Tesco PLC and the UK Retail Industry: An Inquiry-Based Learning Report

Desklib provides solved assignments and past papers to help students succeed.

Inquiry Based Learning
(A Study Based on TESCO PLC and UK Retail
Industry)
Student Name:
Student ID:
Name of the University:
Module Code:
Author Note:

INQUIRY BASED LEARNING
Table of Contents
1. Introduction............................................................................................................................2
2. Current Trends in Retail Industry..........................................................................................3
3. Analysis of the organization along with business model.......................................................4
3.1 Tesco’s Business model...................................................................................................5
4. Recommendations..................................................................................................................6
Conclusion..................................................................................................................................8
References..................................................................................................................................9
1

INQUIRY BASED LEARNING
1. Introduction
Tesco Plc is the multinational groceries or merchandise retailer. In addition to this, the main
headquarter of the company is situated in United Kingdom. In 1919, the company was
established. In more than seven countries, the company has its shops (Aguirregabiria and
Suzuki, 2016). This project will discuss about the current trends which are used by the Retail
Industries. Additionally, this project will briefly explain about the business models which are
used by Tesco.
Figure 1: Logo of Tesco
(Source: Aguirregabiria and Suzuki, 2016)
2

INQUIRY BASED LEARNING
2. Current Trends in Retail Industry
The current trends of the Retail Industry are as given below:
Expand into some Emerging Markets or create some New Channels: The main ability of
the retail industries is to tap into certain new channels and markets. With the assistance of the
Technology, the retail companies are tapping into emerging and international markets. Most
of the retailers are not limited to an individual market and location (Ridge et al. 2015).
Besides these, these retailers are now able to enlarge their operations in different countries by
following the appropriate digital strategy. Based on estimation, it has been expected that
more than five billion individuals will easily come online by the year 2020. By using a digital
strategy, the retail companies can tap into emerging or new markets for increasing their
consumer reach. For example, the company “Alibaba Group” has planned for expanding its
worldwide reach to Japan, Europe, Dubai and Australia.
Embrace the DMW (Digital Mobile Wallet): The retail industries are now using the mobiles
for their payment purpose. Moreover, the use of the mobile payment method is now
considered as the common trend of the retail industry. Various retails companies are now
using this particular trend as well as by using the APIs, these companies are offering picture
perfect mobile payments (Xu, 2018). The survey has been conducted in the Boston Retail
Partners in which it has been found that the company is using the method of mobile payment
and after that survey the merchants has accepted that the mobile payment method is
increasing nowadays. Most of the retail companies in United Kingdom have accepted that
they are using the Apple Pay. However, 23% of the UK retailers have accepted that they will
use this particular payment method within twelve months. However, after the launch of the
Digital Mobile Wallet, it has been found that the consumer demands are increasing towards
the effective payment methods. The survey conducted in the UK retail companies has
indicated that the companies have accepted PayPal (35%), Android Pay (25%) and
MasterCard PayPass (24%). Only 12% of the retail companies have exposed that they are not
having any plan in implementing the mobile payments (Bilińska-Reformat et al. 2019).
Provide the Personalized Retail Experiences: The personalized shopping experience is now
becoming the famous Retail Company Trend for the consumers. In the world of retail, the
personalization involves the retailers which are giving the customers suggestions on the basis
of their previous searches, order history, location and taste. With the help of the simple
3

INQUIRY BASED LEARNING
services, the companies are now creating personalized experiences. Chat- bots are included in
this which has increased the customer interaction and engagement as well as text messages
are also includes in this which offers updates on tele or online based communications, order
or other services (Sahay and Sahay, 2017). Additionally, the personalization as the famous
retail company trend has covered the application of innovative and more advanced
technologies like AI or Artificial Intelligence. Thus, the retail companies, which wanted to
offer personalized shopping experience to their customer, should invest in certain advanced
technologies such as Artificial Intelligence as well as they can also adopt personalization
tactics within the organization.
Invest in the strategies of Omnichannel Retail: Investment in the strategies of Omnichannel
Retail is considered as most essential retail industry trend. These strategies have provided
innovative ideas to the retail companies about mobile shopping. The companies are now
focusing more on mobile which has become the strategic or tactical move for the retail
companies. It allows the companies to take the advantages of the purchasing devices or
supplement the usage of these devices with other devices, channels and systems (Raju and
Singh, 2018). Due to this reason, the retail companies are now tapping towards mobile
shopping.
3. Analysis of the organization along with business model
The main vision of Tesco is to provide best services to the customers as well as they also
wanted to earn maximum profit in the global market. Moreover, the main elements are
involved in the vision of the company including needed and wanted around the globe,
inspiring, earning loyalty and trust from communities, their colleagues and customers,
modern and innovative ideas and a prospering business or full of chances. In addition to this,
the management of Tesco understand the main role of its strategies, vision and mission for
monitoring or evaluating its performance. The main purpose mission of the company is to
generate the value for consumers so that they can earn their loyalty. Apart from this, the
company provide the good range of services and products from clothing to travel insurance,
household products and groceries (Chapagain and Ahokangas, 2015). The business of the
company is based on three main pillars which include Channels, Product and Customers.
Moreover, the company exists for serving their customers as well as the business model
which is used by Tesco has consumers at its core. They listen the needs and wants of their
customers or act upon those things which is essential for their customers. Additionally, the
4

