Trend Analysis and SWOT of Tesco in Retail Industry

The report discusses the current trends in the retail industry and analyzes Tesco using the SWOT model. It provides recommendations for Tesco to remain competitive in the market.

FY028 Inquiry based learning

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Trend in retail industry................................................................................................................3
Analysis of an organization.........................................................................................................4
Recommendation.........................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................9

INTRODUCTION
In the current era, most of the business are focused upon range of key aspects that helps
business to remain competitive. Further, the present study is based upon Tesco which is one of
the top international firm that offer range of grocery and clothes to their customers. Also, study
will shed a light upon the trend that affects retail industry and determine effective ways to remain
competitive. Also, report will analyze the organization and recommend the bet ways through
which company can remain more competitive in the market.
Trend in retail industry
In the recent times, retail industry is going through an enormous amount of change and
customer behavior is also changing, so to meet the demand there is a need to understand the
trend that helps to make businesses successful in market. These trends are as mentioned below:
Provide personalized retail experience: It is one of the most influencing trend that affect the
customer behavior, so to meet the same, there is a need to provide personal shopping experience.
retailers also create a personalized experience through simple services (Zhu and Gao, 2019). This
chat bot further increases the customer engagement and improve the customer experience as
well. That is why, rise of personalization in a retail industry assist to promote the innovative
technologies like Artificial intelligence.
Embrace the digital mobile wallet: It is another trend that provide better customer
experience such that retail industry trend is all about the use of mobile as a payment method and
certain retailers also caught into a retail industry trend and provide a seamless mobile payment.
This assists to provide flexible payment method like mobile payment and also provide an
opportunity to customers in order to enjoy the flexible payment method.
Fast deliveries: It has been identified that majority of the customers prefer to invest into
different online mode where they expect to deliver the products online and with fast mode. It
also seem like customer expectation for shipping times actually getting faster and that is why,
their interest towards this products increases (Huang and et.al., 2019). Hence, the secondary
study entails that all the business i.e. 51% of the online companies are actually offered same day
deliveries and that is why, it assists to generate the better outcomes.

Artificial intelligence: It is another trend that also affect the overall business in positive
manner such that most of the companies are actually uses AI in order to get their business
smooth and effective. Further, it can be stated that it also provides effective customer experience
and effective promotional style that makes a business more effective to remain ahead in the
competition. Hence, AI is also considered as a low cost- to-serve method that increase the overall
customer experience. This in turn assist to generate effective method and promote engagement
with products and helps shoppers to learn more and optimize the product placement as well.
Focus upon personal health and self-care: After pandemic, it has been analyzed that the
customers are majorly focused upon their health care services and this in turn encourage
company to add the products related to health. Further, as per the report presented by Accenture,
it has been analyzed that 34% of the consumers are increasing their purchase regard to personal
hygiene products that reflected that consumers are more focused upon these items. The changing
ins pending habits is mainly extended after the first wave of pandemic and that is why,
consumers are more focused upon such items.
Retail is now omni-channel: It has been identified that retail industry is no converting
into omni-channel where businesses are merging in offline and online. Along with this, the
companies are also focusing upon use of machines which helps to improve the customer service
and make changes in the shopping habits (Ratna, 2020). For example, the cars are automatically
parked in the respective parking areas where companies are actually provide an effective
experience to their customers in order to meet the defined aim and generate better financial
results as well.
Overall, this in turn reflected that companies are actually focusing upon such trend in
which use of AI and virtual fitting rooms are used by almost company in order to generate the
better outcome. for example, Burberry is also used omni-channel as a strategy that helps to make
the customer experience effective and generate better outcomes by attracting range of customers
towards it. Hence, it can be stated that such trends affect the overall business in positive manner
and that is why, there is a need to comply with the same in order to generate effective results.
Analysis of an organization
Tesco is one of the leading and third largest retailer in UK and enjoy lots of opportunities
and faces threat. In order to analyze the Tesco company capabilities and weakness, the SWOT

model is best. It is because this model states the strength, weakness, opportunities and threat
faces by the specific organization in the existing market.
Tesco SWOT Analysis
Strength:
This is a section of model which identifies the strength and capabilities of the company
which driving their growth. The strength of Tesco company is that they are third largest retailer
of UK with 26.9% market share as compared to its closest competitors Sainsbury. The company
also earns the gross profit of £1.9 billion in the year 2020 because of the leadership of Dave
Lewis after the great financial loss in year 2015. This is one of the greatest financial turnarounds
of Tesco company which are their major strength. Along with that the strong performance of the
company at the time of pandemic is also one of the strengths of the company. This means that
the company has shown 10.5% growth in their sales even during pandemic and this is because of
their online delivery facility and innovation (Ratna, 2020). The main reason behind the success
of the organization is its management which help the company in expanding its business in more
than 13 countries in the present time.
Weakness:
Besides of various strength, Tesco also has different weakness which affects their
business growth and success to some extent. Some of its weaknesses are inventory management,
quality control, leadership change and food safety issues. This means that after the Ken Murphy
took the reins from the Dave Lewis, Tesco has faces difficulty in pushing its online sales to the
large level. Along with that, the 2013 meat scandal of Tesco has also caused doubt in the mind of
the customer that the company have the ability to provide them high quality products or not. The
shortage of products in their store and supermarkets at the time of high demand is also one of the
weakest point of the company. The inventory management of the company was very poor it
means the company is unable to sell all its product before its expiry. The impact of which the
company also paid around £175000 in fines (Naseri, 2021). The company also fails to fulfil all
the food safety guidelines which has largely affects their brand image in the eye of local
community.
Opportunities:

