How Tesco Address the Declining Sales in the UK - Case Study

This case study analyzes how Tesco addressed the declining sales in the UK through various strategies. It covers HRM, finance, marketing, and operational management issues. The study aims to determine the level of the firm's ability to gauge the declining market share and withstand future shocks.

Running head: CASE STUDY - TESCO
Case study: How Tesco address the declining sales in the UK
Name of the student:
Name of the University:
Author note

1CASE STUDY - TESCO
Executive summary:
‘Tesco is one of the largest retail brand in the United Kingdom and it is considered as the symbol
of success in the retailing industry in the world as mentioned by the author. During the late 90s
the firm was the highest revenue earner in the UK and it hold its growth path for the almost a
decade that has provided it much amount of popularity. However, during the 2000s it has been
seen that the performance of the UK firm started to fall. As the analysts argue, underinvestment
along with the lack of emphasis from the side of the firm in the UK market has caused
fluctuation in the operations of the organization. It has been found that the Tesco is one of the
largest food retail unit in the world and depending upon its large potential the brand become has
successful over the year. From the perspective of the economy it has been found that the Tesco
has provide substantial amount of job production that has aided the economy to survive in the
case of Global Financial crisis. As it can be seen from the analysis of the Tesco’s situation with
the various business model, the firm has high potential to grow bigger compared to what is now.
However, the firm’s managerial issue along with the lack of the potential of the managerial
section of the company has reduced the growth of the firm. However, it is also important to
mention that the firm has faced various issues in its HRM policies, financial policy, and
operational management and in the case of the marketing. It has effectively failed to entice the
demand of the market due to their extensive campaign in the foreign nations to grow the
business. Due to the lack of the incentive to perform properly, the report has found that the
worker has reflected poor performance and the lack of well-defined supplier measurement
program, there has been considerable amount of miss performance from the different suppliers.

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Table of Contents
Chapter 1: Introduction....................................................................................................................4
1.1 Background of the study:.......................................................................................................4
1.2 Research problems identified:................................................................................................5
1.3 Research questions:................................................................................................................7
1.4 The aim of the study:.............................................................................................................7
1.5 The objectives:.......................................................................................................................8
1.6 Structure of the report:...........................................................................................................8
Chapter 2: Literature review..........................................................................................................10
2.1 introduction:.........................................................................................................................10
2.2 literature review of the industry:..........................................................................................10
2.3 industry size:........................................................................................................................11
2.4 growth rate:..........................................................................................................................12
2.5 major market player analysis:..............................................................................................14
2.6 situational analysis:..............................................................................................................15
2.7 proposed plan of analysis for each problem identified:.......................................................18
2.8 chapter summary:.................................................................................................................20
Chapter 3: Methodology of the Study...........................................................................................22
3.1 Introduction:.........................................................................................................................22
3.2 Research Philosophy:...........................................................................................................23
3.3 Research Approach:.............................................................................................................24
3.4 Research Design:..................................................................................................................25
3.5 Data Collection Methods:....................................................................................................25
3.6 Data Reliability:...................................................................................................................26
3.7 Data Validity:.......................................................................................................................28
3.8 Research Ethics:...................................................................................................................29
3.9 Chapter Summary:...............................................................................................................30
Chapter 4: Results and discussion.................................................................................................32
4.1 introduction:.........................................................................................................................32
4.2 strategic analysis using relevant business models:..............................................................32
4.3 findings from analysis:.........................................................................................................41
4.4 proposed solution to management:......................................................................................42

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4.5 selection of strategies for success:.......................................................................................43
4.6 chapter summary:.................................................................................................................44
Chapter 5: conclusion and recommendations................................................................................45
5.1 introduction:.........................................................................................................................45
5.2 conclusions:..........................................................................................................................45
5.3 action plan:...........................................................................................................................46
5.4 limitations of the study:........................................................................................................46
5.5 recommendations:................................................................................................................47
5.6 chapter summary:.................................................................................................................47
Reference:......................................................................................................................................48

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Chapter 1: Introduction
1.1 Background of the study:
Tesco is one of the largest retail brand in the United Kingdom and it is considered as the
symbol of success in the retailing industry in the world as mentioned by the Yoder, Visich and
Rustambekov (2016). Since 1930 the brand has started to cannonball the UK retail market with
their high growth rate (Stanton 2018). The firm was initially a surplus grocery seller, however,
over the year it has enhanced its business operation around the UK through opening up of
various types of services. During the late 90s the firm was the highest revenue earner in the UK
and it hold its growth path for the almost a decade that has provided it much amount of
popularity (Vu 2016). However, during the 2000s it has been seen that the performance of the
UK firm started to fall. One of the main reasons considered by the Morgan, Tallontire and Foxon
(2017) for the recent drop in the performance of the firm is financial crisis back in 2008.
Recession in the 2008 has caused the fall in the personal disposable income of the UK
individuals that has reduced the aggregate demand of the market and the firm faced huge fall in
their revenue (Mollah 2014). On the other hand it has also been argued by the Hunneman,
Verhoef and Sloot (2017) that consumers of the Tesco found that small retailers provide better
service with better pricing basket.
Reasons behind the fall in the demand of the products and services from the Tesco in UK
market can be christened from various source as mentioned by the researchers. As the analysts
argue, underinvestment along with the lack of emphasis from the side of the firm in the UK
market has caused fluctuation in the operations of the organization (Haddock and Rigby 2015). It
has also been argued that the firm has been more focused on the international operations that has
produced marketing problem in the domestic market and in addition to this operation programs

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of the staffs has been hampered due to lack of the scheduled protocol for the workers, which is
aligned with the present market situation (Wood, Wrigley and Coe 2016). Owing to these
factors, there has been fall in the market share of the firm that has caused the fall in the demand
of the revenue on behalf of the firm.
In order to address the situation, Philip Clark came up with the comprehensive program
that incorporate six elements of restoration for the deteriorating situation of the firm (Nathan and
Murali 2014). As the intrinsic mechanism of the growth of the firm from its present situation,
Clark provided his focus on the improving the dot com channel, enhancing and increasing the
training of its staffs, elaborate its value chain and extend the range of their offering and along
with this focus has been provided to the price activity of the firm (Fogel 2016). Over the time it
has become a paramount importance to the researchers to check whether the firm has revived its
lost charm with the strategies or not. If the firm has been successful to revive the same, it would
be an outstanding example of the fact that how the firms can evolve from deterioration and if it
has failed, there is an ample scope to enhance the growth of the firm in future. This research is
aimed to research how Tesco address the declining sales in the UK through the analysis of the
strategies taken by the firm. This research will emphasis on the literature review and secondary
data analysis in order to trace the performance of the firm post the reform scenario. While
concluding the research, it will provide recommendations for the firm in order to gauge the
present situation.
1.2 Research problems identified:
Tesco is well known for its outstanding performance in the UK retail market, however
recently it has been observed that the firm has been suffering from the poor performance due to
various factors. UK retail industry being the one of the important sector in the economy possess