INQUIRY BASED LEARNING
company also deliver the appropriate business trip which includes availability, range, service
and price.
For bringing the best goods to the customers, Tesco is working through various channels
range – from small scale ships to certain large shops or through their increasing online
business. For enhancing their offer, the company is investing more in making their channels
more convenient and efficient for their customers. Apart from this, the product team of the
company has developed the offer for their customers. The company is working with their
product team and at present the company is focusing more on mutually beneficial, transparent
and fair relationships with the suppliers. Additionally, the product team of the company is
working with their suppliers for providing the best quality products which anticipate and
meet the needs of the customers. The company is focusing more on improving the company
for customers (Remane et al. 2017). The company is reinvesting some of its savings for
improving the trip of shopping. Besides these, the organization is focusing more on
reinvestment because they wanted to serve better services to their customers.
3.1 Tesco’s Business model
 Dynamical model: By using the Dynamical business model, Tesco had succeeded in
expanding their business throughout the UK after that they conquer the whole
European and European area. Moreover, the organization has also expanded the
boundaries of their business in both Scotland and Ireland. Besides these, the company
has bought some stores from their weaker competitors. However, in the United
Kingdom, the company is successful in buying the small and middle-sized grocery
stores which in result they have gained number of new grocery stores throughout the
country.
 Tesco’s dotcom business model: In the year 1996, Tesco has introduced its dotcom
business model as well as the dotcom operations of Tesco are expanded throughout
the United Kingdom. The company has exported the strategy of dotcom to other
different countries like South Korea, Thailand, Czech Republic and Poland. More
importantly, the company is succeeded in operating the dotcom grocery business
(Mussa and Zhi Zhang, 2016). In addition to this, for supporting their grocery
business the company has launched its dotcom model. With the help of this particular
model, the company has introduced their new products in the urban markets like
London. In 2006, the company has launched its dotcom depot in London and
Croydon. This particular dotcom facility was specially designed with some manual
5

INQUIRY BASED LEARNING
processes. In the year 2008, the company launched its second dotcom depot in the
country Aylesford and after that in 2010; the company introduced its third dotcom
depot for offering best services and products to their customers (Demirgüneş, 2016).
These dotcom depots ensure efficient inbound transportations and procurement
operations.
4. Recommendations
The various recommendations that can be made for development of the organization have
been listed as follows:
 The experience of the personalized shopping is one became one of the famous retail
industry trends. With the help of the personalization, Tesco Plc can give the best
suggestions to their customers and these suggestions should be based on their order
history, previous searches, taste and location.
 The company can use simple services for creating its personalized experience.
 Additionally, text messages and chat- bots are included in the process of
personalization. If the company use Chat – bots, they can easily increase their
customer interaction or engagement as well as by using the text messages. Further,
Tesco can easily offer updates on tele and online based communications, order as well
as other services.
 With the help of advanced technologies like Artificial Intelligence, the company can
enhance its business functions.
 They can also adopt the tactics of personalization for maximizing profits in the
business.
 It will effectively work for Tesco if they tap into new channels or markets. By using
an appropriate the company can easily tap into emerging or international markets.
 The company can use digital strategy for expanding their business operations in
various countries (Konishi and Nishiyama, 2016).
 If the company wanted to increase their consumer reach than it will become strategic
move if they keep their step towards emerging or new markets.
 It would be better if Tesco Plc invest more in the strategies of Omnichannel Retail.
With the help of these strategies, the company will know about the mobile shopping.
In addition to this, through mobile shopping, the company can enhance their business.
6

