Noticeable Changes at Tesco - Essay Example

? ACTIVITY- TESCOS ANALYSIS INTRODUCTION: Tesco is a British retail chain which is known as the largest retail chains in UK. It stands tall in world’s top three retail stores. Tesco mainly deals with grocery and other merchandise products. Tesco was formed by John Cohen in 1919 (Tesco). Tesco is divided into six main types which depends on the needs, wants and demands of the customers in different areas of UK (Tesco). NOTICEABLE CHANGES AT TESCO: Change is an essential part of corporate strategies. We know that change is an ongoing process. Tesco has faced many challenges in sustaining itself. It has been observed that the initial effects of changes are always negative. Tesco has undergone a huge change during last five years but these changes were more of developmental kind then the organizational ones. Tesco management has implemented many strategies to face these challenges (Tesco). CHANGES IMPLEMENTED BY TESCO: Implementation of Consumer Approach Concept Adoption of strategic HR policies Technological Change Distributional Channel Changes Consumer Behavioral Changes WHAT CAUSED THESE CHANGES? To meet the demands of the customers, stakeholders and the employees To become more competitive To follow the changing consumer behavior To gain the leadership status as the most efficient strategic leader in the retail world. To achieve financial milestone WHAT CHANGES WERE IMPLEMENTED BY TESCO AND HOW: 1- TO ACHIEVE MAXIMUM CONSUMER LOYALTY BY IMPLEMENTATING CONSUMER APPROACH CONCEPT: Tesco’s main objective was to gain maximum consumer loyalty as it is a fundamental truth that “consumer is a king.” Customer satisfaction is the key to gain success for any company in both long run and short run. It is important for a company to focus mainly on a customer’s needs and wants. Tesco focused more on approaching their customers by implementing thorough consumer approach. Tesco focused more on understanding the needs and demands of their customers in order to remain in the market and to deliver the best to their customers. As a result, this strategy would help Tesco to gain maximum consumer satisfaction and to remain in the business in long run. Implementation of this strategy not only helped Tesco to grow and expand its business, gain maximum consumer satisfaction as well as it helped Tesco to gain employee motivation by bringing new ideas in the business and implementing innovation to their business. This triggered the employees of Tesco to become more innovative in order to deliver best of consumer satisfaction to their clients. 2- ADOPTION OF EFFECTIVE STRATEGIC HR POLICIES: Tesco realized the importance of effective and efficient workforce. No doubt, employees are the basic pillars of any organization which stand as the main driving force and contribute significantly in the success of an organization. Tesco was faced with the challenge of obsolete HR policies and incapable team of employees which were unable to meet the competition in the market, challenges faced by Tesco and growing needs of the business world. Tesco implemented a thoroughly revised strategic HR policy as a change agent to meet the challenges of the business world and to sustain its position in the market. Before implementing the strategy, Tesco ensure that each employee of its company understands his role and set of responsibilities in organization. Tesco also ensured that all the employees contribute together in the success of company and to make it more dynamic in a tough competitive environment. However, Tesco was also faced with the union problem from its employees in America which the organization handled very carefully in order to minimize the gravity of the situation (David Theather). As a result, Tesco motivated its employees to become productive, motivated and innovative to attain the success objective and to meet the challenges of highly competitive global market (Steve Hammett and Ken McMeikan). The implementation of this strategy enabled the employees to understand their role and responsibilities in order to be the part of a successful organization, therefore; the employees became more skilled and positive change agents that helped Tesco to regain its position and overcome the challenges and the requirements of the business world. 