Detailed Analysis of Tesco's Operation Management Strategies

This report provides a comprehensive analysis of Tesco's operation management. It begins with an introduction to the company, its history, and its current market position. The core of the report focuses on analyzing Tesco's operation management (OM) by examining its inputs (money, methods, machines, materials, and manpower), processes (machining, packing, and ordering systems), and outputs (customer facilities like Club Card). The report further analyzes Tesco's monitor and control systems, evaluating aspects like cost, quality, flexibility, and dependability. Finally, the report concludes with recommendations for Tesco to maintain its competitive advantage, emphasizing the importance of adapting to market changes and customer needs. The report uses the 4Vs framework to assess Tesco's sustainability and competitiveness.

Running Head: OPERATION MANAGEMENT 1
Effective operation Management
Name of the student
Name of the institution

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Introduction
A British Multinational General and grocery merchandise retailer, the head office of the
Tesco’s Plc. is located at Welwin Garden city, Hertfordshire, United States. Founded by Jack
Cohen during 1919, Taxco Supermarket was originally a small stall in East London. In 1929, he
opened the first Tesco Grocery Store at Burnt Oak, Edgware North London. In 1932, the
proprietors of this company incorporated it as Private Limited Company. Today, when measured
by profit, it is considered as the third-largest retailer throughout the world (tesco.com, 2017). The
company has stores across 12 countries in Europe, and Asia. The store portfolio of the company
includes Tesco Express, Tesco Extra, Tesco Superstores, and Tesco Metro. Not only that, the
company also have an internet website where the customers can shop from anywhere and get the
home delivery. These stores cater to different types of customer groups and carry a wide-range of
products from grocery to household goods, kitchen utensils, home appliances, and electronics
among the others (tesco.com, 2017).
2. Analysis of Tesco’s OM analysis
2.1 Analysis of Input of the Tesco’s OM management
Input
Money Due to careful selection of product range, the
products at Tesco Supermarket are cheaper
when compared with its competitors
Method The products that are available in the market
are practical, and essential in daily life of the

Running Head: OPERATION MANAGEMENT 3
customers.
Machine The products are procured in bulk and are
packaged in an efficient way.
Materials The management of supermarket continues to
procure material designed to conservation of
natural resources, remove global warming and
waste elimination. The management prefers to
display products with limited packaging.
Manpower The company applies stringent quality control
measures not only within the company stores,
but also with its business partners (Bendoly,
Wezel,& Bachrach, 2015, pp. 53).
The Tesco supermarket offers a wide-range of products for the benefits
of its customers, under one-stop shopping marketing strategy. In this regard,
the business strategy of Tesco supermarket as the cost leadership and its
motto is, “Every Little helps”. One of the main competitive advantages of
Tesco Supermarket is economies of scale and the company continues to
experiment with different aspects of business and on occasion, this strategy
continues to revolutionize the retail industry in the country to some extent
(tesco.com, 2017). For example, this retailer introduced 24-hour shopping
experience for the benefit of the customers. Further, the store has

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established a lot of click and collect point throughout the country for the
customers who prefer to shop online (Bendoly, Wezel,& Bachrach, 2015, pp. 53).
. 2.2. Analysis of the processes of Tesco Supermarket OM
The main focus of Tesco Super market is the cost leadership and its motto is, “Every
Little helps”. As the main business of Tesco Super Market is to market and sell a wide-range of
products the process includes service-oriented activities such as machining, packing,
maintenance of shelves and continuous process of replenishing the stock (Simms, 2007, pp.
45). Not only that, the company continues to create and update appropriate and accurate ordering
system in the stores as well as on the internet website as this step enables to reduce waste and
lead to an improvement in availability of the product that can be displayed at the right location
(Humby, Hunt, & Phillips, 2009, pp. 65). Further, during 2010, the company invested more than
76 million pounds to create and install a third-generation ERP solution in all stores. The next
step in this process is concerned mainly with opening hours, location, queuing system and the
delivery of products and services to the customer. For this purpose, the company has employed
trolley and home delivery services (Nash, 2006, 80).
2.3. Analysis of the output of Tesco Supermarket OM
It is possible that due to supply chain management operations, there may be an overstock.
The company differentiates itself from other competitors in the market by offering various types
of facilities to the customers and it includes Tesco Club card, Tesco mobile and credit card
(tesco.com, 2017). With the Club Card, the customer can collect one point for every £1 they
spend in the store or the internet website. Not only that, the customer can also collect points
when he pays through various modes such as Tesco Mobile, Tesco Credit card, Tesco
Homephone, selected Tesco Personal Finance products or Tesco Broadband (Simms, 2007, pp

