Bow Valley College - MGMT1101: Tesco Management Event Report

This report provides a comprehensive analysis of Tesco's management strategies, organizational structure, and environmental factors. It begins with an introduction to Tesco's global operations and market position, followed by a detailed SWOT analysis to formulate strategies for strengths, weaknesses, opportunities, and threats. The report examines environmental constraints, including political, economic, social, technological, environmental, and legal factors impacting Tesco's operations. It also identifies key stakeholders, such as customers, employees, investors, and communities, and their influence on business decisions. The report then delves into Tesco's organizational structure and design, highlighting its decentralized structure and mechanistic approach. Furthermore, it explores employee motivation, applying Herzberg's two-factor theory, and offers recommendations for expansion, environmental sustainability, and digital communication. The report concludes with suggested controls and recommendations for strategic implementation and performance evaluation, referencing relevant literature throughout.

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EVENT MANAGEMENT

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Table of Contents
Introduction................................................................................................................................2
S.W.O.T. – Formulating Strategies............................................................................................2
Environmental Constraints.........................................................................................................3
Stakeholders...............................................................................................................................5
Organisation Structure and Design............................................................................................6
Motivating Employees...............................................................................................................6
Recommendations......................................................................................................................7
Controls and Recommendations................................................................................................7
References..................................................................................................................................8

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Introduction
Tesco is third largest food retailers in the world operating around 7,000 stores. In
addition, the company gives employment to nearly 5, 00,000 people worldwide and
consistently ranking highest in terms of grocery market share (Wood, Coe & Wrigley, 2016).
The company stores are situated at various different locations such as Canada, Malaysia,
Hungary, Thailand and this benefit the company to achieve greater economy of scale.
Considering their product portfolio, it includes Convenience shops, hypermarket,
Supermarket and Superstore. Other retailing services offered include Tesco Personal Finance.
This report is a blend of different aspects relating to various strategies as per the
internal analysis, environment constraint, stakeholders perspectives, organisation structure
and design and employee motivation. In last, several recommendations are also being
suggested in align with the relevant insight in both Parts I and Part II.
S.W.O.T. – Formulating Strategies
 Strategy for Strength – As Tesco has diversified customer segment, the company can raise
revenue from different sources. With extensive branding strategy, the company can also use
one brand goodwill and customer loyalty to another and this will lead to creation of co-value
in the specific product portfolio of the company.
 Protection against weakness –The weakness that is identified is their concentrated
operations. The company heavily depend upon these three countries i.e. US, Canada and
Mexico as 45 per cent of their revenue come from these. To achieve economy of scale, the
company is required to use market development strategy and need to expand their operations
in both developed and emerging countries such as India (Casadesus-Masanell & Ricart,
2011). For this, Tesco may do joint venture with T&T supermarket in Canada.
 Strategies for opportunities – The opportunities that were stated in Part I states about
strategic acquisition and Tesco already been involved in such decisions. For example, Tesco
acquired various organisations such as WE7, Giraffe, OC FORUM, HIT hypermarket, etc

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(crunchbase.com, 2019). Such more acquisition in future benefit Tesco with gaining of
synergy and overcoming various market barriers.
 Protection against threats – Tesco has an opportunity to use political affiliation to zoom in
on other parts of consumer taste or a chance to drive more traffic to their stores. The company
can also create employment opportunities as taking out responsibility for society will also be
supported by the government.
Environmental Constraints
 Political Factors –As Tesco is operating in 13 countries, the company can be exposed to
various political factors that may have significant impact on company operations. For
instance, as the company import, several inventory outside UK like Canada and East Asia,
import duty on goods may impact Tesco.
 Economic Factors – As Tesco operates in several nations, the economy of each country
which includes stores of Tesco will ultimately impact their success. For example, the 2008
recession was hit and brought their sales fall to lowest figure in 16 years however, the
company has retaliated by introducing a new discount range. Moreover, Tesco also need to
focus on unemployment rate of each location they have stores as it was identified that Tesco
to shed up to 1,700 jobs in new management shake-up.
 Social Factors – The consumer shopping trend in tremendously changing with time as
people are more preferring one-stop shopping. Moreover, the company also need to focus on
obesity issue in the community as consumers are now prioritizing planning with their health
consideration. This change of consumer behaviour and demand for organic food needs Tesco
to adopt new strategies relating to their operations (Hall, Towers & Shaw, 2017).
 Technological Factors – The advancement in technology and several internet tools offers
unlimited opportunities for any organisation operating in retail sector. In today scenario,
corporations are value and importance more with their strong online presence. Tesco is doing
well in terms of this aspect and they also made strong position on almost all social media
sites like Twitter, Facebook. On the other hand, the company already introduced RFID
technology in their stores to raise overall experience which will benefit supplier relating to
the stock (Taylor, 2016).

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 Environmental Factors – In contribution of their CSR policies, Tesco is committed to
using renewable sources and producing 100% of its own electricity by 2030. However, before
Tesco was already accused of environment and safety offences and also fined with £8 Million
due to failure of addressing a known issue related to fuel delivery.
 Legal Factors – The organisation needs to encompass more cautious consideration of their
CSR. Moreover, the company need to assess internal environment carefully as in 2016, 17
workers took legal action against employer for gender discrimination.
Social factors bring out biggest challenge for the corporation as being a multinational
company, they have their operations in various countries such as UK, Canada and US. If
Tesco plans to expand in some other countries such as India, which has different cultures,
social opinions and perspectives, it will be quite challenging (Lonnroth et al, 2009).
The technological element will have created opportunities for the company as Tesco
already executed a framework by developing its own online mobile payment system called
PayQwid. Various Tesco stores are already using that app and consumers can install the
application and connect it with NFC technology and Clubcard. Consumers can also pay for
shopping and get loyalty points.

