Value Chain Of Tesco

Tesco has developed from selling beans and biscuits to becoming a major player in approximately every area of the retail market. Clothing , mobile, furnishings, phones, DVDs and holidays. The survival strategy for Tesco is to aim and get to the customer’s needs by making the products cheap from season to season e.g. winter time they could bring in lemsip because this is the season were a lot of people catch colds. Their business is around the customers and colleagues. Tesco’s strategic priorities is to refresh all there UK stores to ensure that it is worth the visit for the customers, another strategy is to make sure that the prices are stable and logical. Finally another strategy that Tesco use is their Tesco club card it allows customers to choose how to unlock greater value for themselves.

In the first place I will begin with concise presentation of the firm I am expounding on. Tesco PLC is a international global general merchandise and grocery stock retailer whose headquater is situated in Cheshunt Hertfordshire, United Kingdom. Tesco offers an extensive variety

A value chain analysis is a strategic analysis of an organization that uses value creating activities (Dess, McNamara, & Eisner, 2016, p. 76). The value chain analysis describes a company’s activities and relates them to an analysis of the competitive strength of the company

Value chain is the ability to take a product and add some value along the way to make it appealing to the customers in such a way that they be willing to buy the product at a certain price. Many companies in today’s business world analyze their value chains to identify the ways which continue to attract their customers. The value chain analysis consist of two parts, primary activities and secondary activities. The first ones support the actual physical process of buying, manufacturing, shipping and selling the product and the secondary activities are actions that support the process, such as procurement, technical support and human resource management.

Tesco is a public limited company and it’s one of the largest retailer in UK and is the fourth largest retailer in the world. They have over 500,000 colleagues and they provide goods and services to 12 other countries like South Korea and Poland. Tesco is an international business but UK is where its business is more focused on. 75% of Tesco group revenue comes from UK business as they get lower sales from other countries outside UK. By offering the customer new goods and services in expanding UK markets, such as telecom and financial services and expanding their market abroad, enabled Tesco to expand their business so that it can deliver long term growth for the business. It also allowed Tesco to expand into new markets and improve their business in the competitive markets. On the other hand, Tesco main value is to provide good quality of goods and services that are cheap and affordable to the public. Which link to their slogan “every little helps.”

Value chain is the ability to take a product and add some value along the way to make it to appeal to the customers in such a way that they be willing to buy the product and pay the asking price. Many companies in today’s business world analyze their value chains to identify the ways which continue to attract their customers. The value chain analysis consist of two parts, primary activities and secondary activities. The first ones support the actual physical process of buying, manufacturing, shipping and selling the product and the secondary activities are is actions that support the process, such as procurement, technical support and human resource management.

Keane (2008) stated to design, manufacture, promote, offer and facilitate its product or services, all organization engages in some activities. All of these activities of an organization are shown through the use of value chain process. The manner in which organization performs its varying activities along with the firm’s value chain mirrors the organization’s background, strategy along with the way in which the organization executes its strategy. Ponte (2008) stated that the analysis of value chain of an organization is used to develop the organization’s competitive strategies along with formulation the connected and interconnectedness between all the organizational activities that formulate value. Francis, Simons, and Bourlakis (2008) stated that value chain analysis is a helpful tool as an organization looks to attain competitive advantage. Furthermore, Rieple and Singh (2010) stated that a value chain is a useful tool in conceptualizing the varying activities

Tesco PLC is one of the biggest British multinational grocery and general merchandise supermarket; Tesco is the third largest retailer in the world measured by profits and second-largest retailer in the world measured by revenues. It has stores in 12 countries across Asia and Europe and is the grocery market leader in the UK, I am going to analyze some key factors revolving around Tesco, where we are going to discuss the political, environmental, social and technological factors which are shaping the external environment in which Tesco is operating.

This essay aims to identify some of the problems effecting Tesco and point out the solutions and options available to the new CEO of Tesco’s Dave Lewis, in order to stay competitive and remain a market leader.

Established in 1919 by Jack Cohen from a market stall in London’s East End, Tesco has grown and became the leading multinational retailer in the UK with a wide range of products. Tesco’s operations in the UK are the largest within Tesco PLC (Tesco, 2014). The success of Tesco lies in its strategic management. This analysis will look into Tesco’s business in the UK by following a structure of four main parts: Tesco’s value chain management; Tesco’s important stakeholders and its managing them; Tesco’s attempt in competing with other rivals and finally, potential international opportunities for Tesco to get more profit.

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.

As a mission statement, Tesco’s is simple: ‘We make what matters better, together’ (2015). Tesco is known to be the seller of everything to everyone and it’s vision is ‘To be the most highly valued business by: the customers we serve, the communities in which we operate, our loyal and committed colleagues and of course, our shareholders.’ (2015). The long-term success of this company centers around it’s continuity in aim and it’s adaptability with circumstances. Strategic plans evolve to with the clear competitive intention to be the best.

Value Chain is a concept in which an organization employs a sequence of activities in transforming raw materials into final products that customers value, Porter (1985). The primary objective of value chain is to add sufficient value and provide service better than its competitors, so as to gain a competitive advantage. Customer Value can be derived from activities such as; a.) activities that lower cost of production b.) activities that differentiate the product c.) activities that meets the customer’s needs timely and efficiently. Value Chain Analysis basically evaluates how an organization provides sufficient value by examining the contributions of all the various activities in the organization from receiving raw materials through processing to the finished product and after sales service. Value Chain may be divided into two (2) parts namely; Upstream and Downstream. Upstream comprises Inbound logistics and Operations aspects of the organization whiles

Large business organisations constitute not only a single strategic business unit, but a culmination of several business units. The business units which may number anywhere from 4 to as many as 20 or more cannot be considered as a single, separate and disparate entity. Rather the business units are attached to each other like a string completing a full circle, where each complements the predecessor and the successor. The breakdown of any one entity in the chain can have a telling effect on the whole chain itself. Now depending on the type of sector chosen the units in the business chain vary in number and complexity. For example unlike a software company the units/ operational units in company which deals with products/goods are much larger in number. As explained in the previous lines the units in operation are linked and performance of one affects the performance of the other units linked to that unit. Value chain management comes in this picture.

Tesco is an international grocery and household goods retail chain based in the United Kingdom. The retailer has a presence in more than ten countries, and it is the largest retailer in the U.K. Tesco operates superstores and hypermarkets and is now growing its online presence to operate online stores such as through the retailer’s largest online platform Tesco.com. According to Jenkins and Williamson (2016), this online platform operated by the largest retailer in the UK is the most successful retailer platform that has posted an operating profit for the grocery store. This report focuses on Tesco and how it can improve its services in the supply chain.