The shortage of product and change in leadership are the temporary weakness of the
Tesco but along with that there are various opportunities that are available to the company. In
order to gain competitive advantage, the company just need to adapt it. The growth in online
grocery sales will help the company to gain high market share in the both national as well as
international market. The online presence of the Tesco company will help them in increasing
their customer base and sales. Along with that, the rise in the meat alternative and high
unemployment rate will help the company to acquire the number of fuels to its growth. It is
because the people can still get jobs in the supermarket (Fatricia, 2017). The continuous change
in innovation and machines along with AI will help the company in improving their production
and productivity.
Threat:
One of the most major threat that Tesco are facing in the present situation is Brexit i.e.,
EU-UK relation. The company is unable to import goods for its supermarket and also export it
because of the Brexit. This means that this agreement has affects 80% of the imported foods that
sold in supermarkets. Along with that, the new CEO of the Tesco Ken Murphy has states that the
economic recession after the temporary lockdown and Covid-19 has reduces the purchasing
power of the consumers. Thus, this is a threat for the company including the high unemployment
which leads to financial uncertainty for Tesco.
Recommendation
Through the analysis section, it has been analyzed that there are some key areas which
needs to focused that assists to generate more effective results. There are some recommendations
which are as mentioned below:
 It is to be recommended to the company to focused upon the customer needs by
providing the innovative products and this in turn assists to improve operational
performance of company. This helps to provide effective customer journey and delivered
the products in more effective manner (Kaur, Arora and Bali, 2020). That is why, it can
be stated that there is a need to focused upon the innovative strategy that helps to improve
the results and satisfy the need of customers as well.
 It has been also analyzed that Tesco is lacking in advance technology and that is why,
there is a need to focused upon robotics and automation. For that, it is to be suggested

that quoted firm should use robotics in its overall working area which helps to smoothen
the business operations and generate effective results as well. With the help of robotics,
company meet the demand of customers and offer them same range of products in order
to generate effective results in term of financial as well as operational. That is why,
focusing upon automation assists cited firm to create a positive impact and draw attention
of many customers as well.
 It is also recommended to the Tesco company that they have to start using the best
inventory management system in order to manage their inventory well. For this, it is
advisable to the company to adopt Just-in-time inventory management system (Ofori-
Nyarko, Wang and Annoh, 2021). It is because it gives the company full information
about when to order stock and how much. It is also beneficial for the company in their
stock expiry where all stock will be sold until it expires. Thus, this is best way to manage
the inventory at its stores, supermarket and its warehouses.
 Other ways recommended to the company for the quality control are six sigma
approaches of operation. This approach will help the Tesco in maintaining the quality of
its products in the same way which is manages by the Motorola company. Basically,
Motorola is a company that produces mobile phone and their phones are 99.6666% defect
free. With the implementation of this theory, Tesco company not only able to improve its
products and service quality but also increase its customer base and market share (Franco,
and Rubha, 2017). This will also improve the brand value of the company in the eye of
the customer and local community.
 At last, it is also advisable to the company that they must focus more on the online
sectors rather than offline as in the upcoming period customer will only prefer online
delivery of general products at their doorstep. This will also help the company in
increasing their sales and competing its closest competitors Sainsbury and ASDA
(Kaswan, and Rathi, 2020).
With the help of above-mentioned ways and steps, Tesco company will able to expand its
business in more countries and attract new customers from all around the world. The company
also need to put their focus on CSR for better brand value in the eye of key stakeholders.

CONCLUSION
The report has concluded the current trend of the retail industry along with the analyses of
the Tesco company. For the analysis of organization, the report has used the SWOT model as it
is one of the best models to analyses the strength and weakness of the company. Lastly, the
report has also recommended the various steps that help the company to gain competitive
advantage.

REFERENCES
books and Journals
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pp.146-151.
Kaur, J., Arora, V. and Bali, S., 2020. Influence of technological advances and change in
marketing strategies using analytics in retail industry. International journal of system
assurance engineering and management. 11(5). pp.953-961.
Ratna, V. V., 2020. Conceptualizing Internet of Things (IoT) Model for Improving Customer
Experience in the Retail Industry. International Journal of Management. 11(5).
Fatricia, R. S., 2017. STRATEGIC ANALYSIS OF TESCO SUPERMARKET. Jurnal
Manajemen Terapan dan Keuangan. 6(2). pp.69-86.
Ofori-Nyarko, N. S., Wang, F. and Annoh, W. O., 2021. SWOT ANALYSIS: WAL-MART
STORES INC.
Franco, C. E. and Rubha, S., 2017. An Overview about Jit (Just-In-Time)-Inventory
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Kaswan, M. S. and Rathi, R., 2020. Green Lean Six Sigma for sustainable development:
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Naseri, R. N. N., 2021. What is a Population in Online Shopping Research? A perspective from
Malaysia. Turkish Journal of Computer and Mathematics Education
(TURCOMAT). 12(4). pp.654-658.