Delivering Success Tesco

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Management Case Study Delivering Success: How Tesco is Managing, Measuring and Maximising its Performance

For more information please visit: www.ap-institute.com

Delivering Success: How Tesco is Managing, Measuring and Maximising its Performance

API Case Study

Delivering Success: How Tesco is Managing, Measuring and Maximising its Performance By Bernard Marr

Abstract: Tesco is one of the world’s most successful companies. This case study outlines how this world-leading retailer is managing, measuring and maximising its performance. It describes the performance framework used to manage the business globally, outlines how the performance framework is being cascaded and communicated, and illustrates how Tesco is engaging its employees in performance management. In addition, it highlights Tesco’s approach to collecting the right data and its ability to turn this data into customer and business relevant decisions.

Version: 23 June 2009 Bernard Marr is the Chief Executive and Director of Research at the Advanced Performance Institute. E-mail: bernard.marr@ap-institute.com The Advanced Performance Institute (API) is a world-leading independent research and advisory organisation specialising in organisational performance. It provides expert knowledge, research, consulting and training to performance orientated companies, governments and not-for-profit organisations across the globe. For more reading material or information on how the API might be able to help your organisation please visit: www.ap-institute.com How to reference this case study: Marr, B. (2009) Delivering Success: How Tesco is Managing, Measuring and Maximising its Performance, Management Case Study, The Advanced Performance Institute (www.ap-institute.com).

© 2009 Advanced Performance Institute, BWMC Ltd. (All rights reserved) www.ap-institute.com

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Delivering Success: How Tesco is Managing, Measuring and Maximising its Performance

API Case Study

Delivering Success: How Tesco is Managing, Measuring and Maximising its Performance Introduction Tesco has delivered impressive performance. Good performance and business success is underpinned by the right strategic objectives, which have to be communicated to all staff. However, even more critical are: 1. Making sure everyone in the company is actively engaged in trying to improve company performance – all the time. 2. Having the data and analytical skills to test ideas and turn insight into customer and business relevant actions. This case study outlines Tesco’s performance management journey, which so far has been an extremely successful one. About Tesco Tesco is an impressive company. The British-based international grocery and general merchandising retail group operates 4331 stores across 14 countries, employs 470,000 people, and in 2009 generated £59.4bn in sales. Tesco is the largest private sector employer in the United Kingdom, and is currently the third largest global retailer based on revenue and the second largest based on profit. Over the years the company has been transformed from a ‘pile it high, sell it cheap’ market trader to a world-leading retail group. While it originally specialised in food and drink, it now offers a wide range of products including clothing and consumer electronics and offers an increasing range of services such as telecoms, health, Internet, © 2009 Advanced Performance Institute, BWMC Ltd. (All rights reserved) www.ap-institute.com Page 3

insurance and financial services. In addition to its stores, Tesco has created a very successful online supermarket offering among other things groceries, home retailing, and music downloads. Even amidst the current global recession Tesco is performing extremely well with a 15.1% growth in annual sales and a 5.5% growth in profits. Drivers of Success What is leading to Tesco’s global success is that it gives customers what they want. Sir Terry Leahy, Tesco’s Chief Executive, puts it in simple terms when he...
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