Business Strategy Evaluation - Case Study Example

Tesco Strategy Students’ Name Code & Course Professors Name University City Date Definition Strategy Well-established business strategies strengthen the performance of the company. Tesco business strategies not only strengthen its performance in UK but also allow it to expand into new market demands successfully. To achieve it, the main objective is to have a core financial stability and a continuous economic growth at Tesco (Schiraldi et. al, 2012). As postulated, the company business strategies mainly focus on its specialization in its retail shop that offers booth food and non-food products, insurances services and technological equipments (Wood et. al, 2014). The company working closely with customers, suppliers, and production of quality products with favorable prices boost it business strategies. Introduction Tesco is the largest retailer in UK (Brand Finance, 2014). The company leads the grocery market with 30% market share and operates its stores in 12 countries across Asia and Europe (Tesco, 2014). In UK, the company operates under six banners, which are Tesco Extra, Tesco Superstore, Tesco Metro, Tesco home plus, Tesco Express and Tesco one stop. The company offers diversified range of products in new services in personal finance, mobile phones, books, furniture, clothing, petrol, home entertainment, and use of modern day technology (Ma et. Al., 2010). Tentatively, Tesco employs over 500,000 employees globally. Strategy justification Customers The benefit of customers is a critical strategy at Tesco. Targeting highest number of consumer, being the main agenda of the company, the company came up with friendly sale prices in its commodities that are favorable to its customers. Such positive legislations made the company to outshine other competitors in current market retail businesses (Vending International, 2006; Fernie & Sparks, 2004). To attract a mass of customers, the company keeps low prices of commodities when purchased in bulk, a well-designed delivery system and improving employee’s efficiency relationship with customers trough trainings. Customers expect to receive quality products from the retail at a lower price, and the company has maintained this object by offering quality products and services at competitive rate. In procuring from developing nations like Asia, the cost of non-food products is cut hence improving the products purchasing channel. In addition, the introduction of club card has been of benefits. The club loyalty card distributed to its customers has been used to collect data from the customers through their purchase trends or behavior. Data collected is also used to organize promotions to customers and to change the layout of customer conveniences. Customers and company share profits using the accumulation of credits in club card hence attracting more clients (Tesco, 2011). Supply chain integration Supply chain integration is achieved by applying new technologies and lean management. The company integration of IT systems contributes to achieving the low-cost strategy. The introduction of RFID technology, among its functions it is used process information of products and keeping clear records of commodities through products certifications procedures. The RFID is helpful in checkout speed, reducing the time waiting for customers and improving employees’ efficiency through simplifying goods processes. The assist has helped to improve the accuracy of data when tracking the input and output. If it was done manually, hitches and waste of time is part of challenges (Hadfield, 2006). The use of Electronic Point Of Scale (EPOS) scan products for prices and also identify the minimum level of stocks left hence ordering for much more products before its out of stock (Hackney, Grant & Birtwistle, 2006). Moreover, Tesco in 2010 linked a £550 million profit after the integration of Enterprise Resource Planning (EPR) - A digital system that is used to streamline operation in the company (Tesco, 2010). Integration of the lean management system in the supply chain helps to remove unnecessary elements to avoid waste. The introduction of continuous replenishment at this phase shows that Tesco is using pull system whereby it can restock enough products when demand is too high from customers shopping trend. Continuous replenishment is among the essential operations management at supply chain integration (Hill et al., 2011). Products Quality and quantity of products determine and organization’s success. The innovations made at Tesco concerning the quality and choice of products has been boosting impressive relationships with customers. The branding of its products along with the leading branding names, make the products competitive in markets. The use of cold-chain distribution in products ensures that products reach various Tesco stores as per the required time. The close link between Tesco growers, packers, and processors guarantees the quality of products. The highly trained technical team, work closely with suppliers while guiding them how to achieve with Tesco regulatory standards. Such a collaborative relationship ensures that customers will receive quality products at best price. Tesco products go through chemical and microbiological testing, authenticity testing, contaminants testing and quality testing after which quality and quantity products are in distribute to consumers market. The company has diversified its products, on not only food product but also unperishable products such as clothing, furniture and technological equipments distributed to reach market demand by consumers (Tesco, 2014). Stores Operations of various stores in different countries boost the performance of the company. Tesco diversified its various goods and services to various countries using its operating stores and currently it is making impressive sales and trading profits in Asia (Tesco, 2012). The company objective is to achieve a top spot in the foreign market within five year entry into a new state (Thunderbird, 2012). Currently, the company is opening hypermarkets for its international stores since planning permissions permits are in place than it is in UK. In 2012, 30% of its profit was collected from international stores. It, therefore, strives to construct new stores to tap new market demand especially in Middle East, Saudi Arabia, Georgia and Azerbaijan (Tesco, 2010). Main objectives The main objectives determine the prosperous of the company. Tesco operates friendly and efficiently to its clients with the main purpose to ensure customers are well served through meeting consumers various opinions regarding product quality and quantity, choice, store facilities, and services. The company is focusing on becoming the best product producer in non-arena just like in food products. The company is achieving the objective since it has already established a number of distributive retail shops with some dealing with non- food products like clothing and furniture’s (Tesco, 2014). In totality, the retail centers deliver goods to a higher an impressive number of customers per week through internet shopping (Tesco, 2014). This shows that structuring of retails boosts the speedy economic growth hence Tesco retails maintains that its main objectives is to diverse its market products to tap more consumers in its data (Ma, Ding and Hong, 2010) Tesco provides good and services that are cheap and quality to its consumers. The company adopted the low