MSc Management with Project Management: Tesco's Business Analysis

This business project report examines the challenges faced by Tesco, including issues related to product quality, customer loyalty, and stakeholder trust. The report identifies the root causes of these problems, such as accounting scandals and poor customer service, and analyzes their impact on stakeholders. A stakeholder analysis is conducted to prioritize key stakeholders and understand their interests. The report recommends strategies for building trustworthy relationships with suppliers, improving customer retention through enhanced service quality, and implementing rigorous testing programs to ensure product quality. Effective implementation of these recommendations is expected to improve Tesco's market image and overall business performance. Desklib provides access to this and similar solved assignments.

Business Project

Contents
Executive Summary.....................................................................................................................................3
INTRODUCTION...........................................................................................................................................4
Challenges / problems the client is facing...................................................................................................4
Purpose of the report..................................................................................................................................5
Stakeholder Analysis....................................................................................................................................6
Evaluation and analysis with secondary data..............................................................................................8
Recommendations / solutions to the problem............................................................................................8
REFERENCES................................................................................................................................................9

Executive Summary
In current global environment, business strategies play a crucial role in ensuring growth and
success of an entity. Strategies are prepares by anticipating the future conditions so that a
company can survive in competitive market. Strategies are helpful in strengthening the business
process in order to attract more number of customers. In addition to this, business strategies have
positive impact over the performance of business entity. Companies who prepare significant
strategies are likely to manage the internal and external business process in an efficient manner.
Strategies also positively influence the stakeholders. It helps in maintaining positive image of
business in market place. The present study is based on TESCO that is a well known
supermarket company of UK Main purpose of current report is to discuss the issues that are
being faced by company. It aims to find the suitable ways so that company can cope up with the
issues in an effective way. It is found that company is facing issues related to quality of products.
It is directly influencing the perception of customers. Customers seek for quality goods but
TESCO is facing the major issues related to quality. It is found that the another issue that is
being faced by company is related with retention and loyalty of customers. Customers are not
highly loyal for the brand so they easily switch over other brands in order to get quality products.
Due to the ongoing issue company is losing the interest of current stakeholders. They are unable
to maintain trust and faith among target segment which will directly affect the market image of
business adversely. It is found that TESCO has been involved in issues such as accouting
scandal, hoarse beaf scandal and more that put a negative impact over market reputation of
business. It is suggested that company needs to focus on building trustworthy relationship with
suppliers. In addition to this, they need to focus on maintaining postitive relationship with
customers in order to retain them for longer run. Testing program is also required to follow by
organization in order to maintain high quality of products throughout the production process.
Effective implementation of these recommendations will help in formulating positive image of
business entity in market.

INTRODUCTION
A strategy is important for any organization as it explains how an organization plan on
competing in the market as well as gain a competitive advantage. A business strategy can be
defined as a set of competitive actions that organizations use in order to attract customers and
enhance their overall performance. It is important for any organization to take into account
different factors that can have a potential impact on the overall performance as well as
profitability. apart from this, a strategy creates a vision as well as direction for the whole
organization (Guo and Wang, 2019). Organizations that develop effective strategies after
analyzing the overall factors in the internal as well as external environment, are able to conduct
their business operations in an efficient manner as well as attract a greater number of customers
and gain their loyalty. Stakeholders play a significant role for an organization as they can
influence or get influenced by the different decisions of the company. the different stakeholders
of an organization can include customers, employees, government, shareholders, owner of the
organization etc. A stakeholder analysis is an important framework that can be used by
organizations in order to identify the key stakeholders and keep them informed about the
different projects or activities that are undertaken by the company. The respective report is
based on Tesco, which is a British retailer of groceries as well as general merchandise. The
company was founded by Jack Cohen in the year 1919 and is headquartered in Welwyn Garden
City, United Kingdom. Tesco offers a wide range of products and services to the customers at
affordable prices. It offers general products as well groceries to customers across the globe.
TESCO is working in diversify fields such as finance, retailing and more. TESCO started
operations in UK and currently working in nearly 13 countries globally. Company started
operations as a grocery provider but currently it is working in different fields. The respective
report will provide an explanation of the challenges that the company is facing and the purpose
of the report. A stakeholder analysis and potential solutions for the challenges are also included
in the report to help the company overcome the same. Moreover, the report includes challenges
and potential strartegies that can be adopted by entity in order to address those challenges
effectively.

