Tesco vision values and business strategies

TESCO BUSINESS STRATEGY

Case Study: Tesco | Vision, values and business strategies This case study examines Tesco strategies, the reasons behind each component and how vision, aims and cultural value inter-relate to make the strategies successful. Tesco was founded in 1919 by Jack Cohen from a market stall in London’s East End. Today it is one of the largest retailers in the world. Tesco’s core business is retailing in the UK, and in several foreign countries. The UK generates 60% of all sales and profits. Tesco has the widest range of food of any retailer in the UK. Its two main food brands are its Finest and Everyday Value ranges, each sell over £1 billion per year. The position of Tesco as a leading global brand is clearly illustrated by its expansion of operations into 12 countries including China, Czech Republic, India, Malaysia, Ireland, Hungary and Poland. In 2013 Tesco employed in excess of 530,000 colleagues. This level of success does not happen by chance. Tesco’s leaders have always set high standards and clear goals, never settling for anything less than the best. Tesco’s ‘Every Little Helps’ philosophy puts customers, communities and employees at the heart of everything it does. It prides itself on providing a great shopping experience for every customer it serves, whether in stores, online or in its many other service provisions. Tesco’s core values include a commitment to using its scale for good by being a responsible retailer. In 2010, it opened the world's first zero-carbon supermarket in Ramsey, Cambridgeshire and was awarded Green Retailer of the Year at the Annual Grocer Gold Awards 2012. Tesco aims to be a zerocarbon business by 2050. Tesco’s continuing success depends on it reassessing and formulating clear business strategies. Tesco aims to improve customer loyalty and its core UK business in order to help it develop the shopping experience for its customers. It committed £1 billion to an investment programme to achievethis. Strategies to improve competitiveness were then developed. The driving forces behind these strategies are price, quality, range and innovation as well as delivering great multichannel customer service, for example, through its ‘Click & Collect’ service. Vision and Mission: Tesco enjoy long-term success through focused business strategies. They have a core vision that remains constant while the business strategies and practices continuously adapt to a changing world. In an increasingly competitive global environment, without a clear vision a business will lack direction and may not survive. Tesco has a seven part business strategy to help it achieve its vision. The vision, mission statement and goals are interrelated and state what an organisation is seeking to achieve whereas the strategies and tactics show how it will achieve them. Tesco’s core purpose (mission) is simple: ‘We make what matters better, together.’ Tesco’s management recognise the key role that its mission, vision and strategies play in its success and use a range of key performance indicators (KPIs) to monitor and evaluate its performance. These are explored in detail later in the case. Values: Tesco’s values are vital to its success. Tesco is a community-focused global business. Corporate Social Responsibility (CSR) is at the heart of its operations. This commitment is referred to as ‘Tesco in Society’. In the competitive retailing world Tesco’s success relies on its values. Strategy: The company’s values set the tone for the decision-making process. In May 2011, Tesco committed £1 billion capital and revenue investment to improve the shopping trip for customers. It set out a seven part strategy designed to achieve its goals of being highly valued by customers and enjoying strong long-term growth. Monitoring and Evaluating Performance. Tesco Executive Committee assesses the progress of largescale strategies. All of its business units have ‘stretching targets’ which are aspirational targets for certain KPIs. The performance of all business units is monitored continually and reported monthly to the board of directors. Tesco success has not come about by chance but is the result of effective leadership and management. The setting of a clear vision is central to Tesco’s success, supported by a commitment to establishing and monitoring specific objectives and devising strategies to ensure these are achieved. All aspects of the business are regularly monitored and, when necessary, plans are adapted to ensure targets are ultimately met. At the heart of all Tesco does is a commitment to being a responsible retailer. This is demonstrated through its focus on its ‘Three Big Ambitions’ and ‘The Essentials’ to show how it is using its scale for good. Every decision taken considers these areas to ensure customers, communities, suppliers and staff are treated fairly and with respect. Tesco’s values underpin all that Tesco does and, in turn, keeps customers satisfied with their shopping experience and loyal to the brand.

1

Scenario: Your position is as an Assistant Manager. You are required to write a report to your line manager outlining the process of strategic planning and the evaluation of the effectiveness of techniques used in the development of strategic plans. This is with a view to ensuring that Tesco achieves its strategic goals in the UK

1000 words

2

Scenario: Having provided your report in task one; your line manager is keen to see what you propose as a new strategy. Provide a report on your proposed strategy

1200 words

3

Following task two, you are required to show an understanding of different approaches (market entry, substantive growth, limited growth or retrenchment) used by Tesco to enter, grow or withdraw from a market. You are required to write a report to complete this task.

800 words

4

Scenario: Following your reports, you are required to show an understanding about the implementation of strategies for Tesco and the responsibilities of personnel who will contribute to the implementation. Show your understanding of strategy implementation.

1000 words

Learning outcomes to help guide