BM561 Business Consulting: Tesco Research Report and Analysis

This research report examines Tesco, a major retail brand, addressing its market position, competitive landscape, and key issues. The report begins with an introduction to Tesco, highlighting its global presence and market leadership. The main body delves into significant challenges faced by Tesco, including leadership changes, quality control issues, and food safety concerns. The report then explores the external environment affecting Tesco, analyzing political, economic, social, technological, and environmental factors. It also examines Tesco's target customer market and positioning strategies, including functional, symbolic, and price positioning. A competitor analysis of Tesco's rivals, such as ASDA, Sainsbury’s, Morrisons, Aldi, and Waitrose is provided. Finally, the report concludes by summarizing the key findings and potential solutions to the identified issues.

Research proposal

Contents
Introduction......................................................................................................................................3
MAIN BODY...................................................................................................................................3
Positioning strategy of TESCO:.............................................................................................5
Competitor analysis of TESCO:.............................................................................................5
Issues in TESCO:...................................................................................................................6
CONCLUSION................................................................................................................................7

Introduction
Tesco is one of the popular retail brands having presence across different parts of the world it is a
British multinational grocery brand that is having its headquarters located in Welwyn garden
city. It is the third largest retail brand that is measured by the gross revenues and is at 9th position
measured by their overall revenues. They are having shops across 5 countries in Europe and are
also a market leader of grocery market (Harries and et.al. 2019). It was founded in the year 1990
by jack Cohen as a group of market stores in London. Its name appeared in 1924 after four and
purchases the shipment and after that they opened in 1931 in burnt Oak. It is listed on London
stock exchange and is also a constituent of FTSE 100 index. In the present times with the
changing external environment there are some of the issues that are faced by Tesco.
MAIN BODY
Major issues:
Leadership change: Recently KYC and Murphy have taken the range are so it has led to a
displacement from Dave Lewis in September. It has resulted into a massive shift in the
leadership Approach in Tesco in recent times. This shift has affected the overall functioning of
Tesco and the Mars if online is also not an easy task in the present scenario.
Quality control issues: Tesco is a brand having price leadership position but they are also
dealing with various quality control issues.
Food safety issues: In present time TESCO is dealing with a wide range of food products that
requires adherence to some food safety guidelines and standards. So, there is a need to focus on
all such safety issues that can endanger the customer demands.
External environment analysis: There are some of the specific factors that can help Tesco in
dealing with the above mentioned issues:
Political factors: There are some of the political factors that are related with UK leaving
European Union. It has resulted in to change in the regulations and overall legal policies that are
affecting the functioning of different industries.
Economic factors: The covid 19 situation has resulted into various economic issues because
GDP of UK is reduced by 5% in the fourth quarter in a year 2019. The fiscal efforts are also

leading towards more emergency because of the covid-19 pandemic. It is leading towards an
issue of future low projection that is a threat for retail sector organisations. So there is reduction
in the customer purchasing power (Corbet and McMullan, 2018) . This has lead to generation of
opportunities for Tesco in terms of having more cost effective pricing strategies. Tesco can make
use of their cost leadership position by attracting the customers offering lower prices for similar
products as compared to their competitive brands.
Social factors: In the present scenario of covid-19 there is a shift in the preferences of people
and society towards more online sources of products.
Technology factors: Tesco is using a capital intensive approach in some of the locations that can
be moved towards having a complete transformation by using both technological advancements
especially in their delivery mechanism. Many retail competitor brands like Amazon are
developing different alternative measures of delivery by using prime delivery as a medium of
faster options to customers (Merrill, 2019). One such mechanism can be used as a tool to reach
customers fast and help Tesco in achieving the competitive advantage.
Environment factors: The government in United Kingdom is focusing towards having a more
shift towards sustainable approaches by using recyclables products and eco friendly packaging.
This can be opportunity for expansion of Tesco approaches to a more sustainable measure by
reducing the use of plastics.
Target customer market: Tesco as a target customer base was looking for quality as well as
affordable price (Gbadamosi, 2019) . They have developed loyalty card schemes that have
helped them in creating a large customer base that is loyal in long run. Customer orientation
depends on the employee performance that can result into positive outcomes for the organisation.
It is also dependent on the relation of products offered by an organisation.
Apart from this Tesco also as a target base of customers who are having high amount of cost
consciousness and interested in value variety of choices. Customer behaviour has a direct
implication on the marketing activities and a wide range of mine situations (Jermsittiparsert,
Namdej and Somjai, 2019). The present covid-19 situation has resulted into a higher amount of
financial as well as economic crisis that has certain long-term implications on overall purchasing
behaviour of customers. There is reduction in the purchasing power that has led to more

