Food Retail and Wholesale Sector: A Tesco Analysis Report

This report provides a comprehensive analysis of Tesco's food retail and wholesale operations. It begins with an overview of Tesco, its history, and its position in the market. The report then applies the value chain model to analyze Tesco's internal environment, examining primary and supporting activities such as marketing, logistics, operations, technology, and human resource management. Furthermore, it analyzes the micro forces that affect Tesco's activities, including customers, employees, and suppliers. The report assesses the impact of these forces and the value chain model on organizational efficiency, highlighting areas where Tesco can improve its operations and gain a competitive advantage. The analysis considers Tesco's strengths, weaknesses, and opportunities in the evolving food retail industry, concluding with recommendations for future strategies.

Food Retailers and
Wholesalers

Table of Contents
INTRODUCTION ..........................................................................................................................3
TASK 1............................................................................................................................................3
TESCO Overview.......................................................................................................................3
TASK 2............................................................................................................................................4
Application of Value Chain model to analyse the internal environment of Tesco....................4
Task 3...............................................................................................................................................6
Analysis of the micro forces that can affect the activities of the company.................................6
TASK 4............................................................................................................................................7
Analysis of the value chain model on organisation efficiency...................................................7
CONCLUSION ...............................................................................................................................8
REFERENCES................................................................................................................................9
Books and Journals.....................................................................................................................9
Online Source..............................................................................................................................9

INTRODUCTION
The retail industry is changing rapidly, the food retail and wholesaling has gained much
importance in these times. The business environment possess opportunities and weakness also
for this the constant internal review needs to be done. The constant review of internal and
external analysis helps in analysing the strength and threats of the company in respect to
competitors. The main aim of this report is analyse the food retail and wholesale sector, the
company chosen for this case study is Tesco (Borusiak and Pierański, 2017). The Tesco is an
multinational food retailer, with headquarters in UK. The major competitors of Tesco in this
segment are Asda, Sansbury, Morrisons etc. The internal analysis of the company is being done
by using the value chain model and analysis of micro factors are also done in order to gain
insight on the company's position.
TASK 1
TESCO Overview
The Tesco was founded in 1919, by Jack Cohen. The company is listed on the London
stock exchange with market cap of £20 billion,2020. Tesco is a major food retailer in UK, with
subsidiaries operating across globe. The Tesco was initially selling the grocery and food products
multinationally and till now its major income is derived from its food segment. The company
believes in providing the customers with great standard, quality product. Tesco makes high effort
in thoroughly understanding the customers needs, market trends and then the team develops the
high value products. Especially, talking about the foods products, the chefs and food researchers
are always looking out the trends in food industry and understands needs of consumers. and try
to incorporate that findings into their product innovations that provide value and satisfy the
consumers. Tesco, believes in continuous innovations in the food offerings (Carpio-Aguilar,
Rincón-Moreno and Franco-García,2019).
Product Development
The company launched over 1300 new food items in,2019. Tesco has one department
named Nutrition department which solely is responsible for the testing the food product quality,
standards and results on health. This departments works in conjunction with the internal and
external stakeholder to maintain the quality. Such as the company in its recipes mentions
importance on the dietary intake, the company launches food products for everyone i.e kids,

teenagers and old aged people with proper composition of nutritional facts. The company even
started racking the organic food in its ranges as the consumer habits are changing towards the
more organic products.
Labelling and packaging
The food team works with the industry professionals and government to oversee their
performance. Tesco focuses great deal on the mentioning the details pertaining top the food
labelling legislation (Landry, Smith and Turner, 2018). The packaging so used is also an
important factor as they have redesigned there plastic packing as a step towards greener planet.
Safety and Audits programmes
Tesco main focus is to provide with high quality food materials to consumers. The
company has separate food thermal processing centre to check the quality of food products.
Tesco employs the use of local environmental experts that helps in gaining insight on the new
food developments. Tesco skills the employees and puts emphasis on equipping the food and
health experts in its workforce which help the company to achieve its objectives. The company
even conducts the various internal and external audits that help them to know the working going
in the organisation. The timely trainings and workshops are being conducted for the employees
to keep them updated with the industry patterns are going on and providing them with the new
updates in this industry.
TASK 2
Application of Value Chain model to analyse the internal environment of Tesco.
The value chain helps in the adding to the efficiency of the organisation. The efficient
value chain helps in the effective flow of goods and services (Leung and et. al. 2020). The
analysis of value chain activities that help to add Tesco strength area as following;
Primary Activities
 Marketing and Sales : The strong marketing and promotional campaigns helps the
company to develop the brand awareness. The Tesco in its initial was positioned as low
value retailers but they repositioned itself through various marketing efforts as high
valuable retailer. The company owns the stringent network of marketing and sales
professionals that help them to maintain close relations with the public. Outbound Logistics : The Tesco have efficient network of distributors that helps them to
makes the goods and service available at the doorstep of customer in best timely manner.

