Strategic HR Management and Knowledge Management at Aldi Stores Report

This report provides a comprehensive analysis of knowledge management initiatives within Aldi Stores (Ireland) Limited, examining their benefits and challenges. The report begins with a company profile and utilizes PESTLE and SWOT analyses to assess the external and internal environments. It then delves into the significance of knowledge management for achieving sustainable competitive advantage, exploring the SECI model of knowledge creation and the role of IT. The study also investigates the relationship between HR strategies and knowledge management functions, emphasizing how HR can support KM and vice versa. Practical examples and insights from the chosen organization are integrated throughout the analysis, highlighting the importance of knowledge sharing and management within Aldi Stores. The report concludes by summarizing the key findings and recommendations for enhancing knowledge management practices within the organization.

Running head: STRATEGIC HUMAN RESOURCE MANAGEMENT
STRATEGIC HUMAN RESOURCE MANAGEMENT
Name of the Student
Name of the University
Author Note

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Table of Contents
Introduction......................................................................................................................................2
Company Profile..............................................................................................................................2
PESTLE Analysis........................................................................................................................2
Strategic Fit..................................................................................................................................6
Sustainable Competitive Advantage................................................................................................6
SWOT Analysis...........................................................................................................................7
Knowledge Management.................................................................................................................9
Relationship between HR strategies and Knowledge management..........................................10
Conclusions....................................................................................................................................11
References......................................................................................................................................12

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Introduction
The report mainly aims at analyzing the challenges and benefits that are faced by an
organization with respect to the knowledge management based initiatives that are implemented
in the operations. The organization that has been taken into consideration for study is Tesco and
the analysis will be related to the importance of the initiatives of knowledge management that are
implemented by the firm and the sustainable competitive advantage that is gained in the industry
as well (Abubakar et al. 2019). The relationship of the human resource management based
strategies and the functions with knowledge management activities will also be discussed in the
report.
Company Profile
Tesco Plc. or Tesco is a British cosmopolitan general merchandise and grocery based
retailer that has developed its headquarters in Welwyn Garden City, Hertfordshire, England
United Kingdom. Tesco has gained the place of the third largest retailer in the world with respect
to the total amount of revenues in the industry (Tescoplc.com, 2020). Tesco has been able to
develop its shops in around seven countries in Asia and Europe and the organization is also a
market leader in the grocery based industry of the United Kingdom, Hungary, Ireland and
Thailand. Tesco had been established in the year 1919 by Jack Cohen as the group of market
stalls. The name of Tesco had appeared in the year 1924 and the company has been able to
maintain its profitable processes in the industry as well (Tescoplc.com, 2020).
PESTLE Analysis
The implementation of PESTLE framework can help in providing a detailed study of the
external environment that is able to influence the operations of Tesco in Ireland.

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Political factors  Brexit has a major impact on the UK
based supermarkets and the food
prices are also influenced in a huge
way by the devaluation of pound.
 The growth of supermarket has slowed
in the last few years and the imports
have become expensive for the
organization as well.
 The core grocery based items have
also become expensive in the
countries like Ireland (Akhbar Azad,
Abtahi and Pourshojaei 2019).
Economic factors  Brexit has major economic
consequences and the decline in levels
of consumer spending is based on a
combination of different factors that
include slow growth in wages and rise
in inflation.
 The inflation in consumer prices in the
UK has also become quite high in the
last few years. The merger of major
firms like Asda and Sainsbury’s has
led to the development of the biggest

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supermarket in the UK and Ireland.
 The spread of COVID 19 also has a
major impact on the economic aspects
of Ireland (Asrar-ul-Haq and Anwar
2016).
Social factors  The changes that have taken place in
the lifestyle, labor composition and
different demographic trends are able
to offer threats and opportunities to
Tesco.
 The focus of consumers on healthy
foods has been able to influence the
changes in the lifestyle of individuals
in Ireland (Dalkir 2017).
 The healthy food based trend is
considered to be a major threat to the
operations of supermarkets like Tesco.
 Changes have also taken place in the
shopping habits of consumers and this
is able to influence the demographics
as well (Kianto, Sáenz and Aramburu
2017).
Technological factors  The automated delivery provided by

