Understanding and Leading Change in TESCO and Sainsbury

This report analyzes the strategies and operations of TESCO and Sainsbury, including PEST and SWOT analysis. It also discusses the obstacles faced by TESCO in making leadership decisions and the leadership concepts and techniques used to overcome them. Recommendations are provided for both companies.

Unit 17– Understanding
and Leading Change

Table of Contents
INTRODUCTION...........................................................................................................................3
SECTION 1......................................................................................................................................3
Comparison based on strategy and operations............................................................................3
Company One: TESCO ..............................................................................................................4
PEST analysis:............................................................................................................................4
SWOT analysis: .........................................................................................................................6
Recommendations: .....................................................................................................................7
Company Two: Sainsbury...........................................................................................................7
SWOT analysis............................................................................................................................8
PEST ANALYSIS :.....................................................................................................................9
Political Factor............................................................................................................................9
Economic Factor ........................................................................................................................9
Sociological Factor....................................................................................................................10
Technological Factor.................................................................................................................10
Recommendations ....................................................................................................................10
SECTION 2....................................................................................................................................11
Obstacles faced by TESCO when making leadership decisions...............................................11
Leadership concepts and techniques used at TESCO to overcome decision making barriers .12
Recommendations:....................................................................................................................12
CONCLUSION:.............................................................................................................................13
REFRENCES.................................................................................................................................14

INTRODUCTION
Leaders are the key person of an organisation who are responsible to guide, lead as well
as motivate employees to accomplish predefined business objectives (Amey, and et. al.,2018).
As per the current trend, leaders are adopting new and evolve practices in order to manage work
force in an efficient manner. In current report TESCO and Sainsbury has been taken into
consideration which are retail giant based on UK. TESCO is a global brand which provides a
range of groceries and general items at global level. It is a multinational company has
headquarters in England. It was founded in the year of 1919 by Jack Cohen. It is analysed that
TESCO is using effective digital marketing approaches. During current pandemic situation there
is a great hike has been witnessed in overall sales and profit margin of company. In addition,
TESCO is working in diversify fields. Besides from grocer and general items it is also working
in finance field. It helps to attract more number of buyers and provide an edge to entity.
Sainsbury is also a renowned organisation of retail sector which owns several outlets in different
countries. It deals in groceries and situated at London within UK. It is analysed that Sainsbury
emphasis to work on competitive pricing and provide quality products to customers at lower
price. In addition, company also focuses to provide convenient shopping facilities to customers
by using automation in stores that is essential to enhance their experience. Both the companies
undertake highly innovative and advanced approaches to survive at market place for longer run.
In the following report PEST and SWOT analysis has been carried out in order to evaluate
internal as well external factors that affects the performance of companies. In addition, it also
discussed various constraints faced by leaders while guiding and motivating employees along
with several advanced theories of leadership.
SECTION 1
There are numerous factors of PEST analysis that affect the activities and behaviour of
leaders, team & also individuals who are working within company. It can put negative as well as
positive impact upon business operations. In addition different elements of SWOT analysis are
also also included in report which affect leaders, teams and individuals behaviour in organisation
(Dorac-Kakabadse, 2017). Further a comparison has been also included in the report based on
the strategies and operations of respective companies

Comparison based on strategy and operations
TESCO Sainsbury
 Here, TESCO is providing products
and services to customers at lower price
in order to gain higher competitive
advantage. For this, it is associating
with major suppliers to get necessary
resources at minimum possible price.
 In addition, Company is using digital
marketing approaches such as social
media, content marketing to enhance
the market share of company at large
level.
 TESCO uses effective operations
management that helps to eliminate
wastage and unnecessary activities
during production process to operate
business effectively.
 It is analysed that TESCO is using
effective digital marketing approaches.
During current pandemic situation there
is a great hike has been witnessed in
overall sales and profit margin of
company.
In addition, TESCO is working in diversify
fields. Besides from grocer and general items it
is also working in finance field. It helps to
attract more number of buyers and provide an
edge to entity.
 Here, Sainsbury emphasis to provide
better experience to customers that will
help to retain them with company for
longer run. In addition, managers also
use competitive pricing strategies to
sustain at market place for longer run.
 Here, Sainsbury use effective SEO to
improve the ranking of website in
various search engines such as Google,
Yahoo and more.
 Here, it is analysed that Sainsbury uses
Total quality management approach in
order to develop high quality products
to satisfy customers.
 It is analysed that Sainsbury emphasis
to work on competitive pricing and
provide quality products to customers
at lower price.
 In addition, company also focuses to
provide convenient shopping facilities
to customers by using automation in
stores that is essential to enhance their
experience.

