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Tesco Case Study Help

Tesco Case Study Help

Tesco Case Study Help
Table of Content

TESCO is a landmark name in the food industry. It is the United Kingdom biggest retailers with the food stalls sprawling all over the world. TESCO plc. Trading is a British multinational general merchandise and grocery store that is headquartered in Welwyn Garden City, Hertfordshire, England in the United Kingdom. Here we endeavor to present Tesco case study help, to help you deal with the assignments.

About Tesco:

Tesco is an illustrious and the largest retailers in the United Kingdom dealing with general merchandise and groceries. This third largest retailer in the world is measured by its gross revenues. Incorporated in the year 1950 with the launch of its first supermarket in London, the company has over 34,000 stores in the United Kingdom and has 300000 colleagues working there.

Top management of the Tesco are putting their best efforts for strengthening their very foundation that can result in better services, improved quality and a good product portfolio. The company works towards fulfilling its mission which is “serving shopper a little better each day.” Customers want to have an easier lifestyle and Tesco makes their lives easy. The store serves 66 shoppers every second and its customer-centric approach is the reason why it is progressing by leaps and bounds.

According to the annual report published by TESCO, their group sales were £ 49.9 billion and the statutory revenue goes up to £ 55.9 billion in the year 2019. Despite the fact that the market has fluctuated ever since and there has been a stiff competition, TESCO has managed to maintain a leading position in the world of retail. Efficient and well-trained manpower is the biggest strength of the company. At present the company employs about 460000 people and they have the strategy of considering their employees as colleagues.

With adequate motivation techniques and the workforce diversity measures, human resource department of the company has managed to create the motivated workforce. They have a tailor-made approach towards the diversity which has made them a clear-cut market leader and has enabled them to manage the manpower in a far efficient way.

History of Tesco

Tesco was founded way back in the year 1919 when Jack Cohen who was the son of Jewish migrants started selling war-surplus groceries from a small stall located at the Well Street Market at Hackney located in the extreme end of East London. The Tesco brand appeared in the year 1924 and the name came about after Jack Cohen bought a tea-shipment from Thomas Edward Stockwell.

He made new labels by making use of the initials of the supplier TES and the two letters of the surname CO and hence the name TESCO came into existence. It was in the year 1930 that the food and groceries giant experiments with the ever first permanent indoor market by the name of Tooting. In 1931, Jack Cohen opened the first Tesco shop at 54 Watling Street and the company made its first landmark when it was floated o the London Stock Exchange in the year 1947 as Tesco Holdings Limited.

The 1st self-service stall of Tesco was opened in St. Albans in the year 1956 that remained operational till 2010 and then the food giant relocated to the larger premises on the same street prior to relocating to a grand premise on that street and the first supermarket came into existence in Maldon in 1956. In 1961, a milestone was laid down when Tesco entered into Guinness Book of Records as the largest shop in Europe.

Battle for the Top Position:

It was in the 1990s that the Tesco started to tighten its grip on the United Kingdom when more stores begin to open up. They started an intensive market campaign for overtaking its nearest competitor Sainsbury that was UK’s market winner at that time and the world’s leading grocer.

In 1992, the company had launched a punch line “every little helps” which gained popularity overtime. It was followed by the Tesco value range in the year 1993 for its value-conscious customers. After sometime in the year 1995, Tesco Club card scheme was followed in the year 1995 which helped the Tesco overtake the rival Sainsbury’s market which is the UK’s largest food-retailer.

In 1996 the retailer introduced its first round the clock store and expanded its market to the overseas. Shops were opened all across the world mainly in Poland, Czech Republic, and Slovakia etc. In the year 1997 Tesco appointed Sir Terry Leahy to hold the position of CEO.

With the advent of digital era, the company thought of launching its website and the super-market continued to expand its products range that now include many things right from apparels to the electrical and the personal finance products etc.  In 2004, Tesco entered the market of broadband and in 2006; the retailer announced an ambitious plan for the purpose of opening stores under the name of “Fresh and Easy.” The market was funded by the existing resources.

Tesco now operates in as many as 13 countries across the world. Today it is reported that the group sales touched to 51.8 pounds sterling. Pre-tax profit soared up to 2.8 pounds sterling. In 2008, Tesco went to one step further when the company bought its competitors stores on the remote islands located in the Scotland. That was yet another achievement for the Tesco because it acquired the presence in every single postcode areas of the country. In 2009 Tesco bank was launched which was an endeavor to promote joint venture with the Scotland’s Royal bank. In 2010, the supermarket launched its ever first zero-carbon super market in Ramsey Cambridgeshire.