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much amount of importance to the country. According to the latest statistics, retail industry of
the UK shares 11.5% to the country’s economy that makes it of paramount importance to the
country’s economy (Aguzzoni et al. 2016). Out of all the market players in the UK retail industry
Tesco I considered as the market leader with the large market share. However, during late 2000s
it has been observed that the economy of the country has fell considerably that has allowed the
economy reduce its aggregate demand, which subsequently reduced the demand of the Tesco’s
market demand (Rhodes 2015). In presence of the smaller firms who provides better service at
cheap price seems to be performing better in recent days compared to Tesco. As the Walton,
Petrovici and Fearne (2017) argue, the firm has been performing in foreign market that has
allowed the domestic market for the firm to fall. In addition to this, as the Moatti et al. (2015)
highlights, the firm has faced reduction in the performance of the staffs due to the lack of the
performance measurement policy of the firm. Considering these condition of the firm, there are
various factors that can be highlighted for the Tesco. Following are the details regarding the
identified problem of the Tesco:
HRM policy issue:
Analysing the Tesco business, it can be seen that the firm has good moderate amount of
culture and values at its workplace, however, it has failed to maintain the information flow that
has made the biased power to the senior managers compared to the other party associated with
the business (Otaye, Priola and Yerby 2014). Not only this, in addition to this, it has been seen
that career opportunities of the firm is not well known by the employees that makes the
employees insecure regarding their job.
Finance policy issue:

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Due to the rise in the small supermarket chain in the UK there has been constant rising
pressure on the large market players like Tesco, which is fragile in front of the new market
entrant. The firm has lose market share substantially over time and thus it has been hard for the
Tesco retail chain in the domestic market to face fall in the demand (Muller 2015). It has reduced
the financial position of the firm and has allowed it to face reduced revenue over the time.
Marketing policy issue:
It has been observed that the firm has been performing export promotion and working
hard to enhance its foothold on the foreign soil, taking the domestic market condition for
granted. It has reduce d the growth of the firm in the domestic market and in addition to this it
has reduced the market share of itself (Savell 2014).
Operational management issue:
There has been various issues with the operational management of the firm. It can be seen
that the firm has focused mainly on China considering its large market. However, Tesco
deliberately utilised its 30% of the capital stock to expand its business in china, however, very
little has been achieved till now (Zhao 2014). In addition to this, it has been found that the Tesco
has shifted its business from the core food supply chain to retail supermarket that has reduced the
market share of the firm.
1.3 Research questions:
Tesco has been suffering from its HRM, finance, operation and marketing issue since
long time that has been reflected through the reducing revenue figure of the firm (Ivanov,
Tsipoulanidls and Schonberger 2016). Thus, there has been various reformations plans has been
taken to address the issue. However it is under constant research that whether the firm has

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concluded its declining sales in the UK or not. Considering this, the research question for this
study is as follows:
 How Tesco address the declining sales in the UK?
1.4 The aim of the study:
Aim of the study is as follows:
 To check to which extent the firm has been able to address its declining sale in the UK
1.5 The objectives:
Objective of this study is as follows:
 To determine the level of the ability of the firm to gauge the declining market share
 To determine how well the firm has been performing to measure its falling market
demand
 To determine how the firm has been making itself potent to control its future growth
 To determine how the firm can withstand against the future shocks
1.6 Structure of the report:
The research will be based on the secondary data research which will try to showcase
How Tesco address the declining sales in the UK. In order to perform the research, it would be
subdivided into five chapters, which are namely literature review, Methodology of the study,
results and discussion and next to this, there will be conclusion and recommendations chapter. In
the literature review section, the report will provide a brief description about operating market of
the Tesco and next to this it will provide literature review of the industry utilising the academic
models (Gummesson 2017). Next to this, in the literature review section, there will be
information regarding growth of the firm over time and then it will perform situational analysis.
Coming to the methodology section it will describe about the research philosophy and mention

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the research approach. While doing so, it will portray the research design and highlight the data
collection methods. In order to verify the reliability of the same, it will perform data reliability
check and in the next portion of the third chapter, ethical consideration will be discussed. In the
fourth chapter, there will be discussion and result analysis, which will analyse the strategy of the
firm with the relevant business models like Swot, Value Chain, Porter’s Five Force model and
others (Hox, Moerbeek and Van 2017). Moving forward, in this section proposed solution to the
management will be provided and strategy selection will be performed. In the last chapter there
will be conclusion and recommendation section, which will portray the action plan and mention
the limitations of the study. In addition to thus, practical management recommendations those
are derived from the findings, will be provided and to conclude there will be a summarised
overview.

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Chapter 2: Literature review
2.1 introduction:
Tesco being one of the largest retail unit in the UK and the third largest in the world
possess much amount of importance to the economy. As it has been seen there has been rapid
growth in the firm’s performance over the time till 2000s it has shred substantially to the
country’s economy (Zokaei et al. 2016). In addition to this it has been seen that it is accounted
for the large amount of job creation for all thee skilled and semi-skilled labours it generates good
positivity to the economic growth to the economy. There has been substantial amount of research
regarding the performance of the Tesco over the time and it has been found that the firm has
performed well during the early 2000s, however, the market share of the firm felt sharply over
the time (Wood, Coe and Wrigley 2016). It has caused in the revenue of the firm and in addition
there has been substantial amount loss in the jobs too. This section of the research is aimed to
perform literature review considering the literal evidence from the previous researches. In this
section details regarding the market details of the Tesco will be analysed and in addition to this
situational analysis of the firm will be performed for the better understanding regarding the firm.
This section, in addition to the above, will mention the various proposed plan for addressing the
deteriorating revenue of the firm.
2.2 literature review of the industry:
UK retail industry is one of the largest sector of the economy that produces substantial
amount of job as well as shares substantially to the country’s economy. According to the
statistics, UK retail industry shares 11% to the total output of the economic output of the UK and
it is accounted for 10% job creation out of total employment opportunity in the nation (Rahman
2015). During 2015, there has been 2.8 million job creation in the UK retail industry and apart

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from this, the industry has been popular for its rapid growth during last one decade (Adewuyi
2016). Details regarding the market structure of the economy has been mentioned below.
2.3 industry size:
UK retail industry is one of the largest and important sector of the economy, which had
been growing at a large rate during the recent past decades. However, over the year there has
been changing demand from the UK consumers from the supermarket retail industry that has
been causing fall in the rapid growth rate of the industry. One of the recent change can be
observed in the case of the Tesco as argued by the Amin and Broadbent (2015), which has faced
reduced demand since Global Financial Crisis of 2008.
Figure 1: UK retail industry growth
Source: (Aguzzoni et al. 2016)
Considering the figure 1, it can be seen that during last three years, there has been growth
in the UK retail sector compared to the previous years by 2.5% and it is expected to grow further
to the 5% level by the 2019 due to the ailing economic condition of the UK (Pantano 2014).
However, due to the fall in the reputation of the firm and presence of the smaller firms which can
provide better commodity basket with either at lower price or at same price is intimating the
customers to visit them. Besides this, according to the 2013 data, it has been seen that the four

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large firm of the economy, which are Tesco, Ada, Morrison and Asda is accounted for 75% of
the market share making the industry highly competitive (Jary and Wileman 2016). According to
the economic theory of the market it can be seen that there are four large market players that
makes the market structure oligopoly in nature. Considering the market structure, it can be seen
that the firm faces collusive pricing policy in the market due to the fact that the each firm wants
to enjoy more amount of market share compared to the other. Thus, there is high amount of
competition among the firms. Threats from the new entrants in the market is high because it can
produce higher amount of substitution for the large Firm Tesco as argued by Cifci et al. (2016).
On the other hand buyer’s power to bargain is higher in the UK food super market industry.
According to the literal resource, in coming days the competition is going to enhance in presence
of the smaller firms like Aldi, Lidl and Waitrose. These new small entrants enjoy 4.8%, 8.3%
and 5.1% of the market share of the UK food supermarket industry that makes the market highly
competitive (Lewrick et al. 2015). According to the research of the Bleischwitz, Welfens and
Zhang (2017) the market produces substitutable products that makes it hard for the firms to
entice the customers towards them, thus the firm utilise discount policy and in addition to this
they use various other form of the procedures to deal with the ailing market demand of the UK.
2.4 growth rate:
Since decade there has been high growth in the UK retail food industry, however, in
recent days, there has been substantial amount of fall in the industry due to various reasons. One
of the major reason for the drop is the Global Financial Crisis, that hit the UK market during
2008 and the economy shattered due to the same. During the next consecutive years, UK retail
industry faced negative growth rate as the economy faced lower demand from the customers
(Foster et al. 2015). In addition to this it has been found that the UK retail industries focused

