Total Quality Management and Performance - Research Paper Example

Executive Summary The ability to remain ahead of the market is one that is dependent on the internal environment and how businesses approach service quality. When looking at the Tesco gas stations in the UK, it is noted that a variety of alternatives are available for the company to remain ahead of the competition, specifically through the services offered. The main objective of this research paper is to define the advantages and disadvantages that the corporation has and how it links to the service quality offered by the gas station. Examining these components will then create a different understanding of what can be done to increase the service and performance of the company. The paper will define the threats and opportunities within the company through the service quality that is offered. These will be combined with different components which can be used to assist with the growth and development of the company. Through this research, it was defined that restructuring the organizational environment to fit the needs of consumers in different regions will help to set the company apart from the continuously changing trends while allowing the company to continue to grow into a different level of recognition within the community. Table of Contents Problem Definition………………………………………………………………………...3 Approach to the Problem………………………………………………………………….4 Research Design…………………………………………………………………………...6 Results……………………………………………………………………………………..7 Limitations and Caveats………………………………………………………………….15 Conclusion and Recommendations………………………………………………………16 References………………………………………………………………………………..18 Problem Definition The competition that is within the oil, gas and petroleum market is one which continue to fluctuate according to the needs of consumers and the approach which is taken with those who are demanding different formats for the gas that is consumed. A gas station that is known in the UK for carrying a specific reputation among consumers is Tesco. Tesco gas stations in the UK are known for the main mission of the company, which is based on offering convenience of gas at a lower price. This is combined with the smaller convenience stores that are inside of the station and which have created a different approach to the gas that is offered. The approach which Tesco is using is based on having diverse payment alternatives, such as using fuel and club cards and saving objectives that are available for the petrol. This is combined with concepts such as premium petrol and other alternatives to offer different forms of quality with the gas that is available (Tesco, 2011). Despite the main components of Tesco, there is a sense of difficulty with remaining ahead because of the service quality that is provided by the company. Even though Tesco is able to provide competitive prices and convenience stores, there is a question of the service quality on a variety of levels. This is based on the level of professionalism that is offered with many that are service providers. The question comes from the large numbers of stores that are being operated without the correct management that is in position. This is followed by the expectation that all service stations should have the same functions and ideologies. However, this doesn’t fit with the regional needs of various locations and often leads to problems with those who are looking at the need to have gas and services provided with the station (Massey, 2011). The service quality which Tesco carries is one which is defined by training and development offered in the company and specific standards and policies that are withheld in each of the stores. This is followed by a variety of consumers which are remaining loyal to Tesco because of the competitive prices and the fluctuations which are offered. The weaknesses in the service quality aren’t allowing Tesco to remain within the competition and to move even further ahead with the expectations for convenience stores and gas stations. This paper will examine the different concepts of Tesco and the ability to move into the competition by examining the service quality that is offered to help Tesco remain ahead of the competition. An examination of different methodologies which Tesco can use for the service quality and the reputation of the company will be looked into for a thorough examination of what needs to be done with the changes required for the industry. Approach to the Problem There are several components to the problem which Tesco is facing with the changes in petrol and the business structure used. The first is the professionalism that is offered by Tesco. While there is management for quality service and specific standards that are offered, many of the employees don’t follow this. This is because of the lack of management in the stores and the ability for employees to continue to operate the different stores according to various freedoms. Employees are often found without management or without the proper structuring, leading to scenarios that don’t help with the main needs of the corporation. The second problem with Tesco is based on the uniformity of the stores. Even though there are over 1500 stores, none have regional differences or opportunities for customers in the regions. This stops customers from going to the store for convenience that fits with the area that they live in and leads to the inability to both expand and meet needs of consumers. This lack of service quality then doesn’t allow Tesco to expand in different ways with the needed parts of consumer demand. The approach to the problem which Tesco is facing will begin with the research questions of how Tesco can change the business model to meet the demands, changes and needs for higher service quality the UK. Specifically, there will be an understanding of what is required with service quality to create a stronger image in the petrol and gas industry while associating with different components that are related to the industry. The objectives that will be met include: Consumer perception of Tesco gas Investigation of the internal environment and business model and how this is relating to and changing the external environment Examination of the service quality of Tesco and how this relates to changes with demand in the industry Employee standards and whether these meet with the policies of Tesco Concept of convenience and the regional differences that need to be considered