Analysis of Innovation Capabilities at Tesco: A Business Report

This report provides a detailed analysis of Tesco's innovation strategies and future capabilities. It begins with an executive summary outlining the core objectives, which include evaluating Tesco's innovation capabilities and proposing an action plan for their development. The introduction sets the stage by defining innovation within a business context and highlighting its importance for market competitiveness. The report then explores the future of the retail industry, focusing on Tesco's adaptation to technological advancements and changing consumer behaviors. It examines Tesco's current innovation requirements and identifies potential areas for improvement, such as aerial drone delivery and automated grocery kiosks. The report also discusses the significance of organizational knowledge, knowledge transfer, and cross-functional cooperation in fostering innovation. It concludes with an organizational development audit, offering insights into how Tesco can successfully introduce new products and services to maintain its competitive edge. The report emphasizes the importance of adapting to technological advancements and customer demands to drive growth and maintain market relevance.

Managing Innovation In Business

Contents
Executive Summary.........................................................................................................................3
Introduction.....................................................................................................................................5
The Future of Industry 2020 and Beyond........................................................................................5
The Organisation Innovation Requirements 2020...........................................................................6
Building the Future Innovation Capabilities of the Organisation...................................................8
Conclusion.....................................................................................................................................10
REFERENCES..............................................................................................................................11

Executive Summary
This report provides an analysis and evaluation of action plan for the development and
implementation of innovation capabilities in Tesco. The company is one of the Third largest
grocery retailer having various outlets in Countries. The main objective of Tesco is to serve their
customers by providing them best quality of products at affordable prices. They keep focusing
on making their customer happy so that loyalty of individuals remains towards the Brand. The
Company has expanded their business from Groceries to Electrical goods, Telephone
equipment’s, banking, and insurance services. Tesco have their own website through which
customers can avail the services and get information related to products or Outlets. The
Company adopts one stop shopping which means customer can buy the products from one single
place.
In this report the appropriate methodologies are used to identify innovation in business.
Innovation generally means thinking beyond and creating a path to execute that idea into reality.
The Company innovate new products to be profitable and renowned in Market. The employees
in the organisation must have innovative thinking rather than ordinary thinking as it helps to beat
the competitors by coming up with amazing ideas related to products or services.
This analysis is based on how organisation can plan and prepare for innovation. In this
report it is also been discussed the importance of organisational knowledge, knowledge transfer
and cross functional cooperation to analyse the innovation capabilities and blockages. The report
also consists the identification of new product in Tesco and activities required for successful
development. At last, an organisational development audit will be conducted for introducing new
products or services.

Introduction
Innovation means thinking something new and implementing that ideas into reality by
introducing new things. It is a creative idea that has been transformed into practical way.
Innovation is called as management of product, process and concept that helps in gathering
information related to new things or new products for enhancing the growth of organisation. It is
also known as an implementation of new ideas for achieving better results and outcomes in
Business. With the help of new ideas business can increase their market share and attract more
customers towards the Company. Innovation not only means to develop new products or services
it also means to make changes in existing product which helps in increasing profit and
productivity of Firm (Ottosson, 2019). The purpose of innovation is to make business unique in
Competitive Market. A company needs to think innovative to survive in Marketplace, this helps
to be distinguished from other Competitors. Businesses use innovative ideas in launching new
products for making their organisation stand out from Crowd. In this report the chosen Company
is Tesco, it is a British Multinational Company of retailer in England, United Kingdom. Tesco
sell their products at reasonable price which attracts more customers to grab the offers on
products. The areas in which Tesco deals are Clothing, Toys, petrol, Electronics, Telecoms,
Furniture and Internet Services. This project is based on the Future of Tesco in 2020, the
requirements of innovation in Company and Future innovation capabilities in Organisation.
The Future of Industry 2020 and Beyond
Tesco is one of the popular and prominent Retail Chain in the World. The target audience of
company is Middle and premium class people. The company own private label brand which
helps in giving high brand equity in Marketplace. Tesco is also listed in London Stock Exchange
due to its Financial Strength. Tesco had faced many issues and problems related to horse-meat
scandal, poor customer experience and bad accounting. For gaining the trust of customers they
bring technologies for taking back the momentum in Market (Markovic et. al., 2021).
The company Introduced new technology RFID barcode through which products get
automatically counted or removed when product is entered or leaved the store due to purchase by
Customers. Tesco had also launched BYOD Integration through which employees can keep the
record of stock and their availability by scanning barcode of products. This technology also
helps workers to deal with customers issues and request in more significant and efficient way

