Analytical Thinking and Decision Making Report - Tesco Analysis

This report delves into the critical role of decision-making within business operations, using Tesco as a case study. It begins by establishing the importance of effective decision-making, highlighting its impact on various aspects such as timeliness, clarity, professional development, and task completion. ...Read More

Analytical Thinking and
decision making

Table of Contents
INTRODUCTION...........................................................................................................................1
1. Importance of decision making...............................................................................................1
2. Identifying and Highlighting decision making problems related to work or external
organisation.................................................................................................................................2
3. Application of SMART model for finding efficient suppliers................................................4
4. Strength and Limitations of the analysis.................................................................................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
Decision making is very important in processes to plan functions as well as operations of a
procedure before the implementation and involvement of every member. In a firm, it is essential
to gather all members in process of decision making as all the members of an entity should
treated equally (Fenton‐O'Creevy and et.al., 2011). Analytical thinking is known to be an
essential component that may help people to resolve the issues more fast and easily. Apart from
this, it can also add strengths and complexities of the analysis. The report is about applying the
decision making process in the TESCO because of which the company has to face various issues
.
1. Importance of decision making
The process of decision making can prove beneficial for the Tesco in various ways. Some
very common and well known examples are discussed as under :
Timely process
The decision making process is very beneficial for Tesco in numerous ways. This way
right decisions can be taken at correct time. Therefore, it can make process more effective and
reliable. If a decision is wrongly taken then it would make troubles for operation system. Also, it
will be more time consuming in correcting bad decisions. Hence, it is better to take time
previously for right decision making so that time can save for future issues. Therefore, so much
of time will be managed properly and it will make employees to arrange their work
systematically in a given period. Furthermore, it will lead to lessen the complications as all the
problems can be discussed in prior. Which will be very helpful to increase confidence in solving
various issues simultaneously. The remaining time can be invested in conducting several
research and training programs to enhance skills of workers.
So, if the Tesco follow the time effective policies, then it can effect in the overall decision
making of the supplier firm.
Clarity in process
When decision are taken effectively then it can provide workers of entities a clear idea on
how to manage operations. This way, staff members will be clear and more focused about
performing well. It further helps the company for performing operations and other tasks in a
better way. Also, there will be no confusion among employees regarding operations.
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If the Tesco will focus on making the process more clear, then it will automatically improve the
procedure of decision making which can help the supplier firm in various manners.
Enhancement of professional development
When a person hears and understand the ideas and views of others, he or she is able to
learn something new from them. It is essential for firms like Tesco to have such team or group
discussions. Because, one employee has one or limited stock of innovative ideas in his mind but
when a people tries to discuss in group, they find new ways to solve any problem. It provides
help to assess some new solutions and therefore all of them can arrive to a conclusion from the
best ideas given from all members. It gives boost to professional development which is required
in Tesco. Discussing all those and finding the suitable and the relevant one from the all can help
the Tesco in a better decision making.
Completing Tasks Quickly
When goals and targets will be clear, achieving the goals for the Tesco can seem more
faster. It happens because path to accomplish task has already been set. Also, To set and to walk
on a path are different from each other. Once the path is set, it is easy for companies like Tesco
to walk on it and achieve goals easily.(Schmoldt and et.al, 2013). After setting the path one time,
it is easier to follow it and such that the Tesco can easily move forward toward achieving the
goals in a faster time.
2. Identify and highlight problem of decision making related to work or external organisations
It is not so easy to identify potential supplier. This is because while choosing them, Tesco
need to be careful in terms of products quality. If it is not done properly quality of goods will
affect to a great extent and it will also harmful for company image. The process to select a
supplier includes identification, measurement of performance etc. Further, Entities make
contracts with genuine suppliers. However, this procedure is time consuming and demands huge
investments (Kaufmann, Wagner and Carter, 2017.).
Different manufacturing units make large investments to purchase raw materials and also
services. Organisations get success on the basis of how they have chosen their suppliers.
Furthermore, making good relationships with suppliers is also an important factor in order to get
prominent business growth. The purchase manager of firms has to make decisions on the basis of
changes in exchange rates, inflation etc. in addition, the customer needs also changed by the
time. So it is necessary to fulfil those requirements. In order to do so enterprises rely upon
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products that are outsourcing and complex. Purchase manager has to play crucial role as he is
needed to make evaluations to search best valued products. This procedure is very hard and
lengthy. So to make is easier, manager can discuss it with experts in prior to make any decision.
These experts could be technical, operational or legal.
As in case of Tesco, its image has been damaged as it does have good relationship with
its suppliers. Tesco has complained that they have been poor treated by the company. Legal
authority that has been associated with retail industry has given notice to Tesco . After that also
the enterprise was not able to improve its performance that has great effect on the reputation as
well as sustainability of firm.
