Tesco's Innovation: Performance, Capabilities, and Future Growth

This report examines Tesco's innovation management strategies, assessing its historical and current performance in the context of business development. It uses tools like PESTLE and SWOT analysis to evaluate Tesco's capabilities and identify opportunities for growth. The report also explores future industry trends using Porter's Five Forces, focusing on competitive rivalry, the threat of new entrants and substitute products, and the bargaining power of suppliers and buyers. Key innovations, such as the replenishment application system, loyalty schemes, and self-checkout technologies, are discussed in detail. The analysis highlights the role of leadership in fostering innovation and adapting to changing consumer preferences and technological advancements. The report concludes by emphasizing the importance of continuous innovation for Tesco to maintain its competitive edge and achieve sustainable growth in the retail sector. Desklib offers a wealth of similar reports and solved assignments for students.

Managing Innovation in
Business.

EXECUTIVE SUMMARY
Innovation is one of the important aspect that helps to organisation to grab attention of
large no. of consumer base and build products goods and services that differ from the
competitors. In this report Tesco is one of the multinational organisation which deals in groceries
and general merchandise. It by evaluating needs and wants of consumers build products that
satisfy their future needs in better manner. With the help of different tools and techniques an
organisation can know in better manner its capabilities and resources and better find out future
steps that are necessary for growth and enhancement.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................3
THE ORGANISATION AND INDUSTRY OVERVIEW.............................................................4
The organisation and its innovation history................................................................................4
The organisational existing innovation performance and capabilities........................................5
The industry in future (2020)......................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
Innovation is name of new idea, creative thought and process with imagination with help
of device or method. It is considered as application for better solution to meet the requirements,
unanticipated needs or existing wants. Innovation is an very important factor that helps in
organisational growth and enhancement. This report is based on is based on Tesco which is an
British multinational groceries and merchandise retailer headquarter is in UK. It is third largest
retailer in perspective of revenue and ninth largest retailer in context of revenue in world wide.
This report is based on innovation of tesco in present, past and for future that helps in data and
information and with help of various methodologies. It also elaborate role of leader and manager
in bringing innovation.
THE ORGANISATION AND INDUSTRY OVERVIEW
The organisation and its innovation history.
Tesco is an British multinational organisation that deals in groceries and merchandise
retailer, its headquarter situated in England, UK. It is one of the third largest retailer by gross

revenue and ninth largest retailer in world. It deals in almost 7 countries in which Asia, Europe
and market leader in UK. In that innovation history should be elaborate with help of PESTLE
analysis which give important insights and information. Tesco widely use innovation in their
business that one of the effective step for organisational growth and enhancement. In 1990 it
adopts new series of innovation by taking pioneer advantage. It focus on technology and
information system to give best quality products to their consumer base (Biemans, 2018). It
apply different innovative steps in which one of the replenishment application system that helps
in control whole inventory management of organisation in oracle retail warehouse management
system and club related innovation. The another main innovation in past is that it provides
loyalty scheme club card and online shopping to their customers to reach at every aspect to
enlace their market base (Bogers and West, 2012). With help of replenishment system, it occurs
low cost and well stocked shelve in their stores. In their past innovation consist of barcode
scanner that helps in collect the data and store in their system. Loyalty scheme card or club card
helps to organisation in connect directly with consumers, in case when consumer buy something
till consumer ask for card that give them some points. One of the most important innovation in
past is that in retail sector tesco is first organisation that take initiative of self check outs until the
consumers purchase products and services. They are always become pioneer of their field and to
grab attention of large consumer base adopts different innovative techniques that helps to
become a marketing leader to put all efforts into practice. These initiatives helps to improve
internal operational activities of organisation by reducing cost and effective storage of data and
information to reach at desirable outcomes. With the help of innovation that organisation become
one of the market leader and it has 440000 colleagues that serves almost 80 million customers on
weekly basis of more than 6800 stores and by online. Its management and teams have give
strong foundation and operating profit by exceptional items for group 28.4% to £1,644m in
2016- 17 ( Dodgson, Gann and Phillips, eds., 2013.). these innovations are very important for
organisational growth and influences the business and business environment by positively
influence their proceedings. In some past years, the taste and preferences of consumers rapidly
changes in that scenario Tesco have to change their phenomenon and adopts m commerce and
mobile technology to achieve growth and enhancement of ownership with helps of different
strategies and tactics that play an important role in build multinational organisation. Innovation is
one of the important aspect to rach at large consumer base by accessing current and future needs

