The British grocery sector is one of the most competitive and fierce within the retail sector. It is also increasing becoming less profitable, with demand flat lining and over capacity eroding the big players’ profitability. This is evident from Tesco’s recent losses of £6.4bn for the year to the end of February (Source). Not only are these the worst result in its 96 year history of the company, but it’s also the biggest loss in high street history and the sixth worst loss for any British company. Many have pointed towards the rise of the discount grocers as a leading factor in reshaping the grocery sector, attracting cash conscious consumers away from the established brands of the British market. However, price alone or a competitive environment is not the only factor that is reshaping the grocery industry. Instead, online retailers such as retailer Amazon are leading a paradigm shift in the way people shop. To succeed in this new environment, established grocers such as Tesco will have to take advantage of new innovations, to create customer experiences that deliver true differentiation. Significant capital investment will be required to bring these innovative changes; which could be increasing challenging as Tesco is going through one of the worst years in terms financial performance in its history.
Could a Balanced Scorecard approach enable Tesco to realign its strategy and vision that will allow it to navigate through the challenges it’s facing today. Strategy is the most important component of a scorecard and forms the basis for communicating the organization’s approach for gaining a competitive advantage and for improving mission effectiveness for stakeholders. Before building a scorecard system it is important to understand organization’s customers and stakeholders and equally importantly their needs.
According to Kaplan and Norton (1992), customers tend to concern about four main things: time, quality, service and the cost. At present the customer perspective at Tesco is articulated by taking these concerns into their objectives and is then measuring them through its ‘Steering wheel’ (Tesco CRR, 2012). The main objectives of the Tesco regarding the customer are:
Highest quality
Lowest price
Customer satisfaction through product quality and price
Customer Retention
Tesco's main aim or goal is to earn lifetime loyalty of the customers by giving them highest quality products. It is measures this by the percentage of defective products returned to them by customers. To further improve their quality and decrease their cost, Tesco can use Total Quality Management, which many grocers have successfully adopted. Moreover, customer loyalty can be increased by further lowering the prices and making them even more competitive compared to its closest rivals. The most important objective is customer satisfaction with product quality and price.
Customer retention is another key success factor in assessing repeat purchases by same customers at Tesco. The Tesco ClubCard is a world-leading loyalty card scheme, with over 16 million active cardholders (telegraph). This ClubCard enables Tesco to better understand their customers and say a big thank you for shopping with them. But more importantly, using the data from ClubCard, Tesco can predict consumer trends and react to them.
The main objectives of the Tesco regarding the financial perspective are sales growth and maximisation of profits. Every organisation wants to grow and increase profits; it is no different with Tesco. Tesco measures its sales growth by comparing the sales of the company as a five year summary.
According to Kaplan and Norton (1992), the internal perspective of a balanced scorecard consists of the factors that affect the cycle time, employee skills and productivity of the company. The main objectives of Tesco regarding the internal perspective are:
Employee skills
Improve product quality
Employee skills are one of the main objectives of any company. Tesco
Related Documents: Strategic Management and Tesco Essay
Human Resource Management Introdction: Strategic human resource management (strategic HRM, or SHRM) may be regarded as an approach to the management of human resources that provides a strategic framework to support long-term business goals and outcomes. The approach is concerned with longer-term people issues and macro-concerns about structure, quality, culture, values, commitment and matching resources to future need. Defination: Strategic human resource management includes typical human resource…
Evaluate the suitability of the emergent and intended approaches to strategic management for Tesco One of the world’s largest retailers operating in 12 different countries and with over 500,000 employees is Tesco PLC (Tesco, 2014). Tesco’s states their strategic priorities as to continue their investment in the strong UK businesses, establish a multichannel leadership and to pursue disciplined international growth (Tesco, 2014). In any company, strategy plays a key part in its success or failure…
MANAGEMENT IN AN ORGANISATION. What is Management? Put simply, management is the process of organising, planning, leading and controlling resources within an entity with the overall aim of achieving its objectives (Terry, 1968). This basic principal can then be implemented within an organisation (be it profit or non-profit), business or institution in order to come up with a broader more relevant definition. The function that coordinates the efforts of people to accomplish goals and objectives…
consideration of the strategic linkages between business strategy and purchasing strategy Adele Business Strategy- Outcome 1 Characteristics of a strategic management: For specific organisations like Tesco, ford motors and the public sector, the characteristics will be all that similar in every way in order to have a good control over managing their supply chain. A key topic is Integration, this is when a company takes their planning side and specifies it under the strategic management, it is also essential…
Tesco: expanding at the highest rate in the global market Abstract: In today’s world most of the companies depend on its global strategies as it plays a crucial role to succeed in the throat-cutting competition between the companies. This report of international strategic management explains how Tesco introduce, devise and implement its international strategy to strive against the other companies in this rapidly changing market conditions. In this report we are also going to illustrate…
1. Critically evaluate the effectiveness of Tesco’s management of the crisis. Please compare to other examples in different crisis situations. When the horsemeat scandal was revealed to the public in January 2013, the affected organsiations, Tesco in particular, were expected to be open about its social and ethical accountability, since their products’ quality and safety were not met to its normal satisfactory level; Tesco therefore was pressured by the public about its social, ethical and environmental…
Tesco Information System Name of Student: Robert Onyango Course Instructor: Mr. Bonoko Course: Date of Submission Introduction This paper is generally about information systems in an organisation. To illustrate this further, the author will specifically look at Tesco, an organisation of choice. This paper intends to highlight a specific information system––management information systems––and explore it thoroughly using the various analytical models in…
analysis and e-business model essay Introduction The study conducts an audit of the internal and external environment of Tesco. Internal audit will be conducted through SWOT analysis. Analysis of the external environment will be done through PEST analysis. Once this is done, Tesco's e-business strategy will be discussed and examined in detail. Brief Company Overview Tesco is one of the biggest names in food retail across the world and is the biggest food retailer in UK. Its operation is not limited…
Tesco Plc Tesco is the supermarket leader in the UK for last few years. Tesco was founded by Jack Cohen in 1919. He started the business by selling surplus groceries from a stall in the East of London. The profit that he made in the first day was £1 and sales of £4. The first brand product sold by Jack Cohen was Tesco Tea, this was before the company was know as Tesco. 1929 The first Tesco store was opened in BURNTOAK, EDGWARE, NORTH LONDON. Afterwards in 1932 Tesco became a private limited company…