Innovation: Sustainability Issue in Tesco Plc.

This report discusses the sustainability issue faced by Tesco and the need for innovation in the business. It provides an innovative solution and strategies for implementation.

Running Head: Innovation
Innovation
Sustainability Issue in Tesco Plc.
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Contents
Introduction......................................................................................................................................1
Sustainability Challenge in Tesco...................................................................................................1
Need of Innovation in Business.......................................................................................................2
Innovative Solution for Challenge...................................................................................................3
Strategic Innovation Model.............................................................................................................4
Innovation Action Plan................................................................................................................4
Leadership....................................................................................................................................6
Innovation Implementation..........................................................................................................7
Conclusion.......................................................................................................................................8
References........................................................................................................................................9

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Introduction
The purpose of this report is to enlighten the reader about the aspects of sustainability challenge
for the company Tesco. The organization is facing issues in the business environment due to
decreasing level of profit and high level of competition in the business environment. It is
important for the business to continue operating efficiently in the business environment so as to
attain a positive image in the target market. The below mentioned report highlight information
about the business sustainability challenge faced by the company Tesco in the worldwide market
along with the need of innovation in the business. The paper also elaborates innovation solution
for the company to implement and leadership strategies with the help of which the business can
eliminate challenges and grow successfully. Further, more details about the paper are discussed
below:
Sustainability Challenge in Tesco
Tesco is a supermarket retail chain store that is present in the UK supermarket industry. The
organization was incorporated in the year 1919 by Jack Cohen. The company has now become
world’s ninth largest retailer present in the world. However, a significant deplete in the position
of the company can be clearly seen with the emergence of competitors in the business
environment. Talking about the ‘sustainability issue’, the fact should be noted that the recent
annual results of the company stated that the company has seen many ups and downs in the profit
level. The company is still struggling to successfully meet the demand of customers and
eliminate the risk of competition from the market (Our Tesco 2016).
A decade ago, the company had a significant dominant position in the UK food retailing market
that looked unapproachable to most of the organizations present in the target market. Further, the
company also aimed to enter in the US market while maintaining competitive pace in the
segments of central Europe and Asia. While the company laid its footsteps in the market of US,
the great recession came into the picture (Bloomberg 2017). The company entered in the US
market while looking it at a different way, whereas when the conditions changes the strategies
and market research of the company became ineffective and hard discounted retail chain store
attracted the interest of people in the business environment. Aldi and Lidl are the two renowned

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organizations that came into the picture to wash off the activities of Tesco from US market. The
companies utilized no frills business model and very cheap prices to destroy the profitability of
Tesco in the business environment. The company was unable to compete such low priced model
of the competitors due to which they business collapsed in the external environment (Marchant
2019).
Further, along with this, the business also confirmed that the job of their 9000 staffs is at risk
because the management is aiming to close the fresh food counter. The company is planning to
cut the cost base because the people are not frequently using the fresh food section. Tesco has 90
fresh food counters where almost 9000 people works so shutting down the counters will give a
rest to the jobs of 9000 people. The company used this strategy to fight back against the
competition in the environment. However, this strategy worked against the business only. The
company dropped its share’s rate by 8% in the previous year, and it also missed the first-half
profit forecast in the environment (Oakley 2019). Poland and Thailand on the other hand are
acting as a tough area to maintain growth for the company Tesco. Considering from the year
2014, when the company was extremely profitable which they subsequently started losing over
the next coming years.
Need of Innovation in Business
Below mentioned are the reasons why business need innovation in the external environment:
Eliminate Competition: If the business is implementing the activities that belong to a specific
niche then they are far away from standing alone in the business environment. It is important for
the organizations present in the business environment use innovation so as to eliminate high level
of competition present in the business environment. Innovation and creativity helps in making
use of ideas that no organization is currently implementing in the business environment and
successfully applying them in the business to grow. Introduction of innovation in business will
attract more customers in the business environment. Different strategies of the company will
make the investors believe that the company provide more efficient services in the business
environment (Coccia 2017).