With these objectives, there will be the ability to examine the internal environment of Tesco and how this will alter the external fluctuations. This will be looked at in terms of the strengths and weaknesses of the company as well as what the opportunities and threats are. A complete analysis of the company can then provide a different approach to the tactics used for marketing and the associations which are developed in terms of building a stronger image to consumers. Research Design The research design will consist of sampling that will be used with a mixed method, including a qualitative and quantitative study. The qualitative study will consist of a survey that will be given to consumers. This will be designed with over 50 random consumers that are asked information about the service quality of Tesco. The answers which are provided will help to determine the popularity of Tesco, how strong the service is within the region and what is needed for improvement of different stores. This will also determine the perspectives of the external environment that are coming from consumers, specifically which are linked to the policies and procedures that are a part of the Tesco scores. The qualitative study will help to create an overview of the perspectives which are offered at the store. The quantitative study that will follow will be based on analysis and other theoretical concepts which relate to Tesco and the approaches which it has taken. This will begin with an overview of the theories which relate to consumer behaviors and trends, specific to the alterations that are a part of the gas and petroleum field. This will follow with an examination of the newer trends that are associated with Tesco and what is occurring in the environment. The quantitative study will look at the policies and procedures of Tesco as well as how these are reflected within the environment. Creating this perspective will provide new outcomes that Tesco can use within the market. Through these techniques, the objectives of understanding the marketing, competition and potential alternatives for service quality will be available to assist with a well – rounded understanding of the market. Results The first set of results which were determined from the study came from a questionnaire that was given to 50 randomly chosen individuals. These individuals were asked about their use of Tesco as a service provider and what the quality of service was for the gas stations. The results were used to determine the main perception of consumers when relating to the service quality of Tesco and what this was linked to with the specific needs and changes for Tesco services. The random participants had varied ages, beginning from the age of 18 and moving through the age of 50, with the gender divided by 45% male and 55% female. The first question asked was how often the individuals used Tesco gas. The largest percentage stated that they used Tesco gas once a week, at 37%. The second largest group stated that they used Tesco twice a month, at 22%. An average of 7% stated they used Tesco more than once a week with 19% stating they used Tesco less than once a month and with 15% not answering the question. The results are seen in Figure 1. Figure 1: How Often Tesco Gas Is Used The use of Tesco for gas by those who answered the question was followed by the understanding of whether the customers prefer Tesco or other gas stations when deciding to get gas. A large number of 57% stated that they preferred Tesco to other competitors, while the other answers were divided respectively by the top competitors in the market. These results are seen in Figure 2. Figure 2: Competitors of Tesco The next question asked was what the most important use of a convenience station was for those who were filling up gas. This particular question had more than one answer to several of the questions. The top answers included pricing, at over 52% and convenience, which was also at 37%. The responses to this question are in figure 3. Figure 3: Important Parts of Convenience Station The question which followed was the leading strengths that were a part of Tesco. Several of the respondents answered with more than one response to this question. The majority of answers came from the pricing of Tesco, with 71% answering with this. This was followed by 36% answering convenience. Another 29% answered service quality, 17% answered other and 3% did not have an answer. When asked about the weaknesses of Tesco, the answers changed to 21% stating that pricing was a weakness, 3% answering convenience, 17% answering service quality and 24% answering other. A large majority of respondents did not answer this question. The next set of questions which were asked to the participants was based on the service quality of Tesco. The majority of respondents at 49% stated that the quality was standard with the next highest answer being above average at 28%. An average of 13% stated that the services were below average, 2% stated best and 8% did not answer the question. This is seen in figure 4. Figure 4: Service Quality of Tesco The next question asked was whether the service quality of Tesco was professional. A similar response was given in which the highest response was standard at 33%. This was followed by 17% stating that the service quality and professionalism was below average. An average of 21% stated that the professionalism was above average and 2% stated that the professionalism was the best. The last question that was asked was whether the service quality was better or worse than competitors. The highest answer was that the service quality was standard, including 62% of responses. An average of 11% stated that it was above average while 9% stated that it was below average. Only 2% stated that it was best while 16% did not answer the question. Theoretical Viewpoint of Trends The basis that is associated with the gas and oil industries begin with the organizational environment and the service quality with options that there are to remain ahead of competitors within the field. An important theoretical viewpoint is one which shows that there is a direct correlation between the internal environment and the effects which this has on those in the industry. The industries are able to function better if there is a direct association with the knowledge that is a part of the environment. This begins with creating an understanding of the organizational knowledge that moves into the