With the Covid pandemic outbreak also the company addressed the shortage of stocks in
best manner by nurturing the relations developed with suppliers so far. The company
have the strong network of suppliers and distributors across the globe (Lever and Evans,
2017). Operations : The Tesco have the varied and large operations all across the globe. The
company operations include the retail outlets, supermarkets, convenience stores and
supermarkets for making there products available. Tesco has online platform also to offer
the offerings easily. As the preferences of the customer was to shop in one go to address
their ease and flexibility to shop they made an website. The retail forms have various
outlets such as metros which sell the basic food and essential supplies, the superstores
racks the large items which includes bakery products and extended range of food
products etc. In wholesaling to sell to the smaller sections the company used warehouse
mediums which sells at very discounted range the products. Inbound Logistics : This refers to relation between the supplier and the company. The
Tesco maintains efficient network of suppliers and distributors which makes timely
availability of products (Minten and et. al., 2016). The strong network of distributors
globally makes the easy flow of goods and services to customer. This strong networking
helps the company in delivering the products n best possible way.
Supporting Activities Technology development : The technology developments makes the work more easy and
efficient. The Tesco by keeping up its productions and operations update helps them to
serve the customers easily. The company uses the digital platforms tos serve the
customers. The effective use of social media marketing also shows the company's tech
automation. Tesco understands the needs of customers more precisely by deploying the
analytics in its operation. The varied options of payments also provides the ease to
customers in shop. Keeping up with the evolving technology helps to make the operations
more easier and manageable. Human Resource management : The human resource is the important component of any
organisation. The technology so operated requires the humans to run it effectively. The
Tesco maintains the pool of satisfied employees. The company puts great importance on
training and developing the employees so that they can productively contribute towards

achievement of company objectives. When the employees are satisfied only they will
keep the customers satisfied (Paunonen and et. al., 2017). The Tesco employs various
nutrition experts and food and safety experts to keep well its operations going on.
 Infrastructure : The infrastructure design supports the company in distributing its
merchandise well. The Tesco, redesigned its production process to increase the efficiency
in their productions. The company has equipped a facility in which the customer can
collect there orders from the nearest distribution centre. The company used Just in time
operational approach to makes its production processes easy. The application of such
tools makes the working of the company flexible.
The strong network of suppliers makes the working more easy. When company is made available
with the goods timely then only they can flow it towards the customer. The Tesco has strong
Value chain which helps it to gain the competitive advantage.
Illustration 1: Value Chain Analysis,2020
(Source : Value Chain Analysis,2020)
Task 3
Analysis of the micro forces that can affect the activities of the company.
The micro factors affects any business largely as they are the components which makes
the working more effective. The Tesco analysis of the micro environmental factors are as
follows; Customers : The customers are the important part of any organisation which make them
successful. The customers are the forces which exert great power on the company. The
efforts so make to develop the base of satisfied customers are never guaranteed. With the
price cuts and offers being developed the satisfied and loyal customers shifts there

