Tescos Group of Companies and Its Business Operations - Essay Example

Tesco’s Group of Companies and Its Business Operations Tesco’s business operations commenced in 1929 when its first store was opened in Burnt Oak, Middle sex London. Since its inception, Tesco employed professionalism throughout its endeavor in order to achieve the best, which allowed the firm to gain popularity and admiration thereby becoming a familiar feature in most households, in London by the early 1960s. Tesco took advantage of the eighties wave where many business ventures in its line of operations adopted the large out- of- town supermarkets that changed the game in food retail operations (Birkin 2012, 104). In the 1990s, Tesco continued with its professionalism and pioneering strategies whereby it made use of the numerous innovations such as the introduction of Tesco Metro and Tesco Express. Tesco Metro was developed as a new store concept that could provide city residents with all their needs under one roof while Tesco Express was the first petrol station convenience store in London. In order to keep up with the growth trend, Tesco introduced a loyalty card that it branded ‘clubcard’ in the year 1995, which acted as the first United Kingdom’s customer loyalty card. Two years later after the introduction of club card, Tesco formed a joint venture with the Royal bank of Scotland with the aim of improving the range of financial services. Since 2000, Tesco has utilized its internet-based operations, a venture that has led to immense growth and profitability (Plunkett, 2008, 147). The trend has led to the increase of non-food sales both in the stores and online, which has resulted to Tesco’s recognition as the UK’s largest CD retailer. Tesco as a leading grocery and general merchandise venture in United Kingdom employs more than two hundred thousand fulltime employees and has approximately three thousand stores, out of which one thousand five hundred in approximation are Express convenience shops. Philip Clarke who took over as the chief executive officer of the company after he replaced Sir Terry Leahy in the year 2011 heads Tesco venture. The change of guard agitated many senior employees such that many left their duties though at the helm remains Philip Clarke. Tesco group of Companies has engaged in a wide-ranging assortment of products, in United Kingdom over the years for instance, Tesco healthy living, Tesco everyday value, Tesco bakery, Tesco Christmas, Clothing at Tesco, Tesco wholefoods, Tesco world foods and Tesco technical among other products and services. Tesco healthy living entails food products that have lower fat, sugar and salt content than in standard Tesco Brand (ZU, 2009, 154). Tesco everyday value are the products that help to minimize Tesco’s cost, which may include simple packing in order to keep the Tesco’s retail cost as low as possible. Tesco bakery entails pastries and breads that are baked on a daily basis, including cookies though various stores tend to prefer on producing their particular baked items, which are more appealing to their customers. Tesco Christmas constitutes of seasonal goods and products that Tesco group of Companies stock during the Christmas period (Parkinson et al. 2006, 124). Clothing at Tesco is an experience filled with new clothing opportunities as it houses the best cloth lines in the world including Cherokee, True and Stone Bay, though Tesco venture has its own clothing variety. Tesco wholefoods incorporate a wide range of natural and unprocessed products such as, dried fruit, seeds and nuts. Tesco World foods enable the venture to specialize in food products from all over the world. Tesco technical enables the business venture to capitalize on developing own brands of electrical items such as DVD player, television and computers (Peter et al. 2013, 125). Using its internet based operations, Tesco has placed itself as a leading internet business for grocery where Tesco. Com has enabled the venture to reach 90% of the United Kingdom’s populace while enabling more than seventy thousand deliveries to be made in weekly basis. Tesco group of companies has extended its operational boundaries in order to offer their products and services in other geographical localities (Flensted & Toft 2009, 123). In 2004, Tesco group of companies had established many stores outside United Kingdom, its home market, although the revenue collected in United Kingdom surpassed that received in other regions as it accounted for 75% of the total revenue the company attained. Following the preliminary results analysis of 2011 to 2012, Tesco group of companies had established numerous stores in Europe, Asia and North America. During this period, Tesco venture had opened stores in twelve countries excluding the United Kingdom totaling at three thousand three hundred and seventy six stores (Woods, 2012, 156). In Czech Republic, the company has three hundred and twenty two stores with three Tesco Extra stores where one is located in Prague and Borno, while the other two are located in Plzen. In mainland, China, Tesco Company has opened a hundred and twenty-four stores since its toehold in the Chinese market in 2004. In Hungary, the company has established two hundred and thirteen stores since it entered the Hungarian market in 1994 with two Tesco Extra stores opened in Budapest and Debrecen in 2012. In Poland, the venture operates four hundred and sixty stores since it set its foot on the market in 1995. In Japan, Tesco Company entered the market in 2003 and by 2011; the venture had opened a hundred and twenty-one stores. Tesco group of companies entered the Malaysian market in 2002 and by the dates of the report, the company had opened forty-seven stores some in Puchong and Selangor. In Slovakia, Tesco Company has opened a hundred and fifty stores since its inception in 1996. Tesco group of companies has opened four hundred and fifty eight stores in South Korea since it entered the market in 1999. In Thailand, Tesco has immensely achieved growth as it has opened a thousand and ninety two stores since its entry in the Thailand market, in 1998. In Turkey, the company has opened a hundred and ninety one stores since its entry into the market in 2003. In United States, Tesco had opened a hundred and eighty five since 2007 when the venture entered the market in the United States. In the year 2011 to 2012, Tesco group of companies generated an annual sale of 65.15 billion pounds out of which 42.8 billion pounds were generated from the sales made in United Kingdom. Though there has been a constant rise of 5% year on year on the UK annual sales, the United Kingdom operating profit declined by 1%, which made the United Kingdom trading margin fall below 6% a trend that has never been was experienced since 2005. Reduced inflation resulting from low- price promotions and weak sales experienced during the Christmas period were attributed as the major cause of the weakened profits. Tesco group of companies has developed strategies that have placed the firm as a major beneficiary in the market share (Walsh 2011 Pg. 111). By the annual analysis at the end of 2006, Tesco was ranked as the fourth largest retailer in the world after the major competitors such as Wall- Mart, Carrefour, and Home Depot. The trend changed in 2007 when Home Depot sold its professional supply division and the declined value of the United States dollar as compared to the British Pounds, which enabled Tesco venture to move ahead of Home Depot. In the United Kingdom, Tesco venture accounts for 30.2% market share, which depicts a substantial mark of growth. The future of Tesco group of companies relies on the implementation of various core objectives as demystified in this paper. Tesco’s goal to revamp the store in the United Kingdom forms the crux of the matter (Kumar & Reinartz 2011, 235). Rather than adding new stores, Tesco is looking forward to improving the existing store whereby it has earmarked some cash to facilitate the intended objective. In order to survive in the robust global market, Tesco intends to involve creative marketing agencies that will help handle its marketing stances. Tesco looks forward to improving its product loyalty by upholding banking services that will help the company to augment its products loyalty to its loyal Clubcard customers. Having undertaken interviews with numerous key personnel, the common notion from all the interviewed parties is that Tesco group of companies will continue to grow until it gains recognition from all households in a global scale. Bibliography Birkin, J. (2012). Business advantage. Cambridge, Cambridge University Press. Flensted, R., Sibbernsen, B., & Toft, B. (2009). What's up, Britain?: landeområdet Storbritannien. Kbh, Gyldendal. Kumar, V., & Reinartz, W. (2011). Customer Relationship Management Concept, Strategy, and Tools. Berlin, Springer Berlin. Parkinson, L et al (2006). Managing Marketing Performance . New York NY: Routledge Peter, H et al. (2013). Creating a Lean and Green Business System: Techniques for Improving Profits and Sustainability. Florida FL: CRC Press Plunkett, Jack W. (2008). 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