Tesco Plc Analysis

Tesco is a British multinational grocery and general merchandise retailer, it has stores in 14 countries across Asia, Europe and North America and is the grocery market leader in UK, where it has a market share of around 30%.

Tesco PLC is a major food retailer that operates primarily in the United Kingdom. The company operates 2,291 supermarkets, superstores and convenience stores in the United Kingdom, the rest of Europe and Asia. The company also offers financial products, such as insurance and banking services, as well as electrical appliances and telecommunication products. For the year 2007 to date, Tesco PLC achieved revenues that totaled £ 46,611 million, an increase of 10.9% against the previous year revenues that were £42,016 million. Tesco is one of the largest food retailers in the world, operating around 2,318 stores and employing over 326,000 people.

Strategy is not only a tool for outfoxes the competition but also an incredible means for creating and shaping a company

Tesco is a Public Limited Company which allows them to sell shares to the public. The purpose of Tesco is to make a profit because if they did not make money then they would have to close all their stores. Tesco is a very large organisation with over 530,000 workers. For example in the UK alone there are 3,378 stores and over 310,000 employees. Tesco also serves millions of customers a week in the stores and by shopping online. The goods that are sold by Tesco range from grocery items e.g. fresh fruit and veg to electrical items e.g. iPads. There are 12 markets worldwide which include The UK, China, Poland, Slovakia, Ireland, Turkey, Hungary, India, Czech Republic, Malaysia, South Korea and Thailand.

Tesco PLC is a British multinational grocery founded by Jack Cohen in year 1919. As one of the world’s largest retailers with 476,000 colleagues worldwide, serve millions of customers a week in Tesco stores and online (Our businesses, n.d.). In addition, Tesco has stores in 11 countries across Asia and Europe. For example, Malaysia, UK, Hungary, Ireland, Poland, China, India, etc. Since its launch in 2002, Tesco have opened over 50 stores across Peninsular Malaysia.

Thus, managers need to identify particular capacity to defeat their opponent or get the leading position in their competition, in other words, to define their competitive advantage. A study by Passemard and Calantone (2000, p.18) shows that accomplishing strategies successfully would enhance the company’s performance by surpassing other current and potential rivals with the method of competitive advantage. And the result indicates the importance to define one’s competitive advantage. For instance, Virgin and easyJet, two of British major airline corporations, the former represents flair and the latter represents value. These are their great definition and competitive advantages in which differing from other English airline companies, and fits one of Porter’s theory very well-three generic competitive strategies, one is differentiation (Porter, 1985a). In addition, cheaper or higher quality products and service prefer to advertise on customers. As most big brands do, their unique products or services will be recognized from target markets, with their global brand awareness. A simple approach to achieve this objective is to build differentiation from others in the same sector, to help customers distinguish products or companies from unique brand feature. Therefore, competitive advantage plays a crucial role in companies long-term planning.

There are “Big Four” supermarkets in the UK: Morrison, Tesco, Sainsbury and Asda (Cashian, 2007). Supermarkets play an important role in daily life for people. In order to get the result which is better, this portfolio will related to the supermarket industry and make the comparison with Tesco and Asda on the strategic choices respectively. There will be four theories as the tools for analyzing in blew contexts which hope to compare the different situation from difference aspects. The Five Forces Model (1979) will used for the supermarket environment in analyzing the external environment of industry, The Value Chain Model (1985), The VRIN Model (1991) and The Blue Ocean Strategy (2005) will help for comparing the competitive advantages of Tesco and Asda.

Porter (1980) created a model which considers five important forces (Porters five forces) which aims to establish a profitable and sustainable position against the forces that determine industry competition, therefore position themselves within it and differentiating themselves where necessary in order to strategically gain a competitive advantage - this model gives vision of: Threat of new entrants, Threat of substitute products or services, Bargaining power of customers , Bargaining power of suppliers and Intensity of competitive rivalry (Porter 1980). Using models and academic theory like this allows strategy to be formed through a rational and an analytical process. Chandlers (1962) cited in (Lomash 2003) suggests the analytical process is about the determination of long-term clear goals, adopting actions to achieve these goals and then building the resources within the organization around this strategy in order to ensure it succeeds. Johnson (2005), likewise, simply suggested a three step approach to strategy - analysis, choice and implementation which goes hand-in-hand with intended strategy.

* External Context of Sainsbury’s belongs to the biggest supermarket leaders in UK. In other words, Sainsbury’s is part of big four ‘Asda, Tesco, Sainsbury’s, Morrison’s. The biggest rival today in UK market is Morrison’s, they booth fighting for a market but Sainsbury’s ram in a higher place. In Appendix 3, we can find concept of retail and types of functioning.

The factors that contributed in the growth were aggressive marketing campaigns with the aim to promote its brand and product. The company gained the competitive advantage by enhancing the services it offered like making online shopping easy and cheap with almost every product available to online customer as to in-store consumer. The company’s strategy to enter international market also contributed in its growth as the number of stores was increased; however, the factors involved in decrease in G.P include the closure of its Strategic Business Unit in some foreign countries. (TESCO 2011-12 http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9583264/Tesco-profits-fall-for-first-time-in-18-years.html )

In this assignment I will be talking about two organisations which are Tesco’s and John Lewis. I will be discussing the different types of key theories and practises used in each of the business and how they have helped the business to become successful. The three key areas that this assignment will be based upon are Recruitment and Selection, Personality and finally Motivation.

Tesco's is a United Kingdom based international supermarket chain. It is the largest British retailer both by global sales and by domestic market share. Originally specialising in food, it has moved into areas such as clothes consumer electronics, consumer financial services internet services and consumer telecoms.

Tesco was founded in 1919 by Jack Cohen from a market stall selling surplus groceries in London’s East End. The company is now not only a grocery but also a general merchandise retailer who operates in 12 countries around the world, employs over 530,000 people and serves tens of millions of customers every week. Tesco became a private limited company in 1932 and in 1947 Tesco Stores (Holdings) Ltd floated on the stock exchange with a share price of 25p. Tesco’s aggressive negotiation with suppliers helped it grow its market share from 7% in 1971 to 31% in 2007 making them the UK’s top supermarket. Despite being in a recession, Tesco made record profits for a British retailer in the year to February 2010, during which it’s underlying pre-tax profits increased by 10.1% to £3.4 billion. It is currently listed on the FTSE 100 Index meaning that they are within the top 100 yielding companies listed on the London stock exchange but things have taken a turn for the worst for Tesco.

Strategy is a concept that focuses on long term objectives of a firm keeping in view the changes that take place in the business environment and the possible implications that it has on the firm. Thus, a dominant and well-structured strategy plays a very important element in capturing competitive advantage

In doing so, the researcher has compared the data from 2009 to 2012 and after reviewing the performance of Tesco Plc. and comparing it with some of its like for like rivals in UK retail sector in the likes of Sainsbury’s and Asda , the business policies adopted by these business organisations during the period under study