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Meet the Needs of Customers: Use of innovative strategies in the business helps the
organization to successfully meet the needs of customers present in the target market. Use of
innovation in the company can help the management to address the needs of the customers in a
better way and align their interest with the organization. Further, relating it with the activities of
the company Tesco, it should be noted that the company Tesco can make use of innovative
strategies in the business environment to increase satisfaction level of the customers present in
Thailand and Poland (Butler 2019).
Increase Productivity and Eliminate the Costs: It should be noted that innovation is required
in the business environment to use the resources in a better way and increase the profitability of
the company in the business environment. With the help of innovation, the business can
effectively make use of income friendly strategies in the business environment and increase the
level off productivity as well. With the help of innovation, the business can achieve to the
heights that were initially un-achievable. This type of process also provides cost-effective
techniques in the business environment for the companies to grow. By using the innovative and
creative activities in the business environment, the company Tesco can increase the productivity
by making effective use of available resources as well (Nylén, and Holmström 2015).
Innovative Solution for Challenge
Looking at the presence and hurdles of the company Tesco in the business environment, it can be
seen that the company require diversified set of tools to grow and achieve the expected position.
It is important for the business to implement creative techniques that can easily dissolve all the
sustainable challenges that the business is facing. Further, the company should implement the
brainstorming techniques in the business environment to eliminate the problems faced by the
business. Talking about innovative solution, it should be noted that it is not important for the
business to implement innovations in the business that no organization has used before, but
innovation and creativity is something that the own organization introduces in the business
environment to grow (Johnson 2015).
The company should innovative techniques that can initially help them to fight against
competition and simultaneously maintain high level of profits in the business environment. The
management of company Tesco should effectively make use of ‘brainstorming’ techniques for

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generation of innovation solutions for the business. Brainstorming refers to the process of
generation of new ideas and techniques to find a solution for the particular problem attracted by
the business. In the brainstorming session, the business welcomes all types of ideas on the end of
the employees that can help them to eliminate the sustainability problem in the business
environment (Hahn, et. al., 2015). Further, under the given the company should implement
innovative solution by initially implementing the barnstorming technique in the business. Under
this process, the business should eliminate the thought of expelling 9000 employees from the
company and should motivate the employees to present the innovative ideas if they want to
maintain their place in the business. The company should make use of six thinking hats
techniques to generate innovative ideas and grow. The six coloured hats and there are discussed
below:
White Hat: facts in the environment
Black Hat: judgement of what and where something can go wrong
Yellow Hat: optimism and brightness
Green Hat: creativity
Red Hat: intuition and feelings
Blue Hat: management
With the help of this process, the business will get to attain information about the external as
well as internal environment and grow. Thus, using this process the employees should offer new
ideas to the management and the management should propose activities for the change
management (De Bono 2017).
Strategic Innovation Model
Innovation Action Plan

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Activity Time
Period (in
months)
Manager Growth Objective Concerned
Department
Situational Analysis 2 Marketing Head Collection of authentic
information about people,
competitors and disruption
present in the market.
R&D
Creating groups to
provide
brainstorming ideas
1 Manager Identifying best innovative
strategy for business to
overcome sustainability
challenge
Management
Deciding the use of
technology and
innovation for
development
1 Manager Using innovative
technology
Management
Defining audience
and prioritizing areas
to target
3 Marketing Head Deciding target groups and
people
Marketing
Analysing various
innovative strategies
for growth
4 R & D Head Analysing strategies and
Procuring Resources
R & D
Implementation of
Change management
2 Human Resource
Manager
Use innovative techniques
without any barrier
HRM
Initiating disruption
in supply chain and
digital service
delivery activities
2 Management
Head
Finding right technology
for the strategic innovation
Management
Allocation of budget 1 Manager Defining of expenses for
each of the activity
Management
Communication with
potential partners
3 PR Manager Attracting and
communicating customers
Public
Relations

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and customers for
feedback
Training of
employees
1 HR Manager Train the employees so that
they can deliver the
disruption to the customers
Human
Resource
Management
Initiation of Sales by
working on
feedbacks.
12 Manager Implementation of sales Management
Leadership
Leadership refers to the act of leading a group of people in the business environment. The fact
should be noted that leadership place a significant role in introducing changes in business
process and achieving success as well. Leadership activity helps in involving the innovative
activities in the business environment and making the employees use them as well. In the
company Tesco, it is crucial for the management to implement effective leadership techniques in
the business environment to grow and succeed. The employees present at workplace always
resist towards the change in the business environment because they do not want to change their
activities (Binder 2016).
However, when the business is facing sustainability issues in the target market, then it is
important for them to refine the complete process of the business so as to find out the core issue
and rectify it using innovation and creativity present in the environment. The management of the
company should make use of innovation as well as transformational leadership technique in the
business environment. Innovation leadership refers to the leadership technique under which the
leader influences the employees of the company to produce creative ideas in the business. The
leader motivates the employees to provide the brainstorming ideas that they can use to eliminate
the sustainability challenges present with the company (Khalili 2016).
Along with the innovation leadership, the management should also implement the
transformational leadership style in the workplace environment to successfully grow. This type
of leadership style motivates the leader to identify the changes in the business and works to

