Tesco Supermarket Critical Analysis - Case Study Example

TESCO SUPERMARKET Contents Contents 2 Introduction to the company and industry, including a comprehensive schematic or tabular representation of the products and processes 3 Critical Analysis: 4 Social responsibility and environmental issues associated with those products and processes 4 Ways the company has dealt with those issues 5 Resulting social responsibility and environmental performance and credentials of the products and processes and, thereby, the company 7 Recommendations with supporting justification for further improvements in corporate social responsibility and environmental performance 9 References 11 Introduction to the company and industry, including a comprehensive schematic or tabular representation of the products and processes Tesco is British general merchandise and a multinational grocery which is headquartered in United Kingdom. After Wal-Mart it is the second largest retailer measured in terms of profit. Tesco is the grocery market leader in the United Kingdom and has its stores across 12 countries which include Europe, North America, Malaysia, Asia, Thailand and the Republic of Ireland. It is the largest food retailer in UK which operates through 2318 stores worldwide. In 1914 the company was founded by Jack Cohen when he started additional groceries from a stall within the East End market located in London (Tesco and Society Report, 2013). In 1920s the brand name TESCO appeared on the packets of tea. TESCO sells over 40,000 food products in all its superstores and also sells non-food line and clothing products. Tesco has the following stores types, and each store type has a particular customer benefit as shown in the figure: The store offerings of TESCO are as follows: Food retail Non-food retail Petrol Stations Home living range Tesco has the following process on basis of which they operate as shown in the diagram below. It majorly has four main values such as transparency, to share the values with its suppliers, monitoring and improvement. Critical Analysis: Social responsibility and environmental issues associated with those products and processes Tesco is a large company and their various methods of their operations to remain the largest retailer. The products and the processes that TESCO has can create a large environmental threat as it uses the scarce natural resources such as energy and water. They even the use of large refrigerated systems in these supermarkets enables the harmful hydro fluorocarbon to be emitted into the atmosphere thus affecting the atmosphere and resulting into climate change (Mullerat, 2011, p.89).These kinds of products and process pressurises a company to act in a social responsible way by benefitting the society in overall. The major societal issue concerned with the TESCO’s products and processes is the environmental damage they can cause. As the supply chain of the company may give out large amount of carbon emissions which is very harmful for the environment and sometimes the process may also result into large amount of food wastage. Even the products offered should be healthy in nature that too at a reasonable cost. These large company also puts a pressure on the suppliers which can affect the relationships of the suppliers and company and thus affecting the quality of products and services delivered by the company (Schwartz, 2011, pp.55-56).The major societal issues linked with these products and processes are to serve the society as a whole and the environmental issues is to minimise the obligations from all the stakeholders through regulations and corporate governance. Hence the issues majorly linked are sustainable consumption and production in order to cut down the waste, and to reduce consumption of resources and in turn minimise the environmental damage. Ways the company has dealt with those issues Tesco has come up with many ways by engaging their staff and consumers to achieve social responsibility. The responsibility Tesco has undertaken is promoting education, raising funds and charity for foundations. Tesco has made it an aim for providing healthy food to its consumers and at a reasonable charge by not compromising on its quality, having a nutrition labelling technique to ensure the level of nutrition in the products they deliver, changing of their product mix to more of organic products (Tesco Corporate Responsibility, 2014). Tesco had developed a campaign in 1996 to spread awareness towards energy consumption, and they focus on reducing waste at their supply chain. They have even brought down the energy consumption by 35% by 2005. The company has even initiated carbon-foot printing by labelling 70000 products with the carbon they individually created. They are even aiming at building zero carbon emissions buildings by 2020. Tesco is even working with the Energy saving trust to offer products that are energy efficient. Tesco was the first retail company in UK to launch the independent label to ensure that the fruits and vegetables they grow in an environmentally sound manner. The Ethical Trading Initiative opted by Tesco give them specific goal with which the company works with their employees worldwide. Localized tasks and humanity sponsorships are a good way to link accompany with the community. Tesco achieved this through by its own crusade called the Computers for Schools where they deliver computers