Analysis of Innovation Management at TESCO: 2020 & Beyond

This report provides an in-depth analysis of innovation management within TESCO, focusing on the retail giant's strategies and adaptations to the changing industry landscape. The report begins with an abstract and table of contents, followed by an introduction that establishes the importance of innovation management. It then delves into the future of the retail industry, examining trends beyond 2020, including the impact of COVID-19, shifts in customer behavior towards online shopping and conscious consumerism, and the rise of sustainable development. The report identifies TESCO's innovation requirements, aligning them with the company's mission and vision, and highlighting the importance of customer needs and sustainable practices. It also explores TESCO's innovation program, partnerships with start-ups, and collaborations with organizations like WWF to promote healthy and sustainable diets. Furthermore, the report discusses how TESCO is building future innovation capabilities, emphasizing the role of a dedicated innovation team, and focusing on key areas such as food and drinks, data, robotics, and packaging. The report concludes by emphasizing the importance of sustainable innovation for TESCO's growth and profitability. The report highlights the strategic imperative of technology and the need for TESCO to anticipate and meet future customer needs, ensuring competitive advantage in the evolving retail sector.

Managing Innovation
in Business
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Abstract
Innovation management is related with combining different aspects of innovation process. It
is a function that is associated with implementation of innovative and management chains with
greater ease. Present report is based on analysing the innovation requirements in organisations
according to their present level of competence. There can be use of sustainable measures in order
to work towards the requirements of changing external environment. Innovation is associated
with using the present level of competence to work towards future changing requirements.
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Table of Contents
Abstract............................................................................................................................................2
Introduction......................................................................................................................................4
Future of industry 2020 & Beyond..................................................................................................4
Organisation innovation requirements 2020 and Beyond................................................................6
Building future innovation capabilities of organisation...................................................................7
Conclusion.....................................................................................................................................11
REFERENCES..............................................................................................................................12
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Introduction
Innovation management is regarded as a combination of the innovation process and the
change management. It is related with using several set of tools that can be used by organization
and managers for developing an understanding between goals and process. It is used as a tool for
the purpose of assisting organisations’ to respond to various external and internal opportunities
that can be further used for creation of new ideas, products and processes. In present report there
is analysis of the way innovation can be used as a tool by TESCO for the purpose of enhancing
their present market share (Huesig and Endres, 2019). For this purpose sustainable development
is used as an innovation measure in present scenario. The report is based on analysis of the future
of the retail industry and beyond 2020. Further innovation requirements beyond 2020 are
discussed. Based on all such information there is analysis and discussion of building the future
innovation capabilities of TESCO.
Future of industry 2020 & Beyond
The future beyond year 2020 is very predictive to some extent. The main reason behind this
is the changing customer preference and choices are highly predictable. Such as the customer
behaviour with respect to the retail industry is now affected by the number of competitors,
availability of options and the differentiae factors offered in the product or services. Such
differentiation factor can be in form of some attribute or the process associated with it. There is
development of a new customer segment that is of “conscious consumers”. These are the people
who belong to that segment of society who are willing and trying to be a part of sustainable
development.
In year 2020 the world has been affected by COVID pandemic. Retail industry is also one of
the most affected industries in this pandemic. The lockdown and social distancing situations have
drastically affected the way business is functioning in the present pandemic. Customers’ have
been shopping through online modes in large numbers. The scale of changes can be seen very
clearly such as the first five months of 2020 already saw a five years of online market growth.
Some of non essential stores reopened built the footfall was significantly down past in year 2017.
So it was an early indicator of the change in customer behaviour (Curado, 2018).
Customer behaviour: as per the data collected in year 2020 there has been a consolidation
of shift of customers from offline towards online purchasing. According to the data from
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deloitt’s global consumer tracker clearly indicates that 1 among 10 customers across Europe and
now having preference for shopping online for food that is close to 30 percent on UK. Similarly
the non food stores have been shut and customers are quickie moving towards online shopping.
So, future of retail industry can be forecasted in form of a large segment of customers only going
through online mediums for shopping. The most important benefit according to them is that it is
going to save their time and energy both at same time (Retail Trends 2021, Following a year like
no other, 2021).
Another major trend is related with the changing consumption patterns. The people gave
developed a mindset that there is requirement to understand the importance of environment
saving. For this sustainable development is major issue of concern for a particular target market.