automatically. With the emergence of many food retailers they fight for same market
base. The resultant efforts are that the customers enjoys the price cuts and promotional
offers given by any company. Thus, the Tesco should try to increase the switching cost
and should focus to brings innovations in there products and services. So, that the
customers are being loyal and attracted always towards the brand (Priefer, Jörissen, and
Bräutigam, 2016). Employees : The human resources reflects the great correspondence on the company. If
the employees needs are not taken care off it will result in the high turnover ratio. As, the
Tesco is operating its subsidiaries all over globe the diversity in the workforce brings the
different needs and wants. The company should place great importance on satisfaction
and development needs of employees. The tanning and development should satisfy their
satisfaction and motivation levels should be targetted by the company. If the workforce is
being satisfied they will increase to potential of company.
 Suppliers : The efficient flow of products and services is accreditation of the suppliers.
The Suppliers have power to greatly influence the profitability of the company. The
suppliers by increasing there prices developing relations with competitors can affect the
operation's of organisation (Smith and Lawrence, 2018). Tesco, should focus on
developing the strong relations with distributors globally so that in adverse situation and
shortage of raw materials the flow of production is being maintained.
TASK 4
Analysis of the value chain model on organisation efficiency.
The analysis of the internal activities of the company helps in understanding the strength
and weakness of organisation. The internal analysis helps in gaining insight on the company
current performance and where it can improve upon to achieve the competitive advantage. The
value chain helps in flow of production easier. The Tesco's value chain adds to strength largely.
The company can work on employing more operational process that will increase the overall
efficiency of the organisation process. The company can work more on increasing the services as
the service also acts as the differentiators. The Tesco should understand the employees needs
also because the satisfied and motivated employee contributes well which helps in keeping the
customers also satisfied. In technology aspect the company can use the artificial intelligence in

its operation to make the working more easier. The company can gain competitive advantage by
suing AI in its operations. The Tesco present network of suppliers is competent enough than its
competitors. But, that should be maintained that way and efforts should be made to make it more
strong. The company can even use the ERP, SAP to make its workings more easy. The employee
relations should be maintained well as the trade unions can posses great threat if the labours are
not well treated. If talking overall analysis of value chain of Tesco the company is having the
strong edge against its competitors. The Tesco can continually modify its structure and strategy
to identify its positioning in market. With this internal analysis the company can gain insight on
the new opportunities so exiting (Sexton and Xia, 2018).
CONCLUSION
The food retail industry is evolving very much. With such evolvement many
opportunities and threats are coming for the retailers. The continuous innovations in the
productions will help the company to continually attract and differentiae itself from its
competitors. The effort should be made in maintaining the strong value chain. As the value chain
adds to organisation efficiency. The internal and external stakeholders should always be the
concern and they should always be satisfied as they affect largely the business functioning.
Therefore, the constant review of micro and macro factors needs to be done in respect to gain the
understanding of position of an organisation.

REFERENCES
Books and Journals
Borusiak, B. and Pierański, B., 2017. 10. Forms of food distribution and trends in food
retailing. Consumer trends and new product opportunities in the food sector, p.151.
Carpio-Aguilar, J.C., Rincón-Moreno, J. and Franco-García, M.L., 2019. Potential of Carbon
Footprint Reduction within Retailers: Food Waste at Walmart in Mexico. In Sustainable
Development Goals and Sustainable Supply Chains in the Post-global Economy (pp.
225-240). Springer, Cham.
Landry, C., Smith, T.A. and Turner, D., 2018. Food waste and food retail density. Journal of
Food Products Marketing, .24.(5), pp.632-653.
Leung, K.H. and et. al. 2020. Standardising fresh produce selection and grading process for
improving quality assurance in perishable food supply chains: an integrated Fuzzy
AHP-TOPSIS framework. Enterprise Information Systems, pp.1-25.
Lever, J. and Evans, A., 2017. Corporate social responsibility and farm animal welfare: towards
sustainable development in the food industry?. In Stages of corporate social
responsibility (pp. 205-222). Springer, Cham.
Minten, B. and et. al., 2016. Wastage in food value chains in developing countries: evidence
from the potato sector in Asia. In Food Security in a Food Abundant World. Emerald
Group Publishing Limited.
Paunonen, S. and et. al., 2017. Feasibility of active and intelligent packaging for local and
organic food in Southern Finland. In MC/WGs meeting: Application & Communication,
Fourth MC/WGs COST Action FP1405 Meeting.
Priefer, C., Jörissen, J. and Bräutigam, K.R., 2016. Food waste prevention in Europe–A cause-
driven approach to identify the most relevant leverage points for action. Resources,
Conservation and Recycling, .109., pp.155-165.
Sexton, R.J. and Xia, T., 2018. Increasing concentration in the agricultural supply chain:
Implications for market power and sector performance. Annual Review of Resource
Economics, .10., pp.229-251.
Smith, K. and Lawrence, G., 2018. From disaster management to adaptive governance?
Governance challenges to achieving resilient food systems in Australia. Journal of
Environmental Policy & Planning,. 20.(3), pp.387-401.
Online Source
Tesco Plc,2020 [Online] Available Through <https://www.tescoplc.com/>