Tesco Case Study

Résumé du document

To understand the essay, it will be useful to consider the environment of the national market. Indeed, it will be helpful to understand why environmental influences are particularly significant in the future of a company and its competitors. So, 'a dynamic PESTE analysis can be done in order to succeed in the new market'. We can retain that Tesco has to take into account the environmental protection laws which are very strict, and also the fact that local authorities that regulate the land usage planning. Then, Tesco has to consider the inflation rate interests and personal disposal income, as these factors directly affect its sales. Furthermore, the lifestyle of the population is an important factor. As the population lifestyle is changing, and more women are employed, there is little time for shoping. Delivery services, and tesco.com offer good solutions to solve the problem of 'poor time/rich money'. The essay discusses about the electronic method of sales, which are increasing day by day. Finally, it is important not to forget the environmental factors which affect a lot Tesco's business. For example, the company uses a lot of energy (fuel, water), and has to spare the cost of energy by recycling the energy.

Extraits

[...] Tesco took the initiative to use its own trucks to collect goods from suppliers. This is show the importance that Tesco gives to control the logistics. Operations Each day, the purpose of Tesco is to satisfy its customers so as to improve day by day its customer service. Employees can advice them and answer their questions. Managers care about the cleaning of the shop especially toilets. It is very important to keep a clean shop if Tesco wants to have a good reputation and a good image. [...]

[...] This has contributed to Tesco's success because managers are pushed to always work better and they are more motivated in the organisation. The Tesco brand also has contributed to its success. It has a good reputation and good image (strong brand awareness). Tesco offers a wide range of products of good quality for low prices (Tesco value). Its core purpose is based on creating value for their customers to earn their life time loyalty. For example, they are doing a customer listening with “every little help” and they offer outstanding customer service, every customer is offered help at the checkout. [...]

[...] (Subsidiaries or joint venture, see value system). Industry life cycle The mass retailing industry has already started its maturity phase whereas the airline industry is at the end of the growth phase Were Tesco wise to enter internet retailing, why, why not? Looking at the PESTEL analysis shows that the lifestyle is changing. More and more women have jobs and they don't have time to shop in the stores. In general, these group of people constitute a part of middle class or upper middle class and they are within the “time poor/money rich” category. [...]

[...] Tesco offers a range of both online personal finance services. Tesco.com supplies a complete delivery for customers who can't shop at the supermarket and prefer to stay at home. Appendix SWOT analysis of Tesco Core competences Key success factors Appendix Mass retailing life cycle Appendix strategic group analysis Relative price High Low Appendix Financial analysis (2002) Appendix Cultural web for Tesco Stories “pile it high and sell it cheap” Tesco rises profit record Successful recovery: we were the last, we now are the best First private UK employer TWIST program Rituals and routines Communication style: direct and informal (the weekly mail to the top managers) Sharing (customers opinions, employee observation, between departments) Pro activeness is encouraged, dynamism Communication is the key to success for the company Store managers regularly visit distribution centres ‘Fill-up' and up'/two deliveries (pg per day Regular meetings with mangers communication Routine of using the Clubcard (pg to Attract and retain customers; provide customer information Control system Monitored control (Steering wheel for store managers– different colours according to performance) Emphasise on rewards, incentive to achieve objectives Control related on strategies Using scales like DTR and SERVEQUAL to measure service quality Organisational structures Four business units Each employee had quantifiable objectives and incentives for achieving them Experience sharing encouraged (TWIST) Staff expected to work flexibly (multitasking) Power structures Top manager level Empowerment to people to achieve objectives Hierarchical decision making but a strong push to give more authority to managers Charisma of leader Driving hard deals with suppliers Symbols Strong brand awareness: Tesco brand associated with ‘value for money” “doing a Tesco” (failure) to Tesco (success) Customers listening “Every Little Helps”(helped draw customers back to Tesco and to try it again) Tesco: everywhere in the UK (large and diversified implementation) Strong national identity (Logo: UK colours) “Dotty'- everyone in the UK got to know Dotty Paradigm Customers are the core target Internal and external communication is the key to success The Tesco Way which clearly defines their approach to business, for both customers and employees ‘Simpler, Better, Cheaper' that is a part of each of Tesco's activities Their ‘value for money' image/ reputation ‘Make Tesco an essential part of the landscape' the aim of their CEO is to make Tesco a British institution Features that have contributed to Tesco's success Adapted from: Johnson et al. [...]

[...] Then, there is a new “generation which has a new shopping behaviour when compared to the previous generations ( new consumers like children, teenagers). Finally, it is important to take into consideration internal and external migration and geographical location of jobs which have an impact on personal disposal income (differences in cost of living). Technological factors The most important in technological changes is the revolution of the internet. This includes the way of shopping for customers with E-commerce for home shopping. Internet is also an additional channel. Then, supermarkets have changed their way to do business (changes in retail tasks and activities). [...]