strategies to further increase the scale of innovtions in the organization.
Strong track record of project management
– Color.tesco U.s.a is known for sticking to its project targets. This enables the firm to manage – time, project costs, and have sustainable margins on the projects.
High switching costs
– The high switching costs that Color.tesco U.s.a has built up over years in its products and services combo offer has resulted in high retention of customers, lower marketing costs, and greater ability of the firm to focus on its customers.
Cross disciplinary teams
– Horizontal connected teams at the Color.tesco U.s.a are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Diverse revenue streams
– Color.tesco U.s.a is present in almost all the verticals within the industry. This has provided firm in Tesco PLC: Fresh & Easy in the United States case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Organizational Resilience of Color.tesco U.s.a
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Color.tesco U.s.a does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Training and development
– Color.tesco U.s.a has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Tesco PLC: Fresh & Easy in the United States Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Analytics focus
– Color.tesco U.s.a is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by John A. Quelch can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Effective Research and Development (R&D)
– Color.tesco U.s.a has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Tesco PLC: Fresh & Easy in the United States - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Low bargaining power of suppliers
– Suppliers of Color.tesco U.s.a in the sector have low bargaining power. Tesco PLC: Fresh & Easy in the United States has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Color.tesco U.s.a to manage not only supply disruptions but also source products at highly competitive prices.
Highly skilled collaborators
– Color.tesco U.s.a has highly efficient outsourcing and offshoring strategy. It has resulted in greater operational flexibility and bringing down the costs in highly price sensitive segment. Secondly the value chain collaborators of the firm in Tesco PLC: Fresh & Easy in the United States HBR case study have helped the firm to develop new products and bring them quickly to the marketplace.
Operational resilience
– The operational resilience strategy in the Tesco PLC: Fresh & Easy in the United States Harvard Business Review case study comprises – understanding the underlying the factors in the industry, building diversified operations across different geographies so that disruption in one part of the world doesn’t impact the overall performance of the firm, and integrating the various business operations and processes through its digital transformation drive.
Weaknesses Tesco PLC: Fresh & Easy in the United States | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Tesco PLC: Fresh & Easy in the United States are -
Interest costs
– Compare to the competition, Color.tesco U.s.a has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
High dependence on star products
– The top 2 products and services of the firm as mentioned in the Tesco PLC: Fresh & Easy in the United States HBR case study still accounts for major business revenue. This dependence on star products in has resulted into insufficient focus on developing new products, even though Color.tesco U.s.a has relatively successful track record of launching new products.
Slow to strategic competitive environment developments
– As Tesco PLC: Fresh & Easy in the United States HBR case study mentions - Color.tesco U.s.a takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Compensation and incentives
– The revenue per employee as mentioned in the HBR case study Tesco PLC: Fresh & Easy in the United States, is just above the industry average. Color.tesco U.s.a needs to redesign the compensation structure and incentives to increase the revenue per employees. Some of the steps that it can take are – hiring more specialists on project basis, etc.
Aligning sales with marketing
– It come across in the case study Tesco PLC: Fresh & Easy in the United States that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Tesco PLC: Fresh & Easy in the United States can leverage the sales team experience to cultivate customer relationships as Color.tesco U.s.a is planning to shift buying processes online.
Skills based hiring
– The stress on hiring functional specialists at Color.tesco U.s.a has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Products dominated business model
– Even though Color.tesco U.s.a has some of the most successful products in the industry, this business model has made each new product launch extremely critical for continuous financial growth of the organization. firm in the HBR case study - Tesco PLC: Fresh & Easy in the United States should strive to include more intangible value offerings along with its core products and services.
Low market penetration in new markets
– Outside its home market of Color.tesco U.s.a, firm in the HBR case study Tesco PLC: Fresh & Easy in the United States needs to spend more promotional, marketing, and advertising efforts to penetrate international markets.
Capital Spending Reduction
– Even during the low interest decade, Color.tesco U.s.a has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High operating costs
– Compare to the competitors, firm in the HBR case study Tesco PLC: Fresh & Easy in the United States has high operating costs in the. This can be harder to sustain given the new emerging competition from nimble players who are using technology to attract Color.tesco U.s.a 's lucrative customers.
High cash cycle compare to competitors
Color.tesco U.s.a has a high cash cycle compare to other players in the industry. It needs to shorten the cash cycle by 12% to be more competitive in the marketplace, reduce inventory costs, and be more profitable.
Opportunities Tesco PLC: Fresh & Easy in the United States | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Tesco PLC: Fresh & Easy in the United States are -
Low interest rates
– Even though inflation is raising its head in most developed economies, Color.tesco U.s.a can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Manufacturing automation
– Color.tesco U.s.a can use the latest technology developments to improve its manufacturing and designing process in Sales & Marketing segment. It can use CAD and 3D printing to build a quick prototype and pilot testing products. It can leverage automation using machine learning and artificial intelligence to do faster production at lowers costs, and it can leverage the growth in satellite and tracking technologies to improve inventory management, transportation, and shipping.
