The Project to Open a New Tesco Superstore - Case Study Example

New Tesco Superstore Stakeholder Analysis In order to understand stakeholders of Tesco superstore, one has to understand business background of Tesco. Tesco supermarket is subsidiary of Tesco Plc and the company has opened more than 6,000 retail stores across the globe. In UK, the company operates more than 2,000 stores while Tesco.com is wholly owned online subsidiary of the company. The company is head quartered at Hertfordshire, UK (Tesco Plc, 2014). Tesco superstore offers food items, grocery items to customers. Food items offered by the company includes fish, meat, Asian foods, • Afro Caribbean foods, tropical fruits, Kosher, international items, beverages (Tesco Plc, 2014). In order to conduct stakeholder analysis for opening new Tesco superstore, the researcher will use Mendelow’s (1981) Matrix. For sake simplicity and preciseness, UK based operation of Tesco superstore will be used as reference point. Table 1: Stakeholder Analysis (Mendelow’s Matrix) Stakeholder Power Index Low UK based customers and local society members who will buy food items and grocery items from Tesco superstore. These stakeholders will show interest in the project because opening a new store will increase their convenience for shopping. Their motivation to support the project will be directed by desire to shop quality food items, chance to get associated with the Tesco brand name etc. Project workers, Suppliers of raw material. These stakeholders will show interest in the project for monetary interest, opportunity to get financial benefit by signing long term contract with the company. Their motivation to support the project will be directed by business benefits, remuneration and higher supply margin. High Top level managers, of Tesco superstore, project managers and government. These stakeholders will show interest in the project due to political reason, earning corporate tax, monetary compensation for project completion and annual salary. Same reasons will motivate these stakeholders to show green signal to the project. Financial institutions who lend the money in the project, social activists and local community members. The will show interest in the project for financial and environmental sustainability reasons. Motivation to support the project will be directed by environment sustainability assurance from Tesco, assurance timely repayment of debt with additional interest, good corporate social responsibility (CSR) reputation of the company. Low High Probability of power exercising (Source: Mendelow, 1981) In such context, it is suggested to Tesco superstore to use multiple communication channels to communicate the project scope top stakeholders and also engage stakeholders (Jugdev, 2012). For customers, the company use newspaper advertisement to state benefits of the project. Tenders should be used to communicate the project to suppliers while news paper editorial and public discussion will be used to engage local community members. Meetings and workplace announcement should be used to communicate the project scope to workers, project members and top level management. Negotiation and government files sharing, signing all the government legal norms should be used to communicate the scope of the project to government bodies and financial institutions. On the basis of such suggestions, Tesco superstore can develop communication plan including print advertisement, news paper editorial, road show, public announcement, bill board advertisements to communicate importance of the project to most of its stakeholders. Project Brief Objectives: SMART (Specific, Measurable, Achievable, Realistic and Time Bound) objectives can be used to define project objective in comprehensive manner (PMI, 2010). Objective statement for the project should be written as “opening a new Tesco store that can help the company to add new selling space and earn more revenue from retailing selling operation in the new store”. Specific- developing a superstore consisting area of 30,000 square feet and help the company to increase its selling space by 0.075%. Measurable- increase in selling space can be measured from store area log book of the company and success of the project will be measures in terms of completion time and return on investment. Achievable- in last year, the company has opened more than 10 superstores which show that the company has sufficient financial (monetary capital, liquidity, ease in debt capital acquisition) and non-financial (human capital, technology and infrastructural support) resources to support store expansion activity (Tesco Plc, 2014). From resource background, opening new stores seems quite an achievable target. Realistic- Tesco has already established many superstores in UK and in last 2 years, the company has invested significant