management and employee relations that are associated with those who are in the industry. This continues with the opportunities that are created with the knowledge that is given from the environment and other concepts that are a part of the gas industry. Creating these relations then builds a deeper impact and understanding of what is expected within the industry as well as what is associated with the environment. Knowledge management becomes an essential component for both examining the trends toward the stations while developing a stronger correlation with the organizational environment (Carrillo, 2004). The concepts of corporate social responsibility and organizational management lead to the impact of service quality and how this alters the way in which businesses work with others. It is noted that the higher service quality which is offered by a company, the more likely there is the ability to get stronger results from the external environment. An individual is more likely to use the services of those who have a professional attitude toward the business. This is combined with maintaining a friendly and clean atmosphere in a specific shop while making it easy for individuals to finish the required tasks in a short period of time while in the shop. To ensure that this is done correctly, businesses are in need of creating an environment with specific standards and training to implement different outcomes among workers. This, in turn, creates a stronger response from consumers while ensuring that the standards of the company provide stronger results, despite the external fluctuations that are occurring (Anderson, Sweeney, Williams, 2005). The use of service based marketing is one which is furthered with the understanding of value creation, interaction and marketing which can be used to ensure better results from those interested in a business. The concept of value creation doesn’t only come from the products, specifically which are affected by the alterations in the external environment. This is furthered with the interactions which occur and build loyalty and a sense of value to consumers. If this is done through the professionalism and training of those who are in the Tesco gas stations, then there is the ability to build a stronger relationship with consumers. The result is that the external environment no longer affects the perception which consumers have and leads to them becoming loyal consumers while helping the gas station to remain ahead of the competition. The result is the ability to have a different impression on consumers that boosts the level of competition which the company is working toward (Gronroos, 2011). The main concept which is associated with the marketing that is a part of Tesco is based on the ideology of total quality management. In this theory, there is an understanding that the response which is given by consumers and within the internal environment needs to have a well – rounded approach to those who are working in the environment. Total quality management is based not only on keeping the standards and professionalism of a company in the right order. This is also followed by development of employees to move to the right level of management and leadership while ensuring that the products and responses from the consumers follow with the approaches which are seen in the internal environment. Total quality management moves a step further than this by creating a sense of building policies, procedures, visions and different standards which are required for better opportunities for customers and stronger perceptions and attitudes of employees. This changes the service quality and the expected responses of those that are using the different services (Joiner, 2007). Limitations and Caveats The concepts that were provided in this specific paper were limited because of various constraints that were a part of the paper. The first was based on the time limitations in completing the paper. There wasn’t the ability to move deeply into the market with the understanding of consumer responses and the different concepts that were associated with the overall interactions that take place with Tesco. Instead, the research had to be based on available information and research with the focus of what the current conditions are in the market. The understanding of service quality could have been further developed with moving into more responses, questionnaires and different attitudes and perceptions of those that used Tesco gas stations. This could have been expanded with more time to consumer perspectives and interventions, specifically which could have been followed with different approaches to the ways in which the market has continued to change. Offering more investigation and options with the mixed methodology may have provided different results with the information provided about Tesco. Another limitation that was associated with the study was based on the large fluctuations which continue to occur in the gas industry as well as between stores that provide different forms of service quality. This is one which is known to alter on a daily basis and is seen with the fluctuations in gas prices and the policies and alterations of individuals in each store. The perceptions from consumers as well as with ideas of service quality then alter with the expectations which are from a given area. The difficulty then becomes with being able to analyze and find the information available, as opposed to the dynamic information that continues to form and shape the gas industry and set new standards and approaches to those interested in the different types of information. This particular concept is one that is developed with the approaches taken with the political and economic fluctuations as well as the macro – environment that continues to influence the gas industry. Not being able to analyze this aspect creates limitations in the expectations for the company and the needs which are a part of Tesco. Conclusion and Recommendations Despite the limitations of the study, it can be seen that there are a variety of options that are available for Tesco to continue to expand. When looking at the viewpoint of consumers in the questionnaire, it could be seen that there was not a strong response about Tesco in relation to other competitors. The service quality was considered average and was comparative to other competitors. The majority that responded to the questionnaire showed the main area of