Lost the Plot of Customer Service - Term Paper Example

International Business Table of Contents Introduction 3 Discussion 3 Lack of strategic adaptation in retail landscape 4 Lost the plot service 5 Tesco PLC did not create better use of their superior retail channel 5 Risk assessment 6 Entry strategy 6 Human resource management 6 Recommendations 7 Mayo effect 7 Conclusion 9 References 11 Introduction The internationalization is regarded as growing tendency of organizations to increase their enterprise involvement in global market. This approach is implemented by multinational enterprises to design service and products that can be simply adaptable to diversified languages and cultures. During 1990s, there has been acceleration in the scale of international corporate business. The internationalization strategy implemented by Tesco PLC is to enhance their market penetration in North America and United States. The increasing activity of Tesco PLC has benefitted to expand and diversify their activities in foreign markets. The company offers varied range of products or services to different customers by expanding their business portfolio in many countries. The internationalization of Tesco PLC has created huge impact to change the supplier-retailer dynamics in terminating, weakening and consolidating relationships. The internationalization also created problematic situation for the company. The aim of the paper is to present and describe mistakes done by Tesco Plc. during the process of internationalization. It has been understood that learning concept delivers new perspective and theoretical framework for filtering, re-evaluation and reinterpreting on the process of internationalization. Furthermore, the paper provided vivid explanation about mistakes done by Tesco PLC. The application of effective theoretical concepts or models enables to provide better understanding about the problem. Discussion In recent years, the amount of cross-border operations that are conducted by retailers is on rise. The group of growing retailers has seen a substantial structural change. A redefinition of balanced externalized and internalized purposes has provided vivid evident that retailers are expanding their business operation to move out of domestic marketplace. The application of internationalization has become pivotal requirement for these multinational enterprises to gain and grow their scale of economies. Tesco PLC has focused to diversify their grocery retail business. The process of internationalization has become prime focus of the company to grow their market globally (Knight, 2008, p.92). Tesco PLC has globalized environment with stores in the Turkey, Hungary, Czech Republic, Poland, Japan, Taiwan, Thailand, South Korea, etc. In the year 2006, there was a headline which stated that foreign market growth is the one of the key goals of Tesco PLC. But now it seems like this strategy of global ambition is heading for the checkout counter at one of the largest grocer company in Britain. Lack of strategic adaptation in retail landscape In case of retail landscape scenario, Tesco PLC failed to keep up with the seismic shifts. The company adopted internationalization process to build their brand empire with the help of cost-effective strategy and standardization. In the time of globalization of technological advancement, there has been rapid upsurge in retail landscape segment. This has become one of the biggest mistakes of the company (Hollensen, 2007, p.16). It should have been understood by Tesco PLC that there is a rapid shift on consumer preference at online shopping and convenience stores. In this time of changing economic times and new reality, the incremental modifications to the portfolio and store setup are not sufficient to survive in global competitive market. Tesco PLC failed to realize the essential transformation of retail landscape. There are certain factors which escalated the rise of concerns on changing retain environment. The evolvement of technology, spending power of consumers is squeezed and escalation of business costs is crucial pressures that retail industry need to notify in the changing marketplace. Tesco PLC struggled towards basic investment for reshaping the retail landscape (Kotler, 2004, p.29). This fact is that discounters are providing better options and executing better adaptation strategy to acclimatize towards changing competitive landscape. Lost the plot of customer service No matter what is the size of business, it is critical for organization to have excellent customer service within the heart of business model. The lack of investment on effective customer and staff service training has been another mistake labelled towards Tesco PLC. From 1990s, most of the multinational enterprises have realized the importance of incorporating customer engagement and satisfaction within strategic model (Haig, 2011, p.38). Lidl and Aldi are one of the leading discounted supermarket companies that provide better customer service and cheaper products to the customer. The in-store sampling approach was implemented by these supermarkets