Key Skills of Tesco Success and Warren Buffet - Lab Report Example

? Tesco - Warren Buffet 0 Introduction The report aims to talks about entrepreneurship and the skills associated with it. The report is based on Tesco and the man behind Tesco success, Warren Buffet. The overall purpose of the report is to analysis the key skills of entrepreneurs such as Warren Buffet which has helped them to become great entrepreneurs. By analyzing the key skills it will help individuals to cultivate the necessary skills which can make one successful entrepreneur. In addition to the entrepreneur’s skills, the concept of marketing and marketing mix has also been explained in relation to the chosen organization. In an organization the culture plays a vital role and henceforth the report also aims to discuss about the organizational culture that exists in Tesco. Tesco is known for its variety of culture that it holds with it and is one of the best examples to talk about when it comes to organizational culture. Along with organizational culture the report talk about motivation and the types of motivational theory that is adopted by organization to motivate its employees. Motivation is high crucial and Tesco has been a leader in doing that. It motivates its employees to a very high extend which helps it to retain the employees for a long period of time. 1.0 Findings 2.1 Entrepreneur and Skills The term entrepreneur is derived from French word, “entreprendre” which means “to undertake.” The entrepreneur is one who undertakes to manage, organize as well as assume the risk of the business. In recent past the entrepreneurs have been doing more than the above mentioned task and hence the need to broaden the definition. In today’s world, the entrepreneur is an innovator, developer who seems to recognize and seize the opportunities and convert into workable or marketable ideas. They add value through their effort, time, money and skills and assume the risk of the competitors and implement the ideas and thereby realize the reward from the given efforts Kuratko & Hodgetts (2008:4). A generally accepted definition of entrepreneurship which was provided by Shane & Vnkataraman (1997) states, “A process that involves the discovery, evaluation, and exploitation of opportunities to introduce new products, services, processes, ways or organizing, or markets” Baum, Frese & Baron (2007:6) Profile about Warren Buffett Business man and investor Warren Buffett was born on 30 August, 1930 in Nebraska. He is an American business investor, philanthropist and magnate and is considered to be the most successful business man in the 20 century. Buffett is the chairman, CEO and the primary shareholders of Berkshire Hathaway and has been consistently ranked as the wealthiest people in the world. In the year 2012, Time magazine had ranked Buffett to be the most influential person globally (Forbes 2013). Warren Buffett is an entrepreneur by occupation also known as “Oracle of Omaha” and regarded as investment guru (Bio 2013). Warren possessed the skill of investing money at the right place and at the right time. It is very much important for an entrepreneur to analyse the situations carefully and invest. Warren had invested in Tesco and has given a boost to the embattled chief executive of Tesco, Phil Clarke and thus increased his stake in the supermarket chain (Fletcher 2012). When the share price of Tesco fell in 2012, nearly after 20 years, Berkshire Hathaway took advantage of this and thus increased its stake to 5.08% (Fernon 2012). 2.2 Marketing and Marketing Mix Marketing can be defined as the process which is involved in communicating the value of the product or services to the customers. Marketing encompasses integrating, merging and controlling supervision of organisations effort which have a bearing on sales (Reid & Bojanic 2009:8). Marketing mix constituted of 4Ps which are product, place, price and promotion and plays a vital role in setting up strategy for the organisation and is a key tool in marketing. Following is the marketing mix of Tesco, retailers which deals in grocery product and other household products. Tesco mainly deals in household and grocery products and has also expanded its product line to IT, financial services along with business services. Tesco has the widest range of food retailer; Everyday Value and Finest are the two largest food brands operating in UK (Tesco Plc 2013). Tesco operates in about 14 markets across Asia, Europe and North America. In addition to UK, Tesco has its offices in China, India, Malaysia, Thailand, Czech Republic, Hungary, Poland, Ireland, Slovakia, Turkey and USA. In 2012 Tesco entered to an agreement with Japan’s retail group, Aeon (Tesco Plc 2013). Tesco is known for its low cost pricing strategy and is the market leader in low cost pricing strategy. The motto of Tesco was to “pile them high and sell them cheap.” But as Tesco moved up in the market, it moved from low price and adopted the differentiation strategy (Dransfield 2001:54). But still Tesco is known for its cost leadership and is among the third largest retailer globally. As part of its promotional strategy Tesco makes extensive use of media and invest huge amount in advertising strategy as it aims to win back the British shoppers (Felsted 2012). 