Company One: TESCO
TESCO is a multinational company which majorly deals in groceries and have outlets in
different countries. It has nearly 7000 stores in various nations. It is a global brand which nearly
working in 13 countries worldwide. There is higher competition is being faced by organisation at
market place. It is analysed that entity has higher brand value which is helpful to attract more
number of customers.
PEST analysis:
Political factors: It is an important factor which put a great impact on the behaviour and
attitude of individuals who are working in company (Flanding and et. al.,2018). Here, TESCO is
working at global level in different countries thus highly affected with changes in political
conditions of various nations at global level. It is analysed that political environment of some
countries are not stable which affects the strategies of company. It not only influence overall
organisation but also people who are working within it. For instance, due to Brexit, managers
also need to make necessary modifications in their existing policies and communicate it with
employees. Positive and negative impact of above stated factors over the behaviour of
individuals, teams and leaders are given as under:
Positive impact: It helps to analyse current policies, changes and make modifications in the
strategies and policies of company accordingly which is essential to manage the work force in an
efficient manner. In addition, it also helps to minimize ambiguity and disputes arise at work
place.
Negative impact: Here, it is analysed that changes in existing government policy put a negative
impact over the performance of individuals and teams. In addition, managers need to make
necessary modifications in current policies which may oppose by subordinates.
Economical: It comprises several elements such as demand, supply, profit, cost and more
which put significantly affects overall business operations. In regards of TESCO, it is operating
at global level in different countries (Franklin, and et. al., 2019). For this, managers need to
aware about taxation policy, trade policies prevailing in different countries in order to undertake
necessary changes. It is a analysed that TESCO is operating at global level thus operating cost of
organisation is also high. In addition, economical factors also influence the performance of
individuals, leaders which are discussed below:

Positive impact: These factors helps to provide recent information about economic
condition of country. With this, leaders of company are able to make effective strategies to face
future circumstances that is essential to sustain for longer run.
Negative impact: Here, leaders need to evaluate the current economical condition of country on
continuous basis which is time taking process. In addition, they also need to make modifications
in current strategies which will overburden employees and affect their performance.
Social: Under this, several factors such as buying behaviour, attitude of customers,
personality, perception are included (Gutierrez Jr, 2016). TESCO is highly affected with social
factors as it need to adopt effective strategies in order to meet with the desires of customers. It is
analysed that managers need to evaluate several factors in order to provide better products to
consumers. Impact of these elements on the behaviour and performance of employees is given as
under:
Positive impact: It is essential to provide products and services to customers as per their
requirement. It creates positive image of organisation at market place and give motivation to
individuals and leaders to have association with such a renowned brand. This improves their
future performance.
Negative impact: Here, individuals working in company are required to undertake
extensive market research in order to meet with demand arise at market place in an efficient
manner. This is time taking and also affect the performance level of leaders and individuals
within entity.
Technological: It refers to adopt new and advance techniques, methods to perform
various business task in an efficient manner. It is monitored that TESCO is using digital
marketing approaches such as social media, seo and more in order to attract more number of
customers. For this company is adopting automation and soft wares to sustain in market for
longer period of time. It influence current working environment of organisation which affect the
performance of employees (Hart, and rt. al., 2019).
Positive impact: New and evolve techniques are helpful and will provide competitive
advantage to organisation. In addition, it will also help to improve the productivity and efficiency
of subordinates.

