Event Management by TESCO 1. Prospective Plans of TESCO 2. Event Management of TESCO 3. SWOT Analysis of TESCO 4. Recommendations
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Executive Summary This report is about exploring the company profile for any renowned name of the UK. Then a strategic analysis of that company will be done on the basis of its aim, current placing, future prospects & SWOT analysis. In the second half, event management of that company will be done to know in detail whether its event management confirms the aims and objectives of the company or not. On the basis of all this, some recommendations will be given to the company. For the purpose, TESCO which is the market leader of UK retail industry is selected as a case study.
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Contents Introduction .................................................................... .......................................................................................................................................... ........................................................................ .. 3 Case Study of Tesco .................................................................... ................................................................................................................................ ............................................................ 3 Overview of company .................................................................................................. ............................................................................................................................. ........................... 4 Aims & Culture of Tesco............................................................. .......................................................................................................................... ............................................................. 5 The aims of Tesco.................................................................... ................................................................................................................................ ............................................................ 5 Prospective plans for Tesco ................................................................... .................................................................................................................... ................................................. 6 SWOT analysis of Tesco.......................... Tesco................................................................................................ ................................................................................................. ........................... 7 Strengths.................................................................................................................. ............................................................................................................................................. ........................... 7 Weaknesses ................................................................ ...................................................................................................................................... ........................................................................ .. 7 Opportunities............................................................................................... ...................................................................................................................................... ....................................... 8 Threats ............................................................. ................................................................................................................................... ................................................................................... ............. 8 Event Management Management by Tesco................................................................. ................................................................................................................ ............................................... 10 Recommendations Recommendations for Tesco ..................................................................................................... ................................................................................................................ ........... 11 Conclusion............................................................................................. ............................................................................................................................................. ................................................ 11 References ........................................................... .............................................................................................................................. ................................................................................. .............. 12 Appendix A ............................................................................................................................................ ............................................................................................................................................ 13 Appendix B ........................................................................................................ ............................................................................................................................................ .................................... 14
(Words: 1943 excluding executive summary, TOC, References & Appendices)
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Tesco: A Case Study Introduction This report will critically illustrate a brief on the strategic management of a company especially in the context of event management. Tesco is chosen as a case study organisation for this report. The main portion regarding the company is divided into two distinct parts. The first part is concerned with the company profile, its current strategies & standings, culture & aims, future prospects; and the second half will take care of its event management strategies alongside its reconciliation with the company‟s culture & aims.
Case Study of Tesco TESCO is selected as a case study for this report. TESCO is the biggest retail stores in the UK. Sainsbury actually became the market leader for a while but again TESCO took over the market leader position. Currently, there is a strong competition between TESCO, Sainsbury & ASDA to be on top. Moreover, TESCO is expanding its operations outside the UK market which which can aid in company‟s tactics to survive in international market as well. well. TESCO is also a publicly listed listed company so it provides provides a complete picture of all business scenarios which are possible and so can be very informative. Last but not least, being a public listed company, its records are easily available through internet sources and its financial information can be accessed through annual report. The financial information in the annual report can also be reliable because it is audited and so guide to accurate results.
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Overview of company TESCO is one of the major players of food retail industry in the world with its revenue exceeding £70 billion in 2011-12 and 500,000 people working in TESCO. They have approximately 4500 stores not only in the UK but in 14 different countries around the globe. It has its operations in USA, Europe & Asia with head office based in the UK (TESCO Annual report 2011). TESCO has a commercial network comprising on more than 960 express stores which offer more than 7000 products including fresh food, metro stores which operates in towns and city centres with a variety of food products & super stores which do not only offer food but also nonfood articles e.g. books & DVD‟s. To compete in the e-commerce e -commerce world, TESCO is also offering online retail services services through its website website and TESCO direct. Further the group has some other operations in different fields as well i. e. TPF (TESCO personal finance) and internet broadband services. Besides, its main share in food retail market where it is a market leader (datamonitor, 2010). The comparative positioning of Tesco‟s market share with respect to some other leading players in the market has been shown as follows (Euromonitor, 2010):
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Aims & Culture of Tesco Culture of Tesco is set to have more value and regard towards its staff and customers. Its environment is friendly for workers to have better coordination and increased customer services.