amount financial capital superstore expansion project which is being seen as strategic objective. Therefore, opening a new store within specified time period within specified time period will be realistic target for the company. Time Bound- 6 months have been assigned for the project and within the 6 months, the new superstore will be fully functional. Scope: Sambasivan and Soon (2007) and Odeh and Battaineh (2002) defined project scope statement as outline of the project to client and it describes what the project will deliver and what are pertinent work areas need to be addressed in order to deliver the project. Generally, project scope statement covers issues like statement of contract penalties, statement of client requirements, project budget, contingency plan, quality issues, people requirements etc. Time- the project will be delivered within 6 months (the project will start on 3/3/2014 and completed in 1/9/2014). Cost- Approximately US$10 million will be needed to open the store but as buffer capacity, additional US$1 million should be put aside for addressing any kind of project related uncertainties. Quality- new superstore will be developed following BRC (British Retail Consortium) Global Standards of quality and certification will ensure safety and sustainability of the building. As par BRC criterion, green technology will be used to ensure environmental sustainability of the superstore. Deliverables: the project team will work 5 days a week (excluding weekends) and construction workers and engineers will work on the basis of blueprint of superstore layout. Within 1 month, plan for initial layout for the superstore will be prepared and in the next 4 months, the superstore will be developed and last 1 month is being allocated for testing and incorporating final correction to the superstore layout. Training- According to Koners and Goffin (2007), training proper training and client interaction helps project team to achieve project objectives in better manner. BRC (British Retail Consortium) consults will provide 1 month training to project workers on sustainable building development. 15 day workshop with engineers, shop floor architect of client (Tesco Plc) will also be conducted in order to give idea to project team regarding outcome of the project and client requirements. Documentation- documenting pertinent project variables will include details of key project members, communication plan, scope of the project, cost of the project, resource and staffing plan, deliverables and deadlines, penalty structure for delay, environmental clauses, payment documents, legal and government papers, BRC certification etc. Exclusions- although, the project will deal with new superstore opening on behalf of Tesco but the project will not cover financial analysis of operational cost and revenue of the project. The project will deal with construction aspects of new store opening while dealing with strategic perspective of new store opening is beyond the scope of this project (Williams, 2008). Constraints: on the basis of project management scope triangle, resources, time and costs can be considered as main constraints. Volatility of economic condition and monetary payment from client can stop the progress of the project. Delay in project completion beyond the critical path period will automatically increase resource requirements and cost (including fixed and variable cost of the project). In such context, additional US$1 million has been allocated for addressing project related constraints and uncertainties. British government has increased pressure on large format retail stores to decrease carbon emission and increase building safety in order to ensure fulfilment of quality norms. In order to address quality constraints, the project team will follow BRC certification norms. Interface: as part of interface management, agreement between client and project team will be signed, roles & responsibilities of project members will be communicated, agreement with other pertinent stakeholders will also be signed, control mechanism will also be discussed, project risks will be stated to stakeholders, conflict management mechanism will also be discussed (Harmon, 2003). Project Plan Table 2: MS Project Chart for Opening New Tesco Superstore Task Mode Name Levelling Delay Duration Start Finish Auto Scheduled New Tesco Superstore (30,000 square feet) 0 days 131 days Mon 3/3/14 Mon 9/1/14 Manually Scheduled General Conditions 0 days 11 days Mon 3/3/14 Mon 3/17/14 Auto Scheduled Receive notice to start project and sign contract 0 days 3 days Mon 3/3/14 Wed 3/5/14 Auto Scheduled Submission of insurance documents 0 days 2 days Thu 3/6/14 Fri 3/7/14 Auto Scheduled Submission of project schedule 0 days 2 days Mon 3/10/14 Tue 3/11/14 Auto Scheduled Obtaining superstore permits 0 days 4 days Wed 3/12/14 