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mainly on the foreign market to enhance their grasps on those markets rather than enhancing the
capabilities of the domestic market. However, with the strong governmental policies the
economy has started to back on track through the positive governmental intervention. According
to the literal sources, it has been found that there is close relationship between the governmental
involvement and the growth of the economy (Moatti et al. 2015). Considering this, it can also be
found that the economy has grown at a substantial rate in presence of the governmental
reformation program in recent days. It has helped the economy to face higher aggregate demand,
which in turn has aided the UK retail industry to have growth too. For instance, according to the
estimation, it has been found that the UK retail market has been facing growth at 2.5% change
rate annually (Sadun 2015). Considering the figure 2, it can be stated that as the days past, it can
also be found that the UK retail industry is expected to grow at a rate of 5% annual growth rate
post 2019. In addition to this, it has also been found that there has been various new entrants in
the market that has curtailed the customer base of the large retailers towards them utilising their
strategic pricing strategy. As the literary resources, suggest, if a firm can aid the economy to
move forward, then it can achieve much amount of popularity, which will further enhance the
demand of them too.
Figure 2: UK retail industry growth rate
Source: (Aalbers 2016)

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From the figure 2, future growth estimation, it can be seen that the industry will grow at a
modest rate in the coming days (Siqueira, Webb and Brutin 2016). However, there will be higher
amount of barraging power in front of the consumers due to the presence of the large number of
options. In addition to this, it has also been found that the transition from one player to another is
easy and price less. Thus the consumers can shift from one buyer to another pretty easily, which
makes the situation complicated for the firms further. As the previous researches argue, the next
change in the UK retailing industry will come from the changing technological scenario of the
economy. In addition to this, it has also been found that the economy of the UK will move
forward towards the incorporation of the technological advancement. Which will further lead the
growth of the economy at 2.7% rate in future (Kumar et al. 2016). Considering this, it can be
stated that the economy will have moderate amount of growth rate freeing itself from the jibe of
the deteriorating market demand.
2.5 major market player analysis:
UK food retail chain is an oligopoly market, where four large players are present and they
are accounted for 75% of the total market share (Melis et al. 2015). However, in the wake of the
Global Finical Crisis, firms like Aldi, Lidl and Waitrose achieved higher amount market share.
Considering the present number of the market player, it can be stated that the economy is
oligopoly in nature, where four large number of players operate and three small number of player
is present (Hood, Clarke and Clarke 2016). Small firms presently enjoys 4.8%, 8.3% and 5.1% of
the market share of the UK food supermarket industry that makes the market highly competitive
(Diallo et al. 2015). Market players of the retail food industry considers the fact they can become
market leader with the higher number of market share that can be generated through the higher
number of sales. Considering this fact, it can be seen that small firms has been trying hard to

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capture more number of market share through the policies like price reduction and promotion of
the brand. Industry utilise the collusive pricing strategy to enjoy higher amount of producer
surplus, however in presence of the higher bargaining power of the buyers, situation becomes
complicated. The large market players of the UK retail industry are the Tesco, Sainsbury’s, Asda
and Morrison that enjoy the largest chunk of the market share and among them Tesco is the
largest one with its 28.2% market share. Net to this, Sainsbury’s enjoys 16% market share, Asda
possess 15.6% of the market share and the Morrison’s have 10.4% of the market share that
makes them the top four competitors in the market (ichalakeas et al. 2015). The market is highly
competitive in nature due to presence of the four large market players that utilise the collusive
marketing pricing and thus the market is hard to penetrate too. However utilising the presence of
the financial crisis and the debacle within the organisational structure of the large firm like
Tesco, firms like Aldi, Ldli and Waitrose has achieved higher amount of market share in the UK
food supermarket chain (Wood, Coe and Wrigley 2016). According to the economic theory,
oligopoly helps to enhance the consumer as well as the producer surplus moderately that makes
it beneficial for the industry. Utilising the collusive pricing, oligopoly structure of the market has
provided ability to the competitors to provide competitive pricing that has enhanced the producer
surplus and through this it has also gained the firm much amount of scope to enjoy higher
amount of market share.
2.6 situational analysis:
Tesco is considered as the largest retail firm in the UK due to its large market share.
However, in addition to this, other than in UK, there are 14 other nations, where the firm
operates. These nations are namely, Ireland, South Korea, Thailand, Czech Republic, Slovakia,
Hungary and others. Considering the latest data available, it can be seen that the firm has been

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facing reduced amount of sale over the year since 2000s (Ndungu 2014). Literary evidence
shows that the firm has been facing big time issues with their Human Resource policy and in
addition to this, there is certain amount of issues with the firm’s operational performance.
Considering the figure 3, it can be seen that the firm revenue has sales marginally over the year,
however lack of demand has caused fall in the growth rate for the firm.
Figure 3: Tesco financial statement
Source: (Ismail 2017)
Over the time fall in the demand of the domestic consumers from the Tesco highlights
that there has been substantial amount of financial crunches within the firm. Moreover, 2008
financial crisis provided a crippling blow to the firm’s economic performance that has reduced
the operational balance in its treasury (Mwangi 2017). The firm according to the latest statistics
has been facing fall in its marketing strategies too. Due to the extensive focus to enhance the

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business to the various countries in the Europe and Asia, especially in China, it has lost its 30%
of the wealth that has provided much amount of instability in the frim.
According to the estimation it has been found that by the end of the 2019 financial year
the firm will start to face growth in its revenue. The firm utilise various techniques to reach to
the buyers. As the mechanism to reach to the prospect buyers, the firm presently utilise the
fowling ways:
 Tesco extra: it is a hypermarket from the Tesco in the suburbs, which is loaded with the
different type of the stock.
 Tesco: it is general purpose supermarket that holds standard grocery goods and a wide
range of the non-consumable goods.
 Tesco Metro: it is another Tesco supermarket which is mainly focused to serve the busy
citizen of the cities
 Tesco Express: it is a conventional store that can be found in the busy cities where they
are aimed to serve the customer with rapid speed and the stores are basically gets order
through the online portal of the firm.
 One stop: it is a one stop small size shop, which is aimed to serve smaller communities
around the country
 Tesco.com: it is the online store of the firm, where one can purchase goods directly
through the store with a simple click.
Considering the present marketing strategy of the firm, it can be stated that they are well
maintained and well formulated to deal with the present market demand. However, there has
been issue with the Tesco supplier agreement that is highly complicated and has made the Tesco
threats regarding their suppliers to receive illegal income. This has promoted a negative impact

