Tesco Retail: Analysis of Trends, Brexit, and Company Performance

This report provides a comprehensive analysis of Tesco's retail operations, focusing on emerging trends, the impact of Brexit, customer experience, and the role of artificial intelligence. The report begins with an introduction to the retail industry and Tesco, followed by an examination of key retail trends such as the adoption of smartphones and social shopping. It then delves into the Brexit strategy adopted by Tesco, the rise of online shopping, and the importance of customer experience. Artificial intelligence and corporate social responsibility are also discussed. A company analysis, including a SWOT analysis and Porter's Five Forces analysis, is presented. The report concludes with recommendations for Tesco, including market research, 24/7 stores, and promotional strategies to enhance market share and brand image. References and an appendix are also included.

INQUIRY PROJECT

Table of Contents
INTRODUCTION ..........................................................................................................................1
TASK 1............................................................................................................................................1
Retail Trends...............................................................................................................................1
Brexit Strategy............................................................................................................................2
Online Shopping..........................................................................................................................2
Customer Experience..................................................................................................................3
Artificial Intelligences.................................................................................................................3
Corporate Social Responsibility..................................................................................................3
TASK 2............................................................................................................................................4
Company Analysis .....................................................................................................................4
TASK 3 ...........................................................................................................................................6
Recommendations.......................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
.........................................................................................................................................................8
APPENDIX......................................................................................................................................9

INTRODUCTION
Retail is basically a process of selling goods as well as services to final
consumers through adoption of multiple channel of distribution in order to earn
reasonable amount of profit. Moreover, retail industry of UK is vital for overall economic
development (Anand and Grover, 2015). There are several emerging retailing trends
which potentially help business organisation to ensure their productivity and attain
sustainability within business. This report is based on Tesco which is multinational
groceries and general merchandise retailer. The company was founded by Jack Cohen
in 1919. The respective organisation is third largest retailer in world by gross revenue.
Furthermore, Tesco is market leader of groceries in United Kingdom. The outcome of
this report will be based on various emerging retail trends, Brexit strategy, customers
experience and many other such aspects. Proper company analysis would be made in
order to significantly identify areas where implementing improvements are required.
TASK 1
Retail Trends
Retail is a kind of business activity through which buying and selling of goods as
well as services is done to direct customers, usually in small quantities. Goods and
services sold to customers are meant for personal use, not for resale (Ayers and
Odegaard, 2017). Retailing is last activity which is conducted under chain of product
distribution in potential market. However, the retail industry has undergone a significant
transformation over last decade, and it is continuing to evolve very quickly.
There are variety of Retail trends which are now been adopted by big
organisation in order enhance their overall productivity as well as profitability in potential
market. These trends, set highly influence over how consumers shop and how retailers
are able to meet customer's transparency. Some of the major emerging retail trends are
mentioned below:
 Massive adoption of smart phones: In today's competitive business environment,
technological has reached to next level. New mobile payment method eventually
took over retail sector. Now customers enormously make use of e-wallets in
order to pay. With just single touch payments to retailers is easily made.
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Social driving shopping trends: This is yet another emerging retail trend which is
potentially utilised by every business organisation in order to significantly capture
reasonable market share in potential market. Social networks have taken fashion to
next level. Under this trends retailers usually aiming at posting new strategies using
Facebook and Instagram in order to encourage customers (Gerrard, Rudolph and
Sriprakash, 2017). Through this trend huge amount of profitability within business
organisations is witnessed.
However, there several other emerging business trends through which overall
operations are positivity impacted. Furthermore, proper market research is conducted in
order to significantly identifying exact market situation and adopt the most appropriate
business strategy.
Brexit Strategy
Brexit have highly impacted retail industry of UK in several ways. However, there
various strategies which are eventually adopted by this industry in order to deal with
Brexit.
 Supply Chain Analysis: Post Brexit retailers reviewed supply chain in order to
significantly determine effects of customer union on business. Moreover, due to
currency fluctuation as well as increased competition product cost was
enhanced. Profit margins of retails were squeezed (Balaji and Roy, 2017).