of consumers and build products accordingly ( Brown and Osborne, 2012.). In context of Tesco
they focus on giving best services that acquainted with techno friendly products and services so
that they can differentiate form their competitors.
The organisational existing innovation performance and capabilities.
Tesco is an large multinational organisation which is an general merchandise and retailer
chain of different products. In present atmosphere organisation become very challenging and to
exist for long term firm have to adopt different tools and techniques with innovation so that they
can grab attention and market share at large base (Drucker, 2012). It has lot of capabilities as
that it has large chain of employees that are 440000 that is one of their precious assets of
organisation. In present scenario their innovation and technologies that use by them. In tesco
they provide embedded scanner for quick orders and also develops Sync with the help of
multiple devices. In present time it is easily available online to thousands of consumers by great
variety of products related to food to hardware with sports equipments that denotes about large
chain of products that helps in giving delighted experience to consumer base. Present innovation
should be analysed with help of SWOT analysis that give important insights and knowledge to
grab attention of large no. of people. In case of Tesco which is an global retailing and large
portfolio organisation that offers wide range of food and non food range in all most countries of
world. It faces numerous external and internal forces that affects their business proceedings.
Present innovation with help of SWOT analysis:
Strengths:
Tesco deals in retail sector that provides product in large product chain and to grab large
market share they have to come with advent innovations that grab attention of people. In case of
tesco, its main strength that it is an big giant and easily capable to adopt any type of technology
and innovation. According to market demand it advent to adopt e commerce so that it can
squeezed with consumers (Jansen, Cusumano and Brinkkemper, eds., 2013.). Some factors that
are innovations that become their strengths such as instead of stop start nature of retail, tesco is
the pioneer to RFID project and only few industries deal in that sector. In that grocer's clothing,
f&F added with RFID tags in all products that give technology a blow by way of automating
administrative tasks in which stock counting and give permission to staff to develop more
customer oriented roles.
Weaknesses:

In their major weaknesses consist of some of their subsidiaries not performing well and
vulnerable to external factors. It sometimes faces credit crises and lack behind to adopt advance
technology (Schiuma, 2012). To eradicate that problem and bring innovation in organisation
Tesco labs grocers dedicated to innovate and give customer facing tech that give solution to
resolve problems of different shoppers by using and owning multiple connected device. It
launched a digital platform that app helps customers to connect with favourite apps and
applications and taking feedback from them. It also faces price pressure to resolve that issue
Tesco allows consumers to automate their purchases and go down to a certain price and it
directly added to their online basket. Hence to eradicate some major issues and concerns they
adopt different technologies that bring growth.
Opportunities:
the most important opportunity in front of Tesco is to enlarge its market share and it
proved an opportunity for them that consumers become more demanding and want some advance
products and services so that they can differentiate themselves from their competitors. To grab
these opportunities Tesco start business by launching Apple pay which is already with them and
Samsung pay is also in their market and tesco bring a punt to consumers to download mobile
payment platform, PayQwiq. To compensate consumers demand and simplify payment system
they give payment system.
Threats:
Main threats in front of Tesco is rising cost of raw material and food prices rises day by
day that impacts on profitability of organisation. To make it as a strength Tesco have to progress
evident by evaluating group sales that edging by .1% year on year. For that it adopts
replenishment application system that reduces operating cost and also save time to reduce
functional and purchasing of raw material so that they can become market leader. To eradicate
and grab market share organisation have to analyse each aspect and accordingly adopt tools and
techniques that should be prove fruitful in context of organisational growth and enhancement.
That SWOT analysis shows organisational capabilities and resources that helps in compete at
adverse situation to grab attention to enlarge business opportunities (Schneider and Spieth,
2013.).
To bring innovation in organisation, leaders and organisation help in define about what kind of
innovation employees want that drive enhancement and enables to meet strategic objectives.