Negative impact: Here company is planning to use automation and robotics which may reduce
the requirement of employees within company. Further, it may oppose by employees as due to
this they may loss their job.
From above discussion, it is analysed that are related to external environment and put
substantial impact on performance of individuals and teams of organisation. These factors put
negative as well as positive impact on leaders and employees which need to be evaluate on
continuous basis.
SWOT analysis:
It refers to the internal analysis that comprises strengths which differentiate company
from others along with weak points that need to be improved (Hislop, and et. al., 2018). In
addition, it also comprises several opportunities that is essential for future growth and success
along with threats that may restrict its performance. SWOT analysis of TESCO along with its
negatively and positivev impact over employees and leaders is given as under:
Strengths: It is analysed that TESCO is a global brand which has higher brand value at
market place. In addition, it owns higher market share at international market which is essential
to earn higher profit margin. Leaders and employees of company are able to get higher pay due
to huge profitability of organisation which motivates them to work hard. Further, sometime, they
become careless and do not put more attention over business due to its higher growth and succes
rate.
Weakness: To stay in competition, TESCO provides quality products at affordable price
range which increase its overall cost of production. In addition, organisation also faced several
controversies in US and China market which affect its existing brand image. It is analysed that
these points give motivation to employees to work with their full efficiency to ensure future
growth and success of company. Further, it also de-motivates them and reduce productivity and
outcome.
Opportunities: There are several opportunities present at market place for future growth
and success of company. TESCO can expand business in emerging markets such as Asia and
more. Currently, it is only working in 13 countries and have the opportunity to explore
operations in more nations. It will provide great opportunity to employees to explore in their
career and undertake various functions in an efficient manner. Here, leaders and individuals need
to prepare effective strategies and put more efforts for the betterment of whole organisation.

Threats: Here, several threats are faced by company which creates constraint in its
growth and success. TESCO has great threat from competitors and rival firms which are
providing products and services at relatively lower price. It inspires leaders, team and
individuals to work effectively for growth of entity. Here, it also creates a hectic environment at
work place and put a lot of work pressure on employees.
Recommendations:
On the basis of above discussion, following suggestion can be opt by company for
improvements:
Here, managers need to evaluate the external factors on continuous basis in order to
improve policies and strategies of company and communicate it with employees on regular basis
in order to get their support.
It is analysed that subordinates generally oppose changes for this leaders need to arrange
proper training and development program in order to make them familiar with changes and
create positive environment at work place.
Company Two: Sainsbury
Introduction
SWOT analysis and PEST analysis is a framework of how internal and external factors
may affect the working or decision of an organisation . SWOT stands for Strength , Weakness ,
Opportunity , Threats . PEST stands for Political , Economical , Social , Technological factors .
Project management . Sainsbury's is an UK based organisation which is the second largest chain
of supermarket in United Kingdom . It is having 16% share in supermarket sector in United
Kingdom . It also provide financial services through Sainsbury's Bank . The PEST and SWOT
analysis of Sainsbury revolves around the factors which may affect the working of the
company .
SWOT analysis
SWOT analysis give us the insight about what all internal factors might affect our
organisation .
Strength Weakness

1. They are a 150 years old business
enterprise so they are having a lot of
loyal customers.
2. They are able to give their customers
high quality products at low cost which
helped them in retaining old customers
and adding new customers (Hobbs,
2018).
3. The promotion strategies that they use
are also innovative and eye catching ,
this gives them an upper hand over
their competitors.
1. Like all other established retail brand they
also have a problem with retaining customer
who are switching brand .
2. With increase in competition they reduce
their margins to attract customers which will
not let them sustain for longer period .
3. They are also not so technologically
advanced because of which their customers
find it difficult to shop .
Opportunities
1. Sainsbury's can expand its reach by online
collaboration , Joint ventures , partnership etc.
to enter in new market .
2. They already have an established brand
name which helps them in attracting
investments based on their equity .
3. As it's an already established brand name so
its easy for them to enter a new market as they
already having a loyal customer base .
Threat
1. They are having a very stiff competition
within every segment of retail sector .
2. Their maximum competitors operate
themselves through online portal which is
convenient for the customers .
3. The new start-ups are providing their
products at a very attractive price range and
with a lot of attracting benefits .
PEST ANALYSIS :
PEST Analysis is explained as the business tool to analyse the business opportunities and
threats in the external environment. PEST analysis includes different external factors like
Political, Economic, Sociological and Technological.