Online Shopping
Online shopping is a form of electronic commerce which eventually allows
consumers to directly buy goods as well as services from seller over Internet. This is
one of most common process of buying products. Currently most of purchases by
potential consumers are done online, this is basically because huge amount of time is
consumed through online shopping. Internet has totally revolutionized the way of
shopping (Crabbe and Acquaah, 2016). However, due to numerous benefits as well as
advantages, more and more people now-a-days prefer buying things online. Following
some major benefits which are witnessed through online shopping:
 Better Prices: Better prices of products are offered while purchasing goods and
services online. This is basically because variety of discounts and vouchers are
available when an individual buys product over internet.
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More Variety: Huge variety can be seen by an individual over internet and almost every
brand is easily available (Lasswell, 2017). Furthermore, latest international trends
without spending huge funds on airfares is purchased. Also, far better selection of
colour as well as size can be made while purchasing online.
However, there are several other benefits which are potentially witnessed through
online shopping. Retail organisations are able to earn reasonable amount of profits by
adopting this form of shopping. Online shopping is emerged as a major trend under
retail industry this is basically because of advancement and developed of economy on
technical grounds.
Customer Experience
Customers are key market rulers under retail sector organisation. They are main
factors due to which several business strategies are adopted by business organisation
in order to enhance over profitability (Demirgüneş, 2016). However, sales of retail
organisation are enormously impacted by negative word of mouth. Therefore, retail
organisation aims at providing best shopping experience to its potential customers, so
that more and more customers are attracted towards them.
Artificial Intelligences
Artificial Intelligences is the key element in digitalization under retail business
organisation. The main motive of this factor is to create personalized customer
experience and aim at creating proper interaction between business and consumers
(Shin and Eksioglu, 2015). Moreover, for retail business organisation artificial
intelligence essentially creates opportunities to bridge gap between virtual as well as
physical sale channels.
Corporate Social Responsibility
Corporate Social Responsibility is basically a method through which business
integrate social, economic as well as environmental factors into their values and
decision making (Fox and Alldred, 2015). However, retail organisation has to adopt
several ways through which society is benefited and aim at fulfilling the expectation of
customers.
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TASK 2
Company Analysis
Executive Summary: Tesco is a multinational British retail organisation which is
primarily engaged in selling groceries as well as general merchandise across different
countries. Business operations of Tesco is diversified into different segments such as
books, clothing, electronics, furniture, telecom services and many more. Moreover, it is
leading retailer around United Kingdom with approximately 450000 workers and they
serve millions of customers offline as well as online (TESCO, 2019).
SWOT Analysis: This is study undertaken by an organisation to evaluate
company's competitive position and aim at developing strategic planning. Moreover, the
prime objective is to access internal as well external factor keeping in mind current as
well as future potential (Gaur and Kesavan, 2015). Tesco needs to keep proper and
accurate business analysis by avoiding issue which impacts the overall organisation
negativity. Tesco has faced numerous external forces which have increased competitive
environment. Company's strengths, weakness, opportunities and threats are analysed
in detail below:
Strengths: This is favourable condition for business due which positive image
created. It aims at describing what a firm excels at, through which it is essentially
separated from its competitors. Following are the major strengths of Tesco:
 Tesco is considered as one of the largest and most profitable supermarket.
 Several awards are won by Tesco for customer services, retail excellence and
customer shopping experience.
Weakness: These factors stops a firm to perform at its optimum level. These are
areas wherein implementation improvement is must in order to stray in competitive
business environment.
 Huge amount of competition faced by Tesco is hampering its overall productivity
as well as productivity.
 Some of the Tesco's subsidiaries are not performing up to mark. This is
enormously impacted the overall business operations.
Opportunities: These are favourable external factors through which competitive
advantage is attained by businesses (Pantano and et.al., 2017).
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 Variety of opportunities are available for Tesco in order to significantly expand its
business operations in different parts of the world. It can enter into strategic
alliance with competitive company in order to enhance their sales.