INQUIRY BASED LEARNING
 Apart from this, Tesco can attain success in the global market if they combine
different services or products.
 The company can take the advantages of those strategies which are based on cross
merchandise or impulse certain sale opportunities.
 The management of Tesco can use the techniques of lighting or creative displays for
attracting customers.
 By making the good connection with the customers, the company can increase the
sales of their products and services. The more important thing that the company
should listen to their customers so that they can understand their wants and needs.
 For attracting new customers, the company can also provide value- added products
and services.
 The organization can use the tool of social media for attracting huge number of
customers.
 For increasing sales, the company can engage and attract customers by using digital
signage, pop-up ads and images.
 If the company organize loyalty programs than it will become an effective tool for
them because through these programs the company will get to know about the
customer preferences as well as loyalty will also increase within the organization.
 The company can use their loyalty programs for gaining intelligence around
consumer’s actions. Additionally, they can use the data for personalizing and
optimizing communications, offers and products.
 Apart from this, the company can offer surprise rewards for making the customers
happier (Lehto, 2019). Moreover, if the company wanted to make their customers
happy than they can send surprise deals and coupons to the customers.
 It would be better if the company avoid repeated promotions like the offer are valid
up to Thursday.
7

INQUIRY BASED LEARNING
Conclusion
Based on this project, it could be understood that the main vision of Tesco is to serve best and
appropriate services to their customers. The main motive of the company is to earn maximum
profit in the global market. The business of Tesco is based on three main pillars which
include Channels, Product and Customers. Currently, the company is using dotcom and
dynamical business models for enhancing their business. The trends which are used by the
Retail Industries are Embrace the DMW (Digital Mobile Wallet) , Provide the Personalized
Retail Experiences , Invest in the strategies of Omnichannel Retail and Expand into some
Emerging Markets or create some New Channels.
8

INQUIRY BASED LEARNING
References
Aguirregabiria, V., and Suzuki, J. (2016). Empirical games of market entry and spatial
competition in retail industries. Handbook on the Economics of Retailing and
Distribution, 201, 201-232.
Bilińska-Reformat, K., Kucharska, B., Twardzik, M. and Dolega, L., 2019. Sustainable
development concept and creation of innovative business models by retail
chains. International Journal of Retail & Distribution Management, 47(1), pp.2-18.
Chapagain, B. and Ahokangas, P., 2015. RETAIL BUSINESS MODEL
TRANSFORMATION IN MULTICHANNEL ENVIRONMENT.
Demirgüneş, K., 2016. the effect of liquidity on financial performance: evidence from
Turkish Retail industry. International Journal of Economics and Finance, 8(4).
Konishi, Y. and Nishiyama, Y., 2016. Efficiency of the Retail Industry: Case of inelastic
supply functions. Research Institute of Economy, Trade and Industry (RIETI).
Lehto, A., 2019. The Role of Organizational Culture in Transformation-Two case studies in
the context of retail and construction industries.
Mussa, H.I. and Zhi Zhang, W., 2016. The Secret behind Strategic Information Management
over the Success of Agro-Processing and Retail Industries-Case Study Wal-Mart. J Glob
Econ, 4(204), p.2.
Raju, G.S. and Singh, S.P., 2018. BUSINESS MODEL PRACTICES IN INDIAN RETAIL
SECTOR: A CONCEPTUAL STUDY. Indian Journal of Commerce and Management
Studies, 9(1), pp.24-28.
Remane, G., Hanelt, A., Tesch, J.F. and Kolbe, L.M., 2017. The business model pattern
database—a tool for systematic business model innovation. International Journal of
Innovation Management, 21(01), p.1750004.
Ridge, M., Johnston, K.A. and O'Donovan, B., 2015. The use of big data analytics in the
retail industries in South Africa. African Journal of Business Management, 9(19), pp.688-
703.
9

INQUIRY BASED LEARNING
Sahay, A. and Sahay, A., 2017. Looking at Business Model Innovation and Innovation
Ecosystems and How They Are Evolving. In Revolution of Innovation Management (pp. 105-
143). Palgrave Macmillan, London.
Xu, D., 2018, March. The Development Trend and Strategy Research on the Retail Industry
from the Perspective of Retail Industry Transformation. In 2nd International Conference on
Culture, Education and Economic Development of Modern Society (ICCESE 2018). Atlantis
Press.
10