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to the firm’s economy and has caused fall in the reputation of the same. In addition to this, it has
been argued by the literary evidence that the performance of the firm has presently been highly
obscured due to the fall in exposure to the business.
2.7 proposed plan of analysis for each problem identified:
Considering the case analysis of the Tesco it has been found that the firm has been
suffering from the Human Resource Management issue, financial issue, operational management
issue and the marketing issue. Previous analysis has highlighted that the operational management
and the marketing issue are the main issue of the firm that has been suffering the management of
the firm. The firm has extensively focused on the foreign market, mainly on the Chinese
economy to have a strong foothold on the foreign market, however very little has been done so
far (Hengky 2016). In addition to this, it has also been found that the firm has introduced its
business to the other large economies lake India, where it has merged with the Tata group to
expanse its business in the Indian market. However, like china, it has failed to provide great
impression in the Indian market too. In order to analyse the identified problem of the Tesco, this
research will utilise the various business model which are meant to analyse the identified issue
with efficiency. Details regarding the plan for further analysis of the identified problems are as
follows:
HRM problem:
Previous literal researches has showcased that the firm has been suffering due to the fall
in the employee satisfaction, which has influenced the gap between the estimated organisation
goal and the actual situation of the firm. Not only has this, in addition to the issues of the
employees failed the organisation to achieve its organisation while fulfilling the personal goals
of the employees. To analyse the same, this report will utilise the Cost-Benefit analysis for the

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human resource management decision and in addition to this it will utilise the SWOT analysis,
which will describe the strength, weakness, opportunity and threat of the HRM policy of the
firm. Utilising the cost benefit analysis for the HRM policy of the firm, it can be stated that it can
be considered as the decision support framework that specifically considers the benefits and the
costs of the human resource decisions (Hengky 2016). Utility analysis of the HRM policy of the
firm will provide formula for computing the value of the HRM, however it is not only restricted
only to the formulas. According to the literary researches, it is one of the way of thinking
regarding the HR programs depending upon the beliefs and the assumptions for explicit decision
making, rational and system of the same.
Financial issue:
From the previous literary researches it has been found that the firm has been suffering
from the rigorous fall in tis revenue due to the spending of more than 30% wealth during the last
year to open its stores in china and other Asian countries like US. Thus to study the effect of the
financial issue, this report will utilise the various financial ratios which are published by the
organisation with their auditing information. For showcasing the issue clearly, this research will
utilise the financial statement of the firm and showcase how it has performed over the time.
From the literary resources, it has been found that the firm has faced employee issue within its
operational framework in the UK that makes it essential for the researcher to analyse the
involuntary turnover ratio so as to check, how the employee turnover has caused the firm.
Utilising the involuntary turnover ratio, in addition to the impact on the firm, the research will
analyse the performance measurement of the employee too so as to counter check the productive
front of the employee. In addition to these financial ratios, the model will utilise the debt to

20CASE STUDY - TESCO
equity ratio to check, how well the firm has utilised its relative portion of the shareholders’
equity and the debt to finance the brand’s assets.
Operation management issue:
Previous literary review has showcased that the firm has faced serious issue within its
operational framework too. Due to the lack of the well-established performance measurement
practice, there has been work efficiency issue with the suppliers of the firm. For the purpose of
analysing the issue in depth, value chain model will be utilised which will aid the researcher to
determine the specific product from which firm can enjoy competitive advantage.
Marketing issue:
From the literary evidence it has been found that one of the major issue of the Tesco was
the marketing issue that has reduced the market share of the firm. In order to assess the same,
various business model will be utilised. For the strength and weakness analysis of the marketing,
the research will utilise the SWOT analysis, value chain mode, Porter’s Five Force model and
BCG matrix. These tools has been developed to aid the managers to determine the operation gap
between the desired outcome and the achieved outcome. Thus utilising the same for this research
will aid the researcher to trace, final outcome regarding the future possibilities of the firm and
the ways to gauge the present deteriorating revenue issue of the firm.
2.8 chapter summary:
Well till now various literary programs has been discovered and from the thorough
analysis of the firm, it has been found that the firm has been suffering from the various issues
like HRM, issues with its marketing strategy, problem with the firm’s operation performance and
marketing program. The research has also found that the Tesco being one of the largest retail unit
in the UK and the third largest in the world possess much amount of importance to the economy.

21CASE STUDY - TESCO
There has been substantial amount of research regarding the performance of the Tesco over the
time and it has been found that the firm has performed well during the early 2000s, however, the
market share of the firm felt sharply over the time retail industry is one of the largest and
important sector of the economy, which had been growing at a large rate during the recent past
decades. However, over the year there has been changing demand from the UK consumers from
the supermarket retail industry that has been causing fall in the rapid growth rate of the industry.
One of the recent change can be observed in the case of the Tesco as argued by the Shi et al.
(2018), which has faced reduced demand since Global Financial Crisis of 2008. Considering the
market structure, it can be seen that the firm faces collusive pricing policy in the market due to
the fact that the each firm wants to enjoy more amount of market share compared to the other.
Thus, there is high amount of competition among the firms. From the later part of the research it
has been found that there will be various business model, which will be utilised to assess the
above mentioned problems in the Tesco.

22CASE STUDY - TESCO
Chapter 3: Methodology of the Study
3.1 Introduction:
In this section of the study the different types of the methods adopted to conduct research
has been discussed. Some of the main learnings in this section has been seen with research
philosophy, approach adopted to conduct the research, research design, data collection method,
data reliability, data validity and research ethics. The adoption of the study has been defined with
taking examples from various sources which has been conducive in address declining the sales in
Tesco for declining sales in the UK. The identification of the research problem has been further
considered with intensification tof the main factors affecting the decreasing sales in the
company. The main concept for the research philosophy has been included with the main notion
in the way data is gathered analysed and used. Some of the important discourse on the
philosophy of the research is taken into consideration with the concepts such as Positivism,
Interpretivism, Discussion and Rationale for choice of approach of the research. The research
approach has discussed how the study has been proceeded with the qualitative research aspect
with the inclusion of the “social constructivist paradigm which emphasizes the socially
constructed nature of reality”. This section of the study has been relevant with the recording,
analysing and attempting to uncover the deeper meaning and significance to the human
behaviour, experience and contradictory belief. The approach of research has allowed for a
greater flexibility in compare to the quantitative method. The data gathered is mainly based on a
“textual form on the basis of observation and interaction with the participants” (Lewis 2015).
The research design is identified with proceeding with a confirmatory research and the
outcomes are made before the initiation of the measurement phase begins. The research aspects
have been further seen to be considered with the reducing the probability of “falsely reporting a

23CASE STUDY - TESCO
coincidental result as meaningful”. The data collection is considered with various types of the
secondary sources which includes books, journals and previous research studies on the relevant
topic. The reliability and validity in the qualitative research has been seen with the positive
perspective of the research which has been considered with the qualitative research paradigm.
The latter discussion about the research ethics is shown with the norms for conduct that
differentiate among the acceptable and unacceptable behaviour (Smith 2015).
3.2 Research Philosophy:
The positivist’s approach of the research has been evident with the observations which
are identified with the non-interference phenomenon of the study. The main content included in
the study has been considered with the isolation of the observations and repeatability nature of
the observations. The main predictions have been further seen to be done as per the realities and
the inter-relationships. This rationale for the selection of this approach has been conducive for
the long and rich historical significance which has been evident for the empirical studies traced
for the study. Some of the various types of the other research studies has been based on the
discussion of the different aspects of the studies which are based on the inconsistency and
inappropriateness of the positivist’s paradigm. The different types of the predictions made from
the positivist philosophy of research has been implemented to the inconsistencies with the results
associated to the areas where the reality might have been previously unmeasurable (Brinkmann
2014).
The interpretivism nature of the study is included with the studies relating natural environment
has been taken into consideration. The realities of the research studies are seen to be attained
with the various aspects of the discourse associated to the factors which led to declining sales in

