Strategic Management Accounting Report: Tesco's Performance Evaluation

This report provides a critical analysis of Tesco's strategic management accounting practices. It begins with an introduction to the balance scorecard as a performance measurement tool, highlighting its role in achieving competitive advantage. The main body of the report delves into a critical analysis of the balance scorecard's application at Tesco, evaluating its strengths and weaknesses. It then assesses the limitations of benchmarking as a tool for organizational improvement, followed by a discussion on the significance of competitor analysis in gaining a competitive edge. The report examines the use of balance scorecards, the limitations of benchmarking, and the importance of competitor analysis in driving organizational performance and sustainable growth for Tesco. The conclusion summarizes the key findings and the references section provides a list of the sources used in the report.

Strategic
management
accounting

Table of Contents
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
1.Critical analysis of balance score card as the tools of organizational performances in the
Tesco............................................................................................................................................4
2. Evaluation of limitation of using the benchmarking in orders to have improvement in
organizational performances. ......................................................................................................7
3. Discuss over statement of ‘Competitor analysis is fundamental to the pursuit of competitive
advantage'.....................................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................11

INTRODUCTION
Balance scorecard ins the effective tools used as the performance measuring tools which
is helping in gaining the competitive advantage in the market. For the companies it is important
to have proper understanding about performance measurement to have proper tracking and
evaluation of organization performance. Tesco is multinational retailer established in country of
united kingdom. Tesco is company which has been using balance scorecard from almost 20 years
for tracking the business over range of different measures which is effectively encapsulating
business strategy development in set of management accounting. The report is about to have
presentation over critical analysis over balance score card as organizational performances. There
will also b discussion limitation of benchmarking along with competitive advantage.
MAIN BODY
1.Critical analysis of balance score card as the tools of organizational performances in the Tesco.
Balance score cards is the strategic planning and the management system which has been
used by the companies as Tesco to have the evaluation of performance. The BSC is established
in the company to have proper communication between their visions and strategic development
they are taking company as to achieve it. It also helps in having proper alignment in day to days
activity of company along with having proper priority of projects and services which will help in
proper monitoring progress towards the strategic targets of specific organization. The BSC have
suggestion over the major four perspectives in order to have development through the KPI
indicators along with target and initiatives. The BSC gives a specific solution over dividing the
total business environment into major 4 aspects that in internal business process, financial,
stakeholders and organizational capacity with the combine short term to long term perspectives.
Tesco have major objectives in certain perspective of balance score card customer satisfaction
with product quality, increases in sale with profit, employability skill and improvement in
delivery consistency with focus on product in customer, financial, internal and innovation and
learning perspective respectively. In the company Tesco, there is inclusion of one more
parameter that is community perspective. There is development of companies own state of art
business intelligence which is famously known as steering wheel. On the other hand, the BSC
have lack of understanding about non-financial areas which might have the development of
advance strategy allowing the self-service managers to have the option of choosing and
manipulating the different level of results. BSC has also been identified as the dominated

performance measure meet technique which is more difficult to have overall evaluation. As the
financial perspective in present in having the attention over development by the senior manager
as they are one of lagging indicators of success. The company has been identified as the
balanced scorecard became popular because of the advertisements of renowned people and
reputed institutions. The company Tesco is highly variant dependent on the varsity of events that
is been undertaking place with having no immediate control in present situation. On the other
hand measuring focus on financial perspective on Tesco as they have nothing to have direct
relationship with customers in establishing long term of relationship as results the there is
reduction in purchases altogether. The company is majorly dependent on the development of
strategy to broaden the scope which will enable the strong delivery of sustainable and the long
term growth for development as per customer long term expansion in different countries. On the
other hand the Tesco has been categorized as the people orientated organization as they are more
emphasis on customer satisfaction. But the company is failed to provide the good amount of
salaries to employees which not going to yield in the financial result's development. As the
perspective of BSC of customer the company is trying to fool its customer by increasing and
decreasing the proves of product on Regular basis as per name of price cut. The balance score
succeeds in recognizing the needs of the customer along with shareholders but failed in having
recognition of employee needs (Vijayan. and Kamarulzaman, Vu, 2016). But the company have
adjusted framework for employees which means the company has added their own perspective.
On the other hand the balance score card has been critiqued as there is no cause and effect
relationship in any of segments such as customer and loyalty or the loyalty or financial results.
The company is having the preparation of balance score card in terms of long-term perspectives
by giving the major importance customer loyalty and high quality of productions. The BSC have
helps the company Tesco in order of having proper management along with achieving long term
objective to be successful retail organization in world.
Other than BSC, there are other performance measurement techniques which has been used by
Tesco as performance evaluation technique. Activity based management is one of them which
basically have focus on customer satisfaction which add more value to customers. The next is
about business reengineering proves which is adopted by Tesco by focusing properly over
business process in terms of improvement in cost reduction along with quality and customer
level satisfaction. Tesco is having proper improvement over more customer satisfaction along