Mon 3/17/14 Auto Scheduled Long Lead Procurement 0 days 49 days Tue 3/18/14 Fri 5/23/14 Auto Scheduled Submit shop drawings and long lead items - building material 0 days 15 days Tue 3/18/14 Mon 4/7/14 Auto Scheduled Arranging construction material 0 days 15 days Mon 4/7/14 Fri 4/25/14 Auto Scheduled Arranging training and human resource allocation 0 days 19 days Mon 4/28/14 Thu 5/22/14 Auto Scheduled Mobilize on Site 0 days 40 days Mon 5/26/14 Fri 7/18/14 Auto Scheduled Power installation 0 days 5 days Mon 5/26/14 Fri 5/30/14 Auto Scheduled Construction of superstore 0 days 35 days Mon 6/2/14 Fri 7/18/14 Auto Scheduled Foundations 0 days 20 days Mon 7/21/14 Fri 8/15/14 Auto Scheduled Construction of superstore 0 days 20 days Mon 7/21/14 Fri 8/15/14 Auto Scheduled Store layout & furnishing 0 days 8 days Mon 8/18/14 Wed 8/27/14 Auto Scheduled Testing & completion of the project 0 days 3 days Thu 8/28/14 Mon 9/1/14 Critical path for the project has been calculated by using concepts like Latest Start Time (LST), Earliest Finish Time (EFT), Latest Finish Time (LFT) and Earliest Start Time (EST) and Total Float (TF). As the project is critical and the project team has done similar projects in previous occasions, therefore no lag period will be entertained in the project. Float Time= LFT –EST – Duration of the project Williams (2008) defined measurement of critical path as the longest possible route to complete the project and it is the minimum time that will be needed to complete the project. From MS project chart, critical path for the project has been calculated as 131 day. Therefore, minimum 131 days are needed to complete the project (in the MS project chart, red line at the top is indicating the critical path of the project. Table 3: Project Milestones Activity Duration Days Completion General Conditions Mon 3/3/14- Mon 3/17/14 11 days 8% Long Lead Procurement Tue 3/18/14 - Fri 5/23/14 49 days 45.8% Mobilize on Site Mon 5/26/14- Fri 7/18/14 40 days 76.33% Foundations Mon 7/21/14- Fri 8/15/14 20 days 91.60% Store layout & furnishing Mon 8/18/14- Wed 8/27/14 8 days 97.70% Testing & completion of the project Thu 8/28/14- Mon 9/1/14 3 days 100% Risk Analysis Table 4: Risk Analysis Identification Categorization Mitigating Actions Stakeholder Impact Labour movement or project team fails to recruit talented workers High risk factor and it can produce two negative results, 1- stoppage in work progress and 2- poor quality final output Negotiation with labours, offer financial incentives and hire experienced workers from known human resource consultant. Clients will suffer with poor quality superstore outlet and return on investment for the client will be negative. Increased project cost due to economic fluctuation or supplier bargaining Moderate risk but the problem can increase project completion time due to resource crunch. Additional financial resource has been allocated for mitigating the risk. Client will suffer financial loss. Accident & natural calamities Low risk due to low probability of such incidents. Insurance cover has been taken to mitigate these kinds of risks. Project workers life at stake and client will suffer financial loss. Legal constraints Low because all the legal procedures have been fulfilled. Legal documentation and quality assurance has been obtained from the respected authority Local community, customers and legal bodies in the country will be affected such types of risks. Reference List Harmon, K., 2003. Conflicts between owner and contractors: proposed intervention process. J. Manage. Eng, 19(3), pp. 121-5. Jugdev, K., 2012. Learning from Lessons Learned: Project Management Research Program. American Journal of Economics and Business Administration, 4(1), pp. 13-22. Koners, U. and Goffin, K., 2007. Learning from post project reviews: A cross-case analysis. J. Prod. Innov. Manage, 24, pp. 242-258. Mendelow, A., 1981. Environmental scanning: The impact of stakeholder concept. Cambridge: Proceedings of the second international conference on information systems. Odeh, A. M. and Battaineh, H. T., 2002. Causes of construction delay: traditional contracts. International Journal of Project Management, 20(1), pp. 67-73. PMI., 2010. A Guide to the Project Management Body of Knowledge (PMBOK Guide). 4th ed. Newtown Square: Project Management Institute. Sambasivan, M. and Soon, Y. W., 2007. Causes and effects of delays in Malaysian construction industry. International Journal of Project Management, 25(5), pp. 517-26. Tesco Plc., 2014. Our businesses. [online] Available at: [Accessed 8 February 2014]. Williams, T., 2007. Post-project reviews to gain effective lessons learned. 1st ed. Newtown Square, PA: Project Management Institute. Williams, T., 2008. How Do organizations learn lessons from projects—and do they? IEEE Trans. Eng. Manage, 55, pp. 248-266. Read More