Finding new ways to collaborate
– Covid-19 has not only transformed business models of companies in Sales & Marketing industry, but it has also influenced the consumer preferences. Color.tesco U.s.a can tie-up with other value chain partners to explore new opportunities regarding meeting customer demands and building a rewarding and engaging relationship.
Using analytics as competitive advantage
– Color.tesco U.s.a has spent a significant amount of money and effort to integrate analytics and machine learning into its operations in the sector. This continuous investment in analytics has enabled, as illustrated in the Harvard case study Tesco PLC: Fresh & Easy in the United States - to build a competitive advantage using analytics. The analytics driven competitive advantage can help Color.tesco U.s.a to build faster Go To Market strategies, better consumer insights, developing relevant product features, and building a highly efficient supply chain.
Buying journey improvements
– Color.tesco U.s.a can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Tesco PLC: Fresh & Easy in the United States suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Color.tesco U.s.a in the consumer business. Now Color.tesco U.s.a can target international markets with far fewer capital restrictions requirements than the existing system.
Creating value in data economy
– The success of analytics program of Color.tesco U.s.a has opened avenues for new revenue streams for the organization in the industry. This can help Color.tesco U.s.a to build a more holistic ecosystem as suggested in the Tesco PLC: Fresh & Easy in the United States case study. Color.tesco U.s.a can build new products and services such as - data insight services, data privacy related products, data based consulting services, etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Color.tesco U.s.a is facing challenges because of the dominance of functional experts in the organization. Tesco PLC: Fresh & Easy in the United States case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Leveraging digital technologies
– Color.tesco U.s.a can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Identify volunteer opportunities
– Covid-19 has impacted working population in two ways – it has led to people soul searching about their professional choices, resulting in mass resignation. Secondly it has encouraged people to do things that they are passionate about. This has opened opportunities for businesses to build volunteer oriented socially driven projects. Color.tesco U.s.a can explore opportunities that can attract volunteers and are consistent with its mission and vision.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Color.tesco U.s.a in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Loyalty marketing
– Color.tesco U.s.a has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Increase in government spending
– As the United States and other governments are increasing social spending and infrastructure spending to build economies post Covid-19, Color.tesco U.s.a can use these opportunities to build new business models that can help the communities that Color.tesco U.s.a operates in. Secondly it can use opportunities from government spending in Sales & Marketing sector.
Threats Tesco PLC: Fresh & Easy in the United States External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Tesco PLC: Fresh & Easy in the United States are -
Technology disruption because of hacks, piracy etc
– The colonial pipeline illustrated, how vulnerable modern organization are to international hackers, miscreants, and disruptors. The cyber security interruption, data leaks, etc can seriously jeopardize the future growth of the organization.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Color.tesco U.s.a in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
Regulatory challenges
– Color.tesco U.s.a needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
New competition
– After the dotcom bust of 2001, financial crisis of 2008-09, the business formation in US economy had declined. But in 2020 alone, there are more than 1.5 million new business applications in United States. This can lead to greater competition for Color.tesco U.s.a in the Sales & Marketing sector and impact the bottomline of the organization.
Shortening product life cycle
– it is one of the major threat that Color.tesco U.s.a is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Instability in the European markets
– European Union markets are facing three big challenges post Covid – expanded balance sheets, Brexit related business disruption, and aggressive Russia looking to distract the existing security mechanism. Color.tesco U.s.a will face different problems in different parts of Europe. For example it will face inflationary pressures in UK, France, and Germany, balance sheet expansion and demand challenges in Southern European countries, and geopolitical instability in the Eastern Europe.
Learning curve for new practices
– As the technology based on artificial intelligence and machine learning platform is getting complex, as highlighted in case study Tesco PLC: Fresh & Easy in the United States, Color.tesco U.s.a may face longer learning curve for training and development of existing employees. This can open space for more nimble competitors in the field of Sales & Marketing .
Technology acceleration in Forth Industrial Revolution
– Color.tesco U.s.a has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Color.tesco U.s.a needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Increasing wage structure of Color.tesco U.s.a
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Color.tesco U.s.a.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Color.tesco U.s.a.
Backlash against dominant players
– US Congress and other legislative arms of the government are getting tough on big business especially technology companies. The digital arm of Color.tesco U.s.a business can come under increasing regulations regarding data privacy, data security, etc.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Color.tesco U.s.a can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Color.tesco U.s.a needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Weighted SWOT Analysis of Tesco PLC: Fresh & Easy in the United States Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Tesco PLC: Fresh & Easy in the United States needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Tesco PLC: Fresh & Easy in the United States is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Tesco PLC: Fresh & Easy in the United States is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Tesco PLC: Fresh & Easy in the United States is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Color.tesco U.s.a needs to make to build a sustainable competitive advantage.