Political Factor
Political factor in PEST describes about the political framework which includes tax
policy, tax reforms and restrictions, environment regulations, tariffs, political stability etc. The
political environment can affect the business in terms of new policies introduced by government
or new rules and regulation introduced by the government (Hosking, D.M. and et. al., 2018).
Sainsbury business have the opportunity to expand it's business in the environment of UK by
increasing international trade agreements and also Sainsbury can minimize the impact of the
guidelines which includes the accessibility and affordability of the consumers. Sainsbury
business can grow more in the UK environment because of the political stability of the
government.
Economic Factor
Economic factor in PEST describes about the economic framework which includes
economic growth/decline, interest rate, exchange rate, inflation rate, cost of living etc. These
factor have impact on the economy and performance which results in the impact on the
organization and it's profitability. Economic environment of UK can affect the Sainsbury
business in terms of growth because UK economy is a developed economy which can help the
Sainsbury business to grow slow and stable. Sainsbury business in UK environment also posses a
threat due to the rapid growth of developing countries. The economical factor which works in the
favour of Sainsbury is that the inflation rate in UK is 0.7% that is very low in comparison to
inflation rate of other countries like USA where inflation rate is 1.2% whereas the inflation rate
of China is 2.1% .
Sociological Factor
Sociological factor in PEST focus on the social environment and emerging trends. It
helps to understand the customers needs and wants (Kumar, 2019). Factors include cultural
barriers, lifestyle attitudes, population growth rate, family demographics etc. Sainsbury in UK
environment arises the opportunity to grow due to the busy lifestyle and schedule of people
which encourages them to buy groceries in easy and fast way. Sainsbury has the opportunity to
sell the products to satisfy consumer preference in the market. The healthy lifestyle trend is a
opportunity for the Sainsbury as it encourages the organization to sell healthy products but it also
creates an opportunity to include the healthy product in it's product range.

Technological Factor
Technological factor in PEST focus on the technological innovation and development
that could affect a market or industry. It includes changes in digital technology, automation
research and development etc (Maheshkar, and et. al., 2018). It also determines the affect of new
technology on the product and services. Sainsbury business can achieve the competitor
advantage over their competitors because these resources are available in abundance in the UK
environment which can help them to increase it's research and development investments which
can help their business to be effective and efficient. As UK is one of the developed country and
also a developed economy it makes them technologically advanced country so it gives Sainsbury
to achieve competitor advantage over their competitors in terms of technology.
Advantages and disadvantages
The organisation was founded over 130 years ago and therefore they have a lot of loyal
customers which gives them advantages in terms of equity if they want to raise funds for
investment. The company's methodology of giving customers quality services at low cost give
them advantages in retaining their old customers. The companies personalized promotional
activities help them in getting an upper hand over their competitors. Advantages that Sainsbury
experience in the target market includes the opportunities of online collaboration, joint ventures
partnership, etc. The political environment of UK, in which Sainsbury function is very stable
which gives them an advantage of effortless consistent operations. Social logical factors also
worked in the favour of the organisation because lifestyle attitudes and cultural aspects of
customer trends both in the favour of Sainsbury as an organisation.
The disadvantages the organisation will face in that target market will revolve around the
problems regarding retaining customers who are willing to switch because of the presence of
substitute products. With constantly increasing competition in the market the organisation has to
reduce their margins. The organisation cannot fully utilise the benefits that digital landscape off
because they are not technological advanced as their customer find is difficult to shop. The
threats that the organisation faces in the target market revolves around stiff competition,
competitor is using digital marketing strategies to attract their customers and entrances of new
brands. The economic environment of United Kingdom gives the organisation a slow but stable
growth opportunity, growth of the organisation is slow which puts them in a disadvantageous
condition in front of their competitors.

Recommendations
On the basis of PEST analysis and SWOT analysis Sainsbury have to work on their
strategy formulation regarding their product range. Sainsbury can expand their business by
focusing on the revenue generation and focusing on promoting the brand at big level. This can
help Sainsbury to achieve it's goals and objectives and also helps in expansion of their business
in other countries also the Sainsbury can generate higher revenue by providing best quality
products to the consumers and at affordable prices. The Sainsbury has to deal with the fierce
competition and with the higher customer expectations the brand has to implement the effective
and efficient strategy.
SECTION 2
INTRODUCTION
Out of the two organisations described in section one, the company that is discussed
below is the British retail corporate TESCO. TESCO is one of the largest retail brand of UK and
has outlets across 14 countries. Various obstacles faced by the corporate while making decisions
related to leadership along with the use of models such as Schein's organisational culture model
to face these challenges.
Obstacles faced by TESCO when making leadership decisions
Reduced employee engagement: Effective employee engagement is crucial to positive
and healthy work environment. This engagement drives employees to work more efficiently as
they feel more connected to the organisation (Pruzan, and et. al., 2017). Depressed employee
engagement gives the company a disadvantage in the form of unmotivated employees. The retail
sector is considered to be a sector with low career growth, TESCO has not implemented any
measures to change this assumption when considering their employees. This along with non
transparent structure for promotion is the reason for reduced employee engagement and high
absence.
Absence of proper communication: Communication plays a crucial role in construction
of a well managed workplace. The absence of communication or the presence of incomplete or
improper communication can create new obstacles for the organisation instead of solving

