Tesco: Products, Services, and Competitive Analysis

This article provides an overview of Tesco, a British multinational firm known for its groceries and retail operations. It discusses the products and services offered by Tesco, as well as conducts a competitive analysis using Porter's Five Forces and PESTLE analysis. The article also explores Tesco's value chain and support activities.

Tesco UK

Table of Contents
Introduction............................................................................................................................3
Background.............................................................................................................................3
Products and services offered by Tesco ................................................................................3
Porter Five Forces...................................................................................................................3
PESTLE OF TESCO..............................................................................................................5
Support activities ..................................................................................................................7
Value adding activities Marketing and sales and services ....................................................8
Reflection...............................................................................................................................8
REFERENCES..............................................................................................................................10

Introduction
Tesco is a groceries and retailer British Multinational Firm. It is also Known as the third
largest retailer within all over the world through gross revenues. There are various shops within
Seven nations such as Europe and Asia and also its share within the UK market is around 28%
and shops exists Ireland, Thailand, Hungary. Its headquarter is in England United Kingdom.
Tesco is expanded since the year 1990 and with operations within 11 nations within world. Its
net income is £1,320 million (2019) and total number of employees is around 450,000 within the
year 2019.
Background
Jack Cohen, son of the Jewish Migrant was founded Tesco within the Year 1919.The
brand of Tesco was first appeared within the year 1924. Tesco' name came out form the Thomas
Edward Stockwell as Jack bought the shipment of tea from Stockwell and made new labels by
using the initial of the Thomas Edward Stockwell (TES) and also the first two letters of the
surname Jack Cohen (CO). Thus formed the word TESCO. He opened his first shop within the
year 1931 at Middlesex. Firm also floated with the year 1947 on the London Stock Exchange.
Also, the first self-service shop within the year 1956 in St Albans.
Products and services offered by Tesco
There are various products and services which has bene offered by Tesco, like for example
company is working as world’s largest supermarket chain. They are been engaged in providing
high quality service according to needs and demands of consumers.
Porter Five Forces
This model will provide details about the areas in which company can gain competitive
advantage. It will allow firm to grow.
Barging power of the suppliers
There are huge number of the suppliers as compare to the buyers within the industry
where Tesco operates. It reflects that the suppliers have low amount of control and Hence makes
it weak force.
The suppliers of the Tesco do not face any difficulty regarding the other products within
industry as it reflects that there has been substitute for product other than suppliers provide to the

Tesco so it makes the supplier's bargaining power a strong force which can be applied on
industry.
Tesco can be engaged in buying raw material from any other supplier, this has made
supplier power low. They can also take raw material at low price.
Buyer's bargaining power
There is a huge number of the suppliers within the Industry where Tesco operates that
means the firms which produces the products are less as compare to the suppliers and hence
buyers can pick up the few firms and also not so much control over the cost,hence it makes the
bargaining power of the suppliers a weaker force.
The product differentiation within the industry is very high as it represents that the buyers of the
Tesco are unable to find the substitutes of the product and hence it makes difficult for switching
For other products as well as weak the buying force.
The quality of the product is very crucial for the buyers as these are the buyers that are
considered as the frequent buyers this focuses that within the industry buyers are less price
sensitive as well as makes the barging power a weaker force.
Income of the buyers is less in the industry (Hamilton and Webster, 2018). This reflects that
there are pressure regarding purchase and also makes the buyers more sensitive regarding
pricing. Highlighting that the buyers has the weaker force
Tesco can highlights on the innovation so that they cab easily attract more buyers. Here the
quality products are crucial for the buyers and hence Tesco able to attract the large number of the
consumers.
Threats of Alternatives
There are few alternatives for the goods that are available within Industry where Tesco operates.
It focuses that few alternatives are available and at the same time available for low profit earning
(Porter's Five Forces. 2020). Tesco highlights that the products provided at higher quality as
purchaser choose the products that are at high quality but at the same time at lower prices as
compare to the other alternative products tat able to provides the greater quality but at high
prices.
Rivalry among Existing organization

