Tesco's Customer Focused Strategy

The market in which Tesco operates is supermarkets. Although this is a highly competitive one Tesco holds a disproportionate amount of power. The figures below indicate that Tesco holds over a third of the market share, and even double the amount of Asda 's market share, the second leading supermarket. Market share is ‘the percentage or proportion of the total available market or market segment that is being serviced by a company ' (Wikipedia 2006).

In all companies there are many different tasks which need to be carried out regularly, in order for the business to reach its aims and objectives. Stock needs to be brought, the bills and finances need to be controlled, and customer service issues dealt with and so on. In a small organisation one or two people may do all the jobs, whereas in a large organisation people have to be specialized in many different individual tasks. In a large company it is easier to identify the separate functional areas, because groups of employees would work together in departments. Each department carries out its own individual tasks to relate to their specific area. The main purpose of functional areas

Tesco has increased their market share by increasing their product and service line. Moreover, the main target market of Tesco is the grocery market that covers the majority business of the company.

In this assignment I am going to produce report which identifying the expectation of client for my chosen organisation which Tesco and I will link the expectation of client to the organisation and the method they use to provide the Services and meeting the needs and expectation of the customers.

Technology-Tesco's is into mails although this method of communication has been in existence for ages and is still used. But the internet enables messages to be sent faster than postal mails. So Tesco's might face competition from cyber cafes and such businesses operate within the Information Technology (IT) Industry.

The UK supermarket industry is a very competitive and profitable industry. It is made up of four main players with significant share of the market, and then various smaller companies who focus on smaller niches in the market such as the bottom of the market discounters and the top of the line speciality stores. It is an interesting market and this report evaluates the attractiveness of the industry using Porter’s five forces model with an insight into how market nicher Waitrose sustains a competitive advantage. Next this report looks at how major player Sainsbury’s successfully competes against its rivals using differentiation strategies, and analyses current consumer trends and problems can effect this industry.

The objective of this report is to analyse the UK supermarkets industry for John Lewis in order to seek their competitive advantage in the market. This report is to be presented to the Board of Directors of John Lewis Partnership.

Selecting a business strategy that details valuable resources and distinctive competencies, strategizing all resources and capabilities and ensuring they are all employed and exploited, and building and regenerating valuable resources and distinctive competencies is key. The analysis of resources, capabilities and core competencies describes the external environment which is subject to change quickly. Based off this information a firm has to be prepared and know its internal resources and capabilities and offer a more secure strategy. Furthermore, resources and capabilities are the primary source of profitability. Resources entail intangible, tangible, and human resources.

Tesco can be said to be a global leader in the UK retail business. It is one of the leading world retailers. The company started using the trading name TESCO in the 1920s and since the group has expanded in many ways venturing in different markets and with interest in different sectors. Over the years, Tesco has recorded growth which has been achieved through different strategies. There has been emphasis on the growth of Core UK business in order to expand internationally. This growth has allowed the company to position itself in food and non-food sectors based on retailing services. Over the years, the company has witnessed financial fortunes which have been reflected in its growing sales. Sales have risen from 31,726,280 from 2013 to 32,074,650 in 2014 (Kantar, 2014.) This has been achieved through growth strategies which have seen the company expand its retail outlets and at the same time enter into new markets with high growth potential using their famous ‘every little helps’ branding along the way. The ‘Every little helps’ branding helped Tesco’s attract 1.3 million new customers in the period from 1990-1995, and the campaign achieved good effects on staff morale, attracting quality marketers to join Tesco, directly affected the share price and allowed the brand to move into non-grocery sectors where brand credibility is a key requirement. Disadvantages….limitations etc

There are 92,796 grocery stores in the UK and the market value increase by 19.5% in the last 5 years and according to IGD forecast the UK grocery market should reach £203bn by 2019. But what we can see in the figure 1 that from 2009 to 2014 annual grow in the grocery market start decreasing from 4.9% in 2009 to 2.8% in 2014. One of the reason for this is difficult economic conditions which had an effect for consumer spending. Consumers choose to spend less money on food by buying less food or by looking for cheaper places. Retail market is diversified into three main sectors: Hypermarket and superstores which accounts for 42.3% of retail market, convenience stores 21.4% and small supermarkets 20.3% (Figure 3). So about 84% of sales are done in these three sectors. The biggest 4 retail chains in UK are: Tesco which takes 28.7% market share, Asda has 17.3%, Sainsbury’s 16.6% and Morrison’s 11%. (Figure 2) So, if we will sum up 4 biggest retail market chains we will have about ¾ of market share. Finally, a strong characteristic of this sector is competition with price wars and a

Tesco is one of Britain’s leading food retailers and has 586 stores. From 1992, Tesco has grown greatly and has increased its market share from 10.4% to 15.2%. This increase in customers has also given Tesco a large amount of profit.

supermarkets like Tesco offering the biggest discounts in the UK and Sainsbury 's offering of substitute products too (Mintel, 2010). This shows the responsiveness and flexibility towards consumer needs in the supermarket industry.

* External Context of Sainsbury’s belongs to the biggest supermarket leaders in UK. In other words, Sainsbury’s is part of big four ‘Asda, Tesco, Sainsbury’s, Morrison’s. The biggest rival today in UK market is Morrison’s, they booth fighting for a market but Sainsbury’s ram in a higher place. In Appendix 3, we can find concept of retail and types of functioning.

The factors that contributed in the growth were aggressive marketing campaigns with the aim to promote its brand and product. The company gained the competitive advantage by enhancing the services it offered like making online shopping easy and cheap with almost every product available to online customer as to in-store consumer. The company’s strategy to enter international market also contributed in its growth as the number of stores was increased; however, the factors involved in decrease in G.P include the closure of its Strategic Business Unit in some foreign countries. (TESCO 2011-12 http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/9583264/Tesco-profits-fall-for-first-time-in-18-years.html )

Since acquiring number one ranking in 1996, Tesco has developed a successful multiformat strategy that has accelerated its advantage. Its UK sales are now 71% larger than Sainsbury’s. Also the Competition Commission’s report makes it very difficult for a competitor to challenge its scale and has effectively scuppered Wal-Mart’s chances of stealing UK leadership. Therefore, Tesco is in an enormously strong position in its domestic market.