24CASE STUDY - TESCO
the Tesco UK. It needs to be further considered that the research study has maintained the
scientific knowledge of pursuing the data (Choy, L.T., 2014).
3.3 Research Approach:
The research has adopted the qualitative approach for answering the research problems
and objectives. The qualitative paradigm of this research construct has been conducive in
emphasizing on the socially constructed nature of reality. The analysis, recording and attempting
to uncover the deeper meaning of the research has been considered with uncovering the deeper
interpretations and significance of “human behaviour and experience, including contradictory
beliefs, behaviours and emotions”. The interest of the research is seen to be based on gaining a
complex and rich understanding of the experience of the people associated to the topic selected
for the research. Some of the various types of the other paradigms of the research have been
considered with obtaining the information which is generalized to the larger groups (Marshall
and Rossman 2014).
The qualitative approach of the research has been further considered with the bottom up
approach. Despite of this, some research involves certain degree of the deductive reasoning of
the research which are considered as per the predetermined hypothesis considered from the
previously conducted empirical research. In addition to this, the approach for the data collection
and analysis has been conducive for a greater flexibility, this is done based on the observations
and interactions with the participants. For instance, the considerations of the results from the in-
depth interviews has allowed for considerations on the focus groups. The data collection for
these types of the research has been considered with collecting the data into several stages rather
than collecting the data at once. The research has been continuously adopting the attributes with
the meaning to the experience and therefore there has been sufficient information gathered for

25CASE STUDY - TESCO
the “understanding of the situation and expect to learn something new about the experience of
the participants”. Similarly, the adoption of the data is considered with the attribution of the
various experiences and attributes as per the relevant meaning of the study (Flick 2014).
3.4 Research Design:
The implementation of the main design for the research is considered with the
confirmatory approach. This has been conducive in predicting the measurement and phases of
the information collected in form of the advantages of the confirmatory research applied to the
study which has been able to apply the data which has been more meaningful to the overall
depictions of the research. The rationale for such a result is due to the fact that confirmatory
research, study is ideal for reduce minimizing the probability of incorrectly reporting a
coincidental result as meaningful (Thorne 2016). The research has been also seen with the
application of the exploratory design. This method has assisted to identify the potential relations
between variables. This type of the research design has allowed for the various types of the
depictions of the information which are related to the making new predictions on the reason
decreasing sales of Tesco. The research has not missed an opportunity for the minimizing the
probability rejecting a real effect or relation (McCusker and Gunaydin 2015).
3.5 Data Collection Methods:
The source of the various information for the research are considered with the secondary
research. The collection of the data has been based on the previous conducted results of the
interviews, surveys, focus groups, Ethnographies, Oral History documents and record. The
results of the interviews are taken into consideration with the previous obtained results from the
telephonic conversations. The different sources of the information are also taken from the
“formally (structured), semi-structured, or informally” structured interviews. These interviews

26CASE STUDY - TESCO
are also qualitative in nature. The results from the focused groups has been traced from the
“interview with individuals that have something in common interests”. The information gathered
are considered with the combined perspectives and opinions. The responses which gathered from
the previous empirical research are further coded into categories and analysed thematically. The
main groups of the participants for the research are seen as the consumers of Tesco. It needs to
be also discerned that the different types of the other participants for the research are considered
with gathering the information from the regular customers of Tesco. In addition to this, the
research has also included the information gathered from the managers, staffs and executives
which are able to trace the main causes for the decline in the sales in Tesco. The research has
considered the focused group interview form these personals and presented the information in a
thematic manner in the data analysis (Corbin, Strauss. and Strauss 2014).
The data collection from the Ethnographies and Case Studies have involved a
combination of ways which are associated to the techniques such as “observation, interviews,
and surveys”. The ethnographic approach has been able to provide a more holistic approach for
the evaluation of the different perspectives of the study. In some case, the research has also
considered confounding variable (Fletcher 2017).
3.6 Data Reliability:
The various perspectives of the data reliability have been taken into consideration with
the technique based on the positivist perspective used with the naturalistic approach. Similar to
reliability and validity the reliability and validity of the research are taken from a qualitative
perspective. The validity and the trustworthiness of the information are seen with the “credible
and defensible result” which may lead to generalizability defined with the structure of
conducting and documenting high quality of the qualitative research. Henceforth, the quality of

27CASE STUDY - TESCO
the research is related to the generalizability of factors which separates the result, increases the
validity and trustworthiness of the research. The avocation of the qualitative performance of the
research has been further seen to be include with the appropriate discussions which are seen to be
related to the triangulation method of combining the methods. This has been evident with obtain
the data from multiple sources to confirm that the obtained information is of highest quality.
Constructivism values are further relied on the diverse realities, multiple methods of searching
and collection of data. The open-ended perspective of the constructivism has allowed the
research study appropriately record the data from the multiple sources. This has been seen to be
evident with the “observation, interviews and recordings will lead to more valid, reliable and
diverse construction of realities” (Klenke 2016).
The improvement of the analysis and understanding of the construction has been taken with the
researchers to involve the several investigators and data triangulations for recording the
construction reliability appropriately. The open-ended perspective of the constructivism adheres
to the data triangulation method which allows the participants to assist the research question as
well as the data collection. The engagement of the multiple methods has been considered not in a
fixed method but also testing the validity and reliability of the study. The quality of the research
has been further ensured with the impact and reshaping of the research methods. The importance
of the qualitative research is considered with the meaningful picture without compromising on
the dimensionality and richness of the information. The quantitative research further seeks to
answer the “how, where, when who and why” with the main perspective of the building the
appropriate theory and refuting the existing theory. Unlike the quantitative research, the
qualitative research handles the various types of the non-numerical information pertaining to the
phenomenological interpretation which has been inextricably associated to the human senses and

28CASE STUDY - TESCO
subjectivity. The human emotions and perspectives has been considered from both subjects and
research which is considered with the desirable basis for the qualitative research (Vaioleti 2016).
3.7 Data Validity:
Validity in this research has been ensured with appropriateness of the “tools, process and data”.
The consideration of the research question is seen to be valid with the desired outcome, choice of
methodology and conclusion. The ability of the research to generalize the findings to a wider
group and circumstances has been considered with the common test of validity for the qualitative
research. The various approach towards the validity for the qualitative nature of the research has
been taken into consideration with the consideration of humanistic and positive for the
philosophical perspectives. The set off with the different perspectives of the research is validated
as per the cultural and contextual variables selected for the research (Berger 2015). It needs to be
further discerned that the research has been able to enhance the validity by including the “1st tier
triangulation (of researchers) and 2nd tier triangulation (of resources and theories)”. In addition
to this, the various sources of the data included for the study has been ensured with performing
well documented with the audit trail of the processes and materials. In addition to this, the
multidimensional approach has been included with the case oriented and respondent verification
considered from the secondary research study. The validity of the information has been further
ensured with the “transparency” and “systematicity”. In this way, the research process and
results may be assured with the high rigor and robustness. Some of the other factors for the
reliability in the information is ensured with the six-main criterion. These include “clarification
and justification, procedural rigor, sample representativeness, interpretative rigor, reflexive and
evaluative rigor and transferability/generalizability”. The choice of the methodology has been

29CASE STUDY - TESCO
able to enhance the “findings/phenomena in the appropriate context for it to be valid” (Flick
2015).
3.8 Research Ethics:
The study has focused on the disciplines which are taken into account with the standards
such as “philosophy, theology, law, psychology, or sociology”. The norms of the research have
been ensured with promoting the aims of the research such as “knowledge, truth, and avoidance
of error”. The research has adopted a great deal of cooperation and cooperation with the different
disciplines and institutions which has promoted the values essential for collaborative work such
as “trust, accountability, mutual respect, and fairness”. Some of the other ethics of the study has
been ensured with the copyright, patenting and policies associated to the data sharing polices
which are designed to protect the confidentiality rules and encouraging the collaboration (Anney
2014). The third most important aspect for the ethics is considered with the facts which are held
accountable for the public. For instance, the consideration of the “research misconduct, conflicts
of interest and the human subject’s protections” has been ensured in the research study for the
ensuring that the research has been funded by the public money and further seen to be held
accountable to public. The fourth most important concept for the research ethics has been
considered with the ethical norms which has ensured the quality and integrity of the research
(Creswell and Creswell 2017).
The final most important aspect of the research has been ensured with the moral and
social values, like “social responsibility, human rights, and animal welfare, compliance with the
law, and public health and safety”. In addition to this, the ethical lapse in the research will be
significantly able to contribute social welfare of the people. The ethical aspect of the research is
also taken into account with the “specific codes, rules, and policies relating to research ethics”.