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Tesco to the consumers has led to the
implementation of driverless
technology.
 Superfast delivery is also enabled with
the help of appropriate application of
modern technologies.
 The development of apps that provide
the products to consumers can
influence technological
implementation (Mao et al. 2016).
Legal factors  Tesco has faced different legal trials
and this has led to a major damage to
its reputation in the retail market.
 The taxes that have been implemented
by Tesco is able to influence the
processes and image of the firm (Mir,
Rasheed and Gul 2017).
Environmental factors  The rise of various environmentally
and ethically conscious consumers has
been able to influence operations of
Tesco.
 The demand of consumers for zero
waste production has been able to

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enhance the environmental challenges.
Tesco has been able to create around 1500 jobs and has provided key levels of
contribution to the growth of the economy of Ireland in the last few years. The Irish retailing
industry has been influenced by the operations of Tesco in the retail sector (Moghaddam,
Habibian and Hadinejad 2017).
Strategic Fit
The human resource management department of Tesco has been able to provide major
levels of contribution to the growth of the firm. The behaviors and skills of the employees can
play a major role in proper fulfilment of the various strategic needs of an organization like
Tesco. The employees or human resources are considered to be the most significant asset of
Tesco and its sustainable operations in the retail industry as well. The resource based view of an
organization like Tesco is able to provide a detailed picture of the competitive advantage that is
gained in the industry. The goals and objectives have been achieved by Tesco with the support
that is offered by the resources gained by the organization (Nisula and Kianto 2016).
Sustainable Competitive Advantage
The competitive advantage that has been gained by Tesco with the implementation of
Porter’s generic strategies. The three approaches that have been applied by Tesco in order to
improve its competitive advantage in the industry are as follows,
1. Innovation – The implementation of innovative activities have been able to play a
key part in enhancing the position of Tesco in the retail industry.

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2. Quality – The high quality products and services are offered by Tesco to the
consumers in different parts of the world.
3. Cost leadership – Cost leadership strategy has been implemented by Tesco in
order to offer the products at lowest prices. The price based competition that is
faced by Tesco can have an influence on the revenues gained by the organization
(Santoro et al. 2018).
The implementation of generic strategies by Tesco has been able to influence the ways by
which the organization has maintained its revenues and profitability levels in the industry.
SWOT Analysis
The implementation of SWOT analysis framework can provide a detailed picture of the
internal environment based factors that are have an influence the operations of Tesco. The
internal strengths and weaknesses and the external opportunities and threats can be examined
with the implementation of this framework (Shamim, Cang and Yu 2019).
Strengths -
Largest grocery retailer in the United
Kingdom and Ireland.
Leading share in the market.
Geograhical diversification,
Weaknesses -
Failure in the operations in Japan and
the US.
Decrease in the levels of operating
profits.
Implementation of low cost strategies.
Opportunities -
Strategic alliances debveloped with
other organizations.
Joint ventures formed with the other
firms.
Threats -
Implementation of Brexit.
Competition with the supermarkets.
Economic crisis.
SWOT