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implement such change for growth. The transformational leaders are committed to the employees
of the company and do not leave them in between while implementing innovative change
management techniques in the business environment.
The workplace environment of company Tesco is becoming negative because some of the
employees are feeling the risk of replacement while other employees do not want to implement
innovative change management techniques at workplace. Thus, the transformation leadership
style will provide assurance to the employees that the leader is implementing change just for
their benefit, it will also ensure the employees that the leader is working with them to implement
changes (Li, Mitchell, and Boyle 2016). It will also increase the trust level of the unsure
employees that the management is not going to leave them behind just to grow and increase
competence. Further, innovation leadership will motivate the employees to suggest them about
the ways with which the employees want the company to grow. This will provide different
perspective to the employees for the business to work and become sustainable in the
environment.
Innovation Implementation
Below mentioned is the process through which innovation is implemented in the business:
 Before analysing the type of innovation that the management of Tesco should apply in
the business, it is important for the management to conduct situational analysis so as to
gain information about the competitors and the external environment.
 Afterwards, the business needs to formulate the group of employees who can successfully
provide them brainstorming ideas in the business environment. Instead of firing all the
9000 employees, the management should initially seek their advice regarding the
business process so as to innovate the system. These employees have worked in the fresh
food segment so they better know about the activities of that segment. So, asking for their
ideas will help them to identify the issues present in process that is damaging their
growth in the environment (Audretsch, and Belitski 2017).
 The management should create six groups in the environment and shall start creating
brainstorming ideas according to the six hat thinking technique. According to this
technique, the management should provide one hat colour to every team and they should
generate brainstorming ideas within that boundary. Among all the given suggestions, the

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leader should then choose for the best option that can eliminate the sustainability
challenge of the company. In the given case of Tesco, the management should renovate
the supply chain management activities in the business so as to increase the interest level
of the people present in Poland and Thailand. Further, in order to fight against
competition, the management should not eliminate the employees instead they should
generate a new segment with the help of these employees who would focus on digital
marketing activities of the company (Dubey, et. al., 2017).
 After deciding the innovation and technology, the leaders of Tesco should then re-analyse
the target market and prioritize the areas that should be at focus. After analysing the focus
areas, the management should them analyse strategies to implement such innovation in
the business. Change management techniques should applied by the leader and HR
manager to eliminate resistance of employees. Afterward, effective supply chain
management strategies should be implemented using adequate ERP system to track the
products along with digital marketing activities in the environment. Budget should be
allocated for this type of activity and the communication should be initiated to attain
feedback of the clients. Lastly, the employees should be trained according to the feedback
and sales should be made using innovative practices in the business environment
(Botschen, G. and Wegerer 2017).
Conclusion
Thus, in the limelight of above mentioned events, the fact should be noted that the paper
highlighted information about the sustainability issue present in the company Tesco. The paper
highlights the innovative activities with the help of which the business can succeed in the target
market. Challenges faced by the company are explained above along with the need for
innovation and the implementation of innovation for the business. Thus, it should be noted that
by using above mentioned leadership activities and action plan, the company Tesco can
efficiently eliminate the sustainability issue from the environment.

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References
Audretsch, D.B. and Belitski, M., 2017. Entrepreneurial ecosystems in cities: establishing the
framework conditions. The Journal of Technology Transfer, 42(5), pp.1030-1051.
Binder, J., 2016. Global project management: communication, collaboration and
management across borders. UK: Routledge.
Bloomberg. (2017) Tesco’s [online]. Retrieved from <
https://www.bloomberg.com/profiles/companies/9352001Z:LN-tesco's> [Accessed on 27
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Botschen, G. and Wegerer, P.K., 2017. Brand-driven retail format innovation: a conceptual
framework. International Journal of Retail & Distribution Management, 45(7/8), pp.874-
891.
Butler, S., (2019) Tesco confirms 9,000 jobs at risk as it axes fresh food counters [online].
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Management, 29(9), pp.1048-1061.
De Bono, E., 2017. Six thinking hats. Penguin UK.
Dubey, R., Gunasekaran, A., Papadopoulos, T., Childe, S.J., Shibin, K.T. and Wamba, S.F.,
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Johnson, M.P., 2015. Sustainability management and small and medium‐sized enterprises:
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Responsibility and Environmental Management, 22(5), pp.271-285.

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Khalili, A., 2016. Linking transformational leadership, creativity, innovation, and innovation-
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