Tesco's Retail Business Strategy

This report provides an analysis of Tesco's retail business strategy, leadership style, and management practices. It discusses how Tesco has maintained its position as a leading retailer in the UK market for over a century. The report also highlights the importance of developing a competitive advantage through effective decision-making and Porter's Five Forces model. Additionally, it emphasizes the need for a retail business to have a strong brand image, website, display, and store location. The report concludes by emphasizing the significance of leadership style and management practices in retaining a business for a long term.

CONTEXT OF
BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 2............................................................................................................................................1
History of the organisation.....................................................................................................1
Types of leadership.................................................................................................................2
Management practice .............................................................................................................3
Strategy of business................................................................................................................3
Implementation of leadership and management practice.......................................................4
Recommendation in the style of leadership. ..........................................................................5
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................7

INTRODUCTION
The word retail business refer to the sell of products and services to the end consumer. It
work through multiple supply chain management. The main purpose of retail business is to
satisfy the need and demand of customer that are already predicted by wholesale business. In this
assignment vision, leadership style and management practice about TESCO is discussed. The
company TESCO is the largest retailer of grocery and general commodity. It is established in
1919 by Jack Cohen in UK. In present era, Tesco is measured as the third largest retailer to earn
gross revenue in all the world.
TASK 2.
History of the organisation.
The founder of Tesco Jack Cohen started selling groceries in the east London from a
small stall in the year 1919. In the year 1924 first branded product was sold under the name of
Tesco tea. After ten years Tesco first store was opened in Burnt Oak. After success of Tesco
store. The land was purchased to open the Warehouse and headquarter for Tesco. So that the
company can find more ideas to serve their customer in a ideal way. When Tesco store
successfully passed a decade. Tesco find opportunity to expand their business in neighbouring
country also (Arocena, Miller and Mylopoulos, 2012).
Summary of the organisation.
TESCO is the largest retailer of the UK. Tesco first purpose is to satisfy their
stakeholder. In today scenario there are more than four lakh employees which serve and satisfy
lakh's of tesco customer everyday. Tesco fulfil their customer needs and demand through their
store as well as online also. There are more than 6,500 store of tesco all around the world. Tesco
is the ninth largest retailer in the world in earning revenues and the first retailer of UK in earning
profits by creating a sales of 39 billion pounds for the year 2017 and 2018 (Leading 10 retailers
based on sales in the United Kingdom, 2017). In present scenario Tesco is operating their
business activities in large variety of consumer goods. So they can serve all of type customer
from need of food to the demand of furniture. For the year 2016/17 company had paid 3.0
divided per share to their customer. For the year 2016-17 company earned a operating profit of
1,837 million pound with generating sales of 51 billion.
Purpose of taking Tesco for this assignment:
1

 Tesco has successfully running their business activities from a century. There are
thousand of customer which interact daily with Tesco. Company provide different
benefits to their customer. So with the study of Tesco it is easy to understand
international market (Bagdare and Jain, 2013).
 Tesco has reached in different markets. They have launched so many different brands as
their venture. This venture brands help the Tesco to cover those market which is difficult
to reach because of existing competitors.
Vision of Tesco:
As Tesco is already have long term success in their retail business. So the company
always try to serve their customer with a high value. Tesco major focused on need and want of
the company of the world. Company achieve their vision with the apply of their strategic
planning process in their business.
Leadership and management practice:
Leadership refer to a process which show the relationship between leaders and their
followers. In this a leader can influence other people according to company's environment. So
the goals and target of company can be easily achieved.
Types of leadership.
Autocratic leadership refer to those style of leadership in which a leader has the overall
control to take decision. The autocratic leadership can be successful where there is a need of
close supervision. In case of Tesco this leadership style can create confusion because in retail
business sometimes there is need to take action quickly (Moloney, 2015).
Laissez-faire leadership this type of leader are more powerful but they cannot access
their employees. The follower of this leader are experienced. Sometimes in these leadership style
leader failed to improve continues feedback. So in case of Tesco it is not so easy because without
supervision it is difficult to manage such large number of stores.
Charismatic leadership this type of leader perform as a role model in their company.
They are always motivated and perform their work with energy. In the access of Tesco store this
type of leaders are always good because they can perform more better. So the subordinates also
try to achieve high goals as they are follower of their leader.
2

Supportive leadership these leaders always ready to support their employees. In this
leadership style leader behaviour is always friendly. In case of Tesco the supportive leadership
help the company to achieve goals of company as well as of their employee also.
Management practice
The term management practice is the process by which a company can produce good
result from their employees. The productivity of employees can be increased by using least
amount of resources that are available in the company (Ofori, 2013).
1. Reward effort it is the process by which an employee can be motivated by appreciate the
work done by company employees. This appreciation process can create positive impact
on the employees. For Tesco rewards performance can bring better result because
motivate employees can bring more sale in Tesco store.
2. Vulnerable is a way in which employees interact with their senior employees of the
organisation. As if there are not interaction between the employees then junior employees
will feel demotivated. So to bring new ideas it is essential to interact with junior
employees also. Like if Tesco communicate with junior employees then they can aware
about new technology factors. So they create changes that help them to easily access for
their online application.
3. Clarity should need to be present in the case of company. Many big companies cannot
achieve their goals. So for Tesco it should be compulsory to clear their vision with the
employees. Company should delegate the responsibility and authority as required by the
employees to complete the project.
4. Hold regular meetings- to perform a project manager put energy and effort to complete
the goals of the company. So for Tesco it should be necessary to create meeting with
different departments that can help them to complete the project. This meeting should be
done on regular, monthly and quarterly basis (Özer and Tınaztepe, 2014).
Strategy of business.
The term strategy refer to the method and plan that are developed by the organisation to
complete or achieve the overall aim of the company. Strategy work to cover one or more goals of
the company. In these company allocate their resource to achieve a desired state for their future.
Price Skimming strategy
3