Challenges / problems the client is facing
An organization can come across various challenges that can have a potential impact on
its overall performance as well as brand image. It is important to analyze the different challenges
as well as develop effective strategies so that these can be addressed in an effective manner.
Organizational challenges can significantly impact the overall functioning of an organization and
hence, make it difficult for it to operate in an efficient manner. In context of Tesco, the company
has been facing issues such as poor customer service as well as the quality of products and
services. Because of poor customer service, the company has observed a decline in its overall
sales as well as the number of customers. It can be said that this is a major challenge or problem
that the company is facing because customers consider pre as well as post purchase service to be
of much importance. A lot of companies are now focusing on ensuring that their customers
receive the best after purchase service, so that they are able to retain them for a longer period of
time (Kar, Bansal and Mishra, 2021). Currently, organizations that fail to provide effective
services to their customers, have to face negative consequences, such as decline in the overall
sales as well as impact on the performance. another challenge, as mentioned that the company is
facing is that of offering products and services that are of low quality. This challenge can affect
the overall performance of the company to a great extent. Customers prefer products and services
that are of high quality and that are valuable to them.
It can be said that the client is facing challenges with its customer’s service as well as the
quality of its products as well as services. Because of this, the company has been facing issues
with its overall performance as well as brand image. It can be said that because the customers are
not satisfied with the service that they receive at the store or online, they are gradually moving
towards other brands. Customer retention and loyalty are other problems that the company is
facing and its is important for the company to analyze the same and develop effective strategies
or plan so as to overcome the same. This is because in order to maintain a strong brand image in
the long-term, it is important for the company to retain its existing customers and also, reach out
to new ones. Because of a low quality of its products and services, the company is losing its
customers to the competitors. This has impacted on the whole sales of the company and also, it is
finding it difficult to attract new customers. Also, currently, the company is facing a shortage of
food products and the customers are not able to find the products that they need (Food shortages
UK: Full list of shops hit by delivery issues, 2021). The company is falling short of products and

hence, it is important to ensure that these challenges are taken into account in an effective
manner. The reason why the respective company is facing their issue is because of an ineffective
delivery system.
Purpose of the report
The primary purpose of this report is to identify the current challenges that are faced by
the chosen company, Tesco and provide effective solutions for the same. Apart from this,
another purpose of the report is to provide appropriate solutions as well as recommendations to
the firm so as to overcome these challenges. It can be said that this report will be beneficial for
the management of the company as it will provide them with useful insights to develop effective
strategies and hence, overcome their current challenges (Alam and Raut-Roy, 2019). This will
help the readers as well as the management of the organization to make effective decisions and
strategies in the future.
Stakeholder Analysis
A stakeholder can be referred to as a party that has an interest in an organization and can
either affect or get affected by the business. The primary stakeholders of an organization can
include its customers, employees, investors, suppliers, shareholders etc. It can be said that
stakeholders play a primary role in an organization as they can provide useful insights during the
decision-making process. The stakeholders also provide a perspective to a project that is
undertaken by the company (Al-Suraihi and et.al., 2020). Stakeholders are in the position of
affecting the operations of an organization. They have interest in the business and have the powet
to influence profitability of business. Each and every stakeholder is unique and has grat
association with company. Stakeholder analysis is important in order to analyze the position of
different stakeholders in business. It helps to identity position of stakeholders and also allows
organization to prepare significant strategies. Apart from this, it can be said that involving the
stakeholders in a project of the company can be helpful for it in achieving its goals as well as
objectives in an effective manner. A stakeholder analysis can be defined as a framework that is
used for identifying the key stakeholders as well as their level of interest in the company. In
context of the respective company, Tesco, the stakeholder analysis is described below -

High Power, High Interest – These are the most important stakeholders of the company
and it is important to prioritize them. This is because they can influence the decisions of the
project to a great extent (Li, 2020). The key stakeholders of the organization include the owner
of the company, board of directors, shareholders, director as well as the general manager. These
are the stakeholders that the company should fully engage and make the greatest efforts in order
to satisfy them.
High Power, Low Interest – This is another category of the stakeholder analysis and the
different people who come under this category are the customers, government, investors as well
as sponsors of the company. It is important for the company to keep the stakeholders satisfied
but not so much that they get bored of the same. In context to Tesco, it is important to ensure that
these stakeholders are kept satisfied about the different activities carried out within the
organization.
High Interest, Low Power – These are the stakeholders who possess a low level of
interest and a high level of power (Stakeholder Analysis, 2021). These stakeholders should be
kept informed about the different projects that are undertaken by the company. it can be said that
people who come under this category can be very helpful for the firm and the project. The
different stakeholders under this category are suppliers as well as employees.
Low Interest, Low Power – This is the last category of the stakeholder analysis and the
different stakeholders under this category are security guard, cleaners as well as the receptionist
(Ibrahim, Alkhawlani and Al-shaghdari, 2017). Since these stakeholders have less interest as
well as power as well as interest within the company, they should only be monitored from time
to time and not bored with excessive communication.
Impact of current issues on stakeholders
Poor customer service not only has an external outcome however can result in your nice
employees feeling pressured with the aid of dealing with frustrated and indignant clients. There
can be a feel of free driving in the crew i.e. Accurate customer service executives picking the
slack for the no longer so suitable retailers. If your commercial enterprise is online, a bad
customer support revel in can reason extreme damage on the popularity. Angry clients often take
to their keyboards and vent their frustrations online – be it inside the shape of a poor overview,