The aims of Tesco 1. The main aim of of Tesco is to create those values values for customers that can can earn Tesco with their lifetime loyalty. By giving customers more importance and providing them with better services, Tesco has achieved more sales growth as compared to any of its competitors last year (Tesco Annual report 2011). 2. Tesco has the high aim to provide a good neighbourhood to society by contributing positively to it. That is why, contribution to society is included in their balanced scorecard approach and they have plans to promote that aim by providing better environment, contribution to the community, healthy livings, more jobs, and career opportunities. 3. Another important aim of Tesco is to take take care of their employees. They know that if they will take care of the employees, ultimately good services will be given to customers. Tesco wants to have a better work atmosphere which can be achieved by teamwork, coordination and more facilities for employees.
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Prospective plans for Tesco In future, Tesco is planning to grow more by opting the following:
1. Online Retailing Tesco was the pioneer in providing online services 11 years ago to its customers. Now even the means of e-shopping is changed. Customers want to buy the things on the basis of what and where they want. To tackle that aspect, Tesco is also increasing its level of e-services. In the near future, customers of Tesco can use their smart phones to scan the barcodes of grocery items online and order them to get delivered at home (Tesco Annual report, 2011).
2. Leader in green retailing Now the consumer is more conscious about saving the environment and he promotes those companies for the purpose who are trying to keep the green environment. Tesco seems to be the leader in that category as well. Its 2020 target is to have carbon footprint on all of its items which is already done on a noticeable portion of its product. The 2050 target of Tesco is to have zero carbon business. These parameters have increased the credibility of a company in the eye of its customers. In this regards, Tesco also set standards by its actions e.g. Tesco Green cards (Tesco Annual report, 2011).
3. Retain position in UK Tesco is the market leader in the UK retail food industry with almost 30% share of the market. Tesco future prospect includes retaining the market leader position in the UK with more increase in market share (Tesco Annual report, 2011)
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4. Worldwide growth The main concern for Tesco is that its existence in outside UK is not so great. Tesco plans to increase its worldwide growth especially in central Europe to ensure more profits (Tesco Annual report, 2011).
SWOT analysis of Tesco SWOT analysis identifies the strength, weakness, upcoming opportunities & concerned area of work for business (Hales, 2001). It is based on internal and external scanning of the business. For internal and external scanning Porter five forces and PESTEL analysis are most commonly used (Benssoussan & Fleisher 2003). The SWOT analysis of TESCO is i s conducted as follows:
Strengths
Tesco is ranked as the 3rd biggest grocery retail chain in the world with operations in Europe, USA and in Asia as well (Datamonitor, 2010). It is the market leader in the UK food retail industry with 30.7% market share (Euromonitor, 2010)
Tesco has shown improved performance in the recent past which shows its strategic abilities. It recorded revenue up to £67.6bn with a growth of 8.1% (Tesco Annual report, 2011) Company has achieved better sales trend by strongly following the market demand
Tesco‟s has aimed aimed to give the best quality at most affordable rate, moreover the company tried to remain equipped with latest scenarios e.g. e-grocery. Due to the reason, Tesco has recorded a remarkable growth of around 50% in the Tesco Direct sector (Tesco Annual report, 2010)
Its current scheme of the Tesco Club card and the Green Club card has gained and retained many customers to it.
Weaknesses
In spite of geographic dispersion in more than 14 countries, the main segment of the company‟s operations rest with UK retail sector where it recorded 66% of its revenue from that sector in 2010-11 (Tesco Annual 7
report, 2011). This can be regarded as a key weakness due to the risk of the single market.
Opportunities
The company can enter into the new market of India and China through expansion and joint ventures. It has signed agreements with Tata group in India and agreement of setting up shopping malls in China in a joint venture with Anshan, Fushan and Qinhuangdao can be seen as new opportunities (Daily mail, 2010).
The retail food sector is expected to rise to £145 billion in 2014 which can be taken as one of the opportunities (Euromonitor, 2010).
Threats
Global recession wave has reduced the UK economy by 2.4% till 2008. Although it is now on the increasing trend but its progress is on the slow side in G-7 G-7 countries. Tesco‟s main dependence on UK market can bring some problems for it (economywatch.com, 2011).
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Intense competition from ASDA, Sainsbury & Morrison‟s and their consistent growth can be seen as a big threat for Tesco‟s market leader position. Although currently there is a lot of difference between market share of Tesco & Sainsbury (which is holding second place) but yet Tesco needs to maintain its share to remain a market leader.
