Business Context and Its Management: Analysis of Tesco and High Street Retail Trends

This report analyzes the impact of the pandemic on the business sector and provides an internal and external environmental analysis of Tesco using McKinsey's 7s model. It also discusses high street retail trends and applies models like Blue Ocean Strategy, Lewin's Change Management, and Total Quality Management to Tesco. Additionally, stakeholder mapping is detailed.

Business context and its
management

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY ..................................................................................................................................1
CONCLUSION................................................................................................................................8
RECOMMENDATIONS.................................................................................................................8
REFERENCES ...............................................................................................................................9

INTRODUCTION
The coronavirus has changed the world drastically, sales has shown a massive decline
over the years, as the travel restrictions were imposed so the trades were not flowing actively.
During the social distancing, lockdowns and other rules and regulations, the sale of some
commodities were restricted. The economy of the country also went down, every sector was
effected very deeply from the pandemic. Many of the well known brands went bankrupt,. The
shifts in consumer behaviour and their preferences also played a major role in effecting the
market (Kang, Diao and Zanini, 2020).
MAIN BODY
Internal environmental analysis
McKinsey 7s Model
The McKinsey's model is considered as an organisational tool which evaluates the well
being and the future success of an organisation. It has 7 important factors of an organisation
which determines about the structural support that whether it is successful or not. Given below is
the McKinsey's model of Tesco.
 Strategy
The company Tesco approaches the cost leadership strategy of business, so as to attract its
customers. Tesco has various competitors in the market, due to which it has to deal with complex
changes in pricing and product policies, to maintain its position in the long run. The company
has also faced the delayed supplier payments during the pandemic. The main strategic aspect of
the organisation is to focus on the availability, quality of products and services on a reasonable
prices for the targeted customers from different segments of market (Ahmad Tajuddin, 2021).
 Structure
The company follows a strict hierarchical structure that is tall structure, because of its various
levels of management and operations. Dave lewis was appointed as the new CEO of the
company, who has eliminated the role of deputy store managers back in 2015 so as to simplify
the organisational structure.
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 Systems
The supermarket chain of the company relies on a large range of systems which runs on a daily
basis, so as to sustain the operations. According to the new CEO Dave lewis, it is announced to
simplify the structures and operations to keep the work on track Without any mess or unclarity.
The performance appraisal system also came into influence, so as to maintain the productivity
and the functional ability within the organisation. The new methods are also having the key
performance indicators, which help the managers to keep the work simplified and on check too.
 Shared values
The shared values of Tesco consists of two values namely, the core values which can be defined
and communicated in such a way so that the creative and supportive organisational structure can
be maintained and the employees must perform with full potential towards the organisation. e.g.,
creativity, honesty, transparency etc. the next component is corporate culture, which is very
well maintained and celebrated by the company. As it is diversified globally, adapting these
cultures and values can help the company to be more independent and interactive (Buffington,
and et.al., 2020).
 Style
Tesco has a leadership style when it comes towards running the business and performing all the
activities, through this style, the company can engage its workers and employees to be a part of
active decision making. This leadership style can also encourage the interaction with its
employees and workers working on the different levels of management. The organisation can
also increase the support and morale of the employees, to promote the productivity and the
ability to perform.
 Staff
Tesco has adequate number of employees, which are employed and working in the organisation.
The company has skilled and talented workers, according to the tasks and functions provided to
them. The staff is also properly trained and well aware by the working management of the
company. The company also provides the house training which can help the employees and the
managers to familiarize themselves with the environment of the organisation (Bryson, 2021)
 Skills
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Tesco has an effective workforce when it comes towards the performance of tasks and the
operations. The employees and workers are recruited and selected on the bases of their skills and
qualifications that are required to fit for the job role provided.
External environmental analysis
Three trends in high street retail.
As the trend of internet retailing is increasing day by day, there are various methods which can
help the retailers top boost their street store, they should adapt the E commerce strategies and
tactics so as to promote their high street retailing in the market. Given below are the three trends.
