Managing Innovation in Business

This report analyzes the innovation strategies of Tesco Plc, a leading multinational grocery retailer, focusing on the drivers of innovation, the company's innovation history, and the impact of digital trends on the retail industry in 2018.

Managing Innovation In
Business

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................1
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
1. Organization and Industry Overview......................................................................................1
2.Organisation and its innovation history...................................................................................3
3. Industry in 2018......................................................................................................................4
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................7

EXECUTIVE SUMMARY
This project is summarises as field of innovation being undertaken by company Tesco
Plc. The main objective of project is to identify the drivers of innovation within a business and
its environment. Leaders are the important people of company for successful plan, which is also
discusses in report. This present report explains the importance of organizational knowledge
which helps to assess the innovation capability. As apart from this, report shows about the new
service of Tesco and activities performed for the successful development. The organizational
development audit for the new service will be explained in this assignment.
INTRODUCTION
Innovation is a new idea, device or method, which viewed as application of better
solution. It is considered as easiest solution to the complicated problems of people (Altenburg
and Pegels, 2012). The company selected for this report is Tesco Plc, is a British multinational
groceries and general merchandising retailer. The company headquarters in England, UK. This
report talks about innovation adopted by Tesco for simplification of business activities. Beside
this, the role of leader in developing successful plan is being explained in project. The report
discuss about importance of organizational knowledge and cross functional operations. The
various key activities are required for development of successful plan is also explained. There is
organizational development audit for new product or service is explained.
MAIN BODY
1. Organization and Industry Overview
Organization existing innovation and performance and its capabilities
Innovation is the process of translating an idea or invention into goods or services that
creates value or which customers will ready to pay for it. It should be unique so that it can create
value in front of customers. Tesco applies innovation in its company to provide quality goods
and services to the customers. Tesco is the largest grocery retailer in United Kingdom. It has
been retail a leader in retail innovation both at home as well as abroad for many years. In 2014
sales of company goes down by 3% and organisation suffers from the decline. This business data
shows that company needs to boost it sale in forthcoming year. The leaders of company have to
focus on the enhancing sales. The leader faced various kinds of challenges to develop the
innovative idea. The management and leaders had long term vision for Tesco instead of getting
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immediate success. Leaders could only identify the innovation because they knowing about
details of organization. As leaders were aware that, what is the current position of company and
where it stands when it comes to technology. This organizational knowledge assist the leaders
about technological innovation in company. The cross function co-operation helped management
and leaders to analyse the dynamic environment of innovation. And according to that develop the
new technology for business.
Various activities for successful development
The development of innovation is not that tough task but successful development needs
various activities. The discover of positive inflection point can be a game changer for company,
as it has the power to propel company forward. The best innovations drives from a sea of
information about products, services, customers, competitors, market conditions and internal
capabilities. Shifting perspective is necessary for going to get innovation right. As to see the new
opportunities leader must be able to get out of own box. The successful innovators always
question their own assumption and try on alternative and helpful points of view. Successful
leaders learn to identify the opportunities in adverse situation. Apart from this successful
development can be done by generating values for customers (Chesbrough, 2012). Value is at the
centre of everything, with it company can hobble along in other areas and still score a goal.
Value is what company want and what customer is ready to pay.
Identification of new service of Tesco
To increase the sales of company their management and leaders make strategy that they
can make an online application for smartphones and tablets. They made an application through
which consumers can place order online. It provides help to increase the sales of the organisation
because of the following reasons such as follows- consumers were using the Tesco grocery
shopping app in their mobile phones. The app offers benefits such as the use of an embedded
barcode scanner for quick orders, as well as the ability to sync one's orders between multiple
devices. Customers can give order online and food were directly deliver to their homes.
