Tesco’s InternationalisationIntroductionThe Institute for Retail Studies' research (2003) reports that retail industry in the UK is quite competitive, dynamic, and innovative in recent years. And grocery retailers such as Tesco, Sainsbury's, Asda etc. are all compete on price, quality, range, and service in order to strive for business success. Within this intense competition of retail industry, Tesco can stand at market-leading position in recent years has mainly come from its strategies of expanding overseas, shifting to 'higher margin' non-food market and maintaining a strong core UK business. And its UK success has been built on low prices, cultivating customer loyalty, unbeatable quality, offering a range of different store concepts and expanding into retailing services (Tesco Plc Web Source).
Moreover, close control of internal resources and diligent monitoring of all expenditures are also the critical aspects for Tesco to maintain its leading position in the market. Therefore, Tesco's business success indicates that effective operations strategies have played a vital part in supporting and driving its whole business objectives which is "to create value for customers to earn their lifetime loyalty".
(Solberg, 78-98)Accordingly, the purpose of this report is to investigate and analysis internationalization of Tesco. The report will mainly go through three aspects of Tesco's global operations management: operations management performance objectives, planning and control in use, and measurement and improvement activities. Finally, conclusions and recommendations will be drawn from analysis. Internationalisation Strategy EvaluationAccording to Slack et al. (122-25), global operations strategy is defined as "the total pattern of decisions which shape the long term capabilities of any type of operation and their contribution to overall strategy". Slack et al. (2004) also states that operations performance objectives relate to the interests of the operation's stakeholders.
Applying to Tesco, customer's satisfaction is particularly important to its business. Therefore in order to satisfy its customers and contribute to competitiveness, Tesco's operations performance objectives are mainly reflect on cost, quality, speed, dependability and flexibility aspects. With regard to pricing, Tesco every week check over 10,000 prices in Asda, Sainsbury's and Morrisons stores to guarantee its customers have low prices every day. And it also took steps to reduce cost in order to ensure that the way they work is better, simpler and cheaper.
For instance, the reason of Tesco has an effective supply chain is because of implementing an appropriate information technology G. O.L. D. application suite successfully. This software provides Tesco with complete control over warehouse stack. Moreover, the automatic order proposals and warehouse optimisation procedures facilitate a fast and flexible business with minimal logistic costs (Ozsomer, 27-50). Therefore, by doing things cheaply, it will allow Tesco to reduce its price in order to gain higher volumes or increase their profitability on existing volume levels externally. And internally, cost performance is helped by good performance in the other performance objectives. As Slack et al.
(2004, p. 128) points out that quality is a particular important objective to all operations, as quality is an important aspect of customer satisfaction or dissatisfaction and quality operations could both reduce costs and increase dependability. For a grocery retailer, quality could mean goods are in good condition, the store is clean and tidy, decor is appropriate and attractive and staffs are courteous, friendly and helpful etc. , so according to our research with Tesco store manager, he stated that Tesco has put more staff into stores and distribution centres in order to improve its availability and service.
Moreover, Tesco also launched Clubcard that the information provided by it enables Tesco to better understands their customers.