Report On TESCO Plc - Issues While Implementing Change
Added on 2020-02-03
23 Pages6486 Words99 Views
Improving BusinessPerformance
Table of ContentsINTRODUCTION...........................................................................................................................11. Selection of Organization...................................................................................................12. Implementing 3 changes required to improve the operational performance......................13. Critical analysis of the literature on Investment appraisal and select the best method thatneeds to be implemented........................................................................................................34. Evaluating the changes and adapting the best one.............................................................45. Critical evaluation of Radical change theory and Continuous Improvement theories.......56 Evaluate the changes and establish whether Continuous Improvement/Radical change theoryshould be used........................................................................................................................67. Project plan using MS Project............................................................................................78. Critically evaluate the literature on project risk and identify various risk factors and itsanalysis methods.....................................................................................................................99 Project risk for the chose criteria.......................................................................................10CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................11APPENDIX....................................................................................................................................13
INTRODUCTIONAt all the sectors within business, there are many companies that deliver their customerswith similar products and services. It important for the firm to make sure that develop strategieswith the help of which strong customer base can be developed. Ultimate aim of any firm is togain maximum profit. This is only possible when management understand the needs andrequirement of customers. Accordingly, services should be developed so that more and morecustomers can be attracted. In order to be better it is essential to make changes in the businessoperations. Present report is on Tesco which is one of the leading British multinational grocerystore. It was founded in the year 1919 and is headquartered in England. Cited firm make sure thatthey deliver their customers with high quality services. Further, they understand their customersrequirement and make changes in the type of services that are delivered by them. Present reportcovers, the issues that are faced within the business and accordingly steps will be taken toimplement changes. Further, it covers critical evaluation of continuous improvement theories andradical change theory. Lastly, it also includes evaluation of literature on project risk andidentifying various risk factor and analysis of the method. 1. Selection of OrganizationTesco is taken into consideration in order to complete the task in an effective manner.Cited firm aim at deliver their customers with high quality service. Further, they make sure thatthey make use of updated or new technology so that they will be able to satisfy their customers.There are many organizations that deliver their customers with similar products and services andto be better from other it requires strategies so that strong customers base can be developed. Competitors of Tesco includes ASDA, Sainsbury and Morrison. This has reduced themarket of cited firm and in order top be better, it they are planning to make sure that they raisetheir market share and strong customer base can be developed. 2. Implementing 3 changes required to improve the operational performanceTesco is considered as one of the main British multinational grocery and merchandiseretailer. However, it is the third largest retailer in the world in the form of profit and fifth largestin terms of revenue. Company is also listed in London Stock Exchange. Hence, it is consideredas the major strength of firm (Nixon, Harrington and Parker, 2012). While, the weaknesses facedby Tesco is that there are several other competitors serving in the similar market. Business also1
focuses upon selling its own products and does not sell products of other brands. Main purposeof Tesco is to enhance the market share and presence within worldwide area. Also, in regard toremain competitive within international market, it is essential for firm to undertake effectivestrategies and plans so that set targets can be attained. However, it would result firm to attaindesired success and goals. Tesco management also needs to improve its product quality so that it can overcomecompetition and become the world number one retail firm. However, in regard to achieve suchobjective it is essential for cited firm to improve its operational strategies so that desired resultscan be attained (Rock, 2014). Further, developing effective operational strategies helps inestablishing the objectives so that desired results can be attained. While, developing operationalstrategies it helps in examining the current business plans so that new strategies could be usedeffectively and efficiently. Tesco need to improve the value and mission of firm so that settargets can be attained. Following are the 3 different operational changes that needs to beimplemented within Tesco in order to provide varied benefits which are discussed underneath-Cleaning services at TescoOnline selling servicesDiscount in off seasonAll such changes needs to be implemented as it will benefit the business in order toimprove the quality standards and attain desired results. Also, it helps in improving theoperational efficiency and thus results in delivering the best products or services to clients. Ithelps in satisfying the needs and wants of customers. Further, improving cleaning services helpsin raising the organization performance and thus benefit Tesco to gain competitive edge overrivals (Buller and McEvoy, 2012). It also assists in improving the features of products or servicesso that market share can be enhanced worldwide. Moreover, another operational change isincreasing online selling services through creating web portals which would result intodeveloping effective communication so that customer needs could be identified and thus helpfirm to provide particular products to customers. Major benefit of such strategy results intoimproving customer service and thus impacts upon improving sales and profitability. Thus,implementing all such changes would result into improving operational performance and attainsuccess. Thus, all these identified changes helps Tesco in improving its efficiency and enhanceonline selling feature in market. As there is huge competition in retail market, it is essential for2