2.3 Organisational Culture Organisational culture usually refers to “system of shared meaning” which are held by members and distinguishing the organisation from others. Organisational culture tends to provide the employees with a clear understanding of “the way things are done around here” (Divedi 1995:9). The system of shared meaning is a set of key characteristics which the organisation values and some of them includes, Innovation and risk taking; outcome orientation; attention to detail; people orientation; team orientation; stability and aggressiveness towards work (Robbins 2010:248). Tesco follows a normative organisational culture where the employees tend to identify closely with the values and goals of organisation and become highly committed towards the organisation. This process generates a culture which is at its best and is highly suited for customer focused and customer service activities (Newman & Cullen 2002:404). At Tesco, every employee and employers supports each other by sharing knowledge of knowing something, working together as a team, enjoying the work and celebrating at times when it is required. Just as Tesco values its customers, it also values its staff and calls it as People promises. Some of them are to be treated with respect, interesting job, opportunity to move along with a manger ho will help in times of need. In addition three little words which describes the culture of Tesco is better, simpler and cheaper. Better for its customers and help them with shopping experience so that they keep revisiting Tesco; the word ‘Simpler’ is mainly for the staff in order to make them work efficiently and with much lesser stress; Cheaper is the word used to describe Tesco by way of keeping the customers loyal and staff motivated and happy. Tesco looks after its people and treat colleagues with respect and trust and in return they will look after the customers and that’s one of the reasons why employee at Tesco remains 25 years or even more (Tesco n.d). 2.4 Motivation The term motivation has been derived from the word “motive” which tends to activates, directs or energies behaviour of an individual towards goals. Motives are an expression of an individual’s needs and goals. Motivation may be defined as process of stimulating an individual in order to adopt a desired action and intensify the willingness of the people to work harder in order to achieve the objectives of the organisation and the motives should be satisfied by offering incentives. According to Robert Dubin, motivation means something which has the capacity to move person into action and continue in the course of action which has been already initiated (Kumar 2008:12). Motivation is important as it induces an employee to work and give its best for offering made by the company in the form of both financial and non financial incentives and rewards. Among many motivational methods and programs, Tesco promotes motivation through training and development. Tesco aims to motivate the employees by applying both the theories of Maslow and Herzberg. Tesco motivates as well as empowers its employees with timely and appropriate communications, delegating the responsibility and involving the entire staff in decision making process. In addition Tesco also implements Taylor’s motivational theory as the employee reward program at Tesco is similar to that of Taylor’s theory. Tesco’s financial reward packages are among the motivating factors which keeps the employees work at their best. Tesco, in addition to pay increase goes way beyond and supports the lifestyle of employees with relevant and also targeted benefits. Non financial factors tend to motivate and employees feel content in the work place. Employee motivation is likely to be higher for organisation which invests in staff through training and development (The Times 100 2013). 3.0 Conclusion To conclude it has been seen that Warren Buffett has been proved to be influential entrepreneur and has invested in Tesco and increased its stake to 5.08%. It has been learned that entrepreneur should know how and when to invest and at what price. In addition Tesco still rules the retail sector through its low priced strategy and off lately also started to operate in Japan, in addition to the 14 countries across the globe. Tesco follows a normative organisational culture and works closely for the betterment of its customers and staffs and finally it tends to motivate the staff through training and development and incorporates Maslow’s, Herzberg and Taylor’s theory of motivations and is ranked third largest retailer globally. Reference Baum, J. R. Frese, M. and Baron, R. A. (2007). The Psychology of Entrepreneurship. USA: Routledge. Bio. (2013). Warren Buffett biography. Retrieved from http://www.biography.com/people/warren-buffett-9230729?page=2 Divedi, R. K. (1995). Organizational Culture And Performance. M.D. Publications Pvt. Ltd. Dransfield, R. (2001). Corporate Strategy. UK: Heinemann. Felsted, A. (2012). Tesco to shake up advertising strategy. Retrieved from Fernon, A. (2012). Was Buffett Wrong To Invest In Tesco Plc? Retrieved from http://seekingalpha.com/article/910091-was-buffett-wrong-to-invest-in-tesco-plc Fletcher, N. (2012). Warren Buffett increases stake in Tesco. Retrieved from http://www.guardian.co.uk/business/2012/jan/19/warren-buffett-tesco-stake Forbes. (2013). Warren Buffett. Retrieved from http://www.forbes.com/profile/warren-buffett/ http://www.ft.com/intl/cms/s/0/2658cd82-83f2-11e1-82ca-00144feab49a.html#axzz2LiIAkvZz Kumar, S. A. (2008). Entrepreneurship Development. New Age International. Kuratko, D. F. and Hodgetts, R. M. (2008). Entrepreneurship: Theory, Process, Practice. USA: Cengage Learning Newman, A. J. and Cullen, P. (2002). Retailing: Environment & Operations. UK: Cengage Learning EMEA. Robbins, S. P. (2010). Essentials Of Organizational Behavior, 10/E. Pearson Education India. Tesco Plc. (2013). Our businesses. Retrieved from http://www.tescoplc.com/index.asp?pageid=8 Tesco. (No Date). Our culture. Retrieved from http://www.tesco-graduates.com/home/working/our-culture The Times 100. (2013). Motivational theory in practice at Tesco: A Tesco case study. Retrieved from http://businesscasestudies.co.uk/tesco/motivational-theory-in-practice-at-tesco/the-mayo-effect.html#axzz2JRrAkffw Read More