Tesco's Response to Global Pandemic: Challenges and Strategies

This project report delves a critical evaluation regarding how a successful establishment had responded to global pandemic as well as consists of recommendations for gaining success in future.

BUSINESS PROJECT

Contents
INTRODUCTION ..........................................................................................................................1
RESULTS .......................................................................................................................................1
DISCUSSION .................................................................................................................................2
CONCLUSION ...............................................................................................................................3
RECOMMENDATIONS ................................................................................................................4
REFERENCES................................................................................................................................5

INTRODUCTION
Global pandemic has accelerated numerous organisations towards huge losses in a
significant manner. Organisational managers face economic as well as operational uncertainty in
every industry and sector for adjusting their expectations along with renew focus for returning to
their earlier profitable position (Abed, 2021). For having a better understanding about issues as
well as solutions that are undertaken by organisational managers regarding global pandemic,
Tesco is taken into consideration. Tesco is an UK based multinational groceries as well as
general merchandise retail organisation which has its headquarters at Welwyn Garden City,
United Kingdom.
This project report delves a critical evaluation regarding how a successful establishment
had responded to global pandemic as well as consists of recommendations for gaining success in
future.
RESULTS
Mission statement of Tesco is to serve their customers as well as communities in a little
better way. By doing so, they try to reflect their responsibilities to wider communities as well as
society. Organisational culture of Tesco encompasses of listening to their customers as well as
employees regarding their grievances and issues. This practice help them to act in a prescribed
manner by bringing changes as well as innovations for catering their needs in an effective
manner. Managers of Tesco follows tall hierarchical structure whereby there are numerous
leaders as well as layers of management. Here, organisational managers have narrow span in
relation to control and has a long chain of command. Organisational strategy of UK is to expand
their business through acquisition of new stores as well as retail services for catering the diverse
needs of consumers in an effective manner.
It is imperative for organisational managers to formulate strategies for managing the hard
circumstances in their business such as global pandemic (Alameeri, Alshurideh and Kurdi,
2021). Organisational managers of Tesco has reported that their sales have increased due to
increase in demand of groceries during global pandemic. As people have to cook meals at their
home due to restrictions at hospitality sector.
Managers of Tesco have announced that their revenue gets increased by 7% and there is
huge increase in online sales (UK supermarket giant Tesco sees profit dented by Covid related
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costs. 2021). For this managers of Tesco has led to double their delivery capacities for meeting
diverse and rising needs of household customers. Issues faced by Tesco during global pandemic
are lack of staff in context to their distribution centres, manufacturing sites, warehouse and
production. They were in a better position to cater the diverse needs of their customers through
their effective supply chain.
Main issue from Tesco was suffering are related to supply chain disruptions as well as
labour shortages. Profits of Tesco has been tumbled as they are incurring extra costs for hiring
more staff at higher prices which racked up their extra cost to £900m due to corona virus
pandemic (Tesco profits fall as Covid costs offset sales surge. 2021). Poor performance of their
backing operations and significant drop in wholesale grocery business hit profits of Tesco in a
prominent manner. Managers of Tesco have faced significant additional costs due to increase in
their payroll as they have appointed numerous recruits for dealing with increased demands of
customers in an effective manner. Period of corona pandemic has also been stressful for Tesco as
their leadership team is compelled to keep a pace with rapidly changing environment in an
effective manner.
DISCUSSION
For overcoming those challenges, managers of Tesco has adopted a pricing strategy and
provide Club card prices loyalty scheme to their customers. Managers of Tesco has set their
strategic priorities in regards with providing value to customers through loyalty programmes as
well as using cost savings for reinvesting in their business avenues. For managing a crisis
situation, it is imperative for organisational managers to develop strategies for minimizing their
impact in an effective manner (Gupta and Singhal, 2021).
At the time of global pandemic, people are not allowed to go out of their house for
making purchases. They started to prefer online shopping which is considered as better way for
companies to grow their avenues as well as adopt digitalised practices in an effective manner
(Mason and Hruskova, 2021). Managers of Tesco have also enhanced their digitalised practices
by adopting online delivery system. Through this, they have strengthened their brand reputation,
increase their customer satisfaction as well as improved value perception in an effective manner.
For enhancing their profitability at the times of global pandemic, managers of Tesco
concentrated on ensuring that their prices are low in comparison to their rivals. They have also
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adopted loyalty schemes as well as digital services for generating more profit margins at the time
of corona pandemic.
Global pandemic has changed spending patterns as well as customer behaviour which led