(Bashir, M. and Farooq, R., 2019). BYOD stands for Bring your Own Device it is an app which
must be download and login by all Staff members. They had started using digital space by
Advanced M-Commerce through which they can introduce video content, 360 imaginary and
multiple images for increasing offline and online shopping (Ojha et. al., 2020). With the help of
M-Commerce, customers can go through by looking more visually appealing products. For
Improving online and offline shopping experience for people Tesco have co-joined with If This
Then Than (IFTT), it is basically an app through which customers get connected with other
active app and avail the information related to how and why the app must use. For example, if
there are changes in price of products, customers get notification via email about the changes in
price.
With the help of this analysis a detailed innovation history of Tesco is perceived in which
get to know about the transformation in retail industry during last few years. Recently, the
company has launched Tesco Red Door for inviting the innovators to bring some new ideas for
improving their ways to serve shopper and create competitive advantage for them. The Company
is looking for a team that helps in bringing innovation and increase their growth. In Innovation
Journey it is the step to introduce new technologies and make their business simpler and better
for their Customers (Veronica et. al., 2020). They are focusing on four areas such as Food and
drink products and technology, robotics and automation, data, and packaging.
Tesco is also working with Robotics company for getting RFID Scanning autonomous
robots which helps in providing the information to staff related to reload stock. The Organisation
is using location tracking sensor through which they can monitor the home deliveries. With the
help of this technology company can track the information from status to delivery of product on
exact time. This tool is important for informing customers whether the delivery is on appropriate
time or late. The tracking sensor helps to gain loyalty and enhance strong customer base towards
the Company which makes their brand more valuable and Competitive in Market. Through this
technologies Tesco can gain competitive advantage and be reputable supermarket across Globe
(Centobelli, Cerchione and Ertz, 2020).
The Organisation Innovation Requirements 2020
Tesco is a Leading brand in United Kingdom. The Company uses several technologies to
make their customers and employees feel comfortable while purchasing and maintaining stock.
The requirement of innovation in Tesco is to bring something new for uplifting the growth and

profit of Company. Tesco needs an idea through which they can create competitive advantage
and make customers happier with their services. For example, an idea of using airborne drone for
delivering products to customers. This technology helps the company to attract more customers
with their services and saves the time of company and customers by providing order on time.
With the help of aerial delivering drone Tesco can deliver the products quickly and rapidly.
Airborne Drones can be used when there is bulk transfer of commodities customer needed in
accurate time without any damage in product. This Technology conserves energy as its emission
is low as comparison to other Traditional Delivery Mechanism (Gasparin et. al., 2020). There is
no need for using trucks and van for delivering the products to Consumers. It is considered as a
safer delivery system as the drivers who come for delivery faces a level of risk due to their road-
based activities. There is always a risk to get involved in accident, encounter delays and run out
of fuel. So, aerial drones are safer system for delivering as it helps to remove these obstacles.
Through GPS Technologies airborne drones can automatically navigate the location of an area in
which consumer have ordered product.
Tesco must experiment with automated grocery kiosks it is a vending machine through
which the customer can order groceries via online. The workers pick and pack the orders given
by consumers and store that in bins in Kiosks which is attached to stores and customers can
collect the items. The kiosks are a refrigerator or freezer for keeping the groceries items fresh.
Through online mechanism consumers can place the orders and they will get an email with
scannable barcode which is used at the time of collecting the order from Kiosk. This technology
helps to avoid the interaction between customers and staff, they can pick their packaged order
easily (He et. al., 2019).
The company must opt for an innovative packaging which attracts more customers.
Nowadays, consumers are demanding packaging that does not affect their health and
environment health too. The clean packaging demands are rising Tesco must think about
innovative packaging which helps to protect the nutrients, taste, and freshness of products. The
shoppers of groceries are demanding healthy packaging along with healthy ingredients. So, an
innovative idea must be executed for packaging the product that attracts customers and gain their
loyalty towards the quality and packaging of product.
For Tesco AI is not a new term but there are various verticals of AI which helps in
shaping the company globally. The AI technology trends such as AlterEgo which is a wearing

