Background

Established in the year of 1919, Tesco started its journey as a market stall. In the year of 1929, it opened its first retail store in the United Kingdom (Tescoplc.com 2014). The company since then started achieving growth. The company became the leading brand by offering quality goods at an affordable price. Therefore, the company has been able to build a quality relationship with its customers. The company has gained the trust of its consumer, which helped it being the largest leading brand, not only in the United Kingdom but also in the whole world (Bizforum.org 2015). According to the market survey, Tesco currently operates in twelve countries across the world. As per the records, the company presently has 530000 employees over its 2291 stores in different locations around the globe.

In the United Kingdom itself, the company has established over 780 stores (Bbc.co.uk 2014). The company every week satisfies around 10 million consumers across the country by serving quality products. Tesco secures the highest position in the in the grocery retail industry like ASDA and so on. The company mainly offers products out of which 30 % is the grocery products in the United Kingdom only. However, the company has expanded its product range and now offers garments, electronic goods, fuel energy, and financial services. In the entire business sector, Tesco has become the largest group to be delivering goods as well as services. In all part of the United Kingdom, the company has employed around 310000 workers over 780retail stores (Bbc.co.uk 2014). As per the statement of the Chief Executive Officer of the company, it pulls 65% (Bbc.co.uk 2014) of the whole profit from its business in the United Kingdom as it is based in the United Kingdom.

The company provides different channel services to the consumers. In the year of 1997, Tesco secured its place the first retailer, which served home-based shopping services to its customer and pulled a significant amount of profit in their business. Since then, Tesco has been able to make itself as the most profit-making successful retail service provider. The sale margin of the company is more than 2 million every month. The company offers online-based purchasing facility to the customers through which the cust0mers can get the delivery of the product at their suitable location. Special benefits like cub cards are given to the customers those have been loyal to the company, which help the company in making its relationship with the customers stronger. The company holds 30 % (Bbc.co.uk 2014) of the whole market share grocery industry in the United Kingdom. Therefore, it can be said that Tesco is now the largest brand as well as the leader in the market. Due to the rise of ALDI and LiDI, which are the British discount chain of shoppers, the profit level of the company has been lowered. As per the market report, Tesco’s market share has been lowered to 28.8 %, which was previously at 29.6% (Bbc.co.uk 2014). Another factor that affects the growth of the company is the competition in the market. Waitrose and Morrison are the some of the prominent competitors in the industry, with which the company competes.

Operational Issues Faced by Tesco

The company now facing some of the major issues related to operations, which have become threats to the further growth of the company (Wheelen et al. 2017). Some of the major operational issues have been mentioned below that decreased the company’s market share in the grocery market.

Nature and demand of customers have been changing with time. Being the largest brand in the retail grocery market in the United States as well as across the world, the customer demand has been changed, rather it has increased (Eden and Ackerman 2013). Due to high product demand from the customers, the company is seen failing to meet their commitments in service area as well as in products.

Logistic costs

The company primarily emphasizes on physical distribution of their products. However, the existing competitors like Morrison focus on e-logistic strategy in order to delivery of their products (Hill, Jones, and Schilling 2014). Because of the incident, the company loses 30% of its sales value.

Organizational disputes can be considered as one of the major issues of the operational issues of the company. The working culture of the company is discouraging the employee motivation and as a result, poor performance has been noticed in its business (Hill, Jones, and Schilling 2014). The culture of the company being complex affects the management as well as the overall business of the company.

Like other industry retail, grocery market has been changing day by day. Therefore, the external environments, which regulate the business of the organization, excessively pressurize the growth of the company (Wheelen et al. 2017). As the market scenario has been changed and more brands have been entered in the retail grocery market, the company experiences losses. These companies, which have entered in the industry aim in order to provide high quality products at a very low price range. This puts additional pressure on the company. The LiDI and ALDI and their growth in the market are one of the major threat to the company.

The largest company in the retail grocery market in the United States, the company itself acquires major part of the market share within the industry (Eden and Ackerman 2013). In order to reach out to more customers, the company has started selling its products over the internet. Delivery of the product to the home of the customer indeed was an important measure taken by the company. However, due to top un-appropriate implementation of the strategy, the company failed to bring back the lost profit margin of the company. High product delivery cost is one of the major reasons that the company has lost the reputation of the company.

