Tesco Service Based Organisation Report 2022

TESCO- SERVICE BASED ORGANISATION
Table of contents
1.0 Introduction
1.1 Importance of Topic/Aims of report
1.2 Company Background
2.0 Operational Performance
2.1 Porter Value Chain
2.2 4V Dimension
2.3 5 Performance Objectives
3.0 Marketing Principles & Relationships
3.1 Marketing Mix
4.0 Inventory Management
5.0 Conclusion
1.Introduction
Operation Management is the operation of handling the resources, which
create and provide services and products. The operations function is part of
the organisation which is accountable for this operation (Slack, Jones &
Johnston, 2014).
1.1 The purpose of this report is to analyse the concept of operation
management by applying several operational management theory and
models. Assess how Tesco utilises key elements of marketing mix and
evaluate how the marketing mix may influence Tesco operational
performance. Critically discuss how and why Inventory/Quality
Management is important for Tesco. Finally, the report will conclude by
briefly summarising the main points contained in the report.
1.2 Tesco is one of the dominant retailers in the UK industry and one of the
largest food retailers in the word, with around stores distributed across 12
countries, with around 7,000 stores worldwide and more than 400,000
employees census and serves millions of customers online and in stores.
Tesco is a British multinational retailer, with headquarter in Cheshunt,
United Kingdom. Tesco was set up by Jack Cohen in 1919, with his business

slogan ‘pile it high and sell it cheap’. Despite starting as a small market
stall, it ultimately varied into retailing of clothing, books, electronics,
furniture, petrol, internet services and music downloads. During the 90’s
Tesco was able to overtake Sainsbury and Asda and retained its position
over the years as the largest retailer in the UK. The fundamental element
to Tesco’s successful achievement of expansion are its three strategic
priorities. Investing constantly in a strong UK business, create multi-
channel leadership in all markets and pursuing disciplined international
growth. Tesco contribution to the public is notable as it aims at the
reduction of food waste around the world, creates additional
opportunities for millions of people all over the world and builds trust in
customer relationships by consolidating supplier relations.
2. Operational Performance
2.1 Porter Value Chain
Value chain indicates all the activities undertaken by a firm, beginning
with buying raw materials and then manufacturing a product, to putting it on
the market prepared to be purchased by consumers. All value- added activities
in the value-chain are interconnected and are created to make the best
possible product or service, consequently giving the commercial firm a
competitive advantage in the market (Michael Porter, 1985).
The primary purpose of implementing the value chain structure is to maximise
value chain creation whilst minimising the costs.
According to Porter (1985) firms’ activities are composed of two major
sections, primary activities and support or secondary activities (APP 1).
In this case the report will be applying this method to analyse & identify
Tesco’s activities.
Primary activities
Inbound Logistics
Inbound logistics focuses in receiving, storing and the dissemination of the
inputs to the service or product. (Barry Crocker, 2011)

Inbound logistics is one of the significant activities in Tesco’s value chain and it
is Tesco’s first key to creating value (Hassan and Parvez, 2013). (APP 1).
Tesco used it dominant position to obtain low cost of products from its
suppliers. In addition, the organisation makes frequent investments to
maximise logistics capacity, consequently, its production process can be used
to a better expanse (Robert Mason and Barry Evans, 2015).
Outbound Logistics
Outbound logistics refers to the action of transporting, storing and distributing
goods to customers (Matthias Klumpp, Sunderesh Heragu, 2019).
Tesco retains key leadership position in the offline and online consumer
segmentation in the food sector. This is characterized by its outbound logistics
efficiency and effectiveness. Tesco has been able to grow a broad range of
stores and retail formats that are strategically positioned with the purpose of
accomplishing a highest level of marketing exposure (Mintel, 2010). These
formats involve Superstore, Express, Home plus, Metro and Extra.
Outbound is a little area in the business as Tesco does not have to export
goods out of their supermarkets, customers go to Tesco to purchase the
product, pay for it and get out of there. Nevertheless, controlling the line when
customers check out is important, so customers do not have to stand in a long
queue and go out rapidly. Furthermore, locations of store and parking lot are
vital element as well. Tesco’s parking area are usually near to the entrance
store. (Robert Mason and Barry Evans, 2015).
Production Operation Management
The Corporate steering wheel is a strategic business performance framework
planed by Tesco. By utilizing this structure Tesco can control specific dimension
of its operations (Marr, 2017).
Tesco has been lauded by several supply chain management critics for its
information technology method and simplifies the business inexpensive
management strategy.