Leaders and organisation give signal to subordinates about value which enhance by adopting that
innovation in organisation. Leaders and management helps to subordinates to give them remarks
and important insights that how much important that innovation for organisation and an
individual. Leaders and organisation set priorities and metrics to set out targets to bring
innovation and adopt relevant changes (Seebode, Jeanrenaud and Bessant, 2012).
The industry in future (2020).
Tesco to give delighted experience to their consumer base adopt some new and advance
techniques that should be proved fruitful for organisational growth and enhancement. To bring
out future innovation of Tesco by Porter's five force model that are as follows:
Threat of new entrants:
New entrants brings innovation by adopting new ways and things and pressurize Tesco to
adopt lower pricing strategy. They pressurize them to lower their prices and providing new value
proposition to customers. Tesco is trialling new and smaller self service check outs in their three
London stores. Tesco by trialling new and smaller checkouts that helps in busiest stores and
reduce their queuing time for a quarter.
Bargaining power of suppliers:
it has large no. of suppliers that helps in distribution of their products and services to their
ultimate consumer base. To beat the competition level and supplier power they partnered with
Yoghurt brand. It give choice of eight toppings with different sauces. It gives the best example
about how a supplier work with the Tesco to give a new phrase of life to Yoghurt.
threat of substitute products:
In threat of substitute products there are large no. of products and stores available that
offers similar products and services to their consumer base. To give unique products and services
to their consumer base with help of technological advancement it offers unique goods to beat and
enlarge large market share (Tidd and Bessant, 2014).
Rivalry among existing players:
This is another one of the important factor that helps in by observing their behaviour and
steps of their players. To beat their competitors they use advance technology and give some
countless payment technology that rolled out its London stores. They to differentiate from
consumer base give great addition of checkout usage that is high and card payment is best and
preferable option.

After adopting new and innovative things and steps organisation have to deeply research each
and every aspect and for that audit should be conducted to gain desirable outcomes. Tesco adopts
the smart card and discounts card which is an new product and service for their consumer base.
In that scenario they have to judge each and every aspect and by taking reviews and feedback
from consumers adopts some major changes that brings harmony in work and proceedings.
CONCLUSION
From the above report it has been concluded that innovation is one of the important
aspect for organisational development and enhancement. To lead in market organisation have to
adopt innovation time to time by accessing future needs and demand of consumers so that they
can get success to give desirable attributes to their customers. Innovation should be observed and
implemented by observing all past, present and future needs and accordingly implement into
market place. Capabilities and resources should be important factor that helps in reach at large
market share.

REFERENCES
Books and journals:
Biemans, W., 2018. Managing innovation within networks. Routledge.
Bogers, M. and West, J., 2012. Managing distributed innovation: Strategic utilization of open
and user innovation. Creativity and innovation management. 21(1). pp.61-75.
Brown, K. and Osborne, S.P., 2012. Managing change and innovation in public service
organizations. Routledge.
Dodgson, M., Gann, D.M. and Phillips, N. eds., 2013. The Oxford handbook of innovation
management. OUP Oxford.
Drucker, P., 2012. Managing in turbulent times. Routledge.
Jansen, S., Cusumano, M.A. and Brinkkemper, S. eds., 2013. Software ecosystems: analyzing
and managing business networks in the software industry. Edward Elgar Publishing.
Schiuma, G., 2012. Managing knowledge for business performance improvement. Journal of
Knowledge Management. 16(4). pp.515-522.
Schneider, S. and Spieth, P., 2013. Business model innovation: Towards an integrated future
research agenda. International Journal of Innovation Management. 17(01). p.1340001.
Seebode, D., Jeanrenaud, S. and Bessant, J., 2012. Managing innovation for sustainability. R&D
Management. 42(3). pp.195-206.
Tidd, J. and Bessant, J., 2014. Strategic innovation management. John Wiley & Sons.