with improvement in quality of products. In this process , the company is helped by TQM (total
quality management ) which is customer oriented process which focuses on improving products
and services with high quality at perfect time. This project will show the use of balanced
scorecard by a retail company Tesco Plc and how does the scorecard by Kaplan and Norton act
as a framework for the balanced scorecard prepared by Tesco plc.

2. Evaluation of limitation of using the benchmarking in orders to have improvement in
organizational performances.
Benchmarking is turned out to the management approach is order to have the best imp-
0lementation of the best practice at present best cost. This method is often have the consistence
over coming of different indicators. It is the tool based on voluntary and active collaboration in
the different level of organization in order to have creation over spirit of competition by applying
the best management practices (Lakshmi and Rao, 2017). There is level of tremendous influence
over the usage of benchmarking in year 1990 as the front-line employees along with operating
managers have score over different skills at several business situations. This helps in uncovering
the different strength of company in order to have the proper allocation of resources in order to
have the performance improvident in Tesco. As the benchmarking has been termed as the
effective in overall development but on other hand it has some limitation too.
Specific focus on data is required to have benchmarking regarding the claim that the value of
information is been produce from the given data along with adopting the different ways in
formulation different practices in the Tesco. Along with that there is lack of clarity about the
data sources which are been the major reason foe having errors. The companies have
benchmarked different cash management, foreign exchange and real stats as the part of treasury.
In the companies like Tesco the benchmarking has caused the level of distraction over
employee and customer in order to have achievement over benchmarked standards. The
company has been trying out to have over maximization of product which makes employee
more burnout, causing errors and make them have to redo their work. Company try to have fast
receivables along with delaying the payable in order to have meet over numeric goals.
Resistance of employee towards the implementation of benchmarking in company.
Benchmarking has level of potentiality as implementation obstacle lead to have proper
implementation of benchmarking is about having the level of resistance. The employee always
make resistance over expectancy of some employees in orders to have cut over corners to have
avoidance of cost and the troublesome causes in benchmarking. There is requirement of proper
establishment and overutilization of particular metric in order to have monitoring of
performance.

Lack of proper implementation is another problem which have level of occurrence with
benchmarking is about implementation of benchmarking in proper way which leads top have
failure of Tesco (Ferreira, Silva and Azevedo, 2016). The employee is less aware about the major
process though which they can level of improvisation of process. Tesco have faced the problems
in treating benchmarking as the ongoing process as they believed that they can have lookout
over one project at a single time. The company at most time have the avoidance of using process
of benchmarking as it relived in process of making the exposition of weakness. The company
also faces the failure over space of companies in various areas.
Hence, the benchmark has been identified the essential techniques used by the business in
development of process in orders to have quality and customer loyalty over the production of
different service along with product in organization,
3. Discuss over statement of ‘Competitor analysis is fundamental to the pursuit of competitive
advantage'
Competitor analysis helps in establishing the proper marketing and strategic management
along with the strength and weakness of different currents and potential competitors. This helps
in providing both of offensive and defensive strategic context for the development of
organization in such a way that gives the level of benefit in company in helping the different
development in an organization (Davis and Albright, 2014). This helps the company to have
proper identification of barriers in orders to have proper development over varsity competitors
with the level of distinctive advantage by entering into potential market along with level of
explosion which cancan be reduced. To have the successful implements ion of competitive
analysis in order to have gain over competitive market is begun with having analysis over
potential customer. The forces help inn creating the conceptual background over identifying the
different strength, weaknesses along with level of threat and opportunists in order to gains
competitive advantage of the market by company. The model porters five forces helps To
indemnify the strength and weakness in orders to have inherent over potential profit within the
industry development.
Tesco five forces analysis
Threat of new Entrants
Retail beings the level of innovation which is putting many pressure on Tesco which is bringing
out in lowering the price of strategy along with providing the new value in orders to have

