A Value Chain Model for Analysing Tesco Internal Business Environment

Reflective analysis of the internal business
environment.
(TESCO Company)
This essay will describe the Value Chain Model
proposed by Porter (1985) in he’s first part. The chosen
company from the food retailers and wholesaler
subsector is Tesco. In the second part the business will
be describe and will be done an internal environmental
examination using the Value Chain Model. The last part
of the essay will be a reflection on the benefits of this
tool on helping understand the internal business
environment of Tesco.
“The Value Chain was introduced by Michael S. Porter
in 1985 in the book Competitive Advantage and it is use
to analyse the flow of value adding activities from the

raw materials supplier to the customer. The model looks
at what value company adds to each link and the
company competitiveness. The Value Chain consists on
nine value activities that together create added value
and they’re by the company margin. Margin it is also
call profit and it is actually the then field of Value
Chain. In this field is no activity the field size is
depending on the other nine activities. The profit is
equal to the difference between the Value Chain totals
value which is the value to the product to the customer,
that is the price willing to pay to the product and the
total cost of producing the product which is the total of
the cost in the Value Chain nine activities. The nine
activities are divided into two categories primary and
support activities. (flixaboutcom 2016).” ....
“The primary activities include the main activities
which are five, they are directly involved in the
production and selling of the actual product.
 Inbound logistics can consist on receiving
goods, inspection, storage, etc.
 Operations include activities associated with
transforming raw materials and components
into new products.
 Outbound logistics are activities associated
with order processing, packing, shipping
everything that deals with the distribution of
the finish product to buyers.
 Marketing and sales are activities associated
with providing the customer with information

about the product excellence which should
lead to a sale. They are involved in
determining the product distribution channel,
pricing, promotion, personal selling, etc.
 Services activities which ensure that the
purchase product preserve value for the
customer. The service could include advice in
person or online, repairs, customer training,
maintenance, etc.”
“The second category is support activities they go
across the main activities and main to coordinate
their functions as best as possible.
 Firm infrastructure it a superstructure that
covers all the others activities it supports
both the primary activities and support
activities. It includes the organization of the
company, management, planning, quality
management, finance, etc.
 Human resource management includes
recruitment, training, retention, motivation,
is it their responsibility that the right skills
are available at the right time in various
departments
 Technology development it is the overall
system that provide an overview of the
entire organization it may involve ERP
(enterprise resource planning).

 Procurement are activities that refer to the
function of purchasing not the physical input.
It supports all the primary activities, effective
procurement routine can great the influence
purchase cost and their contribute to higher
profit.”
Food retailers and wholesaler’s subsector is part of the
Consumer Services Industry according to I.C.B.
“Tesco is among the largest food retailers in the world
with revenue in excess of £54 billion in 2009 and
employing over 470,000 people. They operate
approximately 4,331 stores in 14 countries around the
world. The company operates primarily in the USA,
Europe and Asia and their Head Office is based in
Hertfordshire, UK. According to Data monitor (2019),
the commercial network portfolio of Tesco comprises:
over 960 Express stores which sell approximately 7,000
products including fresh foods at suitable localities 170
Metro stores which sell a variety of food products in
town and city centres; and 450 superstores which sell
both food and non-food items including books and
DVDs. Tesco also provides online retailing services
through their website tesco.com and Tesco Direct. In
addition, they provide broadband Internet connections
and financial services through Tesco Personal Finance
(TPF). Tesco was founded in 1919 and launched its first