Consumers have access to thousands of products online. They offered everything from food to
hardware to sports equipment for to consumers (Davila, Epstein and Shelton, 2012). There were
thousands of recipes,cooking tips and videos available on the “Tesco Real Food” site. People can
know the recipe of food by using of mobiles phones. Customer can find recipes via Tesco's free
'Recipe Text Service' which enables the user to get recipes on their phone. They can place order
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by mentioning the key ingredients which can be used while cooking. These recipes are offered
by company on basis of their knowledge and customers preference. Tesco has expanded the
capabilities of its mobile application by offering consumers who are in South Korea. The app
provides opportunity to shop while waiting for bus or at subway by simply pointing their phone
at product billboards. The company received positive response to virtual store in Seoul, so
company launched an interactive virtual grocery store at Gatwick airport in London.
Innovation capability of Tesco enhancing day by day. As recently company has launched
its new discount store concept name Jack's. The new brand is offering customers lowest possible
price in UK. The store named after Tesco founder, Jack Cohen. Company has planned to launch
its 15 stores in next six months. The new store is competing with UK discounter Aldi and Lidl
which have continued to take market share from the big groceries. Jack operates on low cost
business model, to keep costs and prices low, by simplifying its product range and keeping store
fitting and fixtures a minimum. As an innovation company allows customer to use their
smartphone to scan products as they shop. And then check out by simply scanning a barcode on
their phone at the till point which total their bills for payment (Gassmann and Schweitzer, 2014).
2.Organisation and its innovation history
Innovation is the process of translating an idea or invention into goods or services that
creates value or which customers will ready to pay for it. It should be unique so that it can create
value in front of customers. Tesco applies innovation in its company to provide quality goods
and services to the customers (Wang and Tsai, 2014). Tesco is the largest grocery retailer in
United Kingdom. It was established in year 1919. It has stores in seven countries across Asia and
Europe. To increase the sales and consumer satisfaction company did various innovative things
such as follows-
Click and collect Drive-Through:
This innovation was conducted in the year 2015 to offer the personalised service to their
consumers based on its personal lifestyle and preferences, Tesco push towards e-commerce.
“Click and Collect” grocery services offers a higher level of convenience for consumers who
pick up items frequently, saving them from having to find a parking spot and enter the store to
pick up orders. So consumers can save the time. Company is focuses to create efficiencies within
the online store to minimise the cost of delivery and to keep its products competitive (Kapsali,
2011).
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New Stock Replenishment systems:
This innovation was conducted in the 2013. New stock replenishment concept was
introduced by Tesco to minimise the food wastage by using auto matted ordering system, Group
Ordering System (GOS) by Oracle. This system helps the retailer to maintain the minimum
inventories. Company optimize fresh food forecasts by programming pre-defined acceptable
waste levels into the system. GOS helps in forecasting the sales before one or two hours prior to
the order is placed by the customers. So it helps in reduction of food wastage in the stores.
Retail Ready packaging initiatives:
This innovation was conducted in the 2013. Tesco was the leading innovator in Retail-
Ready Packaging. It continues to work closely with manufacturers and vendors to store display,
shelves and pallets to improve product packaging and replenishment productivity in store. It
helps in removing various steps from product movement to storage and placed directly on the
shelf. The bread suppliers of the company develop one style of tray and trolley which can be
used by the all the suppliers to reduce inefficiencies in work. Supply chain of organisation was
improved by using the K-roll pallet. K-roll pallet was by the store manager and it is a foot-
activated mechanism (Sommer, 2012).
Application for the Smartphones and Tablets:
This innovation was conducted in the 2015 to increase the sales of company, Tesco
makes an online application through which consumes can place order online and food is directly
deliver to their home. Recipes of food and cooking videos were also available in the application.
It provides help in customers satisfaction because consumers can order as per their likes and food
can be deliver at their home.
These innovative ideas help the company to increase the sales and maximum customer
satisfaction with better quality product. Innovation is the need of every business and it gives the
competitive advantage to the organisation. So company can sustain for a long time in the market
and capture more market share (Storbacka, 2011).