Tesco operates within the industry that have very few competitors as most of the firms
are very large within the size and unable to being at unnoticed so it makes this factors weaker
force.
Tesco also needs to highlights on differentiating its goods so that the actions have very less
effects on its consumers that focuses on its products that are unique.
PESTLE OF TESCO
Pestle provides the external evaluation of the Tesco as it is retailer firm and Pestle
focuses on the Operations and performance of the Tesco.
Political – Tesco is operating within the 12 nations that includes Europe and Asia. Political
factors affects the operations within Tesco, these factors involves as political instability, Tax
rates and economic conditions of the nation were the firm operates (Pestle of tesco, 2018). Such
the impact of the EU referendum impacted as it enhances the risk factors regarding investors as
Economy of British is passing through the Hard times.
Economic factors- There are various factors that affected Tesco such as profits, cost ,price.
Also, Labour cost is considered as the crucial economic factor that able to affects the
Supermarkets of the United Kingdom (Gaganis, Pasiouras and Voulgari, 2019). The firm focuses
on the enhanced borrowing power cost within the UK as it enhances prices and cost as well as
decrease profits. It also affects the cost leadership strategy and brand reputation of Tesco.
Social factors – Over the time the shopping experience of the costumers are changing as people
nowadays have very hectic schedule and need fast and same delivery within the flexible return
policy of the goods (What is a PESTEL analysis?. 2020). Tesco depends on the Customers of the
UK as well as provides the services that easily meet their issues. Also, within the UK obesity is
also an issue that needs more concern .Tesco Firm needs to focuses on the organic food as well
as changing behaviour of the Costumers.
Technological factors – Firms faces the issues such as horsemeat scandal and Poor customer
experiences. Due to the technological advancements Tesco regain the trust of its consumers.
Tesco introduced RFID technology as it can automatically counts stocks and removes it after the
sale of the products. The data collected from this RFID also beneficial for the supplier of the
store. Tesco also developed its online payment system called as PayQwid, consider as their own
app so that the consumers can pay as according to their want. The customers who loves shopping

than Tesco introduces '' scan as you shop'' as consumers able to shop as well as tag their
products. It is beneficial as it save time as well as labour cost both.
Environment
Tesco is been engaged in motivating their consumers about making less use of plastic
bags, they are motivating them to go with paperless and also make use of renewable materials.
Firm is more committed to use renewable sources ad also minimizes the footprint of the carbon
up to 50% .
Legal factors
Tesco faced so many legal actions for misleading investors and responsible for fraud as
they are agreed to pay around GBP of 12 million so that this can settle legal actions. Within the
year 2016,17 workers of the Tesco took legal actions as their employer discriminate them on the
basis of gender and age. Employees also faced the low pays rates for weekends, late nights shifts
and bank holidays (Scanning the Environment: PESTEL Analysis. 2016).
Porter value chain analysis
It focuses on the activities and system with the consumers as the central price instead of
accounting expense categories and departments (Almalki, Al-fleit and Zafar, 2017). According to
this system it links activities to each other as well as demonstrates what effect within the profit
and cost. It makes clear vision about the sources of loss amounts and value that can be found
within the Tesco.
Inbound logistics
It is considers as the complex as well as includes the supply of the product categories all
over the world. Tesco makes regular investment to enhance the capacity of logistics so that the
economies of scale may bee exploited up to a great extent. It is crucial for Tesco to develop
string relationship with the suppliers as their support is necessary for distribute of product,
receive as well as store the product (How Your Business Can Benefit from Value Chain
Modeling. 2020). The inbound logistic will assist Tesco in working on internal areas of
organization like for example they must be involved in providing training and learning to
employees so that Tesco can provide quality of services. It will also help company in gaining
competitive advantage which is necessary for their growth. By this they will also achieve
employees loyalty.
Operations

When the raw material arrives then the operational activities raises as Tesco is able to
process the raw material to the end goods and also launch within the market. Such as assembling,
machining, packaging and testing. Maintenance of the Equipment and repairing of it also comes
under operational activities. It involves both service and manufacturing operations. It is crucial
for the operational activities for enhancing efficiency, improving productivity as well as assuring
the competitive success regarding firm. It enhance productivity that assists firm to accomplish
economic growth, enhance profitability.
Outbound logistics
In these goods can be passed through consumer by making use of various services like
transportation, warehousing. In this process company makes sure that they are delivering high
quality of goods and services to customer. This will help firm in growing and gaining
competitive advantage. It will also allow them to reach out large range or consumers. It helps
them in maximising profit (Porter's Value Chain. 2016). It maximises the experiences of the
customers' satisfaction if it is timely managed with the product delivery and optimal cost that
puts a minimum negative effects on the quality. It maximizes the consumer's satisfaction as well
as increase growth opportunists for the Tesco. It must pay significance to its outbound chain
actions that can be offered products that considers as more perishable as well as needed quick
delivery to the consumers.
Marketing and sales
Tesco will focus on the differentiation and benefits points that are offered products to the
consumers that providing better than the rivalries. According to Tesco only high quality goods at
the affordable cost in not enough and also it unique features are unable to create value until.
Tesco has been engaged in doing digital and content marketing, this has assisted them in
attracting large range of consumers. Also through marketing they are able to increase their sales
by which there profitability has also been increased. They are also promoting their channels by
making use of social marketing channels like Facebook, Instagram and Twitter. Tesco is also
making use of celebrity endorsement so that they can attract huge range of consumers. This can
assist them in growing and achieving their goals and objectives. Thus, it has enhanced Brand
Equity of Tesco. Effective marketing activities able to develop the brand equity as well as assist
it stand out from the competition. Thus, Tesco able to avoid the false promises about the features