New Strategies for Improvement

After analyzing the case, it has been noticed that the company is currently facing some major issues in terms of strategic management. As the company owns over 780 stores in the retail market along with its private commercial website through which the company provides home-based shopping facility, the main issue that the company is presently facing is that all the stores of the company receives frequent orders, but it lacks the essential infrastructures in order to manage them (Shalashova 2013). In addition to that, Tesco have lack management to keep the track of stock of products for both online and physical delivering. This issue has made the company unable to implement the best management strategy in their business. Information regarding stores and the product range is not mentioned by the management system. However, the company has its stores in all the major countries in the world; it should expand its stores more across the world. The

If Tesco expands its business over the world, the Princ2 methodology can be adopted for the purpose of its business strategic management. This method will benefit the company in the top line of strategic management as well as the bottom line of the strategy (Edwards 2014). The prince2 methodology is a type-structured management of project methodology. The methodology is a standard that the government of the United Kingdom uses. It is a largely recognized among the private business sector both internationally and in the United Kingdom (Eden and Ackerman 2013). The Prince 2 method defines what the company wants to define and what are the ways through which it can be done better. The method orders the project and therefore makes it arranged and logical. It is well known that poorly arranged projects have a tendency to become disastrously wrong. Therefore, structured management method, Prince2 is there, which prevent such projects to be wrong. According to the Prince2 framework (Edwards 2014), before starting a new project it is necessary to planned and organized. After starting the project successfully, during the middle the project, it should be kept well organized and finally, the end of the project must be controlled as well organized. Prince2 methodology helps in creating business standards and proper roadmap for further growth in future. The method saves money too by deploying the process of reassessment and the updates that are most essential core points of business (Edwards 2014). The prince2 method can help in Tesco in order to deliver quality service to its customers. Through product oriented planning, changing controlling process, revising the roles and duties of the management personnel as well as of the employees the company can be able to become largely benefitted.

Benefits of Prince2 Methodology for Tesco

In the strategic management system of Tesco, E-procurement can use the volume, which decreases the high cost of delivery (Fine 2013). The term e-procurement refers to the procedure of selling services or goods over the electronic medium that is the internet. The method can be regarded as the alternative of the procurement process that is done manually and the e-procurement is considered as the more effective policy than manual procurement process (www.siam.org 2015). Nowadays, most organizations are opting e-procurement process in order to increase the further growth of their business. The main purpose of adopting e-procurement is to curb the unnecessary cost and other associated issues like irregularities. As supply chain management plays the crucial role in any business, companies invest a lot of money as well as other resources in the procedure of procurement of products and services along with raw materials. Therefore, an effective and well-structured procurement procedure is required in order to benefit the business (Boone 2013). The procurement procedure makes the whole process automated. It makes the process free from the hassles and other irregularities, which are part of the manual procurement process. In an e-procurement process, a portal is created and therefore, users are required to register either as buyers or as the seller of products or services in order to take part in the tender. 

The E-procurement process will largely benefit Tesco, as it will create an appropriate structure so the relationship between supplier and buyer as well as the quality of service improve (Khachidze 2013). The process organizes the information regarding tender such as purchase, order processing, and payments and so on. Even more, the process will ensure fair contracts with its customers. The e-procurement process will enable Tesco to use some essential technology-based process like an electronic request for information in order to make the transaction hassle free (Esper and Russell 2014). With the help of e-procurement process, Tesco will be enabled to show its customer that they provide quality products at best price in the market. As per the present scenario, the manual delivery process consumes huge time, whereas e-procuring process will reduce the time that is consumed in the manual process. Another important feature of e-procurement is the transparency (Khachidze 2013). Through which Tesco can remain transparent to its customers as it provides all the details on the e-procurement portal. As the process consumes less time, therefore, by using this method Tesco will be able to reach out to more customers. The malpractices observed in the manual delivery process are less in case of e-procurement process. Cost cutting feature is another prerequisite of e-procurement process; therefore it can be said that with the help of this process Tesco can reduce the additional costs associated with a manual delivery process (Esper and Russell 2014). Finally, it can be said that as per the observation, e-procurement process simplifies the steps, which are involved in the tender. Tesco, therefore, will be able to provide its customer best service and will be able to maintain its position in the entire retail grocery market in the United Kingdom as well as across the world. 

References

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