For this the organisations’ that are having more sustainable operations are being preferred. This
provides an opportunity for leading brands like TESCO to use this nature of customers for the
purpose of expanding their market share.
Across different industries the technology is something that is reshaping the operating
models and is touching the mindset of customers in a most creative ways. They are changing
their behaviours according to the changing behaviour and nature of organisations. In UK the shift
towards use of online shopping has resulted into more preferences for online mediums by
organisations’. The three major trends that are part of the retail sector of UK and has also
affected TESCO in past some of the years includes that 20 percent of UK customers are
shopping entirely from online mediums (Linton, and Solomon, 2017).
Retail margins have been fallen by 2 percent since year 2013. The reason have been high
amount of competition, increasing cost of Omni channel operations, decline of pace productivity
and the present inflationary headlines that has lead to increasing of the labour cost by 4.8 percent
compound annual growth rate (CAGR) to year 2024.
Retail is the largest private sector employer in UK that is accounting to 13.8 percent of all
the jobs. Technology is the strategic imperative for all the retailers in YK. The retail experience
of future will be affected by the physical technology & presence of advanced analytics to meet
the fast changing customer expectations (Rebooting retail: How technology will shape the future
of retail, 2020). It is allowing retailers to reset their economies and operating models. The
attainment of competitive advantage is one of the key reasons the large sector organisations’ like
TESCO have to work towards innovation requirements. Further the COVID virus has also
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changed the nature of industry as now customers have been able to modify their choices that
have to be used as a strategy for achievement of higher market share by TESCO.
Organisation innovation requirements 2020 and Beyond
The main innovation requirements for TESCO are based on the set mission and vision
statements of this retail brand. The main ambition is to find new ideas, products and technologies
that can help in serving their colleagues, customers and communities in a better way in coming
future time period. The focus of this retail brand has been to work with the employees who
possess an innovative thinking that can help in enhancing the way activities and are functions are
being done in the organisation. It is helping them in development of solution for each issue that
is arising because of changing external environment (Michaelis and Markham, 2017).
The innovation requirement for Tesco is associated with customer needs. Customer needs
includes the internal departments, shoppers and stores, the future forces affecting innovation
includes societal, technical fashion and the changing demographic trends, the overall insights
from such changes are used to brainstorm with the diverse groups for the purpose of generation
of a large innovative ideas (THE INNOVATION PROCESS AT TESCO, 2021).
Another element is the innovation programme at TESCO that is used for supporting external start
up companies; TESCO is willing to collaborate with small entrepreneurs.
The food production and the retail industry is dealing with many environmental issues
because of the changing external environment TESCO & WWF have come together to ensure
that they can make some activities easy for both the organisations for this they are willing to
develop a range of healthy, affordable and sustainable diet as a major innovation on part of the
organisation.
The main objective for this innovation is to develop a UK food sustainable shopping basket for
their customer that is highly sustainable (Łukowski, 2017). It requires action across various
environmental areas that have to be analysed in detail. For this there is need to identify some of
the key areas that have to be focussed:
Scope: the main scope of this innovation is to address the environmental issues to deal with its
global impact. Such as one of the issues of concern is the large scale of deforestation.
Urgency and irreversibility: the need is to develop a interaction to deal with the impact of
climatic changes and loosing of forests habitat.
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Direct impact: It is related with direct impact on environment impact on the greenhouse gasses
that is emissions directly contributing to the climatic change.
Governance: It is related with issues that are related with effective governance. The major plan
of TESCO related to innovation requirements in the organisation is by assigning of weigtage to
each of the issue. Such as, climatic change as been assigned a weight age of 25 percent.
Deforestation is assigned a weighted of 20 percent. Sustainable diets 15 percent, sustainable
agriculture 12 percent, marine sustainability is at 10 percent, Food waster 10 percent and the
packaging waste is at 8 percent. The management of TESCO has ensured that each criterion will
include some other sub metrics. Such as sustainable agriculture will include some percent of
farmers to take robust actions for improvement of the soil health that is the covering of crops and
low impact tillage. There will be taking of action for increasing of bio diversity and pollinators
that is by use of integrated pest management, hedgerows and wildflowers. Another percent is for
fresh product from sustainable water management (Ozkeser, 2018). Another aspect is of key
resourcing regions with clear plan to address the issue of agro plastic pollution.
These are some of the efforts that are part of the innovation requirements of TESCO that are
relayed with using of sustainable measures as part of their overall functioning.