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Figure 1 – SWOT analysis
Source – Created by author
Tesco is provided with major opportunities for the development of joint ventures and
strategic alliances with the other organizations that operate in Ireland. The online shopping based
activities can also influence the ways by which the needs and demands of Irish consumers have
been fulfilled by Tesco. The diverse market and range of products offered by Tesco are able to
support the growth of Tesco in the retail sector (Sundiman 2017). Tesco has also proved to be the
biggest employer in entire Europe and the job opportunities provided by the organization are also
considered to be quite high. The competition that is faced by Tesco from the large supermarkets
is able to influence the business processes of the firm. The product range that is offered by Tesco
is also considered to be a significant aspect that is able to enhance the operations of the firm in
retail industry (Soltis, Brass and Lepak 2018).
Knowledge Management
Knowledge management is considered to be a system that is able to help the individuals
or the organizations so that they are able to share, access and also update the business
information and knowledge. The effectiveness of operations of Tesco is mainly based on the
proper distribution of knowledge within the organization (Dixon 1999). The employees or talent
base of Tesco is able to offer a major competitive advantage to the organization in the retail
market. The physical or financial capital of Tesco is able to play a key part in proper
enhancement of the revenues and profitability that is gained by the organization (Wilkinson,
Redman and Dundon 2017).

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The two major elements that are a part of knowledge base of the organizations include
tacit elements and explicit elements. The explicit knowledge of the organization can be accessed
in an easy manner and it is mainly transmitted between the employees. On other hand, tacit
knowledge cannot be transmitted easily and this is mainly based on the specific levels of
knowledge that is gained by the employees. Tacit knowledge is able to generate high levels of
performance within the organization and it is considered to be quite unique for the individuals
(Irishtimes.com, 2020).
The competitive advantage of Tesco will be developed with the support that is provided
by the skilled employees. The knowledge based workers are mainly found in the dynamic,
unstable, fast changing environment and with the innovative structures. The organizational
culture of Tesco is able to play a key part in the enhancement of work process of the firm. The
goals that have been set by Tesco are mainly based on the job descriptions that have been
developed by the organization (Soltis, Brass and Lepak 2018).
Socialization
Creation of Knowledge that is related to
social interaction based on online and face to
face meetings as well.
Externalization
Knowledge extraction that is based on the
instructions related to frameworks and the
visualizations.
Tacit knowledge Tacit knowledge

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Internationalization
Knowledge that is applied to the practice
based on decision making.
Combination
Combination of knowledge based on the new
projects and new products.
Figure 2 – Nonaka SECI model
Source – Created by author
Relationship between HR strategies and Knowledge management
Tesco has been able to develop an effective relationship between knowledge management
and human resource based strategies. The recruitment process implemented by Tesco is also
based on the knowledge management and skills of the employees. The employee engagement
based survey that has been established by Tesco is able to support the organization in order to
provide major levels of value to the employees. Tesco has developed its partnership with an
organization named Yext that helps the organization to manage knowledge for more than 4000
locations (Shamim, Cang and Yu 2019). The partnership has been able to ensure the levels of
consistency of knowledge related to the brand across leading apps, maps and the search engines
that are used by the customers as well. The Yext Knowledge Engine is mainly a cloud based
platform that supports the organization to manage the various public facts based on their brand
which mainly appears on Facebook, Google and various other online based sources as well
(Moghaddam, Habibian and Hadinejad 2017).
The Yext Knowledge Engine aims at supporting more than 4000 locations of Tesco as a
major part of the partnership that is developed by the firm. The organization has thereby proved
Explicit knowledge Explicit knowledge

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to be a major partner of Tesco based on the contribution that is provided by the employees in
future operations in the retail industry. The high quality knowledge related to the operations of
Tesco is effectively managed by the Yext Knowledge Engine. Tesco has thereby aimed at
enhancing its operations with the proper implementation of innovation in the organization. The
data technology that has been applied by Tesco is also supported in a huge manner by the Yext
Knowledge Engine (Tescoplc.com, 2020).
Conclusions
The report can be concluded by asserting that knowledge management has to be linked
with the human resource management based activities of the organizations in order to maintain
the profitability levels in an effective way. The employees of Tesco have proved to be the most
significant resources of the firm who are able to support the growth of the organization in the
highly competitive retail industry. The PESTLE and SWOT framework have been able to
provide details related to the external and internal environment of the firm. The knowledge
management initiatives implemented by Tesco are able to enhance the contribution provided by
the employees and their skill levels as well.