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45). These points, when used with Club card deals equates to 1p in store. Further, these points
can also be converted to Virgin Atlantic or Avios frequent flyer miles (Virginatlantic.com,
2015).
2.4. Analysis of Tesco’s Monitor and Control System
Monitor and Control System
cost The company uses economies of scale model
for purchase of products from vendors.
Speed Batch production flowline has competitive
cycle time
Quality The organization continues to keep a close
watch on its procurement process (Leahy,
2013, pp. 56).
Flexibility The company continues to experiment with
different process in various areas of operation
in order to find a perfect combination.
Dependability The company continues to introduce new
varieties in order to provide a comprehensive
choice.
3. Conclusion
The sustainable competitiveness of Tesco Supermarket depends on 4vs (Bendoly, Wezel,&
Bachrach, 2015, pp,60).

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4vs
Variety High Tesco offers various types of
stores such as Express, Finest,
Supermarket, Metro and Extra.
Not only that it also offers the
Internet Shopping website, but
also financial products including
credit cards and petrol station.
Volume Low Customers do not purchase
products in bulk
Visibility High The stores offer a high visibility
and the customers can also shop
online (Krajewski, Malhotra,
& Ritzman, 2015, pp, 58).
Variation High The customers have access to lot
of facilities and discounts with
club card.
Variability High The store enables the customers
to personalize their purchase.
4. Recommendations
The Tesco chain of supermarket offers a wide-range of products and services for the
customers at different levels and different needs under one-stop shopping model. Currently, the
company is operating in 12 countries in different continents such as Europe and Asia. Change

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remains the only constant in business and the company should continue to evolve and update the
operation management systems for the benefits of the customers. To increase its reach in the
market, the company can start free home-delivery of products when the purchase of the customer
reaches a certain point. Not only that, the Tesco Supermarket can target new niche market groups
such corporate entities and their executives.

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References
Bendoly, E., Wezel, W. V., & Bachrach, D. G. (2015). The handbook of behavioral
operations management: social and psychological dynamics in production and service settings.
Oxford: Oxford University Press, pp. 53.
Humby, C., Hunt, T., & Phillips, T. (2009). Scoring points: how Tesco continues to win
customer loyalty. London: Kogan Page, pp.65.
Krajewski, L. J., Malhotra, M. K., & Ritzman, L. P. (2015). Operations management
Processes and supply chains. Boston: Pearson Education, Inc, pp. 58.
Leahy, T. (2013). Management in 10 words. London: Random House Business, pp. 56.
Nash, B. (2006). Fair-Trade and the growth of ethical consumerism within the
mainstream: an investigation into the Tesco consumer. Leeds: University of Leeds, pp.80. .
Simms, A. (2007). Tescopoly: how one shop came out on top and why it matters.
London: Constable, pp.45.
tesco.com (2010). A business for a new decade. from
https://www.tescoplc.com/files/pdf/reports/annual_report_2010.pdf

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tesco.com (2017). about club card, Retrieved from
https://www.tescoplc.com/aboutclubcard
Virginatlantic.com (2015). . Shopping partners | Earn miles | Virgin Atlantic. Retrieved from
http://www.virginatlantic.com/gb/en/flying-club/partners/shopping.html.