Retail Sector Analysis: Tesco's Strategies and Practices for Success

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RETAIL SECTOR

Contents
INTRODUCTION...........................................................................................................................................3
VISION, LEADERSHIP STYLE AND MANAGEMENT PRACTICES OF TESCO......................................................4
LEADERSHIP AND MANAGEMENT PRACTICES ACHIEVED AND IMPLEMENTED IN TESCO...........................6
CONCLUSION AND RECOMMENDATIONS....................................................................................................7
REFERENCE LIST...........................................................................................................................................9

INTRODUCTION
The retail sector is the part of the economy that involves the activities of selling and buying the
goods or services either through physical stores or online platform. The activity of the retail
sector is to provide the goods or services to the final customers and not for the purpose of
resale. The manufactured goods are supplied through the different distribution channel and the
retailer is the last step of the distribution channel who directly contacts with the final
customers. There are different types of retailers which include departmental stores, discount
stores, convenience stores, supermarkets, warehouse stores, mom-and-pop stores and others.
The importance of these retailers has increased due to the different needs of the customers.
Some customers want that the goods should be available at one place or some want the goods
at the discounted price or some find it convenient to purchase through online sites depending
on the nature of the customers (Gaur and Kesavan, 2015).
The importance of retailing has increased due to many reasons such as:
1. Retailers purchase the product in bulk from the wholesalers and then sell it to a
consumer in the small quantity.
2. Retailers are the link between the supplier or manufacturer and the final consumer.
3. Retailing is all about displaying, the products and then sale it by describing the qualities
or benefits to the customers.
Tesco
Tesco is a British multinational company and a retailer of groceries and merchandise. Tesco is
one of the leading retailers with more than 4, 40,000 colleagues serving millions of customers
every week. The company has more than 3400 stores in the UK. It is the biggest retailer of UK
and one of the biggest retailer in the world. Its headquarters is in England, UK. The company
has also its operation in retail banking and insurance company. The slogan of the company is
“Every little helps”. The company’s aim is to serve more to customers and community. The
company employs over 450,000 employees in 11 markets to serve the best quality of service to

the customers. Recently Tesco also manufactured its own grocery. The main aim of
manufacturing the grocery is to save money by having its own production (Wood et al., 2016).
History of Tesco
Tesco was started in 1919 by Jack Cohen. He started selling the surplus grocery from a stall in
London. After that Tesco appeared after five years in 1924 when he purchases the shipment of
tea from Mr T. E Stockwell. After that, the company started its operation in the year 1930 when
the Cohen built headquarter in North London and in 1932 the company become a private
limited company. After that, in 1950 the company has expanded its business by purchasing 70
William stores and 200 Harrow stores (Clark and Chan, 2014).
VISION, LEADERSHIP STYLE AND MANAGEMENT PRACTICES OF TESCO
Vision
The company’s vision remains constant in the dynamic environment however; the business
practices and strategies are changing according to changing environmental conditions. The
vision of Tesco rotate around the customer, community and colleagues and its vision statement
is:
“The company wants its business to be highly valued business in the minds of customers that
the company serves, the communities in which the company operates and the loyal and
committed colleagues including the shareholders.”
The vision statement of the company is divided into five elements:
 The company wants and need to be around the world.
 There should be lots of opportunities and growing business.

 The business should be innovative and full of modern ideas.
 To be a local winner by applying global skills.
 To earn trust and loyalty from the customers, community and colleagues (Business Case
studies, 2019).
Leadership style
Leadership is the process of influencing, guiding, supporting, directing and motivating the
employees to achieve the organizational goal. There are different leadership style that is used
for effectively and efficiently achieving the objectives. These are as follows:
 Autocratic leadership: The leader orders and makes the decisions about what to do,
how to do and when to do without involving the employees.
 Participative and democratic leadership: The leader takes the decision by involving the
employees in the decision-making skills but the final decision is taken by the leader.
 Laissez-faire: The leader gives the responsibility to the employees to take the decision
but the leader is responsible for their decisions (Yahaya and Ebrahim, 2016).
Management practices
Management practices are the innovative methods or techniques used to improve the
effectiveness of the work. There are some common management practices that can be applied
in the organization are as follows:
 Reward effort
By rewarding the efforts of employees, they feel that they are being valued by the
management. A monetary or non-monetary reward motivates the employees to
increase their productivity and also builds company loyalty (Perkins et al., 2016).
 Stay committed
When the employees are not committed towards each other or organization then it
results in conflicts, and the employees spend more time in solving the conflicts and their
efforts are towards finding the common grounds.
 Create culture cohesiveness