30CASE STUDY - TESCO
Several sources selected for the research has been ensured to be valid for ensuring the the
research adhered to the relevant code of ethics (Neuman 2016).
3.9 Chapter Summary:
The summarization of the information as per the Research Philosophy is considered with
the observations which are identified with the non-interference phenomenon of the study. The
main content included in the study has been considered with the isolation of the observations and
repeatability nature of the observations. The main predictions have been further seen to be done
as per the realities and the inter-relationships. The different types of the predictions made from
the positivist philosophy of research has been implemented to the inconsistencies with the results
associated to the areas where the reality might have been previously unmeasurable. In context of
interpretivism the studies relating to the natural environment has been taken into consideration.
The realities of the research studies are seen to be attained with the various aspects of the
discourse associated to the factors which led to declining sales in the Tesco UK. It needs to be
further considered that the research study has maintained the scientific knowledge of pursuing
the data. The main approach for the research is considered with the qualitative approach. The
depictions, recording and attempting to uncover the deeper meaning of the research has been
considered with uncovering the deeper interpretations and significance of “human behaviour and
experience, including contradictory beliefs, behaviours and emotions”. The interest of the
research is seen to be based on gaining a complex and rich understanding of the experience of
the people associated to the topic selected for the research. Some of the various types of the other
paradigms of the research have been considered with obtaining the information which is
generalized to the larger groups.

31CASE STUDY - TESCO
The design of the research are included with the confirmatory research applied to the
study which has been able to apply the data which has been more meaningful to the overall
depictions of the research. The inclusion of the confirmatory research, study is ideal for reduce
minimizing the probability of incorrectly reporting a coincidental result as meaningful. The
research has been also seen with the application of the exploratory design. This method has
assisted to identify the potential relations between variables. This type of the research design has
allowed for the various types of the depictions of the information which are related to the making
new predictions on the reason decreasing sales of Tesco.
The various method for the data collection has been sourced from the secondary sources.
The collection of the data has been based on the previous conducted results of the interviews,
surveys, focus groups, Ethnographies, Oral History documents and record. The results of the
interviews are taken into consideration with the previous obtained results from the telephonic
conversations. Furthermore, the different sources of the information are also taken from the
“formally (structured), semi-structured, or informally” structured interviews. The main groups of
the participants for the research are seen as the consumers of Tesco. The various perspectives of
the data reliability have been taken into consideration with the technique based on the positivist
perspective used with the naturalistic approach. Similar to reliability and validity the reliability
and validity of the research are taken from a qualitative perspective. The validity and the
trustworthiness of the information are seen with the “credible and defensible result” which may
lead to generalizability defined with the structure of conducting and documenting high quality of
the qualitative research. (Bohari iet al. 017) Henceforth, the quality of the research is related to
the generalizability of factors which separates the result, increases the validity and
trustworthiness of the research.

32CASE STUDY - TESCO
Chapter 4: Results and discussion
4.1 introduction:
This section of this research will discuss the result and the then it will portray how the
Tesco can utilise the finding in order to enhance the performance of the same. For this purpose, it
will fir go through the testing the business environment of the firm utilising the various business
tools like BCG matrix, Porter’s Five Force model, SWOT analysis and various other business
tools.
4.2 strategic analysis using relevant business models:
SWOT:
SWOT analysis is one of the popular business model that determine the threat, strength,
opportunity and the weakness of an organisation. Utilising this, managers form the strategies for
the business and trace the issues within the firm. Figure 4 highlights the overview of the SWOT
analysis for Tesco and table 1 showcase the detailed analysis for the firm.
Figure 4: SWOT analysis of Tesco
Source: (Rahman 2015)

33CASE STUDY - TESCO
Strength Weakness
Tesco has worldwide presence and it is
accounted as one of the largest brand out of
best 100 brands around the world
It has more than 6,784 stores around the
world, which is aimed to serve their customer
with the best goods and services
According to the words of the brand, their
strength lies within their ability of online
marketing and their large presence in the
foreign nations like china
Loyalty package from the brand is one of the
driving force for the customers that has
enabled them to become where it is now
According to the analysis it has been found
that the brand suffers from the their marketing
policy in the domestic economy
In addition to the marketing policy, there is
issue within the organisation in the form of
mismanagement of the HRM policies, and in
financial crunches since the year of 2008,
when Global Financial Crisis took place
(Theaker 2017).
There has been issue within the firm in the
financial terms that number of the bad loans
has been increased to a large extent that has
deteriorated the economic condition of the
firm
In order to enhance the business in the foreign
market, the brand has utilised a lot money that
has affected the performance of the business
in domestic market
Opportunity Threat
Tesco being the large firm has high potential
for the future growth. Online offer can
provide large amount of impact on the
Considering the present situation of the Tesco
it can be seen that there are various threat in
front of the firm.

34CASE STUDY - TESCO
country’s performance
Oversee expansion is beneficial for the firm,
however, it is necessary to study the market
properly for effective penetration
The firm has introduced six pillar reformation
strategy, which need to be fine-tuned in order
to deal with the requirement of the present
market scenario
One of the main issue of the firm is the lack
of motivation among the employees to fulfil
the organisational goal that has in turn failed
to entice the aggregate demand of the buyers
There is lack of supplier performance
measurement framework that has constrained
the firm’s ability to determine the
performance of the suppliers
Table 1: SWOT analysis of Tesco
Source: (Created by Author)
Porter’s Five Force:
Porter’s Five force model is one the basic business analysis model that helps the
managers to enhance their understanding regarding their firm. It performs the analysis of the firm
depending upon the five factors, which are namely threat from the new entrants, threat from
substitute, bargaining power of the buyers and the bargaining power of the seller (Jaber et al.
2015). Thus, considering this it porter’s five force model can be analysed easily, which will
portray the understanding regarding the market of the firm easily.