price policy and introduced a club card, which keeps the customers’ loyalty to shop in the company. It is ideal for the company to sell a wide range of goods and services to clients at a cheaper price in attempt to undercut other retailers. Providing quality products at lower prices is a key competitive advantage that win hearts of customers from other retail crowded retailers. The company is interested in continued delivery of efficient services by integrating its online service using the van der Lande system (Peart, 2010). Competitive environment Many firms try to attract a lion share customers within the jurisdiction of a competitive market. The brand image of Tesco attracts customers because of its quality products. The branch of financial services and insurance systems within the company brand its image. The 78% brand of value collected in the first fiscal year of Europe and Asia approves the importance of branding. The company diversification towards none- food businesses, retailing services, considering the community and consideration on international markets make Tesco company to be among the top three best companies worldwide. This is achievable through, using the corporate strategy of Tesco, which implies to become an unbeaten international retailer, to become dominant in both food and non-food commodities. In addition, the company continues to win the heart of UK customers and to give the main concern to the community of what Tesco does. Resource and capabilities of Tesco Enough resources enable the company to have strong capabilities. In 2005, the company indicates that it had accumulated two billion pounds worth of profit (Tesco, 2010). Enough profit made indicates that the company capable to fund its strategic endeavors such as diversification and construction of new retail shops in various countries. The company retained it employees. This is an impressive impact to the human resource department, which provide training techniques the human resource department has retained 81% of its employees who are over 270,000 (Tesco, 2013). Sufficient physical resources are Tesco’s signature strength. Many established stores carry the Tesco’s brand-name. In UK, the company has 735 stores, which occupies almost 7.3% of the UK land (Tesco, 2014). The existence of intangible resource prides the company. Due to its efficient relationship with customers, the company is trending with almost 13 million people in UK posses the club loyalty card. These highlight Tesco’s determination in garnering consumer preference in its industry. Suitability of organization Suitability determines the output of the company. Tesco Company constructed in terms of modernization of technology, installation of equipments and systems and training of staff personnel. The technological machines work efficiently hence cutting the cost that could have been spent on manual work. In addition, retrieval of information concerning data and its analysis easily and faster retrieved. The fluctuating rise of fuel and other raw materials have led to the rising of commodities prices. It is the policy of Tesco Company to maintain favorable prices to its customer in case of such functions. Tesco implemented the “f” plan involving fuller cages, tracks and containers traveling fewer miles do deliver its commodities in time. The “f” plan is a stepping-stone for carbon neutral by 2050, which will make the company more suitable to the environment. The distribution centers are strategically located hence suitability for customers to get access to products and services from employees. Customers are impressed when they realize companies respect them. Through this, the company can earn loyalty from the customers. The business model and supply chain system is simpler in Tesco. Tesco receives commodities from its suppliers, moved to different stores outlet, and sold to customers. Customer’s opinions are welcomed through insights and suggestion box hence the company can do a favorable business partnership with consumers. Feasibility requires enough funding and resource while making the required strategies. Acceptability The company favorable customer’s mass population displays it acceptability. The operating of the company in various continents in Europe shows its positive impact on society. The sale of products from the company displays a kind of its acceptability with a record of 7 years ago, the company sales were 770 million Euros but currently the record is ten times larger (Tesco 2014). It is through its unique strategies, unique physical, intangible, and financial resources that take up the responsibility and provide desired results. Feasibility Feasibility of Tesco is in terms of physical resource, intangible resource, and core competence. The physical resources of Tesco are uniquely structured. The ownership of Tesco is of around 74% stake in Hungary, 96% stake southern America and 75% stake in Thailand. Each store outlets are in different formats varying from different countries. The construction of Tesco store outlets is in the form of warehouses that are easily accessible, visible, and spacious to customers. The intangible resources have recorded an impressive relationship between the suppliers and managers. There are almost 1250 suppliers (Tesco, 2013). The outstanding geographical location of various outlets displays its feasibility. Customers can easily access the products from the market irrespective of weather conditions. The integration of technology system has recorded an almost 740,000 online-registered consumers. The company maintained its competency by maintaining favorable prices values for customers. The picking and delivering of products to customers has displayed its competence (Tesco, 2012). CONCLUSION Conclusively, Tesco Company is recognized among the best world trade in business field. The company gets high good recommendations due to its operational skills and efficiency displayed by its workers. The company policy provides a smooth relationship between managers, employees, and consumers. Operational strategies focus on satisfying the consumers’ needs by reduced cost of commodities prices and improvement of the delivery of goods and services and, in addition, clear, innovative supply chain systems. The company has managed to keep its clients loyalty by the introduction of online shopping and card club, which boost the performance of Tesco. Contrariwise, its alleged that the technology being used cannot work full time effective. The machines at some point encounter mechanical problems. It happens when the RFID equipments come close to water or metallic objects. Wrong information induced into machine wrong data analyzed. When such happens, human beings labor skills are needed to assist the services to run efficiently. Without conducting new research, opening of new stores in the markets does not determine the similar expectation like the previous stores in a different location. Reference List Brand Finance (2014). Global 500 2014: The world’s most valuable brands. Fernie, J., & Sparks, L. (2004) Logistics and Retail Management Insights into Current Practice and Trends from Leading Experts. Euromonitor International. Hadfield, W. (2006) No business case for item-level RFID tags unless done by Suppliers, Tesco Trail Finds. Computer Weekly, 18, 8. Hackney, R., Grant, K. and Birtwistle, G. (2006) The UK Grocery Business: Towards a Sustainable Model for Virtual Markets. 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