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Event Management by Tesco Tesco has conducted many events which are in line with their existing aims and objectives; some events highlights and their impact on Tesco‟s underline aim are given hereunder:
1. Tesco Mum of the the year year 2013 2013 Tesco conducted Mum of the year 2013 with the cooperation of Sparks and Fuse. This is an event which is conducted by Tesco every year in recent times. It is usually arranged on Sundays to give chance to maximum people to make their holiday. Tesco also makes someone from celebrities as guest to give the award. That award promotes the betterment towards society by encouraging mothers to have a more balanced attitude towards their kids (Sparke and Fuse, 2012).
2. Tesco Charity Triathlon Tesco was the corporate sponsor for Charity Triathlon arranged on June 25, 2011. This event was sponsored by Tesco to help fundraising in support of „Help for Heroes‟. Such events events promote healthy physical activities in the society alongside fundraising for needy groups of the society. It gives a strong message to society about the positive contribution of Tesco towards it (Breeze, 2012).
3. Tesco team building event In 2011, Tesco managed another event for its colleagues in the UK with the help of White Star. It was called as team building for Tesco UK and aimed to have many fun activities e.g. circus, juggling & Diablo through low wire walking on it to provide the workers a break and also provide them a chance to socialize in a good manner for increased teamwork. Moreover, it was equipped with workshops and games also in between that specifically targeted for building teamwork among colleagues (whitestarevents.co.uk).
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4. Tesco Recruitment presentation Tesco managed a recruitment presentation in Sep 2011 as well for the service leavers to welcome in the retail industry. It was regarding jobs in the management side of Tesco and targeted to increase the potential of society by providing more opportunities to it (Human Race Event Management, 2011). These all events conforms the underlying aims of Tesco and contribute its goal to achieve its values. Tesco aims are to take care of society, employees, and give greater value for customers. The events managed by Tesco recently as above mentioned contributes to these all three aims narrated its aims section.
Recommendations for Tesco The events managed by Tesco are successful ones and contributes to its aims as well but some suggestions are recommended for Tesco after reviewing these events. These are: a) Usually Tesco takes help of event management specialized companies in conducting these events. The company can formulate a department especially for event management rather outsourcing it to others. Their own department can understand the underlying values in a better way and can work on a theme which is suitable for achieving core aims and objectives in an appropriate manner (Bowdin, 2011). b) Secondly, Tesco should should promote and advertise its events events in a good manner so everyone from inside and outside entities can be aware of its contribution towards its stakeholders (Getz, 1997).
Conclusion The report can give the conclusion that Tesco is a market leader in the UK retail industry. It is not only growing and developing its strength with the passage of time but also contributing to the society in a well manner with its positive events managed for all stakeholders. 11
References 1. Bowdin, G., McDonnell, I., Allen, J., O'Toole, B. (2001) „Events Management‟, Management‟, Butterworth Heinemann 2. Benssoussan, B.E. & Fleisher, C.S. (2003) „Strategic and Competitive Analysis: Methods and Techniques for Analysing Business Competition‟, Competition‟, Pearson Education, UK Breeze, K. (2012). Tesco recruitment presentation – retail management, Career Transition Partnership, [online]. Available at: https://www.ctp.org.uk/events/details/Tesco+Recruitment+Presentation411692 (Accessed: 21 July 2012) 3. Daily Mail (2012), (2012), “Tesco starts Pounds 1bn price war”, Daily Mail, Jan 18, 2012. p.7 4. Datamonitor (2012), (2012), „company profile‟ – Tesco‟ Data monitor Europe. 5. Economy Watch (2010). The Economy of of the UK, GB, British Isles, The The Economy Watch, 30 June 2010 6. Euromonitor (2012) „Industry „Industry profile- food retailing‟ Euromonitor 2012 7. Getz, D. (1997) „Event Management and Event Tourism‟, Tourism ‟, Cognizant Communication Corporation 8. Hales, C. (2001) Managing Through Or ganization: ganization: „The „The Management Process, Forms of Organization and the Work of Managers‟, Managers‟, Routledge; UK 9. Human Race Event Event Management, (2011). Tesco Charity Charity Triathlon, [online]. Available at: http://humanrace.co.uk/tesco-charity-triathlon-2011 (Accessed: 20 July 2012) 10. Sparke and Fuse, (2012). Tesco Mum of the Year 2013, [online]. Available at: http://www.sparkandfuse.com/2012/07/23/tesco-mum-of-the-year-2013/ (Accessed: 23 July 2012) 11. whitestarevents.co.uk., available [online] [ online] at: http://www.whitestarevents.co.uk/index.php/2011/01/07/tesco-uk-teambuilding/ (Accessed: 20 July 2012)