3. Industry in 2018
In year 2018 retail industry have faced various challenges and adopted different changes
that can help the sector to maximise profits and to contribute higher percentage in the national
income of the country. This year has brought various challenges and trends for this industry. In
January, February and March moths of the year has resulted in disruption in retail market. As this
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the season of winter than it has reduced the sales of various different food and drinking items
that are sold by retain industry. The inflation rate has also fallen in year 2018 which was
expected which has affected the consumer confidence in this sector.
When the weather has changed in next month than it has resulted positively as sales of
food and beverage items has been increased. Various challenges has been faced by retail sector
in year 2018. These challenges are reduction in customer demand, changes in weather, reduced
inflation rate etc. While the industry was facing challenges at the same time different trends are
introduced for the industry in order to increase its sales and profits. The major trend was of
mobile application that help the customers to reach at the store from their house. They can order
all the items online and get it whenever they want. If organisations are using digital media than it
can help them to acquire higher market share.
The comp[any who always be on the top of the retail industry in UK is Tesco. This
company is a retail company and also provide online services to its customers. A new mobile
application has been adopted by the company in which bar code is provided to the custoemr sand
they can search the products with the help of this bar code. It also provides an easy way to make
payments to the customers. There are end number of products that are provided to various
customers of different region in UK.
As the application has facilitated the customers to place order and get the food item
quickly the is very beneficial for company also because it can reduce the work responsibilities of
the employees. The organisation can assign them different works that cannot be done with the
help of mobile applications. It has increased profits for the organisation by reducing cost of
employment. Now Tesco do not want higher number of employees as customers may order
products online which will b e delivered to them on time.
Mobile application as the trend of current market in which all the business enterprises
benefited and able to attain organisational goals. The main objectives of Tesco is to acquire the
large amount of market, satisfy customers, increased profits and reduction in food waste in
stores. This application can help to reach these objectives because customers get satisfied by
good quality of product and effective services which will result in increased profits and large
number of customers. Food waste will be reduced as food will be ordered online and company
will buy only necessary items that are mostly demanded by customers.
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CONCLUSION
To conclude the report, it can be said that company Tesco has reached new heights by
applying new innovations in business activities. The company is providing simplest ways to its
customers for shopping and making the payment of bill. A successful innovation needs to
perform various activities in business like value generation for customers and company, exploit
disruption and shifting of perception. To sustain in the market and to grab market share
innovation is important for today's dynamic environment. The company has done various
innovation like click and collect drive through, new stock replenishment system, retail ready
packaging initiative and application for smartphones.
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REFERENCES
Books and Journals
Altenburg, T. and Pegels, A., 2012. Sustainability-oriented innovation systems–managing the
green transformation. Innovation and development. 2(1), pp.5-22.
Chesbrough, H., 2012. Open innovation: Where we've been and where we're going. Research-
Technology Management. 55(4), pp.20-27.
Davila, T., Epstein, M. and Shelton, R., 2012. Making innovation work: How to manage it,
measure it, and profit from it. FT press.
Gassmann, O. and Schweitzer, F., 2014. Managing the unmanageable: the fuzzy front end of
innovation. In Management of the Fuzzy front end of innovation (pp. 3-14). Springer,
Cham.
Kapsali, M., 2011. Systems thinking in innovation project management: A match that works.
International journal of project management. 29(4), pp.396-407.
Sommer, A., 2012. Managing green business model transformations. Springer Science &
Business Media.
Storbacka, K., 2011. A solution business model: Capabilities and management practices for
integrated solutions. Industrial Marketing Management. 40(5), pp.699-711.
Wang, C. J. and Tsai, C. Y., 2014. Managing innovation and creativity in organizations: an
empirical study of service industries in Taiwan. Service Business. 8(2), pp.313-335.
Online
Managing Innovation in Business. 2018. [Online]. Available Through:
<http://www.europeanbusinessreview.com/effectively-managing-innovation/>
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