Tesco is one of the biggest grocery and general merchandise retailer in the world, operating around 6,351 stores across Asia, Europe and North America. Tesco’s core UK business is very significant within the group, with around 3,054 stores and over 300,000 employees, operating under four banners of Express, Extra, Metro and Superstore. Tesco as well has the widest range of any food retailer in the UK including the leading own-label range. Also, the company offers a home-shopping service through ‘Tesco.com’ website. (Tesco PLC, 2012)
This report will provide an insight into Tesco’s marketing strategy with its real marketing practices and activities, also recommendations will be made in regards to the marketing based strategies. CRITICAL FACTORS OF SUCCESS
Tesco’s annual revenue has reached £42,248 in the financial year 2011/2012. Three factors which we believe that have contributed to the group’s success are identified in this section.
VALUE AND PRICE
The group aim to provide better-quality goods to customers with lower cost comparing to other retailers. Porter theorised that the more products that become standardised or undifferentiated, the lower the switching cost, and hence more power is yielded to buyers. (M. Porter, 1980) As Tesco mainly sells necessities rather than luxuries, price will greatly affect customers buying decision. Also, Tesco’s famous loyalty card, Clubcard, has remained the most...
...London, Tesco today is the largest retailer in the UK with over £59 billion sales in 2008. In this dynamic environment, Tesco has managed to stay ahead of its competition through focus on people, both customers and employees. However, in today’s rapidly changing globalised environment, anything could happen. Companies today need to always innovate and reinvent themselves in order to maintain their competitive advantage. The macro environment that Tesco operates in provides both opportunities and threats. Therefore, for sustainable growth and development, Tesco needs to have proper strategic direction that addresses these macro environmental challenges.
Though the company has extensive operations worldwide, Tesco’s largest market is still the UK. This report analyses the macro environment that Tesco UK operates in using the PESTEL framework and its interconnectedness to external opportunities and threats. Competitiveness of Tesco UK is analyzed by applying Michael Porter’s five forces model. The paper is further expanded by linking both the PESTEL framework and the 5 forces to understand Tesco’s dynamic macro environment. A stakeholder analysis is carried out in order to understand the expectation of Tesco’s stakeholders. Strategic capabilities of Tesco are explained through the identification of core competencies of the firm. Justification of these competencies explains how...
Leading UK supermarket group, Tesco, can serve millions of Internet customers with home deliveries from its of its stores. In doing this it is not alone – its main rivals, ASDA and Sainsbury’s, also offer home deliveries driven by orders over the Internet. Tesco also runs an on-line bookshop. These are recent developments which have been facilitated by the power and potential of information technology (IT). Price cutting, an important competitive strategy in retailing, does not truly distinguish one food retailer from another, as price cuts can be followed by rivals, although creative advertising can suggest a price differential when one really does not exist. Supply-chain cost savings, also facilitated by IT, however, can be an important source of advantage and improved profitability. This case looks at how Tesco exploited IT in the early 1990s to drive competitive advantage. Since the case was written in 1996 events have moved on, but the basic strategic issues raised here remain pertinent and relevant. Tesco, for example, now shares live sales information with its suppliers and, by embracing IT themselves, more and more suppliers are linked electronically to Tesco. Again using the power of the Internet, e-markets allow any retailer to post up ‘confidential’ information but limit access to it through password-driven ‘firewalls’. Going beyond the...
Tesco Gains Inventory Visibility with ADT RFID Solution
* Reduce out-of-stock items at store level
* Shrink reduction
* Simplify supply chain
* Enhance customer satisfaction
* Tesco tasked ADT with developing a RFID solution, capable of increasing supply chain efficiency
* ADT’s RFID technology helps Tesco track goods through the supply chain
* 4,000 readers and 16,000 antennas protect Tesco’s network of stores and warehouses in the UK
UK based Tesco is the country’s number onesupermarket chain and a leading international retailer. It has a variety ofstore formats such as Extra, Superstore, Metro, Express and Tesco.com, amongthe world’s largest online supermarkets. The retail giant wanted to simplifyits supply chain and reduce stock shrinkage to remain competitive and tocontinue offering its customers top-quality service and varied product choices.
Tesco asked ADT to develop a radio frequencyidentification (RFID) solution for receiving, counting and transporting theright quantity of each product at the right time to the right store. ADTimplemented a quick and unobtrusive solution that helps Tesco monitor thedelivery of high-value goods through the supply chain. Installation included4,000 readers and 16,000 antennas throughout Tesco stores and...
Compare and contrast the concepts of marketing orientation, production orientation and sales orientation. Which one of these philosophies do you feel Tesco utilise?
The marketing orientation evolved from the earlier production orientation and sales orientation, and continuously extend to the relationship marketing, ultimate purpose for all are earn profits through deliver products or services to customer (Kotler & Keller,2008).
Since 1920s, production orientation was the first evolutionary of marketing development where apply with the concept of mass production to lower its cost price, mostly focused on product quantity rather than quality and assumed that customer will buy it if cheaply enough (Pearson,1993). It happened in the seller’s market when demand exceeded supply. During 1930s~1950s, sales orientation under the transition period of product supply exceeded demand, it was the period which mainly focused on sales instead of offering what customer wants (Kotler,1999). Customer will buy your product if you sell hard enough. In sales orientation, marketers produced products same as production orientation but “hard sell” and “push” activity were the method to stimulate the sales volume and target.
In 1950s, manufacturers started to realize that analyse and understand customer wants and needs both were important than pure selling, this was the marketing orientation era which began adopt with 4Ps- Product, Price, Place and...
...Tesco’s corporate aims and objectives
Tesco is one of Britain's leading food retailers, with 519 stores throughout England, Scotland and Wales. There are also 105 stores in France operated by Catteau, and 44 in Hungary operated by Global. Tesco is committed to:
Offering customers the best value for money and the most competitive prices -
Meeting the needs of customers by constantly seeking, and acting on, their opinions regarding innovation, product quality, choice, store facilities and service
Providing shareholders with progressive returns on their investment, improving profitability through investment in efficient stores and distribution depots, in productivity improvements and in new technology
Developing the talents of its people through sound management and training practices, while rewarding them fairly with equal opportunities for all
Working closely with suppliers to build long term business relationships based on strict quality and price criteria
Participating in the formulation of national food industry policies on key issues such as health, nutrition, hygiene, safety and animal welfare
Supporting the well-being of the community and the protection of the environment
Tesco's mission statement is creation of value for customers to enable them earn their lifetime loyalty. This is based on the fact that success depends on people especially the ones who shop with them and also the ones who work with them. They...
Before performing a specific SWOT analysis it is often useful to perform a SCAN (strategic creative analysis), or similar objective setting analysis. Objectives vary between companies. For instance, many companies would want to increase market share. But Tesco is under investigation by the monopolies commission, therefore they might be better concentrating on objectives like "increase sales revenue".
The following discussion provides a general overview of the strengths, weaknesses, opportunities and threats surrounding Tesco. Use it as a basis for conducting your own, specific, SWOT analysis of Tesco (or similar companies.) It is a teaching resource for students or managers that can be used to provide inspiration for any specific SWOT analysis.
Threats to Tesco
First, let's take the T in SWOT and look at possible threats to Tesco. Examples of possible financial threats are fluctuations in the stock market and tax increases. Remember, if the objectives of Tesco are not threatened by these factors then they are not threats. But, as most companies would be worried about a tax increase, a general, continuing objective might be to decrease the tax burden. Other objectives may take precedence, and make the tax threat insignificant (for a period).
The biggest, most obvious, threat is:
* Online and offline innovation by other supermarkets aimed directly at...