Tesco to bring change within its business structure and for that they need to Cleaning services,Online selling services and Discount in off season. However, all these proposed changes areproved to be useful for business and thus results in enhancing current performance of firm andbring desired changes so that success can be attained. 3. Critical analysis of the literature on Investment appraisal and select the best method that needsto be implementedEscobar-Rodriguez and Monge-Lozano (2012), stated that project management is thestudy of carrying out process which involves necessary activities and operations in relation toattain desired targets and goals. It is a numerical approach which involves different steps thatstarts from initiation, organizing, executing, controlling and monitoring the activities. However,project/investment appraisal technique is considered as the best method that assists in finding themain strength and weaknesses of each and every project and then evaluate the best proposalamong them. However, Gilmour (2013), argued that payback period is considered as the besttechnique used by the investors in order to forecast that how much time will a project take to getback or obtain its invested cost of capital. Thus, it helps in identifying the time period afterwhich firm will gain profit. It also assesses that the investors who are risk averse uses thismethod which helps them to recover the initial investment within short period of time. Further, payback period does not consider time value of currency and inflow of cashbeyond payback period. However, discounted payback period is more effective and suitablewhich helps in evaluating different alternatives. Hwang, Wu and Chen (2012), explained thataccounting rate of return is another technique that helps in determining the profit percentageupon the project which is computed by dividing average cash flows by the initiative investment.However, such method assists in comparing two different projects on the basis of its relativeaccounting profit. Hence, using accounting results helps in providing unfaithful results as it takesinto consideration non cash transaction as well. As per the opinion of Sharma, Chrisman and Chua (2012), using discounted models suchas Net Present Value and Internal Rate of Return helps in obtaining different results. NPVtechnique has been used in order to assess the discounting periodical inflow of cash in order toanticipate the present value of cash flows. However, such method identifies the excess of surplusof discounted cash inflows over the beginning is called NPV and positive plus maximum valueof NPV is always preferred by investor. Furthermore, IRR helps in determining the rate that3
shows the nil value of NPV at an equal present value of cash inflows with the starting of cost ofcapital.Thus, it can be evaluated that NPV technique has been adopted by Tesco as it isconsidered the best so that firm can evaluate the commercial and economic feasibility in order toconsider the time value of currency as well as assessing the net return after adjusting the risk(Trkman, 2013). The best method that Tesco should adopt is improving online selling so that itcan enhance its customer base as well as overcome rivals.Through adopting NPV technique itwould help Tesco to enhance its quality of products and thus enhance customer satisfaction.However, it also benefits firm in the form that company is able to improve its online selling andenhance customer base. Through such way Tesco management aims to build quality parametersand result in efficient ways so that desired objectives could be attained. 4. Evaluating the changes and adapting the best oneAs per the discussion it has been identified that there are different changes available forimproving business performance. Hence, in regard to improve business operations, firm needs tofocus upon online selling which requires huge cost and expenses. Thus, implementing suchchange helps Tesco to improve its product quality and enhance customer base within firm(Nixon, Harrington and Parker, 2012). However, if such change has been implemented than toothere is no surety that it will attract customers to purchase the product. Changes within businessand increasing online selling through promotion results in incurring huge cost and thuscustomers are required to pay more amount and thus it results in choosing competitors who areproviding similar products at reasonable rates. Further, it is essential for Tesco management to focus upon implementing the changeswithin providing discount in off season which also results in increasing the cost. Thus,implementing such method method results in enhancing online selling of firm as well asincreasing customer footfall within firm and helps in enhancing sales and proit. Thus, it wouldhelp business in the form that they obtain ease in attracting potential customers so thatsatisfaction could be attained. However, employees are required to be trained according to thenew changes and thus use the software effectively so that best results can be attained. Further,using such strategy would result into recording and collecting the data effectively and efficiently(Rock, 2014). Through implementing such changes would result Tesco in improving the productquality and thus overcome competitors. 4
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