35CASE STUDY - TESCO
Figure 5: Porter’s Five Force analysis overview for the Tesco
Source: (Rahman 2015)
From the figure 5, an overview of the Tesco Porter’s Five Force model can be seen,
which explains the five quadrant of the business environment analysis on behalf of the firm.
Detailed analysis of the Porter’s Five Force for the firm, is as follows:
Threat from new entrants: Moderate
Analysing the case of the Tesco it can be found that there is moderate amount of threat
from the new entrants that the firm face while its operation. UK food supply supermarket chain
is being enjoyed largely by the big fours among which Tesco enjoys the largest chunk of the
share, whereas the small firms cumulatively enjoy only 10% of the market share (Li et al. 2016).
Over the time due to the poor performance of the existing large farmers, it has been seen that the
small entrants started to enjoy large amount of market share during the last two decades. They

36CASE STUDY - TESCO
provide service in limited areas and has been connected with the food supplies only that has
enabled them to provide food at lower price. Thus there is always scope to shift to the new
entrants from the large brands. Thus the threat from the new entreats in the UK retail market is
moderate.
Threat from the substitute: High
It has been observed that there are four large players in the retail market and the almost 5-
6 small market players who provide better service at smaller price. Thus there is high scope for
the brand substitution under the competitive UK food chain industry. Though it is imposable for
the small firms to compete directly with the Tesco, however utilising the scope of the poor
economic performance of the firm it has become possible for the smaller firms to produce itself
as the substitute of the Tesco (Haleem and Jejehangir 2017). Thus the threats from the substitute
is high.
Bargaining power of the buyer: Moderate
UK is one of the largest market for the retail service, where the demand of the customer
has been ever changing. People of the UK retail market shows preference to those place, where
they can have large number of needed goods under one roof and have competitive pricing
policies. Tesco being a large company in the industry has pulled the right string and it has been
successful to deal with the customer demand with the help of the various buying offers(Haleem
and Jehangir. In addition to this, it has been found that there is high chance of the customers to
shift from one brand to another brand. This makes the bargaining power of the buyer moderate.
Bargaining power of the seller: Moderate
UK food retail market is one of the largest industry in the world, which is accounted for
11% GDP of out of the total output of the nation. Considering the case of the Tesco, it can be

37CASE STUDY - TESCO
seen that the firm is the largest supermarket retailer in the UK and the third largest within the
same industry in the world. According to the latest statistics, it has been found that the Tesco
possess more than 28.2% market share which is the highest in the UK market and when it comes
to its nearest competitor, then it can be seen that the firm is accounted for only 16% market
share. (Hengly 2016) That makes the Tesco the market leader in within the industry in domestic
market. Considering the large amount of market share it can be told that the producer has
considerable amount of bargaining power. However, due to the recent rise in the economic
turmoil has aided the small firms to enjoy large amount of market share leading to fall in the
market share.
Market rivalry: High
UK retail market is one of the largest one and there is more than four large and 6 small to
medium sized retail organisation that operate around the whole UK. (Hengky 2016) In order to
reduce the market share of one organisation, other need to enhance its business. Thus, this
research finds that the market rivalry is high.
Value chain analysis:
Value chain analysis is the relation between the key value adding activities and their interaction
with the support activities. Depending upon this, managers takes decisions for the mangers
depending the weakness and strengths of the firm. From the figure 6, overview of the Value
chain analysis for the firm can be seen.

38CASE STUDY - TESCO
Figure 6: Value chain analysis overview of the Tesco
Source: (Gereffi and Fernandez 2016)
Details regarding the value chain analysis is as follow (Mustapha 2016):
Inbound logistics:
Leadership strategy of the management of the Tesco is exhibited through the logistics
function and in the case of the firm it has been seen that the market leader position has aided it to
constantly upgrade itself over the time in order to keep itself aligned with the market demand.
Operations management:
Tesco has a wide number of supply chain management critics for its effective usage of
the IT system, which facilitate the brand lows cost leadership. Considering the Tesco released
details, the brand has invested more than 76 million euro in order to enhance the performance.
Besides this post the recession it has provided 550 million euro to its business in order to
generate efficient ERP solution.
Outbound logistics
In the case of off-line and online retail segment Tesco is acknowledged as the market
leader due to its large market share. As the means of future proof plan to withstand against the
deterioration of the brand’s share it has introduced various different form of the stores around the

39CASE STUDY - TESCO
UK. For instance there is metro store, express store, home plus store and superstores to serve the
dean of the different type of the customers (Sparks 2014)
Marketing and sales:
Loyalty programs introduced by the Tesco is being highly influential to the customers due to
their added benefit. Next to this as the deterioration tackling program the brand has brought in
the greener means of living which is both the environmental friendly and consumer friendly. It
was meant to effectively enhance the performance of the firm over the time.
Services:
Since decade Tesco has been trying hard to pursue dual stagey of differentiation and the
cost leadership, which lead it to the increased importance to the customer service.
Cost benefit analysis:
Economies of scale:
The firm being a well reputed and long lived company that accounted for largest market
share in the UK retail market, possess economies of scale. Over the year, through learning by
doing the firm has learned how to entice the customer demand and utilising the same, the firm
has been facing benefit in present date by large amount.
Diversification:
Though the firm mainly operates in the food retail market, however, the firm has
diversified range of business. For instance, the brand has credit cards, petrol, mobile phone,
banking and other services. It provide the firm ability to withstand against negative market
condition.
Large employee range:

40CASE STUDY - TESCO
As the firm operates globally and it aims to provide something better to their customer every
day, large number of employee are being employed in the organisation. According to the latest
statistics, there are more than 4, 76,000 employees, which provide better scope to serve their
customer better.
BCG matrix:
BCG matrix entails the real scenario of a firm’s market share and market growth situation. from
the figure 7, an overview of the BCG matrix can be obtained, where stars represent products
which are having rapid growth, question marks represent risky and potential objects that can
become stars, dogs represents products that are good, however facing low market share and
lastly, cash cows, which are at their peak of sale and possess ability to fund the question marks
and stars. Detailed review of the BCG matrix for Tesco is mentioned below.
Figure 7: BCG matrix
Source: (Hammad 2015)
Cash cows:

41CASE STUDY - TESCO
This section represents the goods and services that are high yielding good. Considering
the case of the Tesco, it has been found that the cash cow for the brand is fresh meat section,
where the maximum number of sale takes place.
Stars:
Other than the cash cow, there are some other products in business, which creates
opportunity for growth in the organization. In the case of the Tesco it has been found that the
firm’s banking sector has been operating well apart from the supermarket retail sector.
Question marks:
This is the place, where the lower revenue items are stored and in the case of the Tesco, it
will be some products that are not performing well due to the lack of the incentive for smooth
performance. These products are the food products, because the rand has shifted from its core
business to the subsidiary products and has reduced sale in the sector.
Dogs:
This category of the BCG matrix includes those products, performance of which are not
up to the benchmark. Considering the case of the theca, it can be seen that the firm has low
performing employee strength that comes under the dogs. In addition to this, it has also been
perceived from the literary review that the firm lacks in the case of operation management,
financial cases and HRM policy. Thus these will also come under the purview of the dogs.
4.3 findings from analysis:
Analysing the present situation of the Tesco it can be found that the firm has been
seriously suffering from the internal as well as external issue. As it can be seen from the analysis
of the Tesco’s situation with the various business model, the firm has high potential to grow
bigger compared to what is now. However, the firm’s managerial issue along with the lack of the

42CASE STUDY - TESCO
potential of the managerial section of the company has reduced the growth of the firm.
Moreover, it has also been found that the firm lacks in the case of financial management, which
shows there was intrinsic cash crunch in the firm that has caused loss for the firm during 2016
(2018. Not only this, it has been argued by the findings from the analysis that firm has strong
retail as well as the banking sector, that has provided it much amount of boost during the post
global recession period. Moving forward from the business analysis it has been found that the
economy has strong meat selling section that has acted as the main reason for the growth of the
firm during the post-recession.
Considering the case of the Tesco, it can be found that the research has found that the
high potential of the firm has been germinated through its large market share and the past
experience of the marketing. However, the research has also showcased, there has been
considerable amount of negligence from the management regarding the performance of the
domestic market because they were busy with the foreign outlets, especially which are located in
the Asian pacific regional countries like China, India and others. Due to the lack of the incentive
to perform properly, the report has found that the worker has reflected poor performance and the
lack of well-defined supplier measurement program, there has been considerable amount of miss
performance from the different suppliers.
4.4 proposed solution to management:
According to the Brown, Low and Booth (2017), Tesco has tried to capitalize its global
opportunities for the growth understand the domestic market of the firm. This, in this process
Tesco have to work for the internationalization for the benefit of both the domestic as well as the
foreign market. In order to do this retails need to ensure that their stores is in order to function
for the growth of the firm (Cabral and sciooni learned during 016. .