The issues related to goods and services can include material shortage. The cited firm
may find it difficult to balance demand and supply. This may lead to any short term losses for
company. It also affects schedule of production which may further arise problems in terms of late
delivery of goods. Cited firm will then find it difficult to manage both demand and supply
because of the late arrival of products in enterprise. Suppliers may not have concerned to meet
people's requirement to provide high quality goods. Also, they may not concerned about
customer's health so he can provide less quality products which may further increase in problems
like demand of goods. These problems may negatively impact company's growth and affect its
brand image very badly because it is essential to meet standards of customer's expectations
(Andriof, Waddock, Husted and Rahman, 2017). Due to low quality and defective stuff buyers
may reject the choice to buy products from cited company. Which will greatly influence entity's
market share.
Further, there are some environmental issues due to which many problems occur. Among
them, delay in supply is a huge issue. This may lead to late production of goods by
manufacturers. It can affect profitability of company and through it defective products can reach
to consumers. However, environmental problem can be considered as uncontrollable. This affect
food prices to a great extent. Due to which profitability of any company can be decreased as
compared to before. The quality issue from buyers can arise because of supplier's selection of
low quality material to produce goods. This affects consumers health badly and it may cause
severe disease generated by consuming contaminated or foods that are not fresh. This can hugely
impact organisation and customer relation. Also, it will not good for buyers trust on company.
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This further lessen its permanent customers and prevent others to purchase any item from cited
firm. That eventually will down firm's market reputation and its profits
Enterprises may face issues regarding complaints of buyers related to unhygienic or
defective goods. It tends to put company in legal troubles. As consumers may file report against
bad quality goods of firm. It can badly affect company's image among its buyers and they will
less likely to buy stuff from entity. Additionally, this can ruin supplier and entity relations as
well (Mohamad, Ibrahim, Sukarma and Salleh, 2017)
Companies find it hard to manage good quality of their stuff due to using low quality row
materials by suppliers.
Suppliers are the people who can support to a firm to increase its performance. So they
should supply high quality raw materials and manufactured stuff to firms. Many enterprises are
there which run many schemes to attract more buyers. If suppliers fail to provide good quality
products then it is harmful for cited firm (Frysak, Bernroider and Maier, 2017).
Over spending is the another problem due to which companies may face financial crises
in the future. Also, it can prove to be negative for firm sustainability. When entities do not focus
on eliminating such issues it would be problem for them in long run. Due to it, cash flow will not
be balanced properly and lead firm to great problems related to lack of cash. This generally
occurs because of poor coordination and communication.
Impulse buying, decisions that have been taken emotionally or depending upon suppliers
can raise of lot of problems for enterprises. It leads to various issues like procurement of raw
materials. Also, organisations should carefully select their suppliers because they may cause
higher costs which will further decrease revenues. It can greatly influence organisation's overall
performance and people will get low quality products because of shortage of funds. Hence
company will not able to invest in high quality goods and therefore customer satisfaction cannot
be achieved. It can minimise sustainability of the firm and consumer retention.
Due to late supply, entities start to purchase goods in a rush. Which may tend to increase
chances of high charges in damaged products, freight and also transportation. These problems
occur because of human mistakes.
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The enterprises can deal with issues like price negotiation of raw materials. It generally
happens due to poor skills to select right supplier. This can influence bargaining power of cited
firm. Further, it may lead to decrease company's competitive strength. The firms can fail to get
various favours from their suppliers that is needed in critical time. It will lessen the power of
organisation in terms of generating more revenues and retaining its marketing position (Qin, Liu
and Pedrycz, 2017).
It is required by manager in Cited venture to develop effective policies as well as
strategies in order to develop strong relationship with suppliers. As this strategy will support firm
in getting continuous supply of raw material. It will also help organisation in maintaining quality
of product or services. TEsco should focus on building integrated IT structures that Extends
Deep Into Your Supply Chain. These solutions are often implemented to solve a set of problems
without considering that longer-term strategic vision of a seamlessly integrated set of business
solutions. Companies are now aware that they must integrate and collaborate with suppliers to
remain competitive. Manager in Tesco can also make use of technology such as software for
checking the quality of product or services that has been supplied by supplier. As This technique
will help manager in making suitable decision related to selection of supplier. It is required by
management team to be more concision when selecting the supplier. They should form
contractual relationship with those suppliers who have ability to cater the ned of organisation.
Coordination with supplier is another factor that will support enterprise in maintaining the
quality of goods or services.
3. Application of SMART model for finding efficient suppliers
On the basis of an additive model, a technique has been used which is called as the simple
multi attribute rating technique. In this the evaluation of final value is being analysed. The model
can be further evaluated in different stages which has the investigation about all the decisions,
issues and stages and it also helps in providing a sort of guarantee about the quality and standard
regarding the products and services. It is divided into various stages and the first most stage is
investigating about efficient suppliers that can even help in providing the guarantee of the
products and suppliers. Some people prefer quantity while some prefer quality. It depends on the
people whether they prefer quality or quantity.
