Tesco Stores Market - Term Paper Example

Introduction Tesco plc is a general merchandising and international grocery retail chain that is based in the United Kingdom. Tesco is the biggest retailer in the UK in terms of global sales and also domestic market sales. It comes behind Wal-Mart of US the Carrefour of France. Currently Tesco has a market control of about 30% of the grocery market of the UK, which is a combination of its two most close rivals Sainsbury's and Adsa. In the year 2007 the retail chain announced a profit of more than 2.55 billion sterling pounds. In the past the chain mainly concentrated on food stuff but currently it has diversified its range of products to include consumer electronics, clothes, financial services, internet services, health insurance for customers and other services. Of late the retail chain has entered into housing market. Tesco (2007): Tesco logo source www.tesco.com Procurement and inbound logistics Tesco Stores has a strong corporate image which helps the organization to have a competitive advantage over the other players in the field. According to latest research, the supermarket chain has investments in many other businesses, such as property management, a cloth branding line which has led to the success of the company. The company is also accredited with the best marketing network that have made the company to do well nationally and international, this is achieved by exporting products to other countries such as Germany and south Korea. The company also boosts of a large branch network has enabled it to capture a large clientele base. In order to sustain such a market the Tesco has clear procurements and inbound logistics that it has put in place which it uses to ensure that its services are well delivered. Tesco (2007): How suppliers found and supplies procured Like any other marketing decision, choosing a channel supplier require a lot of thoughts and vast research in order to determine who can qualify to supply the company's products more effectively and efficiently in a way that it will meet the company's production objectives and overall procurement targets. (Ruffian, et al, 2000) A company has to consider some major factors before choosing its suppliers. Thus we shall examine the key factors that the company will have to put in to consideration which are; Credit & financial condition Financial stability is very important in ensuring success level of any business organization, companies with financial power have an advantage when it comes to supplying because their have ability to expand their volume in relation to increased demands of the Tesco or they can easily acquire new technology to and value to their products. Tesco looks for a supplier with sound financial and credit management so that he can easily supply products without financial hindrance. Sound credit management will allow a supplier to receive some credit facilities from different financial institutions which is vital in running supplier enterprise. At the same time shareholders and other stakeholders will only have confidence in a supplier with sound financial and credit management. (Louis, et al, 2006) Production Strength Louis et al (2006) states that a supplier will only be effective if he can easily and effectively supply goods or service from to a client consequently, before selecting a supplier, Tesco have to ensure that the supplier member can easily and efficiently supplier the required materials to the company without due delays. The level of supplying and coverage of the supplier is considered to know how effective it is. Product Lines, The type of the product will definitely dictate the kind of supplier to recruit. As pertaining the supplier for Tesco supermarket chain, the supplier will have to be able to supply a large number of various products that the supermarket deals in. at the same time, Tesco chooses a supplier who has all the relevant certifications of the product safety measures which are required by the different concerned bodies to ensure that it gets what is safe. (Ruffian et al, 2000) How the receipt and warehousing or input is handled Warehousing Tesco remains one of the biggest retail chains in Europe, the chain supplies various kind of products it its customers using more that 1800 store located in UK and 250 in the Europe. It is uses its distribution channel to serve all these stores. Tesco distribution channel and Tesco partners have a warehousing facilities across Europe in which Tesco stores it products and distributes them later. (Hogan, 1998) Tesco introduced automated handling system (AHS) which was a little complicated but which mangers were asked to use in distribution warehouse. However the model have had significant delays that are brought about by interfacing separate but connected loading systems that put a lot of constrain on the performance and capacity. However, the model has been perfected and it has proved to be work. (Hogan, 1998) Receipts Tesco chain has receipt program for development and innovation in creating an environment which is more shopping friendly as much as possible. The aim is ensuring that customer who shop at Tesco enjoy their experience and do not have any problems. To make sure that the receipt services are efficient Tesco has installed the Axiohm A756, which is the highly advanced designed printer specifically, designed for point-of sale markets. This has brought about a lot of purchasing freedom for the customers at the same time providing the Tesco with a chance to increase it sales. (Hogan, 1998) Operations and manufacturing: How are goods and/ services produced and Operations management Operations management is very important in any business organization. The main aim of undertaking operation management should be to increase productivity, reduce costs of productions, and enhance flexibility to match customer requirements and at the same time improve quality and customer care services. Tesco retail chain formulates plans and ways of dealing with the business opportunities and daily challenges that come up within the business environment. (Ruffian et al, 2000) Designing the business system Designing the business system starts with developing product. Development of a product entails determining the features and characteristics of a good product to be sold. When designing a product it is important that the customer needs should be incorporated in the designing process. The facilities and tools which will be used in product production are in this category. Also information system that is required in monitoring and controlling the performance of the product are included in this stage of designing. As Slack et al, (2007) points out manufacturing process of a business or a company are integral part of the designing process and will determine the failure or the success of the business enterprises. The decisions address the questions such as how the product will be made. It is important to ensure that product designing is teamwork process and marketing and operating plans are incorporated so that the product can successful be launched on the market. Tesco retail chain carries out all this process in designing their products. Volume Tesco retail chain distinguishes between the actual number of the customers that the business can serve, and the maximum number of the customers which the business can cope up with. The later is termed as the capacity, this is the number customer that can be effectively be served by the business. (Weiss & Mark 1989) Variation Tesco retail chain provides different variations of products to its customers so that they have a choice to make when it comes to the product. (Weiss & Mark 1989) Role Everybody in Tesco retail chain plays an important role in a business; the important aspect is that each person behaves differently in accordance to the operation function that is arising for such an individual. As an operations manager of a business it is important that the manager carries out different roles in the business. Among the roles are; Implementation of business strategy Being a supporter of the business Driver of business strategy Quality Quality is taken as a priority in Tesco operations and in performance objectives, since many authorities do belief that quality is the most important aspect in a business. Tesco remember that; The external influence of good quality in business operations affects the customers who use the products from the business. The customer should not have an issue to complain about the product. If the customers are satisfied then they can consumer more products from the company and ensure that they is steady income of revenue for the business. Thus this is what is termed as client or customer satisfaction. Inside the business operations; in a business quality has a different affect. If the business operations are followed to the later and all the process and activities are followed very little mistakes will be done ensuring the quality is maintained. (Weiss & Mark 1989) Distribution channels; Tesco have numerous distribution channels that it uses it distributed it products, Tesco uses its enormous transportation vessels and other private and public means to deliver its products and services to the various stores located all over UK and Europe which in terms servers it customers. Other service like financial are also delivered through the use of information technology systems to its customers who can access them in various Tesco stores or its partners or they are delivered to the customer directly. (Ruffian et al, 2000) Conclusion Tesco is a very successful retail stores that has been able to succeed through the use of technology and financial power powers. Tesco is very dynamic and it has been able to offer varied services and products in UK and Europe, the chain store is bound to expand as the market is still wide. Tesco has an elaborate way of selecting its suppliers who must have power to deliver. The operation management of the store is good and Tesco has an elaborate distribution chain for its products and services. Reference: Hogan, K (1998): Tesco Tycoon, Interview with Tesco's fortunes Chairman Ian MacLaurin", Marketing, Haymarket Publishing Services, Ruffian, F et al (2000): Organization Design in Operations Management; International Journal of Operations and Production Management. Slack, N et al (2007): Operations Management, 5th edition, Pearson Education Ltd. Weiss, H. J., & Mark E. G (1989): Production and Operations Management. Allyn and Bacon, Tesco (2007): Our History. www.tescocorporate.com Tesco plc. Retrieved on; 26/11/07 Read More