In the price skimming strategy the company charged high price from their customer in its
introduction phase. It is mostly used by small companies to recover the cost that they invest in
their business. For Tesco it is useful when company launch a new product in their store. Like a
unique product that is not available in competitive stores.
Acquisition strategy
This type of strategy can used by the companies which have surplus amount in their
capital. The term acquisition refer to the purchase of more product lines and also a another
company. Like Tesco can buy small stores that are giving competition to them in a local market
or area.
Implementation of leadership and management practice.
For the case of Tesco the best leadership style to implement by them is supportive
leadership. As Tesco store are present all over the globe and supportive leadership can help
company to fulfil the goals of Tesco as well as of their employees also.
Positive impact of supportive leadership.
 For Tesco it is to manage their all stores with the supportive style leadership. Each
country has different environment. So each store should be little different from each
other. Like in supportive style a leader can motivate their employees as per need of the
store (Starik and Kanashiro, 2013).
 In supportive style the leader can motivate their employees with fulfil of their needs. In
the supportive leadership a employee is more motivated as compare to bureaucratic,
autocratic and laissez-faire leadership.
 The company which have high structure for their project are more in need of supportive
style leadership. Like in Tesco large number of customer visit in the store. So company
can choose those leader which morally boost their employees with positivity.
Negative impact of leadership.
 As for Tesco autocratic leadership cannot be more comfortable. As in these employees
cannot feel as they are part of the company. So this can result in low performance of the
employees.
 While in laissez-faire leadership the leader has not direct control on there employees. As
employees are experienced but due to not control over them. There is delay in the
decision making which can slow down the process of company operating activities.
4

In the case of management practice the result are always better. These management
practice should help the company to better performance of their employees. For Tesco team
effort and regular meetings is a better option for the company to increase the performance of
employees. Some employees start to become alienated worker when they spend several years in
the companies. For this there is a need of engage workforce which is always enthusiastic and
help a company to achieve their targets. As Tesco is the largest retail company in the globe. So
for the employees should be more committed towards their work. For the completion of a project
the company invest lot of time so it is the responsibility of member also that they should
committed towards the work (Wang and et. al., 2013).
For Tesco the company can go with acquisition strategy. As company is earning more
profits and they have surplus amount to buy stores of other company. Example- Tesco has
different venture brands which are operating by them to match with specific need of products in
a particular market. Chokablok ice-cream and Yoo yoghurt are the example of venture brands of
Tesco. Acquisition strategy is also benefit because company is able to buy local stores which are
already placed and furnished in the market.
Recommendation in the style of leadership.
 Tesco is following supportive style leadership which is a best option for them but it leave
a negative effect. The employees are more dependable on their leaders.
 The company store are present in all over the globe. More ever they have a large number
of workforce employed with them. So a single leader has been responsible to fulfil needs
of every employee which create a barrier to perform their task also.
For the vision of Tesco to line up with them for a long term there should be some
recommendation which is as follow:
 Company should make further plans that are be a clear idea of target market and
customer service. If Tesco want to succeed in their vision then they should run their
business with the right decision making.
 Tesco has a brand image in the UK. But they should be more conscious about the other
country. As people are aware with the brand Tesco only when they advertise their
product on the media. For a retail business there is a long list for business like name,
website, display as well as their store location should also matters to develop their
image.
5

 Tesco can apply Porter five force model for their company that can help them to find
opportunities and threats for their business. With these model Tesco is capable to fight
with new companies and to develop a competitive advantage that can retain them to earn
revenue and profit for a long run (Wood, Coe and Wrigley, 2016).
CONCLUSION
From the above report it is concluded that to operate a retail business there is large
amount of investment is required by the company. Different leadership style can help a business
to deal with company employees. To retain a business for a long term it is essential to develop
management practice that can increase the productivity of employees. Tesco is serving the
customer from a century. It is possible only because of company vision that is to keep create and
fulfil interest of their stakeholder.
REFERENCES
Books and Journals
Arocena, P.C., Miller, R.J. and Mylopoulos, J., 2012, August. The Vivification Problem in Real-
Time Business Intelligence: A Vision. In International Workshop on Business
Intelligence for the Real-Time Enterprise (pp. 37-49). Springer, Berlin, Heidelberg.
6

Bagdare, S. and Jain, R., 2013. Measuring retail customer experience. International Journal of
Retail & Distribution Management 41(10), pp.790-804.
Moloney, N., 2015. Regulating the retail markets. In The Oxford handbook of financial
regulation.
Ofori, D.F., 2013. Project management practices and critical success factors–a developing
country perspective.
Özer, F. and Tınaztepe, C., 2014. Effect of strategic leadership styles on firm performance: A
study in a Turkish SME. Procedia-Social and Behavioral Sciences, 150, pp.778-784.
Starik, M. and Kanashiro, P., 2013. Toward a theory of sustainability management: Uncovering
and integrating the nearly obvious. Organization & Environment, 26(1), pp.7-30.
Wang and et. al., 2013. Gender makes the difference: The moderating role of leader gender on
the relationship between leadership styles and subordinate performance. Organizational
Behavior and Human Decision Processes, 122(2), pp.101-113.
Wood, S., Coe, N.M. and Wrigley, N., 2016. Multi-scalar localization and capability
transference: exploring embeddedness in the Asian retail expansion of Tesco. Regional
Studies, 50(3), pp.475-495.
Online
Leading 10 retailers based on sales in the United Kingdom. 2017. [Online]. Available through:
<https://www.statista.com/statistics/462863/leading-ten-retailers-by-sales-uk/>.
7