 Uberificiation
Uber has basically taught us that with the help of our cellphones we can get most of the things
we want in just a few taps, which is quite easy and convenient way to buy or sell online. With the
increase in technologies and online shopping methods, the shoppers are more comfortable in
getting their product at a place which they want and at a particular time (Shahrivar, and et.al.,
2018). The Uberificiation provides a fantastic opportunity to the high street retailers, which is
quite easy.
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 Growth of online to offline
This term is related with the shifting in consumers preferences from browsing in store, then
buying online to, browsing online and shopping offline. According to the statistical data the
offline shopping market has gradually boosts an increase in its selling, over the years, around
76% of the location based public visits on the store on a daily basis.
 Importance of experience
This is the basic term which is required in every field, experience is required on a great extent, to
increase the retailing. The buyers value the ail as the destination to not only browsing the the
products, but also to finalise the products and the purchase decision. If the marketers makes the
product easy to find and experience in their stores then they can expect to rewarded by the
customers in a positive way accordingly (Schulz, Swaby and Wangdi, 2021).
Economic cycle
The term economic cycle is also known as the business cycle, is basically referred to the circular
movement of the economy, from expansion to contraction and vice versa. Given below is the
economic cycle of Tesco.
 Expansion
In this expansion period, the economy tends to show, rapid growth, the interest rates are
comparatively low and the inflation period begins.
 Peak
Peak is generally that stage of a company in which the growth rate is high. In order to reach at
the peak position Tesco should provide heavy discounts to the customer so as to bear the losses
occurred in the pandemic period. By which it can also increase its productivity.
 Contraction
This is the period when the growth is slowed down, the employment also falls and prices
becomes stagnant. The company has faced a period of contraction during the phase of pandemic,
where the economy is also at the declining phase. And the growth was also very slow. With the
entry of the Brexit policy the organisation has suffered contractions again (Bhattacharyya,
2020).
 Trough
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According to the Trough, the economic cycle is reached at the point where the growth starts
recovering. Tesco is basically recovering now, from its contraction stage after the pandemic, as
the sales also uplifted and their online operations are also going successfully, attaining the
organisational goals
Blue ocean strategy
The Blue ocean strategy is referred to bring differentiation to the various organisations and the
brands, like Tesco as it helps to create awareness and increasing the presence in the market. With
the help of this strategy, the company can reconstruct their market, and its operations. According
to this model, the structure of the industries should be flexible and not rigid in adapting the new
changes. Tesco creates a new market so as to stay differentiated in terms of its competitors. The
company also creates the new boundaries, that lays down the path for innovation and creativity,
so as to stay dynamic in the long run. Tesco continues to approach the way of staying
differentiated, by opting various low costing strategies and activities etc. the organisation has
also experienced a sense of growth and increased profitability, since they have adopted the Blue
ocean strategy (Bhattacharyya and Thakre, 2021)
Operations Management
Total quality Management
The TQM tool used by the Tesco company is a technique which helps to improve the quality of
their products and services which they are delivering to the customers. With the help of this
management system, they have earned a greater amount of satisfaction with respect to their
customers, the process has also increased the productivity by increasing the efficiency of the
organisation. In this quality management, Tesco is using an effective way of working through the
resources. According to Tesco, this tool has also helped it to analyse the demand of its potential
customers according to their taste and preferences. Effective communication is also an important
component of this tool which is used by the company to pro,mote the interaction with its buyers
so as to void any misinterpretation and the sense of unclarity among the workers.
Managing change
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Lewin model
The term change is a basic requirement in every field and sector. A business should adapt
relevant changes in order to run smoothly and effectively. The organisations that handles the
change well just flourish in every step of the business. The key part of this model is that how
well the people understands the change. This model has basically three stages of change. Given
below is the Lewin's change management of Tesco.
 Unfreeze
This stage is uncertain in nature i.e., the stage before the change is adapted and the company
should make its shareholders aware about their upcoming changes and new adaptabilities so as to
increase the flexibility among the organisation. According to this stage Tesco should prepare
itself and their workers in the direction of change so as to move forward and building a new way
to generate in the existing market.