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Tesco can search for an efficient supplier. In investigating the perfect supplier, they can
evaluate some factors before doing so such as they can check the history of the suppliers because
by that they can evaluate how has been the supplier remained in past years and how many
achievements they have. In the second stage, identification of issues take place in which Tesco
can have tests on a regular basis that whether there are some faults or not so that if there are
some present, Tesco can involve ways of altering it. The next stage is to check for alternate
solutions. It is important as well because if one option or operation fails, in that case, some
alternative option can be used. If Tesco will keep plenty of alternate options with them, it will
help in making use of them at the time when some option has been failed. At the end analysing
results is also important so that they can evaluate whether everything is going normal or not.
Tesco can also make use of the SMART objectives because by means of this, Tesco can be able
to find efficient and skilled suppliers so that it can help the company in achieving all the targets
and goals at a much faster rate.
There are some benefits as well as limitations of applying these SMART objectives and these are
discussed as under :
Pros
The SMART Model has a similarity feature with the model of CBA. The final value is
being analysed as the weighed value of the output. The relationship between the CBA and
SMART model is strong enough as it helps in identifying raw weights and other necessary
factors. There are some impact scores as well that can be considered as quantified but cannot be
evaluated as normalised. Thus, it can prove very helpful feature for Tesco.
Cons
There is a presence of alternatives in the screening phase, so there can be the possibility
of the failures as well for Tesco. But there are some factors such as if the supplier turns to be
cheating the firm and runs along with a huge amount of supply of products, then it can result
negative for the company, thus decreasing the achievements and the objectives as well.
Step 1: Identify decision makers
Tesco is the multinational supermarket retail firm, it has strong supply chain system. The
main issue faces by cited firm in selection of correct supplier. For resolution of the problem
model process is being followed and on the bases of this solution is made.
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Step 2: Alternative course of action
Company can make a list of several suppliers those which are available to the business.
All these suppliers will be compared by the entity on the bases of their quality, cost of raw
material, capabilities, reliabilities etc. On the bases of these parameters final decision will be
made.
Step 3: Attributes for decision making
Quality, reliability, geographical location, capability and financial condition are main
attributes for decision making.
Step 4: Assigning value to each attribute
Alternatives
Weights
Suppliers
A
Supplier
B
Supplier
C
Supplier
D
Supplier
E
Attributes
Quality organization 30.14 60 45 55 65 82
Reliability 25.75 45 55 85 75 55
Geographical condition 20.25 85 40 44 75 65
Capability 15 95 89 75 35 42
Financial condition 8.7 55 80 85 50 43
Total 99.84 340 309 344 300 287
Aggregate
Aggregat
e 65.919 56.1355 66.0195 63.691 62.0808
Quality organization 1808.4 1356.3 1657.7 1959.1 2471.48
Reliability 1158.75 1416.25 2188.75 1931.25 1416.25
Geographical condition 1721.25 810 891 1518.75 1316.25
Capability 1425 1335 1125 525 630
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Financial condition 478.5 696 739.5 435 374.1
SUM 6591.9 5613.55 6601.95 6369.1 6208.08
Aggregat
e 65.919 56.1355 66.0195 63.691 62.0808
Step 5: determining weight of each attribute
Weights
Quality organization 75 0.3014 30.14
Reliability 82 0.2575 25.75
Geographical condition 50 0.2025 20.25
Capability 45 0.15 15
Financial condition 35 0.087 8.7
Total 287 99.84
Step 6: Calculation of weight average of value
Alternatives
Weights
Suppliers
A
Supplier
B
Supplier
C
Supplier
D
Supplier
E
Attributes
Quality organization 30.14 60 45 55 65 82
Reliability 25.75 45 55 85 75 55
Geographical condition 20.25 85 40 44 75 65
Capability 15 95 89 75 35 42
Financial condition 8.7 55 80 85 50 43
Total 99.84 340 309 344 300 287
Aggregate Aggregat 65.919 56.1355 66.0195 63.691 62.0808
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e
Weights Suppliers A Weight*values
Quality organization 30.14 60 1808.4
Reliability 25.75 45 1158.75
Geographical condition 20.25 85 1721.25
Capability 15 95 1425
Financial condition 8.7 55 478.5
6591.9
Weights Suppliers B Weight*values
Quality organization 30.14 45 1356.3
Reliability 25.75 55 1416.25
Geographical condition 20.25 40 810
Capability 15 89 1335
Financial condition 8.7 80 696
5613.55
Weights Suppliers C Weight*values
Quality organization 30.14 55 1657.7
Reliability 25.75 85 2188.75
Geographical condition 20.25 44 891
Capability 15 75 1125
Financial condition 8.7 85 739.5
6601.95
Weights Suppliers D Weight*values
Quality organization 30.14 65 1959.1
Reliability 25.75 75 1931.25
Geographical condition 20.25 75 1518.75
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Capability 15 35 525
Financial condition 8.7 50 435
6369.1
Weights Suppliers E Weight*values
Quality organization 30.14 82 2471.48
Reliability 25.75 55 1416.25
Geographical condition 20.25 65 1316.25
Capability 15 42 630
Financial condition 8.7 43 374.1
6208.08
Step 7: Provisional decision
C and A needs to be selected as best supplier by the Tesco.