loyalty to the gas was based on convenience and pricing. While these advantages are providing Tesco with the ability to reach customers, the competitors have the ability to easily surpass Tesco with different needs. Combining this with higher service quality can then provide Tesco with a stronger response from consumers. The main approach which Tesco needs to make is based on altering the strategies so it can begin to create a different response to the level of service quality that is within each of the gas stations. The advantage which Tesco has with the main concepts is based on the internal environment and organization. To continue to increase the quality of the gas stations, Tesco would need to focus on the internal environment and management within the gas stations. This is inclusive of the customer service, management and leadership that Tesco has implemented in each store. While this foundation is strong, Tesco is known to not comply with the needs of different regions and areas. This can be altered by looking at the different concepts that are associated with each region and beginning to create a regional approach to the needs of the community. Combining this with leadership that is within each region can provide a different set of alternatives to the customer service that is a part of the community. By doing this, there is the ability to develop a stronger understanding of what is needed within each community while building and developing social relationships that will move outside of the main trends with gas companies. If Tesco creates service quality that is higher than others, such as through creating regional convenience areas and stronger levels of professionalism, then it will begin to alter the consumer perceptions and will lead to total quality management within the stores. This can be combined with stronger training and development as well as initiatives for management and leadership skills that allow those working in the store to have more career advancements. Adding in these initiatives will guarantee professionalism and will begin to change the organizational environment so it reflects in the service quality which is offered to those who are interested in the Tesco convenience stores. While Tesco has the strongest market in the UK, there are still ways to improve the quality of service and alternatives. This will help to create stronger relationships and loyalty to what is involved. Currently, Tesco is remaining ahead of the market by slashing prices, having convenient locations and adding in the convenient products to attract consumers. This is combined with the organizational environment that has a sense of responsibility to the location and region which they have developed the different products in. However, Tesco can’t continue to develop this unless there is an association with the management and organizational environment. This is inclusive of regionalizing the locations for different needs. Combining this with better customer service and approaches to the fluctuations in the market will help to stabilize the market and build a stronger reputation for the corporation. The result will be the ability to continue to increase and grow while expanding the format of gas stations so it is able to reach personal needs of individuals that are within different locations. References Anderson, David, Dennis Sweeney, Thomas Williams. (2005). Statistics for Business and Economics. New York: Cengage Learning. BBC. (2005). “Is Tesco Taking Over?” BBC (January). Carrillo, Patricia. (2004). “Managing Knowledge: Lessons from the Oil and Gas Sector.” Construction Management and Economics 22 (4). Corporate Watch UK. (2004). “Tesco: A Corporate Profile.” Corporate Watch. Retrieved November 20, 2011 from: http://www.corporatewatch.org/?lid=252. Derbyshire, David. (2007). “Tesco Just Keeps on Growing.” The Telegraph (April). Elliott, David. (2011). “Tesco’s Job Threat Over Plan for Tax Hike.” The Telegraph (October). Gronroos, C. (2011). “A Service Perspective on Business Relationships: The Value Creation, Interaction and Marketing Interface.” Industrial Marketing Management 51 (3). Idowu, SO. (2004). “A Comparative Study of the Contents of Corporate Social Responsibility Reports of UK Companies.” Management of Environment Quarterly 57 (1). Independent. (2008). “Why Tesco Looks Frayed At the Edges.” The Independent (April). Joiner, TA. (2007). “Total Quality Management and Performance: The Role of Organization Support and Co – Worker Support.” Journal of Quality and Reliability Management 53 (2). Kelly, N. (2006). “The Role of Energy Efficiency in Reducing Scottish and UK Co2 Emissions.” Energy Policy 31 (2). Massey, Ray. (2011). “Supermarket Big Four Start Fuel Price War With 3p Cut At the Pumps.” Mail Online (June). Parliament UK. (2011). “Environment and Energy Policies.” Retrieved November 22, 2011 from: http://www.parliament.uk/business/publications/research/post/environment/. Rutledge, I. (2003). “Regulation, Competition and Price Formation in the UK Gas Industry.” Economics and Politics in the Industry 67 (1). Rydl, L, C Simpson. (2008). “Wireless Technology Uses in the Oil and Gas Industry.” IAICS. Tesco. (2011). About Tesco. Retrieved November 22, 2011 from: http://www.tesco.com/petrolstation/. Tuodolo, F. (2009). “Corporate Social Responsibility: Between Civil Society and the Oil Industry in the Developing World.” An International Journal for Critical Reviews 41 (2). Wright, P. (2005). “Liberalization and the Security of Gas Supply in the UK.” Energy Policy 71 (3). Appendix A: Questionnaire for Analysis 1. Age 2. Gender 3. How often do you use Tesco to get gas? a. More than once a week b. Once a week c. Twice a month d. Once a month 4. Do you prefer Tesco or another competitor? a. Tesco b. Morrisons c. Sailsburys d. Other 5. What is the most important part of using a convenience station? a. Service quality b. Pricing c. Convenience d. Other 6. What are the leading strengths of Tesco? a. Pricing b. Convenience c. Service quality d. Other 7. What are the weaknesses of Tesco? a. Pricing b. Convenience c. Service Quality d. Other 8. Do you consider the service quality of Tesco: a. Best b. Above Average c. Standard d. Below Average 9. Do you consider the service quality of Tesco professional? a. Best b. Above Average c. Standard d. Below Average 10. When compared to competitors, the service quality of Tesco is: a. Best b. Above Average c. Standard d. Below average Read More