Tesco Cost Benefit Analysis

Tesco tries to understand customers and be the first to meet their needs by always sending emails to latest new products in store and on their website. Plus deals and discounts on products that suits the customers’ needs.

This is another big objective because they are a retail store they sell products in exchange for money. They do this in a number ways for e.g. customer services. Customer service is the advice and assistance a business provides to those people who buy their products. Tesco provide good customer service by giving a range of different numbers for different enquiries. This shows the customers that they care about them. Also if someone needs help in the shop while shopping then if it is available then that person will tell friends or relatives about how good shopping at Tesco and this will lead to Tesco getting more customers which also leads to maximising

Tesco Plc is a Public Limited Company who securities and shares are included in the stock exchange and list of different countries. In UK, companies like Tesco Plc are registered under the companies Act 1980 and its shared are offered to public in regards of limited liability. In addition, Tesco is associated with retail sector that carries out a majority business of the company and contribute their share in country’s economy to a huge scale. Apart from the retail sector, Tesco Plc faced tough competition all over the world from companies like Wal-Mart, Asda, Sainsbury, and others. Although, Tesco is not in dominating position in the current retail market in the UK, but the company is one of the biggest retail companies working in the UK, North America, Asia, Europe and other. The company

Tesco’s biggest weakness is its increasing of debt. As growing its network worldwide, Tesco has undergone into huge financial debt. Tesco has not been able to get rid off from debt in last year as compared to its competitors. Dues to this financial crises, Tesco has been withdrawn a series of products from the market. This has been concluded in a huge financial loss also, has been damaged its image in market.

Cost has traditionally being a major influence on all business as all businesses desire to achieve maximum efficiency as it is a vital factor for businesses in order to reach the ultimate goal and success. Businesses sees cost as the key value to success and aims to become as much cost efficient as possible, by implementing a cost-leadership style approach to the operations variable cost or fixed cost ,while maintain the expected profit margin, business is able to gain a competitive advantage over their competitors in their target market. This is called cost-based competition. By determining the break-even point and applying cost saving strategies, to reducing cost, businesses who apply cost-based competition in their operations is able to maximize the profits and lead business to success.

A cost leadership strategy focuses primarily on “producing products and/or services that are the lowest in the industry” (Turban, Rainer, & Potter, 2003). This type of organization forms business alliances that support their inventory management through computers and computerized purchasing. A differentiation strategy focuses on being unique within the industry and provides high-quality products at a competitive price (Turban, Rainer, & Potter, 2003). These types of companies “provide their customers with a

Tesco operates in 14 different countries. Therefore its performance may be influenced by the local legislation and political factors. There are

Customer feedback – obtaining customer feedback is essential to the company. Without keeping up to date with our customers, we cant be sure that we are meeting their expectations. We will send out surveys via emails and post. Also we will send out regular brochures updating our customers of any changes that may benefit/effect them. We will also call our major customer's regularly to see if there is anywhere we need to improve.

The Cost Leader has the opposite strategy of the Pioneer. Cost Leaders places lower emphasis on product innovation and have a decentralized marketing organization. Instead, they are internal-cost oriented. To be successful, Cost Leaders must focus on process innovation that improves production efficiency over product

Tesco is also doing well in the information system applications by including loyalty club card system to get valuable informations about customer's behaviors to extract their needs. In addition to the Information technology adopted by Tesco in using the newest technology and staying up to date. For example company has used a technological system that controls stocks, and keeps valuable record of customer's transactions and their purchasing

As I have mentioned before, this research paper is being taken exclusively with the aim to evaluate the Tesco’s performance in both financial and business terms over a three years period. Since the financials will be compared with its three year

tesco can take advantage of its successful international expansion. tesco is in a position to share their know-how and also is able to apply technologies and know-how which will create a competitive edge over its rivals and also step its learning curve.

Profits for Tesco’s operations in Europe, Asia and Ireland increased by 78% during the last fiscal year. The company has a strong brand image, and is associated with good quality, trustworthy goods that represent excellent value. Tesco’s innovative ways of improving the customer shopping experience, as well as its efforts to branch out into finance and insurance have also capitalized on this.

A successful cost leadership strategy usually provides the entire firm with high efficiency, low overhead, limited perks, intolerance of waste, intensive screening of budget requests, and wide span of control efforts. However, some risks of pursuing this strategy are that competitors might imitate the strategy, thus, driving overall industry profits down; that technology breakthroughs in the industry may make the strategy ineffective; or that buyer’s interest may swing to other differentiating features besides price.

The Corporate Steering Wheel has delivered an impressive performance of Tesco in line with its corporate goals and mission. Each of the five perspectives has assist and transformed Tesco to be well positioned for long term growth. David Reid, the Chairman reported that the Tesco team has once again delivered a good set of results for the year 2010. Even as the markets around the world are emerging from recession, each part of Tesco’s business is well positioned to pursue its