Step 8: Sensitivity analyses
Weights
Suppliers
A
Supplier
B
Supplier
C
Supplier
D
Supplier
E
Quality organization 100 60 45 55 65 82
Reliability 0 45 55 85 75 55
Geographical condition 0 85 40 44 75 65
Capability 0 95 89 75 35 42
Financial condition 0 55 80 85 50 43
Weights
Suppliers
A
Supplier
B
Supplier
C
Supplier
D
Supplier
E
Quality organization 0 60 45 55 65 82
Reliability 100 45 55 85 75 55
Geographical condition 0 85 40 44 75 65
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Capability 0 95 89 75 35 42
Financial condition 0 55 80 85 50 43
4. Strength and Limitations of the analysis
There are some strengths as well as limitations of the procedure and can be well analysed
using the SWOT model. Various aspects of it are discussed as under :
Strengths
The most common factor that can prove strengthener enough is that it can help in
providing enormous ways for finding efficient suppliers so that the company can reach to a final
conclusion about it and can have an efficient supplier. The supplier should be efficient enough
that they can help Tesco in achieving all the targets and goals in a shorter period of time. Also, it
can prove beneficial for the supplier as well because when the company will be happy with the
outcomes, there may be the possibility that the company can provide some benefits to the
suppliers
Weakness
A weak factor that can be considered here is that if in case the chosen supplier fails to
complete their role during some important deal, then it can result negative enough on the
company and its popularity. So, in case of such situation, the company might can use alternative
solutions so that they can even able to make the image of the company safe enough.
Opportunities
AS the bargaining power is low, there can be avrious opportunities that can stay available
for Tesco to find the suppliers. Also, the company can include various new factors such as taking
feedbacks from their customers so that they can make modifications in areas that are not liked by
the customers. So, these can be considered as various opportunities that can be involved by the
company in order to achieve the targets and goals.
Threats
A very common threat that can occur is that the company relies on the supplier to a huge
extent. So, if in case the supplier cheats the company in any operation, it can act as a very big
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threat for the company. Also, it can make huge loss as well in the company. For this, the
company can ensure the factors before only that they can take if something this happens. Then, it
can prove quite helpful for the company in achieving the targets and goals.
Strength Weakness
 SMART analyses is the beneficial tool
that supports in gaining reliable results.
 It supports in making weight
calculation related to attributes thus,
correct decision can be made by the
firm.
 It is best tool through which
comparison between various
alternatives can be made thus, it is
helpful in applying the model at border
level.
 It takes long tome in analyses of data.
 Evaluation of alternative options can be
complex task for the evaluator.
 This SMART tool is inappropriate in
resolving specific issues of business
unit.
CONCLUSION
It can be concluded from the report that it can be a tough job for Tesco to find efficient
and appropriate suppliers but with the help of SMART objectives, the company can investigate
about various ways. Various operations of a company somehow relies on the supplier, so it is
very important to choose the supplier carefully. So, this can help the company in achieving all
the targets and goals in a much faster time.
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REFERENCES
Books and Journal
Andriof, J., Waddock, S., Husted, B. and Rahman, S.S., 2017. Unfolding stakeholder thinking:
theory, responsibility and engagement. Routledge.
Fenton‐O'Creevy, M. and et.al., 2011. Thinking, feeling and deciding: The influence of
emotions on the decision making and performance of traders. Journal of Organizational
Behavior. 32(8). pp.1044-1061.
Frysak, J., Bernroider, E.W. and Maier, K., 2017. An effort feedback perspective on persuasive
decision aids for multi-attribute decision-making. International Journal of Information
Technology & Decision Making. 16. pp.161-181.
Kaufmann, L., Wagner, C.M. and Carter, C.R., 2017. Individual modes and patterns of rational
and intuitive decision-making by purchasing managers. Journal of Purchasing and
Supply Management. 23(2). pp.82-93.
Mohamad, E.B., Ibrahim, M.A.B., Sukarma, L., and Salleh, M.R.B., 2017. Improved decision
making in lean manufacturing using simulation- based approach. International
Journal of Agile Systems and Management, 10(1), pp.34- 48.
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