proposition over customer. The company is trying to management the challenges in orders to
have effective bargaining to safeguard the interest. The entrants of new companies is high in the
business.
Bargaining power of suppliers.
The increase numbers of dominant supplier in the company can have the reduction inn profit
margins of company. The supplier having power can help in making customer service sector
development with negotiating the in orders top have extraction over the high prices in the
competitive environment (Cheng and Humphreys, 2016). Over all the company has the high
power with suppliers which will have the impact in reduction of profit margins of company in
greater level.
Bargaining power of buyers
Buyers are turned out to be demanding as they want best offers available to them at least level of
prices. This has the pressure on level of profitability of Tesco PLC. The smaller lead to be
powerful bases in the Tesco PLC which leads to higher level of bargaining power over customers
which seeks to have higher level of pressure on company to decrease the profits.
Rivalry among the existing competitors.
The company Tesco have the dealing in very competitive markets as there is long term
composition that is prevailing in market along with that the profitably of business effected.
Threat of substitute products
Each product that comes into market the profitably of retail interindustry used to suffer. There
threats of substituent goods leads to have high level of offerings in values proposition which is
present offering for an industry. The treats of substitute goods are high as there are level of
competitors available in market. This indicates that this big player in the retail industry is
capturing the customers bringing them from other competitors, so the competition gets more
severe.
CONCLUSION
From the above report it can be concluded that The BSC gives a specific solution over dividing
the total business environment into major 4 aspects that in internal business process, financial,
stakeholders and organizational capacity. Tesco there is inclusion of one more parameter that is

community perspective. The BSC have helps the company Tesco in order of having proper
management along with achieving long term objective to be successful retail organization in
world. There various limitation of benching marketing in successfully organization like Tesco
which is making the dreadlocks such as the Specific focus on data, lack of clarity, distraction
over employee and customer, Resistance of employee ,Lack of proper implementation. Porters
(Porters) helps in providing both of offensive and defensive strategic context for the
development of organization in such a way that gives the level of benefit in company in helping
the different development in an organization.

REFERENCES
Cheng, M.M. and Humphreys, K.A., 2016. Managing strategic uncertainty: The diversity and use
of performance measures in the balanced scorecard. Managerial Auditing Journal, 31(4/5).
pp.512-534.
Davis, S. and Albright, T., 2004. An investigation of the effect of balanced scorecard
implementation on financial performance. Management accounting research, 15(2).pp.135-153.
Elkhouty, S.M and et.al .,2015. Measuring the effectiveness of banking risk balanced scorecard
in enhancing bank value. International Journal of Economics and Finance, 7(6). pp.139-152.
Ferreira, L.M.D., Silva, C. and Azevedo, S.G., 2016. An environmental balanced scorecard for
supply chain performance measurement (Env_BSC_4_SCPM). Benchmarking: An International
Journal, 23(6), pp.1398-1422.
Lakshmi, S. and Rao, S., 2017. Implementation and Practicalities of Balance Scorecard: A Case
Study. Asian Journal of Applied Science and Technology (AJAST) Volume, 1, pp.61-67.
Smith, D.L. and Sparks, L., 1993. The transformation of physical distribution in retailing: the
example of Tesco plc. International Review of Retail, Distribution and Consumer Research,
3(1), pp.35-64.
Vijayan, G. and Kamarulzaman, N.H., three tiers of Sustainability Measurement in the grocery
Retail Industry. Universiti Putra Malaysia Press Serdang• 2016, p.74.
Vu, M., 2016. IS THE BALANCED SCORECARD USEFUL IN A COMPETITIVE
INDUSTRY?: Using Tesco PLC as a case study in the UK grocery retail industry.