43CASE STUDY - TESCO
However, in the case of the Tesco, reverse has been observed, where the firm has lost its
place in the domestic market of the UK at the price of the international presence of the firm.
Though the Tesco has been expanding at a good rate on regular basis, its managerial structure
and as well as the economic viability is not stable. Thus it would be hard for the firm to expand
farther without incorporating the strategic renovation of the organisational structure. Considering
the case of the PwC recommendation, it would be ideal for the retailers to utilise the mix stratify
for the success and adhere the opportunities from the technological innovations (Samantara and
Aharma 2015). It would be another importance for the firm to understand the customer
requirement so as to serve them with the proper solution. Considering the mullet channel retail
mix, it can be seen that Tesco is highly dependable upon the harmonization and technological up
gradation. However, technology change its course in order to make all the things aligned with it.
Besides this promotion strategy can come helpful in such a situation, where the economy can
face better demand while maintain the corporate social responsibility.
4.5 selection of strategies for success:
Strategies for the success of the Tesco are as follows:
Sales strategy:
 With the help of the social integration and introduction of the greener technologies which
are helpful for both the firm and the consumer can enhance the sales of the Tesco
 It would be ideal for the firm to bring in lucrative pricing strategy so as to entice the
customer demand on behalf of the firm
Providing the best deal in the market would be the another best policy to increase the sales
Growth in both the domestic and foreign market will aid the firm to enhance its sales.

44CASE STUDY - TESCO
Marketing strategy:
There has been serious issue in the marketing of the Tesco that has caused fall in the sale
of the firm, this now it need to take effective marketing strategy for the growth of the firm as the
mechanism of enhanced marketing it can utilise discounts of buyback policies (Riders nee to
conc7an6 i . In addition to this, it would be ideal for the firm to use the promotional programs to
entice the market.
Growth strategy:
As the growth strategy the firm would need to perform the following:
 Enhanced KPI analysis frequently
 It has to achieve cost leadership irrespective of the market to ensure growth both in the
domestic as well as the foreign market
 Strategy differentiation would be beneficial for the firm to ensure future growth
 Introducing programs to enhance the performance of the suppliers would be beneficial
4.6 chapter summary:
From this this chapter it has been found that the Tesco is one of the largest food retail unit
in the world and depending upon its large potential the brand become has successful over the
year. From the perspective of the economy it has been found that the Tesco has provide
substantial amount of job production that has aided the economy to survive in the case of Global
Financial crisis. As it can be seen from the analysis of the Tesco’s situation with the various
business model, the firm has high potential to grow bigger compared to what is now. However,
the firm’s managerial issue along with the lack of the potential of the managerial section of the
company has reduced the growth of the firm. However, it is also important to mention that the
firm has faced various issues in its HRM policies, financial policy, and operational management

45CASE STUDY - TESCO
and in the case of the marketing. It has effectively failed to entice the demand of the market due
to their extensive campaign in the foreign nations to grow the business (Palmer et al. 2014). Due
to the lack of the incentive to perform properly, the report has found that the worker has reflected
poor performance and the lack of well-defined supplier measurement program, there has been
considerable amount of miss performance from the different suppliers.

46CASE STUDY - TESCO
Chapter 5: conclusion and recommendations
5.1 introduction:
This section of the research will highlight the conclusion and the recommendation for the
Tesco case study. This part will first provided conclusion of the research work and next to this, it
will provide action plan for the same. Next to this, it will portray the limitations of the research
and moving forward it will portray the recommendation for the firm to gauge its present
situation. To conclude it will portray the chapter summary.
5.2 conclusions:
From the above analysis it has been found that the Tesco has performed really well till
2000 and the two decades before that; however, it has failed to entice the market post 2000
(Kotabe and Helsen 2014). As the research portray, one of the main reason for the recent fall in
the market share and the revenue of the firm is christened through the lack of the focus from the
management on the domestic market. In this regard it would be ideal to mention that the firm has
provided good amount of focus only to the foreign market, rather than putting lime light on the
domestic market. It has effectively reduced the number of customers that the firm has and in
addition to this, it has faced reduced demand in their retail industry. Though the firm has
introduced new renovation plans to entice the customer demand for further growth, it has not yet
shown any positive result, rather than slight rise in the revenue from the previous year. In coming
years the economy of the UK is expected to move away from the GFC and it will enhance the
domestic demand that will lead the market share for the Tesco to rise again. As it can be seen
from the analysis of the Tesco’s situation with the various business model, the firm has high
potential to grow bigger compared to what is now. However, the firm’s managerial issue along
with the lack of the potential of the managerial section of the company has reduced the growth of

47CASE STUDY - TESCO
the firm. However, it is also important to mention that the firm has faced various issues in its
HRM policies, financial policy, and operational management and in the case of the marketing.
5.3 action plan:
As the action plan for the Tesco following details can be followed:
Budget:
 Tesco need to implement 50% of the their total revenue into their renovation planning
 It need to utilise its cash reserve ratio so as to enhance their market share
Control and monitoring scheme: Tesco can record the predictable optimistic outcomes and have to associate them with the
definite
Consequences:
 Tesco can demonstrate their dependability upon the benchmarking system
 The achievement of monitoring and controlling contrivance could be safeguarded only if
this action has commenced by Tesco management on the consistent base.
5.4 limitations of the study:
Though the researcher has tried to make the research error proof and has do the same in
timely manner, it has various limitation. For instance it has time limitation, next to this it has data
limitation and finally there is limitation in the case of the budget for the research. Considering
the study of the Tesco, it can be seen that the study has been performed through the secondary
data within the limited time period. Thus this research has faced time limitation. Besides this,
there has been limitation in the data collection method, because the research is based on the
secondary data, which has been derived from the website, journals and the annual report of the
firm, rather than real field survey. Thus, there may be discrepancies in terms of the data and next

48CASE STUDY - TESCO
to this comes the budget limitation. The research has to be done within the limited budget
because there was lack of funding, thus it has budget limitations.
5.5 recommendations:
Recommendations for the Tesco is as follows:
 Enhanced KPI analysis frequently
 Growth in both the domestic and foreign market will aid the firm to enhance its sales.
 Introducing programs to enhance the performance of the suppliers would be beneficial
 It has to achieve cost leadership irrespective of the market to ensure growth both in the
domestic as well as the foreign market
 It need to take effective marketing strategy for the growth of the firm as the mechanism
of enhanced marketing it can utilise discounts of buyback policies
 It would be ideal for the firm to bring in lucrative pricing strategy so as to entice the
customer demand on behalf of the firm
 It would be ideal for the firm to use the promotional programs to entice the market
 Providing the best deal in the market would be the another best policy to increase the
sales
 Strategy differentiation would be beneficial for the firm to ensure future growth
5.6 chapter summary:
Analysing the present situation of the Tesco it can be found that the firm has been
seriously suffering from the internal as well as external issue. Various recommendations has
been provided by the researcher to gauge the situation and it is expected to aid the firm to have
higher profit in near future. Though the researcher has tried to make the research error proof and

49CASE STUDY - TESCO
has do the same in timely manner, it has various limitation. The researcher has addressed the
same in this section and to conclude the research has provided action plan for the firm.
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