and accessories to localized schools. Tesco has established a corporate responsibility committee in 2001 encompassing of cross functional executives (Idowu and Filho, 2008, p.59).They have a steering wheel to evaluate the CSR activities of the company and ensure that CSR approach is an everyday performance of the company. Since the operations of the company requires lot of energy they have being using renewable energy and have set up the largest roof mounted solar installations in its distribution centre. Tesco has even launched Green Things which are the range of environmentally friendly products in US; this has proven to be of great help for the consumers. In the year 2010 Tesco has launched Home Efficiency Services in the UK. These services offer solar energy and insulation products and also provide information about planning issues and government funding (Fernando, 2009, p.79). Tesco has in store Energy Champions whose main function is to save energy in the stores and even educate their fellow colleagues on the need to save energy. A priority for Tesco is to reduce waste; every store of Tesco located in UK has targets set on waste management and is assessed on a weekly basis. Tesco works effectively for waste management and recycling of products. From the social point of view Tesco supports the UK public health campaign Change4life which helps the customers to make healthier choices. They extend their support through fruit and vegetables promotions in-store, by local initiatives that are organised by in store community champions, and provides articles on healthy eating on Tesco magazine. Being a large retailer of alcohol it is the duty of the company to sell it responsibly, which Tesco does through Community Alcohol Partnerships which is a UK government initiative (Macdonald, 2013, p.15).The aim of this is to work collaboratively with the police, schools, and alcohol retailers to encourage responsible drinking. Tesco even organizes UK community fairs which have a combination of stalls from national and local charities, suppliers and community groups. Resulting social responsibility and environmental performance and credentials of the products and processes and, thereby, the company The social responsibility and environmental performance of the products and processes that the company has opted for has made them caring for the environment, buying and selling of the products responsibly, providing support to local communities, providing customers with healthy choices, and even creating jobs and careers. These responsibilities makes Tesco create a sustainable core for a successful growth in business. Their strong relationships with suppliers help them to work innovatively to meet the changing needs of the customers and even attract new suppliers to deal with them. Tesco by decreasing their impact on the environment saves money and helps the company to become sustainable and competitive (Williams, 2013, pp.66-67). They evolved as a green pioneer by offering some environmental friendly products. The healthy products offered by Tesco help the customers to eat more healthily and fight against obesity. The ‘get active’ programme helps the customers to get fit as well as increases their loyalty (Crowther, 2008, p.44).Their focus is on reducing the carbon emissions and use of renewable sources, due to this environmental responsibility though the various methods the company has opted they may become a zero carbon business in the near future and help in causing less impact on the climate change which is a major environmental issue. By generating renewable energy of their own Tesco is able to eliminate the use of scarce resources which are non renewable. Low carbon stores helps in cutting down the carbon footprint across the world hence lesser amount of carbon emissions in the atmosphere (Idowu and Louche, 2011, p.78). The method of natural refrigeration as being used by Tesco helps in reducing the discharge of hydro fluorocarbons into the atmosphere which depletes the ozone layer hence affecting the global climatic conditions. The recycling of their aluminium cans and other products are initiated by giving club card points to the customers, these recycling activity helps to cut down on some resource usage at the supply chain hence causing less environmental impact. The packaging of the products is done in a way that has the lowest carbon impact which results in minimum food wastage and thereby lesser carbon emissions (Randall and Seth, 2011, pp.117-119). By giving healthy products to its customers Tesco can give the best information on the nutritional value of their products, and make their customers and staff live a healthy life. Tesco results in providing the best practices and standards in relation to food safety for their customers (Mullerat, 2010, pp.101-102). Tesco through serving different communities ensure that they understand the needs of these customers and can serve them better. By donating, they ensure that they are fulfilling their responsibility towards the society. Thus the methods undertaken by Tesco to fulfil its social and environmental makes it a eco friendly brand and even being such a large retailer it aims at not maximizing its profit only but also makes sure that the possible threats imposed by the retailers to the environment is lessened. The eco friendly products that sell through home services makes the society