 Change
After the uncertainty created in the stage of unfreeze the business organisation starts to look at
the new ways to to do things and performing their activities. The change does not takes place
over the night. It takes a lot of planning and patience to promote the change within the
organisation. According to Tesco, people needs to focus on adapting the change and the
employees should stay focused on being flexible in learning the new changes which can benefit
the company in many ways (Lewis,2020)
 Refreeze
In this stage, when the decision of changes are in process, or after they have implemented in the
organisation's operations and activities, the company must makes sure that employees are
working properly in the direction of work assigned to them. In Tesco, this stage is related with
the working of employees with the flexibility after adapting the new organisational changes that
are made. The managers makes sure that the employees and the workers are moving correctly
and efficiently towards the accomplishment of the common goal of the organisation. In this stage
the top level management also keeps the work on check and the track records of all the tasks and
the function performed in the company. As the employees are handy and comfortable with the
new changes in their organisation, they become more confident and motivated in their position.
Stake holder mapping
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This is the process of laying out the total stakeholders of particular product, new idea, plan or a
map. Given below is the stakeholder's mapping with respect to Tesco
 Employee
The company should keep their employees completely in formed about their products and the
new ideas which should be taken. There should be a complete transparency between the
company and its employees.
 Customer
Tesco should interact more with its customers and make them aware about their new policies,
regulations etc. and also should meet the needs of its customers on time, so as to stay successful
and consistent in the long run.
 Shareholders
The organisation should make sure that the shareholders are informed completely, and they
must be aware about the new policies regarding the buying and selling of shares.
 Community
Tesco should not involve much with the community, as it should maintain a regular and a
minimal contact with the community in which the company surrounds. Basically it should not
provide every detailed information to the community, the spread of information and ideas should
be categorised.
CONCLUSION
The above report went in to detail regarding the pandemic situation for the business. Further
more the internal and external environmental analysis on the Tesco company has been
mentioned above with respect to the McKinsey's 7s model. Along with that, the three trends in
high street retailing is also stated, and various models were applied on the company like blue
ocean strategy Lewin's change management and total quality management for grasping the
knowledge about how to develop the quality among the employees working in the organisation.
At last the stakeholder's mapping were detailed.
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RECOMMENDATIONS
The pandemic has laid down the situation of fear and outbreaks all over the world, imposing
several restrictions, regulations and lockdowns as well. Due to the pandemic, every sector of the
economy is being effected whether it is a small scale industry or a full fledged business
organisation. The economy of the counties has shown a great decline over the period of
pandemic with having a low GDP. The business firms has faced the period of recession due to
COVID 19 by facing a huge amount of losses and declining sales of their commodities. The
Consumer behaviour has also changed a lot during the period of pandemic, by which the
continuos shifts in the tastes and preferences also got increased.
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REFERENCES
Books and Journals
Ahmad Tajuddin, S., 2021. Technology Entrepreneurship Project (ENT 600): Tesco PLC.
Bhattacharyya, R., 2020. COVID-19 Pandemic: Business Continuity Checklist.
Bhattacharyya, S.S. and Thakre, S., 2021. Coronavirus pandemic and economic lockdown; study
of strategic initiatives and tactical responses of firms. International Journal of
Organizational Analysis.
Bryson, J.R., 2021. COVID-19 and the immediate and longer-term impacts on the retail and
hospitality industries: dark stores and turnover-based rental models. In Living with
Pandemics. Edward Elgar Publishing.
Buffington, C., and et.al., 2020. Measuring the effect of covid-19 on us small businesses: The
small business pulse survey (No. 20-16).
Kang, J., Diao, Z. and Zanini, M.T., 2020. Business-to-business marketing responses to COVID-
19 crisis: a business process perspective. Marketing Intelligence & Planning.
Lewis, S.C., 2020. The objects and objectives of journalism research during the coronavirus
pandemic and beyond. Digital Journalism, 8(5), pp.681-689.
Schulz, A., Swaby, G.S. and Wangdi, S.P., 2021. LDC priorities from COP25 to COP26:
Unfinished business and pandemic disruption.
Shahrivar, S., and et.al., 2018. A business model for commercial open source software: A
systematic literature review. Information and Software Technology, 103, pp.202-214.
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