an irate tweet on Twitter, or something else. When an organization goes via a bad section, the
most splendid employees haven't any preference however to clean the mess done by means of
terrible client care dealers, which ends up in extra stress (Awadari and Kanwal, 2019) (Arora,,
2017). Dealing with several irritated customers pushes the strain degree and pressure to some
extent in which businesses lose their great personnel. Also, don't forget that losing employees
creates extra fees because of the increased need for brand spanking new employees to be
recruited, hired, and skilled. Some groups have real difficulty staying updated on their social
media platforms, specifically in terms of spouting comments from customer service. These
companies frequently offer purchaser remarks with everyday or cheating solutions and
constantly omit possibilities to clear up poor comments or posts. The state of affairs wherein the
consumer paid to sell a tweet to send negative comments approximately an plane corporation is a
superb example of the importance of social media remarks.
Poor customer service can't best impact the existing/destiny sales widespread but can
negatively effect a enterprise in a selection of approaches. This is specially real for groups that
rely upon repeat commercial enterprise and wonderful phrase-of-mouth marketing for its
success. In addition to going for walks the threat of alienating contemporary customers with sub-
popular carrier ranges, chronically negative carrier can impact the enterprise potential for
attracting new customers as well. Poor stages of customer support can motive you to lose even
the maximum forgiving of customers. Consumers generally tend to do business with a
organization because it’s handy, it’s a dependency, or they’re searching out particular product or
service that’s hard to find someplace else. Even those sturdy customers may be turned away with
the aid of inferior ranges of carrier (Fatricia, 2017). Poor customer service has the ability to
price your business customers earlier than they even purchase a component. When new patrons
stroll right into a enterprise and discover themselves neglected, talked all the way down to or
subjected to lengthy traces and uneducated employees, they could head for the door earlier than
they even attain for his or her wallets.
Evaluation and analysis with secondary data
It may be stated that the customer is facing challenges with its purchaser’s service in
addition to the excellent of its products in addition to services. Because of this, the company has
been dealing with problems with its ordinary overall performance as well as emblem image. It

can be said that due to the fact the clients aren't glad with the carrier that they get hold of at the
store or on line, they may be steadily moving in the direction of other manufacturers. Customer
retention and loyalty are different problems that the organization is going through and its is
essential for the organization to analyze the same and broaden powerful techniques or plan in
order to triumph over the same. This is due to the fact to be able to preserve a robust logo
photograph inside the long-time period, it is vital for the organization to preserve its current
customers and additionally, reach out to new ones.
Poor customer service as well as the quality of products and services
In the year 1997, TESCO emerged as one of the most famous and trusted retail brands because of
the wide range of products that they were offering. They entered the market with wide variety of
product range and a reasonable price scenario that lead to massive attraction for customers at its
initial stages. But after a time period of 10 years a decade later there were issues that lead to long
period of decline that lead to two major corporate reputation crises in year 203 and year 2014.
the main reason for such crises were because of the fundamental problems in business that was
indicated by tumbling of the share prices (Evans and Mason,, 2018). There are some of the
issues that has actually affected the customer satisfaction level at TESCO in recent times.
(Source: CONTEXT: THE FALL OF TESCO, 2020)
Undifferentiated middle: Over years TESCO first mentality has been in favor of expansion but
the prices had crept up. The business observed a decline in the positive customer feedback
measures. The grocery market in some years were fragmenting the customer to spread their