In 2013 Tesco reported its first profit decline which continued for as long as two-decades. 2014 remained a tumultuous one and the Tesco reported its worst performance in 20 years the same year. There was a sharp decline in the sales and on July the same year, the company unveils Alan Stewart as its new CFO or Chief Financial Officer. Philip Clarks abandoned the post of CEO and Dave Lewis was named as its successor.

Revenue of Tesco:

Somewhere in the year 2017, Tesco group made the decision to sell its entire operations in Turkey and these operations were discontinued in 2017. Annual record of the company accounted to about 52 billion British pounds in the UK and Ireland Republic. There was an increase of about seven billion pounds as compared to its previous financial year. This was the first increase on the revenue in almost a decade and the ROI rose up to 300 million pounds and became 1.54 billion in the FY 2019.

Tesco quarterly or annual revenue history and the growth rate right from 2006 to 2019 has increased steadily. Revenue of the company is defined as the top line items or the income statement from which costs and expenditures are subtracted to get the net income.

Tesco revenue for the FY 2019 was $84.331B which was an increase of 11.71% from the previous financial year. In the year 2018 it raised up to $75.491B which was an increase of about 2% from the previous year. In the year 2017 the revenue was $74.012 billion which was a decline from the past year.

Growth of the Company:

After reporting subsequent rise in sales, Tesco is reported that the growth is on the track. The giant has reported that the sales has recovered from the adverse weather conditions.

Tesco performance is on a constant rise and it has improved ever since the year 2014 when it reported to be the worst one in the history as there was a record loss of 6.4 billion pounds sterling. Mr. Lewis is credited with the turning around of the entire group and ever since his reign there is a steady growth. Despite intense competition in UK’s food and grocery market, Tesco has continued to be the market leader. The supermarket continued to focus on the re-launch of its own brand range and it’s more than a quarter away from this which means the company will see further growth in the coming year.

Present Status of Tesco:

Tesco Plc is the largest retailer in the United Kingdom and the 4th largest in the world after Wal-Mart, Metro AG and Carrefour). The company was established in the year 1919 by Jack Cohen and the brand made its appearance in the year 1924. In 1929, the first Tesco store was opened in Burnt Oak, London, and Edgware and since then Tesco’s businesses begin to operate in Europe, Asia and USA. With more than 470,000 employees, the company has meticulously-drawn growth plans.

In the year 2010, revenue of the company exceed 56,910 pounds sterling that was a net increase of 5.6% over the year 2009. The operating profit of the company in the year 2010 was 3,457 million pound sterling that was grown to 9.1% as compared to the profit of 2009. Net profit of the company was raised by 9.3% over 2009 with 2,336 million pounds sterling.

With about 4,800 stores in as many as 14 countries all across the world, products and services of Tesco include the following:

Stores Types Tesco Operates:

Superstore, extra, home plus, metro etc. are some of the stores that Tesco operates

Store Offerings:

Food retail, petrol stations, non-food retail, home living range and more..

Tesco Telecom:

Tesco mobile value SIM, Tesco network, Tesco phones, Dialup Internet access, Mobile phones etc…

Tesco Personal Finance (Tesco Banks):

Pet insurance, home insurance, travel insurance, credit cards, personal loans, online mortgage finder and secure investment bonds etc.

Core Strength of Tesco:

At present, Tesco is ranked as the largest global grocery retailer and the second largest retailer based in the profits generated. It is just behind the Wal-Mart and has as many as 4,810 stores in 14 countries across the Europe, Asia and USA etc. Apart from that, Tesco has occupied 30.7% share of the United Kingdom grocery retail market in the year 2010.

One of the biggest strength of this food and grocery giant is its strong financial performance. In the year 2010, revenue of the company rose by 5.6% and it was about 56,910 million more as compared to that of in the year 2009. Products and the services are provided in accordance with the demands of the market.

Online non-food retail market has matured significantly over 50% through the year 2009. As a part of their marketing strategy, Tesco started providing Club cards to its customers as a greater reward towards their loyalty and to increase the investment. Today Tesco has 15 million active Clubcard holders in seven countries all across the world.

There is no doubt that Tesco is actually a market leader and has been innovating and trying out new marketing tactics for growing constantly. Innovative services and products in the market are being used by Tesco for offering better value to its customers and as a part of its marketing strategy its focuses more on the value than on the pricing. Clubcard is proved to be a great success as it attracted a large of customers and influences their behavior.

Tesco’s Vision:

Vision of the company is to strive towards obtaining the highest standards of the service for the purpose of ensuring the long-term access to the quality that it produces. This has helped Tesco to remain at the top position in the UK retail market. The core purpose of the company is “to create value for the customers and to earn their life-time loyalty. Vision of this food and grocery giant is to treat the people exactly the way they want to get treated.