 Opportunities with regard to online business expansion is also available.
Currently, Tesco is providing its services to fewer areas.
Threats: Threats are those factors which have potential to negatively harm
business organisation.
 Economic recession witnessed under UK market have threaten market share of
Tesco. This is basically because purchases made by consumers is negatively
impacted.
 Labour threat also impacts the business operation of Tesco and they are
pressured to increase wage rate. Due to these factors overall pricing strategy of
Tesco is changed.
SWOT Analysis eventually helps a business organisation in creating several new
business strategies through which overall productively of is enhanced.
Porter's Five Force Analysis: It is framework which is basically adopted to
analyse company’s competitive business environment. Furthermore, five force industrial
analyses are done in order to determine intensity of competition within an industry
(Gregory, 2015). Tesco significantly make use of Porter five force model in order to
understand several force which influences profitability. Through this evaluation strategy
can be developed in order to attain long term profitability in Retail industry. Following
are the major factors which are considered under Porter's five force analysis:
 Threats of New Entrants: New entrants within retail organisation hampers the
working condition of Tesco. This is basically because new business comes up
with several innovation and new ways of doing things (Kurnia and et.al., 2015).
Several strategies are adopted by Tesco in order to safeguard its competitive
edge.
 Bargaining Power of Suppliers: All the companies under retail organisation
purpose raw materials from different suppliers available in potential market
(Moatti and et.al., 2015). Number of suppliers under retail industry is high as
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compared buyers. Due this supplier has less control over prices and weak force
of bargaining power of suppliers is witnessed.
 Bargaining Power of Buyers: In today's competitive business environment
buyers are often demanding a lot (Denzin, 2017). Tesco is offering high quality
products to its potential customers, due this factor bargaining power of buyers
does impacts the business operation of respective organisation.
 Threat from substitute products: When similar kind of products are launched
under retail industry profitability is highly hampered (Wei and et.al., 2018). In
context to Tesco there very few substitutes available which provide high quality
of products to customer’s base. Threat of substitute products is low with
reference to Tesco.
 Rivalry among competitors: Tesco company is dealing in highly competitive
environment which affect it business operation and market share. It is producing
high quality products with innovative technology and features which is not
available with its rival company. So rival among competitors have moderate
impact on Tesco.
TASK 3
Recommendations
In order to attain sustainability and focus of continuing their success following
some major recommendation which the respective organisation might implement within
business. As per the primary method of research, it has been analysed that customers
are more likely towards the online services that are provide by Tesco to their potential
service users. Majority of individual are providing their feedback in the favour of
organisation’s product that they can recommend to others. Primary data has been
collected through 20 random candidates in which maximum 15 are in the favour of
organisational services that has been provided by Tesco by implementing different
methods and approaches. The views and opinion of respondents are denoting
effectiveness of organisation’s pricing policy as well as their services qualities. In order
to attain higher growth opportunities, Tesco requires to implement some changes as:
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 Proper market research might be conducted in order to adopted the most
significant marketing strategy so that competition faced by Tesco can be handled
easily.
 Moreover, the company must open their 24*7 express stores in order to enhance
their overall market share. Through this customer will be able purchase products
of this respective company whenever they want.
 Proper promotional strategies might be implemented every season in order to
boast brand image and profit earning share.
 Tesco as CSR shall provide several services to its potential customers in order to
attract them towards their company. It can provide free health care services to its
customers so that they are motivated to make purchases.
 Tesco must aim at following all the rules and regulation which are implemented
by government of United Kingdom in order to create good reputation of
respective organisation in potential market.
 Steps might be adopted by Tesco in order to overcome their weaknesses and
attain the desired business profits within allocated period of time.
 Meaures are Tesco might be taken and entry adopt several succession
strategies through which competitive advantage shall be gained.
 Strategies shall be considered in order to expand Tesco's business operation
online more effectively. Same day home delivery option shall be provided in
order to capture new market share.