to provide quality service to the customers. The lack of in-store demonstration and customer service was important mistakes of Tesco PLC. Tesco PLC did not create better use of their superior retail channel Now-a-days, there has been rapid alteration on shopping habits of people. People prefer to do their grocery and buy products from small store or online. There is larger number of stores that costs fortune for Tesco PLC. The lack of making better usage of large retail shops has been primary concern for the company (Copley, 2007, p.62). There changing mind of people has become a concern for companies. Therefore, it is critical for organization to make better use of its resources. Tesco PLC ventured with Fresh & Fresh to provide fresh vegetables and fruit to United States customers. The struggle for Fresh & Easy has been poor customer service, minimalistic marketing approaches and partial cultural adaptation. In April 2009, the company has recorded loss of about 142 million pounds. Some of theoretical strategies provide vivid explanation about the lack of effectiveness and efficiency of Tesco PLC (Friedman, 2007, p.182). Risk assessment The lack of adaptation of effective risk assessment strategy has been one of the prime weaknesses of Tesco PLC. Areas in United States line Nevada, California and Arizona have been heavily hit by collapse on real estate market and rising economic recession (Cheverton, 2006, p.82). The application of effective risk assessment model can ensure robust process, standardization and improved facilities. The meeting of customer demands by creating small format stores has become harder challenge for risk assessment. Furthermore, Tesco PLC realized that lack of stores for mid-market specialist has resulted in to failure of capturing United States consumers. The global operation of Tesco has been intensified by deep global economic crisis. Entry strategy Traditionally, Tesco PLC has approached transnational projects by adapting great cultural sensitivity and awareness in their operation model. This benefited the company to meet their conditions and demands of local customers (Burrow, 2011, p.29). After entering in to United States market, Tesco PLC wanted to make consumers buy their products. The lack of effective entry strategy had made the operation of US vesture as failure. Initially, the cultural discrepancies between American and British consumers have made entry strategy as failure. The introduction of small-format stores has failed to meet demands of US consumers. Human resource management In past, the management of human resources and personnel was viewed as strongest area for Tesco PLC. The company introduced self-checkout system to limit their labour costs and increase convenience. The traditional checkout lanes lacked employees (Burgemeister, 2003, p.51). The absence of employees has made more difficult for employees working in Fresh & Easy to provide quality customer service. Furthermore, the introduction of technology-based self-service has created adverse effect on Tesco PLC. This resulted in to increased rate of adverse word of mouth. This negative feedback reflected negativity about the technology-based self-service and service provider. Recommendations It can be underperforming stores, Tesco PLC should reduce sale of varied products range. The main net beneficiary for poor trading of Tesco is Sainsbury. Therefore, it is crucial for the company to lower their net cost of goods and reduce credit to squeeze the market share of Sainsbury and recapture customer base of the company. The change in retail landscape must be looked closely by Tesco PLC. The company should adapt to the situation of shifting customer preference by application of adaptable strategies (Brown, 2009, p.88). The idea of introducing non-food outlets should be considered by Tesco PLC. Every supermarket company must capitalize on application of effective and shop local approach. Furthermore, it is important to know that Tesco PLC is still most popular supermarket chain in United Kingdom. This tagline of being popular should be maintained by introducing effective motivational theory. Mayo effect This is one of the motivational concepts that can help Tesco PLC to motivate employees working within the organization. The internal and external factors are required to be considered by the company. The external factors include incentives and sales target (Baker, 2012, p.31). The internal factors include desire for employees to learn. Some factors that Tesco PLC needs to promote within their workplace are good teamwork, great communication, showing interest towards other department, ensuring betterment of employees and enhancing workplace environment. The company should introduce career strategic planning for employees. This would make them feel that they are valued by the organization. The introduction of effective development and training opportunities can benefit Tesco PLC The focus on customer’s in-store should be amplified. This would benefit the company to enhance their customer interaction. The knowledgeable and enthusiastic brand