Corporate Strategy & Governance – Tesco
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Added on 2020-03-01
Corporate Strategy & Governance – Tesco
Added on 2020-03-01
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Running Header: CORPORATE STRATEGY & GOVERNANCE – TESCO1Corporate Strategy & Governance – Tesco
Corporate Strategy & Governance – Tesco2ContentsIntroduction & Background.......................................................................................................3Industry Life Cycle & Corporate Strategy at Tesco...................................................................4Structure & Effectiveness of Tesco Board’s Corporate Governance.......................................10Board Crisis Action Plan..........................................................................................................16Corporate Governance Failure – Analysis & Actions for Reduction / Elimination................19Data Collection Methods – Research at Complex Organizations............................................22Conclusion................................................................................................................................22References................................................................................................................................24
Corporate Strategy & Governance – Tesco3Introduction & BackgroundStrategic management represents a domain for the accountability management as wellas social responsibility in being an element of the vision / mission, as well as the interests of shareholder are effectively highlighted which could interrupted by way of employee interests or else environmental regulations / responsibilities leading to conflict in interest (Tricker and Tricker 2015; Filatotchev and Nakajima 2014). The undertaking of business over longer term forms the essential objective in the context of successfully and effectively managing achievement which could take place by way of varied possibilities in attracting newer investors. In this context, corporate governance helps in ensuring that the overall interest amongst top tier managers are lined up / aligned towards the overall interests of the shareholders, spanning across the various domains of interests amongst board of directors, managers, and shareholders and these various domains comprise the electing of the board of directors as well as chief executive manager, and also other set of stakeholders (Tricker and Tricker 2015; Filatotchev and Nakajima 2014). At the outset corporate governance refers to strategic direction and structure, which in turn illustrates corporate governance, possesses managerial roles by way of varied tools which include legislations pertaining corporate governance, ethics pertaining corporate governance, as well as responsibilities pertaining corporate governance both in social and environmental contexts that could aid in achieving the strategic objectives (Tricker and Tricker 2015; Filatotchev and Nakajima 2014). Tesco PLC refers to United Kingdom based multinational grocery as well as general merchandising retailer having its headquarters at Welwyn Garden City in Hertfordshire, England. Tesco PLC represents third largest amongst the retailers across the globe measured in terms of profits as well as represents ninth largest amongst the retailers across the globe measured in terms of revenues (Tesco PLC 2017a). Tesco PLC owns stores across 12 nations
Corporate Strategy & Governance – Tesco4in Asia as well as Europe and holds a market leadership position in grocery market across United Kingdom wherein it holds market share at about 28.4 per cent (Tesco PLC 2017a). Asspecified even if originally Tesco PLC was a United Kingdom based grocery retailer, the company has undertaken geographical diversification starting from early period of 1990s as well as diversification within domains like that of retailing for internet services, telecom services, financial services, software, petrol, toys, furniture, electronics, clothing and books (Tesco PLC 2017a). The period of 1990s witnessed Tesco repositioning itself as the companytransformed from being lower cost / higher volume / down market retailer, to that of a one appealing to various set of social groups, through the offering of products that range across the items branded "Tesco Value" to that of items branded "Tesco Finest" (Tesco PLC 2017a).The broadening of the company’s appeal led to successful outcomes with the Tesco chain of store growing from about 500 stores to that of 2500 stores over a period of 15 years (Tesco PLC 2017a). The crucial element of expansion strategy employed by Tesco has been the innovative application of various technologies (Tesco PLC 2017a). Industry Life Cycle & Corporate Strategy at TescoThe business enterprise of supermarkets represents larger and highly intricate structure that comprises various set of component entities including – A range of repeating customers who are grouped within varied local regions, the chain of grocery / retailer stores, various set of systems for transportation, the range of centres for warehouse distribution, an a range of suppliers for products by way of contracts (Kurnia et al. 2015; Hübner et al. 2013; Davies and Kirby 2012). Any supermarket prevails and operates within competitive environments, wherein it shall acts as the value adding intermediary amongst the supplier companies that are dispersed geographically as well as the various customer individual scattered across the region who shall eventually purchase their products (Kurnia et al. 2015;
Corporate Strategy & Governance – Tesco5Hübner et al. 2013; Davies and Kirby 2012). By way of carrying out the function, the supermarket enterprise acquires as well as assembles wide range of product assortments procured from individual set of suppliers, which are later organized as well as distributed as is required to the retail store chains for purposes of sale towards local customers. This model of supermarket focuses over the work which are involved to physically handle stocks as the same makes a journey starting from the suppliers to the end customers (Kurnia et al. 2015; Hübner et al. 2013; Davies and Kirby 2012). Even though the same references to business entities which are involved, this model fails to include lifecycle development concerning the structures of physical housing relating to trucks, stores, warehouses, as well as equipment which are employed. This model effectively identifies key set of parameters which are suitably involved, yet the generic version shall not encompass specifics, like that of specific amount of the product types which the store sells, amount of warehouses/ stores, their respective sizes, and other such criteria (Kurnia et al. 2015; Hübner et al. 2013; Davies and Kirby 2012). These shall be determined while this model can be applied towards particular supermarket business. The overall supermarket industry is at the approximate estimation US Dollar 492 billion valued behemoth based on the recently available publications (Kurnia et al. 2015; Hübner et al. 2013; Davies and Kirby 2012). The industry has evolved from that of an industry characterized by pure competition, wherein many hundreds and thousands of the smaller sized and independent stores in essence sold same set of goods, each catering limited region geographically and the concerned customer base. The same represents the initial phaseof this industry’s life cycle (Kurnia et al. 2015; Hübner et al. 2013; Davies and Kirby 2012). During the course of 21st century, overall industry was dominated with the limited number ofentities comprises larger sized and sophisticated chains that served multiple state regions over
Corporate Strategy & Governance – Tesco6more of oligarchy based structure with mature phase of this industry’s life cycle. The evolution of life cycle from various smaller and independent retailers to that of fewer larger sized chains could be explained in the best manner by way of the theory termed as Wheel of Retailing (Kurnia et al. 2015; Hübner et al. 2013; Davies and Kirby 2012). This theory essentially postulates that any store shall start out by serving limited market by using smaller product mix, lower prices levels as well as lower margins (Kurnia et al. 2015; Hübner et al. 2013; Davies and Kirby 2012). With the growth in the store, the same shall expand the relevant product mix, enhancement to the facilities, as well as increase in services. The same shall eventually add tooverall costs of the operations, with consequent increases in the price margins (Kurnia et al. 2015; Hübner et al. 2013; Davies and Kirby 2012). With the continual growth in the store, thebusiness shall follow the similar approach concerning increases in product mix, enhancement to the facilities, as well as increase in services. It shall expand by way of opening additional set of stores as well as expansion of the marketing areas and all of these shall continue the overall need for increasing prices as well as margins (Kurnia et al. 2015; Hübner et al. 2013; Davies and Kirby 2012). If the same could be successfully managed, at an eventual time the relevant operation could become increasingly sophisticated form of chain serving to the multi-state regions. Naturally various other entrepreneurs shall endeavour in taking the market share through opening of stores serving to limited market armed by smaller product mix, lower prices, lower margins as well as limited set of services within facilities that are bare-bones (Kurnia et al. 2015; Hübner et al. 2013; Davies and Kirby 2012). As these entitiesgrow, they shall follow same set of format as compared to their respective predecessors, as well as at an eventual time become much more effective through learning derived from experience as well as delivering an effective job, forcing them towards the phase of decline in
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