 Services provided to company's potential customers shall be improved. Tesco
must aim at developing customer-friendly policies through they are motivated to
purchase.
 Tesco might regularly add new products to its portfolio in order keep customers
returning. Through this profitability will be enhanced.
CONCLUSION
From the above report it can be concluded that retail industry is one of the most
important sector which highly impacts the economy of a country. Whereas there are
several retail trends which are adopted by businesses in order to gain profitability.
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Furthermore, in order to significantly carry business related business there are several
business model which are utilised by an organisation.
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REFERENCES
Anand, N. and Grover, N., 2015. Measuring retail supply chain performance: Theoretical
model using key performance indicators (KPIs). Benchmarking: An International
Journal. 22(1). pp.135-166.
Ayers, J.B. and Odegaard, M.A., 2017. Retail supply chain management. CRC Press.
Balaji, M.S. and Roy, S.K., 2017. Value co-creation with Internet of things technology in
the retail industry. Journal of Marketing Management. 33(1-2). pp.7-31.
Crabbe, M.J. and Acquaah, M., 2016. The determinants of service recovery in the retail
industry: A study of micro and small enterprises in Ghana. African Journal of
Economic and Management Studies. 7(1). pp.54-74.
Demirgüneş, K., 2016. the effect of liquidity on financial performance: evidence from
Turkish Retail industry. International Journal of Economics and Finance. 8(4).
Gaur, V. and Kesavan, S., 2015. The effects of firm size and sales growth rate on
inventory turnover performance in the US retail sector. In Retail Supply Chain
Management (pp. 25-52). Springer, Boston, MA.
Gregory, J., 2015. The Internet of Things: revolutionizing the retail industry. Accenture
Strategy.
Kurnia, S. and et.al., 2015. E-commerce technology adoption: A Malaysian grocery
SME retail sector study. Journal of Business Research. 68(9). pp.1906-1918.
Moatti, V. and et.al., 2015. Disentangling the performance effects of efficiency and
bargaining power in horizontal growth strategies: An empirical investigation in
the global retail industry. Strategic Management Journal. 36(5). pp.745-757.
Pantano, E. and et.al., 2017. Does innovation-orientation lead to retail industry growth?
Empirical evidence from patent analysis. Journal of Retailing and Consumer
Services. 34. pp.88-94.
Shin, S. and Eksioglu, B., 2015. An empirical study of RFID productivity in the US retail
supply chain. International Journal of Production Economics. 163. pp.89-96.
Wei, C. and et.al., 2018. Location-based pricing and channel selection in a supply
chain: a case study from the food retail industry. Annals of Operations
Research, pp.1-26.
Gerrard, J., Rudolph, S. and Sriprakash, A., 2017. The politics of post-qualitative
inquiry: History and power. Qualitative inquiry. 23(5). pp.384-394.
Lasswell, H.D., 2017. Power and society: A framework for political inquiry. Routledge.
Fox, N.J. and Alldred, P., 2015. New materialist social inquiry: Designs, methods and
the research-assemblage. International Journal of Social Research
Methodology. 18(4). pp.399-414.
Denzin, N.K., 2017. Critical qualitative inquiry. Qualitative Inquiry. 23(1). pp.8-16.
Online
TESCO. 2019. Available through:<https://www.tescoplc.com/about/>.
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APPENDIX
Questionnaire
Name:
Phone no.
Email id:
1) Are you aware about the services provided by Tesco?
 Yes
 No
2) Do you think that online business strategies adopted by Tesco have potentially
enhance the overall productivity?
 Yes
 No
3) Does the Tesco provides fair prices to its potential customers?
 Yes
 No
4) Are the employees at Tesco friendly in nature?
 Yes
 No
5) Will you recommend services provided by Tesco to others?
 Yes
 No
20 different respondents provide their views and opinion for the above questionnaire.
Participants are classified as 10 Male and 10 Female in order to getting appropriate
results for the business services that are provided by Tesco to their customers.
1) Are you aware about the services Frequency
10