device that could read the mind of people they can converse with machines in natural language
without opening their mouth they communicate by articulating words internally (Madsen, 2020).
Building the Future Innovation Capabilities of the Organisation
Executive Summary
This report summarises how innovation is important for the success of business. Tesco
needs new innovative ideas to attract customers so that their productivity gets enhanced, and
they can create competitive advantage in Market. With the help of innovation Tesco can gain
several advantages which could increase their growth. Innovation makes the Company
differentiate from its competitors. If there is a continuous improvement in products with the help
of innovation it gives sustainability to Organisation. There are various types of Innovation which
company can do for gaining better Outcomes. They are product innovation, process innovation,
improving customer experience, business model innovation and many other Innovations. By
innovation economic growth of Country also increases as more innovation leads to more income
which results in Economic Growth. The Customer’s needs Change, improvements and efficiency
in product and services so that their requirements get Fulfilled and they become satisfied. If
customers are not interested in Business than also, they must bring innovation to attract
customers and build a loyalty among them. In Organisation there are many challenges and issues
for making their operational activity workable, profitable, and Functional. To Solve these
problems the company must bring innovation so that they face less fear in taking risk and have
passion to solve the issues for achieving success and survive in Competitive Market. For Tesco,
the latest technology that can bring the change in their business activities is Aerial drone delivery
as it saves the time of them and customers too. This technology helps to grab more customers
towards the services as it is a unique service which provides delivery of commodities within an
exact time. The drones transmit the goods on proper time as compare to delivery van or truck.
The goal of Tesco is to make their customer feel happy it can be possible by bringing changes in
products or services. Consumers get happy by new products or services which looks attractive
and makes them comfortable. So, this technology can make the customer to build loyalty
towards the company if they provide better services of delivering goods through aerial drone.
Innovation and Why
Innovation is an art which helps an organisation to increase their growth and Customers
base by fulfilling their needs and demand. There are various importance of innovation in

Business it helps them to enhance their growth. For becoming more successful in Market Tesco
must implement a new idea of using aerial drones for delivering the products to Customers. With
this technology customers can avail the product at an appropriate time without facing any issue
related to late delivery. The aerial delivery helps the organisation to attract more customers with
their new services. The airborne delivery helps in reducing road conjunction as due to drone
services less delivery van and trucks will be on road that is the main reason companies want to
adapt this technology. Delivery drones are more convenient and efficient as comparison to
delivery van as it reduces the Carbon emissions and protect the environment. With the help of
airborne drone there are several benefits for customer and company. The time of delivery get
reduce and there is less chances of getting product damage during handling. The drones are not
only available for military, elite or law enforcement now businesses can also use drone for
increasing their growth. Aerial drones can fly lower with proper direction with the help of
navigation (Pereira et. al., 2021).
They have a great range of movement than other aircraft. Airborne delivery can also stay in
air for a long period of time and can o repetitive task with effective manner. This technology is
cost saving tool as their prices are more pocket friendly. The person who has minimum
knowledge of Drone can also control and operate it easily. The delivery drone has higher
accuracy rate in delivering the products to right customer as compare to humans. This
technology also helps in preventing from accidents, when company uses drone for delivering
commodity, they do not face the any risk of putting someone’s life in danger. With the help of
this humans can focus on other delivery procedure as the device is faster because of its accurate
locating program. They face lesser error margin if exact location is targeted. So, Tesco must opt
for this technology as it helps them to increase their productivity and profitability. Aerial
delivering through drone is one of the unique and new concepts of transmitting commodities
from one place to another place. By using this technology Tesco will become more competitive
and leading in Market.
Cost
A Cost is an expense required for producing and selling of product. It is an amount which
is paid to manufacture of product at the time of purchasing inventory and sell them or make a
commodity ready for the normal use. Cost are of several types it also included Fixed and
Variable cost. The Cost of purchasing drone is not high, company can use drone for the purpose