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Appendix A Porter Five forces analysis Threat of substitutes (low): This threat is low in case of TESCO as it is providing all the food f ood items of daily usage but it is not on the low side of its non-food items Threat of entry of new competitors (low): In the food retail industry, there is a chance of small chains of convenience stores exist but it does not threat TESCO a lot as it is already offering high quality at low prices because of the economies of bulk buying and also by opening express stores in local vicinities. Further it needs heavy capital investments to give a strong competition to companies like TESCO. It needs considerable time, resources, and planning authorizations so it can be a barrier to new entrants. Intensity of competitive rivalry (very high) The rivalry is on the high side in food retail industry. Currently TESCO is facing a high degree degree of competition from Sainsbury, Sainsbury, ASDA & Morrison‟s. Morrison‟s.
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Sainsbury took over as market leader for a while in the early part of the last decade. All the above mentioned three companies hold a considerable share of market and the point of fear is that their growth rate is on the move. Moreover companies like Somerfield & Co-op have attracted a marked share of consumers in rural areas. In the time during the recession, some companies like ALDI & LIDL have recorded massive sales growth through big discounts.
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Bargaining power of buyers (High) In the wake of high competition in retail food industry, buyer can get its required items from anywhere in the town which makes him the king. Companies have to give low prices, discount offers, quality products at the buyer‟s convenience and so they have a greater bargaining power. Bargaining power of suppliers (Low) As TESCO is a big name and maximum suppliers wants to do business with TESCO, so it makes them on the fairly lower side in terms of negotiations regarding quality of supplies, rate of supplies and payment terms. It seems apparent from the age of payable ratio of TESCO as well.
Appendix B PESTEL Analysis Political: China‟s adoption of the WTO can be a tempting move for big companies including TESCO. They can make their way to the most profitable market of the world. Increased globalization is the shape of the WTO or EU has paved the way for TESCO to get into new markets. Economic UK suffered a great deal in the mid of the last decade as like the global recession wave took over. UK is expected to have an economic growth of around 1.75. Although it is almost slowest in G-7 countries but at least it is expanding again. The Purchasing power of the customer has been hurt a lot in the recent past although things are on the right track again and it is expected that the market will regain its position in mid 2012 but lack of confidence from a customer is not prompting them to spend more on items like prepared meals or premium products.
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Social A Major portion of the UK population is getting comprised of retired and old age people people rather rather than youngsters.
They have lesser intentions intentions to go to
supermarkets and buy food, further lesser use of internet in that class is also not helpful even to provide them the online facility of shopping. Because of the more health consciousness, consumer wants more hygiene food of the best quality. This can lead to the increased demand of organic food. As TESCO has already included that in its products so it can boost its sales. Technological With more use of internet, the concept of online shopping is increasing in the society. Internet users among the UK‟s population is estimated estimated 70% of its total volume. This has promoted the use of online services in the retail food industry as well. TESCO has tried to combat the situation through its website and „TESCO direct‟ services. Environmental Government is promoting the reduced packaging culture to save the environment. The proportions of people who are using reusable bags or trying to switch into that category are increasing which can be beneficial for TESCO in reducing its cost of making m aking plastic bags available. Government levy of „fat tax‟ to reduce the advertisement of junk food was an important factor to take care in marketing strategy of TESCO. Customer wants carbon footprint data on the t he products of the company (Wood, 2009). Due to that, TESCO had to respond and add carbon footprint on its items. Legal VAT is expected to rise 20% more that can affect the non food items of TESCO.
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The government's policies for monopoly controls and reduction of buyers' power can limit entry to this sector with such controls as license requirements and limits on access to raw materials. Due to Report of Low Pay Commission, recent years have resulted in increase of minimum wages by 15.5%. This has increased the operating cost of TESCO.
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