Tesco Mission:

Tesco mission statement is retaining customer’s loyalty. This means the company works towards retaining their customers permanently and frequently. To achieve this goal, the company set themselves to the varying aims. Tesco is aimed towards maintaining their customers and help them enjoy different kinds of goods and service ranges. Moreover, Tesco also work towards keeping their customers loyal to them and encourage them to shop with them so that they can get extra points and special vouchers. In fact, revenue of Tesco has increased constantly as they have the right strategy at place to support their mission. Its clearly defined mission has helped it to adhere to its future goals.

Tesco’s Objectives:

There are a number of objectives to be met and since the company is very clear about what it wants, there is no looking back for it. Its objectives are as follows:

  • To be a super successful retailer internationally.
  • To grow its core UK business
  • To be as strong in non-food market as in the food industry
  • To develop the retailing services more vigorously like personal finance, telecoms, tesco.com and more.
  • To put its customers at the heart of what it does.

The simple reason behind the success of Tesco is to pay attention to its capacities. Obviously, profit is the foremost concern of all the companies and Tesco is not an exception to this. It can expand its sales and focus on making profits so that it can maintain its image as the number one retail company in the UK. Tesco always wish to surpass the goals of its competitors and wish to preserve the grand image that it has in the UK market. Also, providing all types of services and goods that are cheap and affordable is the part of their marketing strategy. Successful efforts by the company in the past has helped it achieved a great image.

What are the Key Strategies for Employees?

The company wants to be focused. For the purpose of motivating staff, Tesco has started offering competitive salaries to the staff and an opportunity to learn and have a better growth prospects with time to time quality training that can help them grow.

All the employees have a proper healthcare cash plans and an opportunity to join the pension scheme right from the day they join. Managers and senior managers have chance to get private medical insurance and more. There are other policies as well like that of 20-days as holidays and 25 days holidays once they complete five years at the Tesco. Most of the Tesco staff works in part-time and they are offered several opportunities like emergency leaves, flexible working hours, shift swaps and more.

Apart from this, the company also offers affordable housing schemes to its employees and the staff is encouraged to involve in the profit-sharing scheme of the company like “shares in success”, “save as you earn”, “buy as you earn” and a lot more. Tesco has a strategy to make its staff understand the core-value and encourage the staff to contribute to the development of its customers and community at large. The best part of the company is its constant efforts towards achieving excellence.

TESCO Marketing Strategy:

Though Tesco has earned a bad reputation in the market over the time period and it has earned a bad publicity like the “horsemeat scandal” The decrease in sales of the company has lead to the negative perception of the public which had hit the sales and profits in a hard manner. However the takeover of the business by the CEO Dave Lewis in the year 2014 has turned around the entire business and it is now more focused on the customers.

Focused at solving problems and doing away with discount-offers strategy:

Tesco looked at its own marketing plans from the eyes of the customers and found out that customers are more concerned about getting their problems solved more than discount offers like “buy one get one free.”  So, the company adopted the strategy in which the best bargain is to assist the customers with their day to day problems that just offering something for free or in discount.

With the aim of keeping customers at the fore, Tesco developed a marketing campaign with the slogan: “Tesco food love stories.” The stories are aimed at solving any typical family problem from some specific reason or the other. Tesco makes use of the adverts to give customers a fully-immersive experience. Full-video guides to show how to make meals that Tesco has used in its adverts has helped the customers get engaged and hence this way of marketing resulted in customers responding far better. Though Tesco has tried different types of tactics over the past decade for the purpose of engaging and retaining its customers, its customer-focus marketing has helped it achieve high profit margins.

Tesco has restored the reputation of building its brand and enhancing its market share. It has created messages that speak directly to the audiences and have helped the companies earn high customer loyalty in the business.

Market Positioning of Tesco:

After the recession, customers have begun to look differently at the market and even at their own money. They want to know the ways to cut the costs and increase their savings.

Like the other big super markets in the United Kingdom there was a time when Tesco’s marketing campaign was focused on the price alone as the result of which the company showed no substantial growth. Not only this, Tesco also lost its position in the market and was no longer perceived as a big brand. This left the entire market in the limbo and the Tesco brand needed years to get build firmly.

Tesco has positioned back in the market as a key player in the market by focusing not on the price but on the lifestyles of the customers. It also targeted towards showing the real customers how easily Tesco can fit into their lives and can solve day to day problems that people often come across. This helped them gain customer’s loyalty and their market positioned has strengthened further.

With its constant efforts, Tesco has been able to re-gain its market position and has built a good reputation in the market with the sole focus on customers and this problem solving marketing approach of Tesco has enabled it to be a winner.

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