previous problems. TESCO has faced many obstacles during the pandemic due to absence of
proper and efficient communication at all levels of the organisation.
Absence of complete agreement: The presence of total agreement regarding any decision
about the operations of the organisation plays a crucial role in effective leadership judgement
making. If the team members do not completely agree on the execution of the tasks they are
about to perform, chance of formation of various conflicts increases. This can impact the
organisation and cause serious disruptions in the successful implementation of the task at hand.
TESCO has faced the results of this barrier as they do not involve every employee when making
important decisions, this lack of employee participation results in some employees disagreeing
with the leadership and administrative decisions
Cultural Differences: The existence of diversified workplace requires the leadership to
manage the viewpoints of the employees from different cultures in a way that they impact the
business positively. TESCO has faced allegations of treating their employees on the basis of race
recently and this has shown a lack of effective cultural management decisions taken by the
leadership (Van Wart, 2017).
It is analysed that there are several rules and regulations have been formulated by higher
authorities which affect the performance of company. Data protection act which state that
necessary information related to employees and customers of entity necessary to be protected in
an efficient manner. In addition, there are some predefined laws related to rewards, incentive that
are crucial to follow in order to maintain positive environment at work place. These all factors
put a great impact on overall decision making process of organisation.
Leadership concepts and techniques used at TESCO to overcome decision making barriers
Schein's model of organisational structure: According to this model an organisation has
three levels of culture which are
Artefacts: These are the visible factors belonging to the culture of an organisation such as
technology, language and ambiance of the workplace. This level of culture is easily understood
by external people.
Values: The common opinions and beliefs held by every employee are the values of that
organisation and form the cultural environment of the organisation. These values help the

employees in determining the correct paths and strategies for any given operation held at the
organisation .
Assumptions: This involves the part of the cultural environment of the organisation
which is synonymous to rules of the organisation. These assumptions include relations and
execution of various tasks completed by the employees ending struggles and leadership
procedures.
Lewin' change model:
Unfreezing: It is the first step in which company spread awareness regarding the change
so that employees get to know about changes and coordinate with it. In context of TESCO,
managers arrange proper induction for employees before introducing changes within
organization.
Changing: After getting clarity employees start to adopt changes. At this stages changes are
applied in real context so that business can be operated effectively. In regards of TESCO,
managers provide necessary motivation to subordinates to get their support.
Refreezing: In this stage, it ensures that people do not revert back to old methods of work. For
this, positive rewards are provided to employees so that they stay with new approaches. Here,
managers of TESCO communicate and coordinate with work force in order to get positive
outcomes.
Advantages: It helps organisation to bring new and evolved practices at work place that are
essential to receive competitive edge at marketplace. With this, managers ensure to get support
of employees while making changes in organisational functions.
Disadvantages: Here, managers need to analyse the performance of subordinates on regular
basis. It will incurred huge cots that will reduce overall profit margin of company.
Recommendations:
On the basis of above report, it is analysed that further improvements are need to be done
for further improvements:
There is a requirement of proper communication between leaders and subordinates in
order to create positive environment at work place.

In addition, appropriate methods need to be use by leaders and managers after evaluating
their benefits and drawbacks in order to guide and lead subordinates in an effective manner.
CONCLUSION:
With above discussion, it is monitored that leaders are crucial part of a company and
play a great role in motivating and inspiring employees. There are different tools such as PEST
and SWOT analysis which also put significant impact on overall performance of employees,
leaders, teams of organisation. Here, several advance techniques and approaches are used by
leaders in order to guide ad lead employees in better manner. Discussion has been carried out
about various leadership methods such as lewin; s three step model and more.

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