know the need for being concerned towards developing a green environment. Their initiatives are of much help to the society and environment as a whole. Recommendations with supporting justification for further improvements in corporate social responsibility and environmental performance Tesco as a company has a goal of increasing the shareholder’s value but it cannot be achieved by following the law or by value creation but by developing active relationship with public interest. Tesco has realized of the impact of all their operations on environment and develops various methods to lessen this impact. It follows its corporate social responsibility well and all its strategy should be followed on a regular basis to benefit the society and environment. However there are certain areas where the company can improve on. Tesco like working with some organizations can even work with the National Farmers Union and Food and Drink Federation to record emissions across their supply chain and then take actions accordingly. They need to handle the disposal phase of products in order to reduce the large source of emission. Tesco should provide strict targets for landfill and packaging reduction (Sun, Stewart and Pollard, 2010, pp.212-213). Tesco is recommended to come up with certain activities in store to engage customers to minimise wastage of food. Water saving is a key area of concern in the supply chain of Tesco and they should opt for some alternative source in areas where there is water stress. Tesco has taken initiative to use renewable source of energy but even efficient alternative sources of water supply is essential as it is an important source of energy and reduction in the level of this resource can greatly affect the environment. Tesco can even engage its employees to spread awareness on sustainability not only on the shop floor to aid the customers in order to make sustainable choices but also in the purchasing activities behind the scene. Tesco aims at effective buying and selling of products they even have strong partnerships with the suppliers (Crowther and Bacchus, 2004, pp.190-192). They can effectively work along with their suppliers for improving the efficiency in farming systems and by adopting certain practices best suited for improving biodiversity in the farms. Tesco can make use of renewable heat incentive and incoming feed in tariffs either by leasing space to community owned projects or as a direct investment in their energy emission cuts or long-term heats. Tesco in order to lessen on environmental damage and to take certain predefined steps can do constant assessment on its current and predicted risks and report the essentials to the government. Tesco contributes greatly to various communities they should even come up with more of school programs, as they have established schools in certain areas but there are certain towns such as in Turkey where there program has not yet be initiated. They even run campaigns on how to avoid obesity and to make the population be aware of the conditions that results into obesity and hence the need for consuming healthy food products. This can improve their performance towards society more and can set a benchmark for other retailers. They need to improve on the training and development of its employees to make them aware of all its activities and for this they can keep the retired colleagues as a coach for these employees since they have worked with Tesco and know the method by which the organization performs. Installation of more of solar panels will increase the environmental performance of Tesco. These are some of the recommended methods through which Tesco can improve more on its societal and environmental performance. References Crowther, D., Aras, G. 2008. Corporate Social Responsibility. UK: Bookboon. Crowther, D., Bacchus, L. R. 2004. Perspectives on Corporate Social Responsibility. Great Britain: Ashgate Publishing, Ltd. Fernando, A.C. 2009. Corporate Governance: Principles, Policies and Practices. New Delhi: Pearson Education India. Idowu, S. A., Filho, W. L. 2008. Global practices of Corporate Social Responsibility. Germany: Springer. Idowu, S. A., Louche, C. 2011. Theory and practice of Corporate Social Responsibility. Belgium: Springer. Johnson, G., Scholes, K. 2003. Exploring Corporate Strategy. London: Prentice Hill. Macdonald, R. 2013. Global Corporate Social Responsibility of Tesco. USA: GRIN Verlag. Mullerat, R. 2010. International Corporate Social Responsibility. UK: Kluwer Law International. Mullerat, R. 2011. Corporate Social Responsibility. United Kingdom: Kluwer Law International. Randall, G., Seth, A. 2011. The Grocers: The Rise and Rise of Supermarket Chain. UK: Kogan Page Publishers. Schwartz, M. S. 2011. Corporate Social Responsibility. Canada: Broadview Press. Sun, W., Stewart, J., Pollard, D. 2010. Reframing Corporate Social Responsibility. UK: Emerald group publishing. Tesco and Society Report, 2013. TESCO, what matters now using our scale for good. [Online]. Available at: http://www.tescoplc.com/files/pdf/reports/tesco_and_society_2013_ipad.pdf#ref_society/report [Accessed on 7th March 2014]. Tesco Corporate Responsibility, 2014. Tesco’s commitment to Corporate Responsibility [Online]. Available at: http://www.tesco.ie/corporate-responsibility. [Accessed on 7th March 2014]. Williams, O. F. 2013. Corporate Social Responsibility. New York: Rutledge. Read More