budgets across broader range of players. It worked in favor of some of the competitive brands of
TESCO that include waitrsoe and Marks and Spencer who were conveniently placed (Lee and
Park, 2020). Smaller stores helped them in securing of enviable premium :top up” shops.
TESCO value proposition was attacked from different angles. Marks and Spencer and wait-rose
enhanced the overall quality and services to the sector but Lidl and Aldi were the two retail
brands that created a dynamic impact offering a more simple range of fresh food and quality at
rick bottom prices.
TESCO emerged as the least differentiated retail brand in the market. The customer traded up
down find the brand unappealing in the “middle” ground. There was lack of brand differentiation
that lead to eroding of TESCO overall market share.
As per view points of brand stories (2019), TESCO boasts an impressive history in abroad but
there have been certain issues that they are facing. For the purpose of poor customers services
there have been some past instances that affected the brand image of TESCO.
Horse meat scandal: In February 2013 there are some products that believed to be entirely of
beef but later it was found to be horse meat. The food safety authority of Ireland tested range of
beef burgers and it was founded out that TESCO sample included 29 percent of horse instead of
beef (Oluwoye, Chembezi and Herbert, 2017). The retailer has made effort to appease the
concerned customers that included promise to to strengthen the supply chain for purchasing
significant share of meat from UK.
Accounting scandal: in the year 2014 also there was and FTSE 100 firm that may get away with
cooking the books. The company admitted submitting overstated profits by 250 million pounds.
It resulted 2 billion of supermarket share price in one day.
Despite of the horse meat scandal TESCO has remained favorite of customers across UK. In
these years retailer has also shifted its approach but it was not able to detriment the quality. In
recent years TESCO has recorded loss of 6.4 billion pounds. TESCO has not focused properly on
managing the customer satisfaction level (Wood, Wrigley and Coe, 2017). It is not just related
to quality of products and services but is also with responding to customers complaints or
offering them with after sales services. In the food retail sector customer service is one of the
major influences that may affect the peoples choices.

Joined up approach: The customer base of TESCO has always expected to have highest quality
of products at reasonable prices. They are having trust to ensure that the products are safe and at
the same time complying with all the applicable regulations and laws. In TESCO there is highly
skilled colleagues and team members that is dedicated to ensure that customer expectations are
met and exceeded. The main aim is to manage the overall quality of products up to certain
specific standards.
Food safety in stores: in TESCO, store standards are required to develop robust safety policies.
Store standards and training are required for quality, legality and safety of product to be maintain
through customers expectations. TESCO in recent year have experienced a operational risk ream
that is supporting the stores to ensure that customer may have a good shopping experience in a
compliant and safe environment.
Criticism TESCO and related litigation: TESCO as a supermarket chain is involved in several
type of litigation that is related with many claims of personal injury from customers,. Unfair
dismissal from staff members and various other related commercial matters. There were some of
the cases such as ward TESCO stores Ltd (Ling and Wahab, 2020). That set a precedent that is
so called trip & slip injury claims against retailers. Another case has been TESCO supermarkets
Ltd V Nattrass that reached house of Lords that was a leading case related with corporate
liability of business that arises because of failures of store managers. There is criticism of
TESCO includes disapproval of the effect of supermarket chain that has on suppliers, farmers
and small other competitor brands.
Use of toxic chemicals: It is found that TESCO was uses toxic chemicals in production
of electronic products. They do not have publicly facing policy. In addition to this, they use
plastic in cloth manufacturing. TESCO also found guilty of using risky chemicals such as
parabens and triclosan. Additionally, company has got worst rating from ethical consumers.
In year 2014-2015 are the years when TESCO suffering from biggest loss. There was a
experiencing of sobering reality as suppliers, customers and colleagues were finding it very
difficult to trust TESCO as a global retail brand. There was a period of introspection & brand
Archaeology. TESCO was not able to define the some of the reason behind the quality issues
faced by customers that lead to high dissatisfaction among the customers. In the tear 2014 there
was appointment of new CEO DAVE Lewis in the tear 2014 when there was beginning of

change. As marketer there was understanding of the power of business agenda & the overall
strategy of branding that can be used for evaluating the customers reaction.
Loosing of trust: the diminishing trust for TESCO as a global retail brand was largely driven
because of the daily disappointing experiences of customer with the brand. There was continuous
increase in prices, absent of colleague and empty shelves. The “choice: was promoted based on
the increasing growing range but it created a dizzying shopping environment that lead to lot of
confusing deals for customers.
In January 2013 the entire food range offering of TESCO was under question because of the
revealing of gorse meat scandal that was a major break down in the trace ability of the food
supply chain in the industry (Romero, Cruz-Roche and Charron, , 2020). In April 2015, when the
overall results of accountancy scandal was made official it was reported s worst results in
history. It lead to biggest loss suffered by the UK retailer that was statutory pre tax loss of 6.4
billion pounds in the year.
The inflation scenario across different parts of the world has lead to more difficulty for TESCO.
There is grocery inflation has resulted into weaker situation that is much profitability is passed
on to suppliers of TESCO. The pressure is to sacrifice profits by dealing with cut prices. In year
2017 there has been instances where TESCO has emerged as compensating victim of market
abuse.
(Source: CONTEXT: THE FALL OF TESCO, 2020)