Building future innovation capabilities of organisation
For the purpose of building of future innovation capabilities in TESCO there is need to
develop some of the measures that can assist them in carrying on their business with the present
market share and the percentage of profitability. For the intention of working towards the future
innovation requirements in TESCO the supermarket is working towards a newly built up
innovation team. In this there has to be a single point of cont for evaluating of ideas, supporting
of partners and helping in implementation of ideas. After there has been a sustainable innovation
there will be a focus on four crucial areas that is food and drinks products, data, robotics &
automation and last aspect is packaging.
As per views of Dave lewsi that is chief executive there is requirement of a strong of
innovation to ensure that they are able to anticipate and work towards the customer future needs.
As the retail brand believes that is provides them a opportunity to work towards better innovation
for the business and the way it can be done faster as compared to other existing competitors
(Tesco looks to the future, 2020).
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Present innovation: in the present scenario of TESCO the innovation that is being used by
the organisation is sustain innovation. It is t he opposite of disruptive innovation that is part of
the present market. In this there is not emphasis on creation of new value networks but there is
improvement of the existing ones for satisfaction of customer needs. Just like the incremental
innovation the product performance of sustaining innovation can be made better with reduction
of defects and iteration (Saunila, 2017). There is requirement of sustain innovations for business
organisations’ like TESCO. In this for the purpose of growing with t he market there is
requirement to focus on increasing profitability. The innovation in terms of having a sustainable
innovation for TESCO is going to lead towards better scope of improvement in coming future
time period. This it leads to a scenario of more innovation requirements of making the services
and product better by working towards enhancing the present profitability margins.
Technology innovation in TESCO: There is a misconception that innovation breakthrough
is regularly done by use of costly or fascinating technologies. But creation of positive change
does not require tech savy personnel or large technological investments, but also most of the
innovations are based on utilisation of updated technological versions.
Technological innovation can be a new base for TESCO for the purpose of updating its current
base requirements. It will be based on generation of new ideas according to the capability,
knowledge and technology to develop new solutions to the viable entity.
New technology usage in TESCO has to be based on acceleration of the innovation
process. For this there is need to realise the new possibilities in the market based on which there
is generation of new ideas to build up into innovations. For those the products and services have
to be modelled in a better manner. For this experiment and testing of the concepts are required.
One of the important benefits that be experienced by TESCO in this regards of using
technological innovation will be that the organisation does not have to start from scratch. Instead
they can use the existing technological solutions that were originally intended for one objective.
Such as presently in January 2020, TESCO has team up with ocado as their tech partner for using
of robots in the warehouses. They are also working with swisslog that is a automated pallet
retrieval & the storage systems (Tesco teams up with Ocado tech partner for warehouse robots,
2020).
In year 2020 TESCO has been using tech partner of Ocado swisslog fi he purpose of
installation of robots at their various logistic centre across UK. Swisslog will be providing this
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grocer with the automated retrieval and a storage system by use of robots riding on various
conveyors belts for pick up & drop off pallets of foods. This system can be further improved by
developing of robots in their actual retail outlets which can help in serving proper ease for the
customers.
The future innovation capability of TESCO is in a way where they can use their existing
competence and capabilities in form of existing modification of functions. In this there can be
future application of this existing modification of functions to build up a approach where there
can be avoidance of requirement of manpower in stores instated robots can be placed at key areas
(van de Wetering, Mikalef and Pateli, 2017). They can solve all the issues faced by customers at
same provide them with their specific requirements. This new innovation can lead towards
saving of lot of time, resources of both the organisation and customers at a same point of time.
TESCO ahs made several revelations in year 2019 that they will be using of autonomous
delivery robots as an effort for saving of cost and boosting of efficiency. Apart from installations
of robotic technology in stores and their warehouses the key delivery channels in form of robots
is also an attractive manner that can be used to utilise the existing competence of organisation.
TESCO has been testing delivery robots in their stores in Milton Keynes as part of their
collaboration with starship technologies in tear 2019. After in year 2018 there has been
delivering of goods via automated robot fleet to the customers. The starship services have
expanded to 100 cities across world. There has been 200,000 miles of covered journey and 50,
000 successful delivers that has already been done by use of such networks.
Tesco has been earlier part of using many numerous technology initiatives that is self as
labelling and also use of RFID scanning camera for using the internet of things in logistics
sector. This retail brand has been working closely with use of robotics technology as part of
RFID scanning autonomous robots that can go up and down on the aisles to measure the gap in
cells.