of the products that can be fulfilled by the department of product. It involves the need to assure
coordination among various value chain analysis.
Support activities
The secondary activities are also called support activities as they play significant role
within coordination and facilitating the activities of the primary chain value analysis. Tesco
benefits form the support actions as mention below.
Human resource management- Firms analyses by evaluating the various aspect of the
Human resource aspects involves providing learning, mentoring, performances management as
well as other personal management actions. effective management assists organization to reduce
the pressure created by competition and also based on the commitments, supportiveness as well
as skills regarding its workforce. Company is also engaged in finishing its cost minimization
objectives through analyzing training plus learning and mentoring cost. The dependence of the
Tesco on the staff members will enhance the importance regarding the value chain analysis.
Technology development
In today's world all the activities related to the value chain analysis depends on the
support of the technology. Tesco realizes the importance of the technology development within
distribution, production, human resource activities and marketing activities. Such as product
design research, customer care devices of technology supported, automation software and data
analytics.
Value adding activities Marketing and sales and services
Tesco sales and marketing attracts the consumers. Such as 'Every little helps ' is
considered as the communication message regarding the supermarket as they are able to pursuing
the aim of the stakeholder trust addressing the severe damage regarding the brand image that can
be caused through the income scandal. They attempt the various selection of the goods quality
and prices.
Services
The post sale and pre sale of the products of the Tesco will play the significant role within
developing loyalty customer. The customers focuses on the post sales services as crucial one as
promotional activities and marketing activities. The feedback comments are also taken from the
customers so that Tesco can change the improvement where it is necessary (Virglerova, Dobes
and Vojtovic, 2016). Firm always helps the customers about their issues and problems regarding

the products. Tesco must also provides its support to avoid the damaging brand reputation as
well as spread a positive image due to timely and quick support services.
Reflection
The company can implement various IT tools and techniques to improve product quality and
gain competitive advantage. Also, technology can be used to enhance processes and develop new
products. Tesco can implement artificial intelligence within their business procedure. Through
that, it can identify deviations and improve process. Besides that, company can use automate
process of production and offering services. In this way, they will be able to gain trust of
customers and retain them. Alongside, block chain technology can be used to integrate suppliers
so that products are delivered on time and its quality is maintained. By this, Tesco will grow and
expand in other markets.
In addition, organisation can use digital marketing and Google analytics in analysing
marketing data so that customer needs are identified. So, on basis of that new product can be
developed and competitive advantage is gained in the market.

REFERENCES
Books and Journals
Almalki, M., Al-fleit, S. and Zafar, A., 2017. Challenges in Implementation of Information
System Strategies in Saudi Business Environment: A Case Study of a
Bank. International Journal of Computer Trends and Technology. 43(1). p.60.
Gaganis, C., Pasiouras, F. and Voulgari, F., 2019. Culture, business environment and SMEs'
profitability: Evidence from European Countries. Economic Modelling. 78. pp.275-292.
Hamilton, L. and Webster, P., 2018. The international business environment. Oxford University
Press.
Virglerova, Z., Dobes, K. and Vojtovic, S., 2016. The perception of the state's influence on its
business environment in the SMEs from Czech Republic. Administratie si Management
Public. (26). p.78.
Online
How Your Business Can Benefit from Value Chain Modeling. 2020. [Online]. Available at:
https://www.smartsheet.com/value-chain-model
Pestle of tesco, 2018. [Online] Available through :https://www.marketingtutor.net/tesco-pestle-
analysis/
Porter's Five Forces. 2020. [Online]. Available at:
https://strategicmanagementinsight.com/tools/porters-five-forces.html
Porter's Five Forces. 2020. [Online]. Available at:
https://www.mindtools.com/pages/article/newTMC_08.htm
Porter's Value Chain. 2016. [Online]. Available at:
https://www.ifm.eng.cam.ac.uk/research/dstools/value-chain-/
Scanning the Environment: PESTEL Analysis. 2016. [Online]. Available at:
https://www.business-to-you.com/scanning-the-environment-pestel-analysis/
What is a PESTEL analysis?. 2020. [Online]. Available at:
https://blog.oxfordcollegeofmarketing.com/2016/06/30/pestel-analysis/