of sale. It is a long-term investment which is cheaper than paying number of employees. If the
company use drone instead of paying to people, it can reduce the cost and make company more
efficient (Shakeel et. al ., 2020).
Resources
Resources generally means a source through which benefit is produced. The resource can
be of money, assets, staff, material, staff, and other resource that could produce benefit. The
Resources which are require while implementing aerial drone technology are well trained pilot.
For flying drone company needs qualified pilots who must have certificates and knowledge of
understand the regulation of controlling and moving drone. Batteries are other resources which
must require for flying the drones, with the help of battery the drone can move and deliver the
product to Customers at proper times (Simmers and McMURRAY, 2019). The main resource
which Tesco need is money, it is an important resource through which they can execute their
plan for delivering commodities from aerial drone. The company requires huge investment for
investing in this technology as they will buy the drones in bulk so there is a need of high amount
for launching aerial delivery drone. The other resources are the materials which they must
maintain for accomplishing new launch of technology. The materials can be battery, motors
which must be maintain by the company as there is a requirement of these materials frequently.
Strategic Implementation
For implementing this technology Tesco must know the pros and cons of aerial delivery.
The company must turn strategies and plan into action so that they can gain the advantage of
aerial deliveries by creating strong customers base and gaining advantage for using this
technology which helps in making environment safe from pollution. For implementing the
airborne delivery, organisation must have a capability to put strategy into action for the success
of Tesco. They must develop a policy through which encourage to execute the strategies and
helps in continuous improvements. Tesco must create a budget which can help to provide
sufficient resources for the activities required in strategic success of Organisation (Jackson, N.
C., 2019). There must be a skilled employee for handling this technology effectively. They
should conform that the policies which are drawn must be assist in successful implementation of
strategies. A proper leading practice to be carried out for the functioning of this technology.
There must be a communication and information pass to employees for facilitating the tasks
which they must perform in implementing strategies. Then a favourable culture must be

developed to implement the strategy for launching aerial delivery technology for increasing the
growth of the Company. With strategy implementation the organisation follows a path on which
they have to move for executing the plan they have made (Al Zaabi and Hassan, 2019).
Monitoring and Control
With the help of monitoring and controlling Tesco can track, adjust review, and report
the performances of aerial delivery. The company must find out whether the implementing
strategy is working properly or not. They must find out how this new technology is working or
performing and does it require any changes. Monitoring and controlling helps in increasing the
productivity and efficiency of Company. Through this page the organisation can measure the
performance of new technology and identify the risk that could be occurred during executing
aerial delivery drone. In this stage Tesco observe the new technology after its implementation,
identify the problems or risk associated and develop the strategy to control the airborne drone
delivery (Fernando, Jabbour and Wah, 2019). The main purpose of monitoring and controlling is
to identify the risk that is require proper action. While detecting the issues in early-stage Tesco
can be more pro-active in handling risk related to launching aerial drone.
Conclusion
From this above information it is be concluded that innovation brings new ideas in
introducing new products and services. With the help of innovation business can achieve their
mission and vision by serving a goods that fulfil needs and demand of Customers. The company
must focus on making their customer happy by providing them satisfaction. The products must
be innovate keeping in mind the needs and wants of consumer. The organisation must know
what their customer wants in the product according to that new product must developed. For
running the business smoothly and productively they should make an approach to attract more
and more customers towards the Firm. As Consumers are the key ingredients for any business it
is important to bring some changes according to their desire so that their needs get fulfilled.
There are various types of innovation which helps a company to be successful in Market. These
innovations make more profitable and reputable in Marketplace. Innovation increases the
productivity and competitiveness. It also helps in retaining employee as they prefer an
environment to work in innovative and challenging position that promote problem solving and
teamwork. Through innovation the business can handle the legal and environmental issues by
reducing carbon emissions and producing less wastage. To establish Unique selling preposition

of product effective innovation is best way by which customers are ready to pay more and helps
organisation to be different from its competitors.

REFERENCES
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