Management practices create a sense of cultural values, engagement level towards the
job, members or organization and hence it leads to the development of efficient and
productive outcomes (Beare et al., 2018).
Development of appropriate policies and strategies within a changing environment to meet
stakeholder’s interests
Following are the strategies and policies to meet the stakeholder’s interest within a changing
environment:
1. Communicate
The stakeholders want to know the purpose and aim of the business. Both internal and
external stakeholders want to know why the company is formed and what are the
values the company wants to provide to its stakeholders? By communicating with the
external stakeholders through newspaper, e-mail, meeting, messages etc. the company
should regularly communicate with the stakeholders so that they will be able to know
how their contribution helped in the success of the organization (Herremans et al.,
2016).
2. Actively involved the stakeholders in the process
Involve the stakeholders in strategic planning and it does not only include the top
management. The representatives of the stakeholders should participate in the
discussion for strategic planning. This can normally be done by involving them in the
large group planning activities while the representative of stakeholders should be
involved in different informal meetings.
LEADERSHIP AND MANAGEMENT PRACTICES ACHIEVED AND
IMPLEMENTED IN TESCO
Leadership style

Leadership is all about bringing together the people to achieve the common goal of the
business. Leadership style is the way the individual guide, direct and motivates people for
implementing the plans in the organization. Based on the power, the leadership style is divided
into three main categories such as autocratic leadership, participative leadership and laissez-
faire leadership. Autocratic leadership focuses that the top management makes the orders or
decision and expect from the employees that they will follow their orders. In democratic or
participative leadership, the decisions are taken by consulting with employees and in laissez-
faire, the employees are free to take their own decisions.
Out of this three styles, Tesco followed the participative or democratic style of leadership. In
this type of leadership, the employees are heard at the time of the decision-making process.
Democratic leadership motivates the employees that increase their morale and they provide
good services to customers. The management gives importance to appointing the leaders for
each department. So that everyone is clear about their roles and responsibilities in the
organization. The role of the leader is to provide the information to the employees by
communicating effectively so that they are not away from providing the quality of services and
also for the smooth functioning of the organization (Iqbal et al., 2015).
As the democratic leadership style is applied in the Tesco, the information is passed from the
higher level to lower level and the employees have the freedom to freely express their views or
ideas in the organization. The Tesco empowered the employees and considered them as an
important asset of the company.
Tesco also focuses on motivational strategies for its employees such as bonus; safeguard their
future by providing the health benefits, a staff discount card after completing one year in the
organization (Samantara and Sharma, 2015).
The leadership style that the Tesco followed is also consumer oriented. The leadership style of
Tesco focused on providing the services according to the needs of the customers and providing
better services. The main aim of the Tesco is to satisfy its customers and producing according to
their needs.

Management practices
The vision of the company is to open business opportunities all around the world. The
management of the company consists of an organizational structure that includes majorly 5
departments. The departments of Tesco are finance, human resources, marketing, research and
development and administration. Each department operates separately but is interdependent
on each other. This is the reason that Tesco utilizes the concept of management by objectives.
Through MBO, the department of the company is able to meet its objective on time. Therefore,
each line manager assigns the distinct duty to the manager. For instance, the line manager
assigns a duty to the sales manager, that the sales of a particular product should be increased
by a certain percentage. In this way, the organizational objectives are achieved by coordinated
the efforts of all the members of the Tesco (Filimonau and Gherbin, 2017).
The organizational culture of Tesco is market-oriented. This means that the activities are
performed to achieve by maintaining respect, integrity as well as responsibility. The company
has taken care of meeting corporate social responsibility because the company considers that
all the stakeholders are an important part of contributing success.
The management practices are built to satisfy the needs of the customers and to increase loyal
consumers. For satisfying their needs, the company mainly focused on its logistics management
with the aim of decreasing the cost and expenses and improving the business performance
(Haleem and Jehangir, 2017).
CONCLUSION AND RECOMMENDATIONS
Therefore it can be concluded that the retail sector of the economy is that sector that mainly
involves buying and selling of the products or services. Tesco is one of the biggest retailer of the
UK dealing in manufacturing and selling of groceries and merchandise. The company’s aim is to
provide the quality of grocery by satisfying the needs of customers, community and colleagues.
The company achieves this objective by managing internal environments such as through
leadership style and management practices. The following recommendations can be suggested
to the company for improving the leadership style, management practices and the strategies.

1. Leadership styles: The leadership style should be changed according to the situation
arises. The employees must ready to adopt the changes that are done in the leadership
style because it is necessary for the growth of the business. Therefore, in order to keep
growing the organization must change its leadership style such as autocratic or laissez-
faire to ensure that the employees must carry out their work timely.
2. Management practices: The main aim of developing management practices is to
achieve the organizational objectives by different applying different methods and
techniques. These management practices are applied mainly to employees. The
employees of Tesco must always remain motivated so that they work hard to achieve
the organizational goal. The company can apply different theories of leadership which
includes McGregor’s theory X and Y or Ohio State University model or Herzberg two
factor theory. These theories help the management to find the factors that decrease
their productivity or decreases their morale.
3. Strategies: The effectiveness of the organization's strategies can be improved by
including the following points while formulating the strategy.
i. It is not possible for the company to include all the employees in the decision-
making process but the representative of all the department should compulsorily
be involved in the decision-making process. The representative must be selected
according to the majority of the employees.
ii. The company can explore the new markets or can improve the existing market
for expanding its business or to gain competitive advantage.

REFERENCE LIST
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