ambassadors should be hired by the company. Rather than introducing some samples which are not related to customer interactions, Tesco PLC should focus on improving their customer interaction (baker, 2001, p.29). These ambassadors must deliver in-store demonstration to the customers. The alteration of business strategy of Tesco PLC by use of American senior managers and continuous morphing should have been included earlier in the venture strategy of United States. In case of international management viewpoint, the alteration of strategy should have been done earlier to create profitable results and greater effectiveness (Palacios, 2008, p.48). The company should invest on providing better customer experience. This would help to increase their profits. One of the options that can be implemented by Tesco PLC is introducing sub-let floor space. The company should connect their Tesco Direct on bigger stores. If any certain product in Tesco Direct is working well, then it should be offered and introduced as physical product on larger stores (Arnold, 2002, p.62). The click and collect initiative should be introduced by the company to reduce their costs. This is better way of connecting with customers and encouraging them to buy their products. The good way to test their potency is by extending big-ticket and high-margin non-food items. These items should be sold on online marketplace. There are several risk assessment examples that can be implemented by Tesco PLC. The strategic, compliance, operational and market risk assessment should benefit Tesco to lessen their challenges and risks. The senior management of the company must evaluate the risk of loss and market movements globally. The company should hire effective market risk specialists to evaluate the market movements of Tesco PLC. This could consider commodity risk, option risk, currency risk and interest risks (Aaker, 2004, p.54). The research provided vivid presentation that smaller player in United States grocery segment appreciates monopolistic rivalry. On the other hand, the larger players have to face high rate of competition on grocery segment. Consequently, Tesco PLC should have created wide product collection, great customer service and large marketing campaigns by joining larger competitors in the United States. The company should have entered in to United Stated grocery marketplace with big supermarkets. The company should try to enhance their demand by entering with large supermarkets. Tesco PLC should fully utilize their space. This would enable to effectively allocate their products the company should provide free gifts to customers. The gifts should be part of appreciating customers. The online website of the company must include more sorting options, inclusion of delivery charges for online products and addition of user reviews. Conclusion This can be concluded that the internationalization process of Tesco PLC is always not a straightforward and progressive approach. The findings of the article provided valuable insights about complexity of internationalization process. The lack of experience in international market has become prime downfall Tesco PLC. The failure of Tesco to market Fresh & Easy in ambitious and unique way has proved to be costly. The company failed to replicate their success from United Kingdom to globally. The forced application of self-service checkouts system proves the fact that company has lack of focus towards providing quality customer service. The company should focus on enhance their customer experience by providing in-store demonstration to new customers and implementation of effective risk assessment strategy. It is crucial for multinational enterprises like Tesco PLC to increase their market share and lessen their failure globally. The improvement on customer satisfaction and sales can provide effective solution for the company to cope up with the increase rate of global competition. Therefore, the introduction of effective innovative and new service can help to nullify mistakes made by Tesco PLC. References Aaker, D. A., 2004. Brand Portfolio Strategy. New York: Free Press. Arnold, D., 2002. The Handbook of Brand Management. London: Century Business. Baker, M. J., 2001. Macmillan dictionary of marketing and advertising. 2 ed. London: Macmillan Press Ltd. Barker, N., 2012. Integrated marketing communications. New York: McGraw-Hill. Brown, L., 2009. Marketing and Distribution Research. New York: Ronald Press Company. Burgemeister, S., 2003. Market analysis. Berlin: GRIN Verlag. Burrow, J., 2011. Marketing. Stamford: Cengage Learning. Cheverton, P., 2006. Understanding Brand. London: Kogan Page. Copley, P., 2007. Marketing communication management. London: Sage. Friedman, T., 2007. The World is Flat. Stamford: Cengage Learning. Haig, M., 2011. Brand Failures. London: Kogan Page. Hollensen, S., 2007. Global Marketing. London: Routledge. Knight, G., 2008. International Business. London: Sage. Kotler, P., 2004. Marketing essentials. London: Prentice-Hall. Palacios, J., 2008. Multinational corporations. London: Cambridge University Press. Read More