them to visit the stores in less frequent manner (Paul and Et. Al., 2021). For engaging customers
and avoid increased competition in market, managers of Tesco have adopted Aldi price match
strategy whereby they have matched numerous products. This practice has led to implement
competitive pricing at Tesco with offered huge discounts.
With the aid of these strategies led Tesco to earn profits and be at a better position after
considering the effects of global pandemic in a significant manner. These also cost high to Tesco
for managing their distribution as well as supply channels due to shortage of staff (Tortorella,
Narayanamurthy and Staines, 2021).
For managing varied risks and challenges at Tesco during global pandemic, their finance
team plays a vital role for responding to the crisis with an immediate effect. They stated to work
with their colleagues for supporting their rapid implementation in regards with vast operational
changes. They have doubled up their capacity in accordance with digital grocery shopping. They
also have recruited 50,000 people as temporary staff for supporting their workforce at shop floor
(Adapting to COVID-19: the Tesco story. 2020) They have been given the job roles of delivery
drivers as well as workforce at their distribution centre. They also started the practice of remote
working for employees who perform clerical jobs. They have implemented this strategy in a
smooth as well as transition manner due to their effective organisational culture. However,
adoption of digitalised practices led to increase operational cost of Tesco in a significant manner.
Managers of Tesco have also collected valuable insights in context to buyer decision-
making force as well as spending patterns which help them to cater their diverse demands by
building proper strategies.
CONCLUSION
From the above provided information, it has been assessed that global pandemic has hit
varied economies and business houses in a significant manner. Organisational managers face
varied challenges as well as issues due to global pandemic on a world-wide basis. Tesco has also
come up with varied challenges such as shortage of workforce, lacking effective distribution
channels, increased costs and many more. For overcoming these challenges, they have
implemented varied strategies such as adoption of digitalised practice, increased remote working
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practices, capitalizing their online services in an effective manner. Due to adoption of these
strategies, managers of Tesco has enhanced their online delivery system which help them to
enhance their brand reputation as well as gain customer satisfaction in an exponential manner.
With the aid of these, managers of Tesco are able to remain stiff at the times of global pandemic.
RECOMMENDATIONS
It has been recommended to managers of Tesco to enhance their online delivery system
with the use of artificial intelligence as well as machine learning in an effective manner. For
engaging more customers they can develop other programmes other than club card and loyalty
schemes. They should enhance as well as build their organisational culture which extensively
promote remote working practices in a significant manner. It is advisable to them to adopt a
cloud based computing system which helps them to have access of their customers as well as can
provide recommendations to them for enhancing their revenues in an effective manner.
It is imperative to them to make continuous interactions with their employees for
engaging them in a collaborative practices at workplace. This would help them to promote
remote working culture in a significant manner which is adopted by varied organisations in a
strategic manner. It has been desirable for managers of Tesco to have a back up plans for
meeting the challenges of situations like global pandemic in an effective manner. They should
promote remote working for aiding their employees to maintain their work-life balance.
It is imperative for managers of Tesco to work on their key performance indicators which
help them to register the feedbacks which they got from their suppliers, customers as well as
employees. It is advisable to them to formulate their marketing plans accordingly for engaging
more customers towards their brand. This will help them to gain competitive advantage as well
as enhance their success in future.
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REFERENCES
Books and Journals:
Abed, S. S., 2021. A literature review exploring the role of technology in business survival
during the Covid-19 lockdowns. International Journal of Organizational Analysis.
Alameeri, K. A., Alshurideh, M. T. and Kurdi, B. A., 2021. The effect of covid-19 pandemic on
business systems’ innovation and entrepreneurship and how to cope with it: A theatrical
view. In The Effect of Coronavirus Disease (COVID-19) on Business Intelligence (pp.
275-288). Springer, Cham.
Gupta, A. and Singhal, R., 2021. Impact of COVID-19 on digital payment services in business
organisations. IJCRT2106045 International Journal of Creative Research Thoughts
(IJCRT).
Mason, C. and Hruskova, M., 2021. The impact of Covid-19 on entrepreneurial ecosystems.
In Productivity and the Pandemic (pp. 59-72). Edward Elgar Publishing.
Paul, S. K. and Et. Al., 2021. A recovery planning model for online business operations under
the COVID-19 outbreak. International Journal of Production Research, pp.1-23.
Tortorella, G., Narayanamurthy, G. and Staines, J., 2021. COVID-19 Implications on the
relationship between organizational learning and performance. Knowledge Management
Research & Practice. 19(4). pp.551-564.
Online:
Adapting to COVID-19: the Tesco story. 2020. [Online]. Available through:
<https://www.icaew.com/insights/interviews-and-profiles/2020/july-2020/adapting-to-
covid19-the-tesco-story>
Tesco profits fall as Covid costs offset sales surge. 2021. [Online]. Available through:
<https://www.theguardian.com/business/2021/apr/14/tesco-profits-fall-as-covid-costs-
offset-sales-surge>
UK supermarket giant Tesco sees profit dented by Covid related costs. 2021. [Online]. Available
through: <https://www.business-standard.com/article/international/uk-supermarket-
giant-tesco-sees-profit-dented-by-covid-related-costs-121041400640_1.html>
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