Case Study
Tesco – Business Transformation Case Study
Who would have thought that the food retailer famous for the slogan “Pile It
High, Sell It Cheap” launched by Jack Cohen on an East End market stall in
1919, would have grown into one of the largest non-food retailers in Europe by 2007?
What was it about Tesco that enabled it to move from being the poor relation to J. Sainsbury in the 1970s and 1980s to become the largest UK food retailer in the first decade of the 21st century?
What was it that happened inside this company that turned it around and has had such a lasting effect on its fortunes?
The answer to all three of these questions is simple:
For two decades from the mid 1980s, until the new Millennium turned, the company underwent one of the largest and most comprehensive
Business Transformation exercises of any UK retailer.
Business Transformation Introduction - Page 2 - Tesco case study
Page 1 of 6
Version 1.0
Let’s remember how it used to be
It is very easy to look at the mighty Tesco now and believe that the company has always been a successful, premium brand retailer with a seamless supply chain, minimal out of stocks, trading 24-7, with an exemplary customer service. But in the early 1980s things were very different:
•
Tesco’s stores portfolio was made up of predominantly older, high street locations, many in need of repair or upgrade.
•
Stock control was a highly manual and inefficient process, resulting in large numbers of out of stocks and poor buying regimes.
•
Stock buying was highly localised, with little corporate control.
•
Staff attitude and service to customers could be best described as
‘patchy’.
•
Management structures in head office central functions were inwardly facing and detached from the end customers and the stores.
•
Checkouts were manual, with price lists being manually updated.
•
Customer product pricing was manual, time-consuming and inherently inefficient. •
The supply chain from supplier to customer in the store was
Who would have thought that the food retailer famous for the slogan “Pile It
High, Sell It Cheap” launched by Jack Cohen on an East End market stall in
1919, would have grown into one of the largest non-food retailers in Europe by 2007?
What was it about Tesco that enabled it to move from being the poor relation to J. Sainsbury in the 1970s and 1980s to become the largest UK food retailer in the first decade of the 21st century?
What was it that happened inside this company that turned it around and has had such a lasting effect on its fortunes?
The answer to all three of these questions is simple:
For two decades from the mid 1980s, until the new Millennium turned, the company underwent one of the largest and most comprehensive
Business Transformation exercises of any UK retailer.
Business Transformation Introduction - Page 2 - Tesco case study
Page 1 of 6
Version 1.0
Let’s remember how it used to be
It is very easy to look at the mighty Tesco now and believe that the company has always been a successful, premium brand retailer with a seamless supply chain, minimal out of stocks, trading 24-7, with an exemplary customer service. But in the early 1980s things were very different:
•
Tesco’s stores portfolio was made up of predominantly older, high street locations, many in need of repair or upgrade.
•
Stock control was a highly manual and inefficient process, resulting in large numbers of out of stocks and poor buying regimes.
•
Stock buying was highly localised, with little corporate control.
•
Staff attitude and service to customers could be best described as
‘patchy’.
•
Management structures in head office central functions were inwardly facing and detached from the end customers and the stores.
•
Checkouts were manual, with price lists being manually updated.
•
Customer product pricing was manual, time-consuming and inherently inefficient. •
The supply chain from supplier to customer in the store was