3- TECHNOLOGICAL CHANGE: Due to advancement in technology, consumers are seeking for more convenience and comfort during their shopping hours and hence, they prefer retail stores those who offer them more convenience and comfort. For organizations such as Tesco, it is important to know what their customers want, demand or need. Organizations should understand the value of convenience as it attracts large number of consumers towards the business. Tesco also realized the importance of introducing advanced technology to facilitate its customers with convenience during shopping and felt the need to meet the changes of the modern business world. Technology enables organizations to gain more competitive advantage, to attract more customers and to sustain its position in the market. To facilitate its customers, Tesco introduced electronic cash desk which allows the customers to make smooth transactions without the hassle of standing in a long queues (Jen Kostner). Tesco also introduced the bar-code technology which automatically generates bills every time a customer comes with his purchases. The laser sensors detect the purchase code and the amount and hence, generate the bill (Jen Kostner). This helped customers to shop more without any hassle of long billing queues as well as this strategy helped Tesco to attract more customers. The implementation of technological change strategy helped Tesco to gain positive response from customers and it also enabled Tesco to build its strong competitive strength in the retail world. 4- DISTRIBUTION CHANNEL CHANGE STRATEGY: Distribution channels play significant role in maintaining the flow of operational activities smooth and active. Distribution channels work as strong networks between producers, distributors and consumers which allow the movement of goods from one point to another. Distribution channel plays an important role in the success of any business and empowers the entity to gain strong competitive advantage over other players in the market. As a result, organizations or business entities focus more on building a strong yet effective distribution channel to carry out their business activities. Tesco was faced with massive turbulent distribution channel which became the bone of contention between the management team and the drivers of the Tesco distribution channel network. However, due to the disputes between the two parties, Tesco realized its dependency on truck transport for the delivery of its products (Steve Hammett and Ken McMeikan). To lessen this dependency, Tesco implemented a change policy for its distribution channel network. Tesco planned to use other mode of delivery options such as rails for the delivery and supply of its goods. This strategy enabled Tesco to lower its dependency from trucks and Lorries. Tesco also used an advanced technology named as RFID which enabled Tesco to track its inventory as the truck moves. RFID tags were placed on Tesco goods which not only helped Tesco to track its inventory but also helped the company to locate for its missing items (Steve Hammett and Ken McMeikan). This strategy was not well appreciated by the truck drivers but however, Tesco convinced them by declaring this act as a part of their new strategy for distribution channels. 5- CONSUMER BEHAVIORAL CHANGES: Tesco realized the importance of consumers in the world of business. The success of an organization depends on how well they understand the needs, wants and demands of their consumers and how well they cater to fulfill those needs. Realizing this fact, Tesco focused its business strategy towards keeping the track of its consumers, their purchase behaviors, how often they buy any product and studied their behavioral pattern (Tesco). As a result, Tesco came up with new innovative ideas and strategies, introduced new products, reduced the costs of certain products, offered best satisfaction to their consumers against the amount they paid and introduced more customer-oriented policies which helped the organization to gain more customers. CONLUSION: In the world of business where competition among the organizations is increasing day by day, different companies implement different corporate strategies to meet the changing requirements o f the business world and to gain competitive advantage (Margaret Wheatley). Tesco was also faced with these changes and challenges that were hindering the success and leadership position of the organization. Tesco came up different corporate strategies in different areas to overcome such challenges and difficulties. Along with these strategies, Tesco focused maximum on retaining its consumers; Tesco understands the value of consumers in today’s world of business. On the other hand, till today Tesco is striving hard to retain the strength of its customers without making them disappointed of their services and facilities (Mark King). As a result, Tesco not only met the changing requirements of the business world but these effective steps also gained them success and strong competitive advantage over others. Work Cited: Kostner, J. Virtual Leadership: Secrets from the round table for the multi-site manager. Warner Books, 1996. Print. Wheatley, M. Turning to One Another: Simple Conversations to Restore Hope to the Future, 2001. Print. Hammett, S and McMeikan, K. - Tesco - Competitive Management Development. Volume: 12 Issue: 6; 2004 Teather, D. American unions bring Tesco fight to UK. (2008). Web. 19th April 2012 King, M. Tesco attempts to win back customers, (2012). Web. 19th April, 2012 Tesco. www.tescoplc.com Web. 19th April 2012 Read More