Customer were using and nor choosing TESCO: TESCO drifted in a undefined middle trust
and found that lead to difficulty in customers desire to shop there. They were not able to ignore
TESCO complete but if they were given a choice they were not having any type of preference for
this brand. If customer visit TESCO they used to spent very less that lead to falling of the present
market share of TESCO.
Apart from this while offering customer services in context of TESCO many customer have
also reported issues that arises because of last minute cancellation of orders when the customer
reported that the orders simply does not arrive. In 2015 there was a growth observed in the online
grocery business as customers started pushing for all types of omni channel space but after that it
slowed down. The customer behavior led to drop in the footfall of some of their physical
locations they had blamed drops in profitability because of shift towards digital omni channel
realms. TESCO also faced issue because of the IT glitch that lead to an automatic overnight
update that left its customers not being able to log in to use the system. Hence, TESCO faced
ample of issues and they also surrounded by the controversy which put adversely affect the
image of entity. Due to the inappropriate behavior, unethical practices, company is losing the
trust of customers. It is found that customers are loosing the desire to shop from such a renowned
company. It will hamper the market reputation of entity. It will also affect the competitive
positioning of business entity.
Recommendations / solutions to the problem
TESCO can work towards using digital solutions for the purpose of approaching the customers in
unique manner. It is recommended that arsing of lock-down restrictions across different parts of the world
such as in Scotland more people are venturing further and heading to the favorite
supermarket. The overall quality of service can be improved in recent times since the
starting of the covid pandemic shoppers are willing to adapt to measures that can protect
them from the present prevailing scenario (Buntara, and Adhariani, 2019). For this
purpose TESCO has also adopted a club card and nectar points system that is working
fairly for shoppers during the pandemic that is based on deferring to monthly subscription
and reducing the charges for home delivery services. It is going to help TESCO in
dealing with the changing customer expectations from the brand.

 Building of trusted partnership with theirs supplier: TESCO can focus on rebuilding of
trusted partnership with other suppliers. There was a declining of revenue for TESCO to
a continuous time period of three years they also suffered from greater ever annual loss.
But in year 2016 trading over Christmas helped TESCO to achieve a higher growth. Putting customer as main priority: In past because of so many issues that are faced by
customers has lead to difficulty in managing the overall customer demand. TESCO has
worked towards managing the customer loyalty by managing their customers through low
prices and high promotions. Presently the economic recovery of TESCO is slow and the
main belief of TESCO is to serve their customer as per their changing preferences. In this
context, organization is required to structure suitable promotional as advertisement
strategies in order to gain the trust of customers. They need to assess the market trend
and produce products as per the requirement of buyers. It will help in enhancing the
overall experience of customers so that they will make frequent purchase in future period
of time.
 Testing programme: TESCO is suggested to work towards Establishment of a
comprehensive food safety management system that can help them in continuously
monitoring and checking the quality of the food. There is need of a routine testing
programmer that can help in regular checking of the food products by experts at their
laboratories to make sure that the products offered are safe and are meeting all the quality
specification. It is going to lead towards building up of required customer trust in long
run. It is recommend that to further enhance this trustworthy relationship with customer
all the non food products have to be subjected to pre shipment inspection at factor by the
colleagues of TESCO or it has to be approved by the third party. Such inspections include
ensuring that product is as per the expected levels of quality and legality checks are
properly done.
 Following ethical practices: It is recommended that TESCO is required to follow the
ethical practices. They need to minimize the use of chemicals and other hazardous
products in production. In addition to this, they are required to set the parameters of
ethical practices and work on those parameters in order to achieve excellence in future
period of time. Implication of sustainable practices will help company in maintaining

positive image among competitors while protecting the environment in an efficient
manner. For this purpose, they need to ensure to follow the ethical guideline prepared by
the higher authorities.

Conclusion
It is concluded from the above made analysis that organizations are facing different
quality issues and foods safety issues in the present scenario. There is increasing expectations of
customers that is leading to difficulties to meet the customer demand. So, it becomes important
for organizations to understand the requirement of customers and then work on meeting such
demands so that they are able to deal with customer changing choices. It is analyzed that a
ineffective quality has direct over stakeholders of entity. Offering high quality customers based
on their expectations it can lead to effective ongoing investments towards dealing with the
customer issues. E commerce strategy of retails sector organization can help in reflecting the
brand commitments towards convince and value. The digital initiatives can be very helpful to
resolve the issues that customer are facing by analyzing their negative feedback and then
responding to their changing preferences. It is concluded that testing programs, putting
customers on first priority and following the ethical practices will help company in coping up
with the issues related to customer trust and retention.

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