Tesco is one of the retail brands that have been using location tracking sensors for
monitoring of home delivery (Rangone, 2020). The present updated version of technology that is
used by Tesco ranging from status of the when to whether goods are delivered on time is one of
the key differentiation sources. This can be used as an aspect of existing technology support for
the purpose of expanding their in vision by using robotics technology.
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Tesco has been working with Microsoft for the purpose of experimenting with the
augmented reality. In this there is emphasis of Tesco on their corporate social responsibility
aspects also. the main experiment is conducted to ensure that a visually impaired shopper can
also shop in a more easy way at Tesco express. Using of augmented reality shoppers can get
loose for the navigation and signal so that they are able to scan the aisle to get overall product
information (Garechana and et. al, 2017).
Another opportunity for Tesco to build up their innovation capability is using connected
homes for retailers. There can be use of Amazon Echo by Tesco. There can partnering with
existing organisations to further improve their capabilities.
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Conclusion
It can be summarised from the above discussion that supermarket giants have to work
towards their innovation by partnering with premium convenience stores, use of robots as
effective technology and for their investing in plant based food. All this will be combined with
the sustainable efforts of organisations that are to be made in respect to their sustainability
program. It provides opportunity for various innovators to come and describe their innovative
ideas across the globe. It can be concluded from the above made discussion that there are various
key aspects of innovation management that have to be considered by organisation while working
towards a new innovation. The changing external environment there has been a complete shift
towards development of more sustainable measures. Recent development in organisations is
helping them in getting effective position in the market. It also leads towards providing
opportunity to the employees in terms of enhancing their level of capabilities. Innovation is one
of the major key of success in the changing digital era. Organisations are working on using their
existing strength and brand image in order to achieve wider market share. Innovation main
Innovation may not result into the required benefits on part of organisation. It can assist in the
process of getting a competitive advantage in terms of providing something different to the
existing target segment of customers. Innovation development and management is very
important for bringing a positive change for all the associated stakeholders. Innovation
management is related with dealing with capabilities culture structure and present strategies of an
organisation.
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REFERENCES
Books & Journal
Curado, C., 2018. Human resource management contribution to innovation in small and
medium‐sized enterprises: A mixed methods approach. Creativity and Innovation
Management, 27(1), pp.79-90.
Garechana and et. al 2017. Effects of innovation management system standardization on firms:
evidence from text mining annual reports. Scientometrics, 111(3), pp.1987-1999.
Huesig, S. and Endres, H., 2019. Exploring the digital innovation process: The role of
functionality for the adoption of innovation management software by innovation
managers. European Journal of Innovation Management.
Linton, J.D. and Solomon, G.T., 2017. Technology, innovation, entrepreneurship and the small
business—technology and innovation in small business. Journal of small business
management, 55(2), pp.196-199.
Łukowski, W., 2017. The impact of leadership styles on innovation management. Marketing of Scientific
and Research Organizations, 24(2), pp.105-136.
Michaelis, T.L. and Markham, S.K., 2017. Innovation Training: Making Innovation a Core
Competency A study of large companies shows that, although managers see human
capital as central to innovation success, most aren’t providing innovation
training. Research-Technology Management, 60(2), pp.36-42.
Ozkeser, B., 2018. Lean innovation approach in Industry 5.0. The Eurasia Proceedings of
Science Technology Engineering and Mathematics, (2), pp.422-428.
Rangone, A., 2020. Managing Corporate Innovation. Springer International Publishing.
Saunila, M., 2017. Managing continuous innovation through performance
measurement. Competitiveness Review: An International Business Journal.
van de Wetering, R., Mikalef, P. and Pateli, A., 2017. Managing firms’ innovation capabilities through
strategically aligning combinative IT and dynamic capabilities.
online
Retail Trends 2021, Following a year like no other, 2021[online], available through<
https://www2.deloitte.com/uk/en/pages/consumer-business/articles/retail-trends.html>
Rebooting retail: How technology will shape the future of retail, 2020[online], available
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THE INNOVATION PROCESS AT TESCO, 2021 [online], available
through<https://www.destination-innovation.com/the-innovation-process-at-tesco/>
Tesco looks to the future, 2020[online], available
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2020/#:~:text=Tesco%20said%20it%20will%20initially,robotics%20and%20automation%3B
%20and%20packaging.>
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