requirements of integrated Marketing Communication practices and different form of discounts,
rebates that can lead to cost effectiveness for customers.
Positioning strategy of TESCO:
Functional positioning: for the purpose of enhancing the present position of Tesco in market
Tesco is using functional positioning that is associated with increased range of quality and price
as a tool of attracting customers in their existing products and services. For instance Tesco has
self financed range of products to function positioning in this quality of the range is serving as
main point of promotion for a specific target customer base. In this crisis are considered as
additional cost that customers are willing to incur for the purpose of getting that wide and high
range of products.
Symbolic positioning: It is a subjective positioning that can be created by Tesco based on their
aimed aspiration and values. In this positioning of Tesco there will be fair trade range of
products in the grocery sector. Symbolic positioning is generally used by Tesco in relation to the
clothing sector of products. This type of positioning is used for a narrow customer segment in
emotional and physiological levels. In this strategy the product range is generally less diverse but
the prices are higher that can help in development of self perception for responsible buyers.
Price positioning is generally applied by Tesco with respect to the wide range of own brand
products
Experiential positioning can also be used in relation to the provision of cognitive stimulation
and sensory to customers (Assarzadegan, Hejaziand Raissi, 2020). Tesco can focus on using
experiential positioning to target the customers for beauty and health range of products.
Above mentioned are different types of positioning aspects that can be used at Tesco in the
present scenario in order to maximize their present market share.
Competitor analysis of TESCO:
Asda: ASDA is a wholly owned subsidiary of Walmart and it is having prioritising towards
maintaining the lowest prices in Big 4 UK grocery brands. This organisation is working towards
improving its online se silence and store layouts that has resulted into increasing threat for
present cost leadership position of Tesco.
Sainsbury’s: It also second largest grocery chain in United Kingdom having presence across
1418 locations. These locations are split roughly between convenience for maths and
supermarkets. Sainsbury has been one of the highest quality crossing markets among various

peers. This grant has charged a premium for grocery products to price reduction as a important
element of the recent competitive strategy.
Morrison’s: Morrison’s is presently operating 492 supermarkets and other 50 convenience
stores. The brand participates significantly in food production and is one of the second largest
producers of 18 manufacturing facilities and other distribution centres. Morrison’s is working
towards driving efficiency improvement through a vertically integrated structure to create a more
balanced approach towards promotional pricing as the important element of the strategic price
review.
Aldi: ALDI is having headquarters in Germany and is operating 10000 stores in 19 different
countries. The main strategic advantage of this competitor brand of TESCO is there discounted
grocery needs market that is offering low priced items with the high private label offering (Evans
and Mason, 2018).
Waitrose: Waitrose is a British retail brand that is having presence across 336 locations they
emphasize on the quality of their workforce and overall production practices.
The above mentioned are some of the competitors of Tesco that are affecting their present
pricing strategies and competitive marketing position (Bilińska-Reformat and et.al. 2019). This
requires required to formulate effective strategies in order to benchmark the performance against
competitors and evaluate some effective practice that can help them in dealing with the changing
market situation.
Solutions: Purpose of dealing with the issues of an effective from high amount of competition
Tesco can focus on re launching some of their social media marketing campaigns.
Issues in TESCO:
The main three issues that have been identified from the above discussed aspects are:
 Ineffective marketing Approach.
 Changes in the present leadership approach of top management
 No timely new product launches.

CONCLUSION
From the above discussed aspects it can be summarised that there are different issues that are
faced by retail sector organisations in United Kingdom. External changing environment has
affected the present competitive positioning strategies. This is mainly resulting into a lot of
issues that are affecting the present as well as future effective market position.

REFERENCES
Books & Journal
Bilińska-Reformat and et.al. 2019. Sustainable development concept and creation of innovative
business models by retail chains. International Journal of Retail & Distribution
Management.
Assarzadegan, P., Hejazi, S.R. and Raissi, G.A., 2020. An evolutionary game theoretic model for
analyzing retailers’ behavior when introducing economy and premium private
labels. Journal of Retailing and Consumer Services, 57, p.102227.
Gbadamosi, A., 2019. Contemporary issues in marketing: Principles and practice. Sage.
Jermsittiparsert, K., Namdej, P. and Somjai, S., 2019. Green supply chain practices and
sustainable performance: moderating role of total quality management practices in
electronic industry of Thailand. International Journal of Supply Chain Management, 8(3),
pp.33-46.
Merrill, G.J., 2019. How Sinful Is Your Shopping Basket?. In The Political Content of British
Economic, Business and Financial Journalism (pp. 143-181). Palgrave Macmillan, Cham.
Corbet, S. and McMullan, C., 2018. Stock market reaction to irregular supermarket chain
behaviour: An investigation in the retail sectors of Ireland and the United
Kingdom. Journal of Retailing and Consumer Services, 43, pp.20-29.
Harries and et.al. 2019. Diversity in place: narrations of diversity in an ethnically mixed, urban
area. Journal of Ethnic and Migration Studies, 45(17), pp.3225-3242.
ONLINE:
Marketing Analysis of Tesco, 2020 [online], Available through<https://ukdiss.com/>
Tesco has three issues, but only one matters, 2020 [online], Available through<
https://www.reuters.com/article/us-britain-tesco-breakingviews/tesco-has-three-issues-but-only-
one-matters-idUKKBN16Z1A8
Tesco: Brexit disruption 'is a challenge not a crisis', 2020 [online], Available through<
https://www.bbc.com/news/business-55658645>