Tesco and its Competitiveness
According to Mentis (2013, p. 3), Tesco’s core value is to generate for its customers and earn their life loyalty through monitoring the main performance indicators. Today, Tesco’s strategic strength emanates from its hybrid position on the strategic outlook. The company offers a wide range of branded and own brand products in clean, modern and efficient supermarkets with ample parking and facilities for children and yet appears to offer lower prices (Angwin, Cummings and Smith, 2011, p. 3). The company underpins the low prices with low costs which it enjoys from its buying power.
According to the resource-based approach, an ...view middle of the document...
85). In relation to the resource based models, Tesco distinguishes itself from the competitors by strategically positioning itself (Jones & Tilley 2007, p. 124).
Barney views the research objectives of the resource-based model of competitive advantage as being able to tie a model that facilitates the rigorous analysis of internal organizational strengths and weaknesses with an external analysis. The resource based view perceives form resources to include all capabilities, knowledge, processes, assets, attributes and information that enables it to attain its effectiveness and efficiency (Naresh & Malhotra 2004, p. 229). According to Barney’s perspective, a firm’s ability to attain and maintain a profitable market position depends on its ability to gain and defend advantageous positions in underlying resources. Further, Barney lays out four important requirements for a resource to be a source of sustainable advantage; it must be valuable, imperfectly imitable, rare among a firm’s current and potential competitors, non-substitutable and characterized by the absence of strategic equivalent substitutes (Naresh & Malhotra 2004, p. 229).
According to Peteraf’s model, a competitive advantage for a firm exists if the following conditions are met. The firm possesses different resources (heterogeneity), resources are not substitutable or imitable (ex-post limits to competition), resources are not tradable (imperfect mobility) and the resource gain a competitive advantage before competition (Klug 2006, p. 20).
In view of the resource based models, though organizations may be identical, they have different capabilities (Singh 2008, 6). Whereas Sainsbury, Tesco and Asda compete in the same environment for instance, Tesco has proved to be a superior performer. It is therefore true that organizations are not distinguished by the environment they operate in, but their internal strategic capabilities that give them a competitive advantage. The idea underlying the concept of generic strategies is that competitive advantage is at the heart of any strategy and achieving competitive advantage expects a firm to make a choice (Naresh & Malhotra 2004, p. 229). A firm must therefore make a choice about the type of competitive advantage it seeks to attain and the scope within which it will attain in order to accomplish a sustainable competitive advantage.
Strategic capabilities can be defined as the competencies and resources that are needed by an organization to prosper and survive (Barnes 2008, p. 55). While...