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Stakeholders
In relation with customer perception, the stakeholders influence business decisions of
an organisation (Hind, Wilson & Lenssen, 2009). The main stakeholder group of Tesco are –
Customer, employees, investors, and communities. Employee stakeholder desire career
development as well as fair compensation. Inside the stores, these stakeholders may benefit
the company by fulfilling the needs of customers as per upper commands and policies.
Customers are reflected external stakeholders who show interest in purchasing
products from Tesco stores as well as provide necessary feedback regards their various
products. This also helps the corporation to introduce new products or diversify the product
lines and portfolio as per latest market preference. The other stakeholder group includes
investors who help the Tesco in their business operations by contributing timely fund. They
play a vital role in decision making of the organisation as management need to consider them
while taking out any major decision or strategy.
Communities are the last stakeholder group and the Tesco rely on the community in
relating to their business with attainment of various resources and with providing well
services. In support of these stakeholders, the company also undertake wide varieties of CSR
programmes.
Tesco should rank employees as its top stakeholder's group as they contribute to
company vision and their strategic goals. Moreover, employees are well-thought-out as those
resources who cannot be imitated by any other business in the marketplace (Progoulaki &
Theotokas, 2010). Therefore, it will benefit them to attain competitive edge in the retail
business.

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Organisation Structure and Design
Tesco supermarket chain has a decentralised structure. Each Tesco store has a store
manager who takes out certain decisions in relation to the store. The store manager is
accountable to a regional manager. In addition, Tesco has mechanistic structure as due to
high repetition at each local shops while carrying out task in stores. Moreover, there is a
vertical communication taking place considering their hierarchy which makes decision
making to be on top of store i.e. store manager. Tesco should encourage departmentalization
so that enterprise Tesco can encourage a wider range of audience all over the globe.
Motivating Employees
With the help of motivated and productive employees, an organisation can create
better levels of productivity with generation of more output (Brekke & Nyborg, 2008). With
relation of Herzberg two factor theory, the categorization can be done on two basis – hygiene
aspects and motivators. Factors associated with motivators such as interest of work and
upcoming opportunities may help employee to gain more job satisfaction. On the other side,
there may be dissatisfaction also be in workers in relation with hygiene factors such as the
Regional Manager
Store Manager
Food Trading Manager Non - Food Trading Manager Personnel Manager
Personnel Assistant
Electrical
Section
Manager
Clothing
Section
Manager
Fresh Food
Section
Manager
Ambient
Food
Section
Manager

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working environment. Therefore, motivators in Herzberg theory can bring greater satisfaction
among personnel with Tesco. The workers will also be motivated with the payments because
of their superior performance and future development. Hence, Tesco is required to stimulate
personnel motivated with their work as a substitute for hygiene factors plus earnings.
Recommendations
 Tesco should expand their operations in emerging markets with adoption of
international strategy. Most of their stores are in UK only, as with creating footprint
into other countries such as Asian, they can achieve more market share outside their
home country.
 The company need to gain understanding about all necessary environment policies
and ensure that they should not repeat past mistakes in the future that may question
their sustainability.
 Tesco needs to bring more organic food into their stores as the consumer preference is
changing with the marketing trend. It will help the company to achieve competitive
advantage in the retail industry.
 Tesco can also use digital tool for cost-effective communication programme on social
media and other digital tools.
Controls and Recommendations
Tesco may implement control before commencement of the activity, while it is
running on or after it gets finished up. This will benefit Tesco to consider necessary strategy
before the occurrence of an issue. It allows helps the management to prevent the problem to
occur rather finding cure later on. If there is huge gap, the management can use the
information to build up new plans in align with organisational goals. It will also make the
employee motivated in light of feedback control.
To check whether goals have been attended or not, the company can ask for a survey
on social media sites that helps Tesco to undertake various perspective of the consumers.

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References
Brekke, K. A., & Nyborg, K. (2008). Attracting responsible employees: Green production as
labor market screening. Resource and Energy Economics, 30(4), 509-526.
Casadesus-Masanell, R., & Ricart, J. E. (2011). How to design a winning business
model. Harvard business review, 89(1/2), 100-107.
crunchbase.com. (2019). Tesco > Acquisitions. Retrieved from
https://www.crunchbase.com/organization/tesco/acquisitions/acquisitions_list
Hall, A., Towers, N., & Shaw, D. R. (2017). Understanding how millennial shoppers decide
what to buy: Digitally connected unseen journeys. International Journal of Retail &
Distribution Management, 45(5), 498-517.
Hind, P., Wilson, A., & Lenssen, G. (2009). Developing leaders for sustainable
business. Corporate Governance: The international journal of business in
society, 9(1), 7-20.
Taylor, E. (2016). Mobile payment technologies in retail: a review of potential benefits and
risks. International Journal of Retail & Distribution Management, 44(2), 159-177.
Wood, S., Coe, N. M., & Wrigley, N. (2016). Multi-scalar localization and capability
transference: exploring embeddedness in the Asian retail expansion of
Tesco. Regional Studies, 50(3), 475-495.