Tesco Plc

A CRITICAL REVIEW ON IT’S KEY PRACTICES

PEOPLE, MARKETING, OPERATIONS AND FINANCE
Introduction
• TESCO IS THE GLOBAL GROCERY AND GENERAL MERCHANDISE RETAILER
BASED IN THE UK.
• TESCO WAS FOUNDED IN THE YEAR 1919 IN THE EAST LONDON BY JACK
COHEN.
• THE COMPANY’S EMPLOYMENT RATIO IS 476,000 APPROXIMATELY. TESCO PLC
IS A MULTINATIONAL COMPANY WHICH WORKS ACROSS 14 COUNTRIES IN
EUROPE, ASIA AND AMERICA.
• IT IS ALSO KNOWN AS THE THIRD LARGEST RETAILER AFTER WALMART AND
CARREFOUR IN THE WORLD.
• TESCO HOLDS AROUND 30% MARKET SHARE IN THE UK, MAKING TESCO
LARGEST RETAILER IN THE UK.
 Human Resource Management (HRM)

 The recruitment process in the Tesco Plc. is done online. (Tesco Careers,2011)
 Tesco uses their company’s website for the purpose of the recruitment and selection process.
 Tesco also uses Internet for the hard to fill recruitments such as Pharmacists and baker. They post
advertisement on the various online platform such google advertisement for the recruitment.(Gopalia,2011)
 Tesco uses a software which is known Bond Talent Program.
 This software allows Tesco to use a proactive approach of the recruitment process. (Gopalia,2011)
 Another aspect of Human Resource in which the Tesco believes the most is Training and development.
(Tesco,2014)
Human Resource Management (HRM) (Cont.)

 One of the major source of recruitment in Tesco is the High quality University
Graduates. (Rosethorn,2009).
 Tesco has a deep values for all its staff as the human resource is one of the key
resource and promises each employee that this will have a chance to enhance
their skills and progress ahead in their company and future as well. (Fernie and
Moore, 2013).
 Tesco’s other HRM strategy is to provide the higher base pay as much high as
they can. This rewards and benefits strategy always helps them in recruiting the
best talent in the market.
Financial Management Tesco

 The company's efficiency in terms of market share expenses has not been
changed. In 2009 it was 4,19 however in 2010, it dropped to 3,89.
 The stock transactions of Days provide us with an indication of how much the
firm has expended its stock values during the year (Wurusmay, J,2008).
 Borrower turnaround in days is the time taken to refund the balance for the stock
from of the sellers as well as the brokers.
 Operations Management

 The price element of the marketing mix is the major strategy for the Tesco. The company follows
the marketing message which is the “Every little help” which indicates that the Tesco works on
small margin which makes a better saving plan for their customer.(Zao, 2014).
 The company also offers a loyalty card by the company which serves a tool of customer
intelligence allowing the firm to understand trends and position and accordingly change their
strategies depending on the markets needs (Brenkert & Beauchamp,2017)
 In the retail business the operations requires co-ordination, management and empowerment. Tesco’s
depends largely on their front service workers who directly communicate and connects with the
customers. They also ensures that service quality it provides s strictly maintained and for this they
often have recruitment exercises to make sure that attracts the best talent(Zao,2014).
Marketing Management

 Tesco’s strategy for marketing is to make sure that gain the confidence of the brand
players. The company is focusing on its title which is “every little help” to strengthen its
competitive advantages in the market.
 Tesco’s Marketing strategy is to gain the focus by using various promotional means such
as advertisement, club card, occasional discount, and buy one get one free offers.
 The main aim of the Tesco’s Marketing Strategy in helping the clients to achieve the
maximum satisfaction by fulfilling their demands and expectations. This has really helped
Tesco in competitive advantage and lead to becoming one of the world’s Largest retailers.
(Humbly et al., 2008)
Internal and External Factors affecting
Financial Management of Tesco

 Due to the COVID-19 Pandemic lot of people have lost their jobs or are receiving the a
cut in the percentage of their salaries which results in the reduction in the purchasing
power of the consumer, leading them to turn to more cheaper brands. On the contrary,
high labour cost in the UK cost millions of pounds annually for the Tesco.
 This has reduced the Total revenues and profits for the Tesco.
 This effect has directly affected the stock prices of the Tesco in London Stock Exchange,
the price of Tesco’s share in February 2020 right before lockdown in the UK was 256
Pounds which has now reduced to 228 in the November 2020.(Tesco,2020)
Internal and External factors affecting the
Finance Management of Tesco.

 Certain government regulations also play an important role. In 2004, Food

Retailing Commission (FRC) suggested to have a code of practice which banned
many practices, this includes changing prices without prior notice and
demanding payments from the suppliers. To manage this rules had to incur lose.
 The UK Government also adopted a tax measure which affected the Tesco. In
2011, UK government raised the Value added Tax from 17.5% to 20%. The UK
government’s goal was to increase its revenue by 13 billion pounds per Annum.
(BBC, 2011).
Internal and External Factors affecting Financial
Management at Tesco.

 The government of UK also proposed a fat tax which aimed to achieve control over
the rising obesity one of the major problems in the UK. This would help in making
sure that the people purchase less products especially food products.
 The UK government has also proposed to adopt a fat tax with the aim to control
obesity and limit the medical problems associated with it (The Guardian,2014). This
affected the total revenues of the Tesco.
 Because of this, Tesco specially had to launch a brand new healthy food range, this
again costs them a whole new budget again. (Tesco, 2014)
Internal and External Factors affecting Human
Resource Management

 During the COVID-19, to comply with the guidelines relating to the sanitization and
social distance practices and increase in the online shopping due to restrictions on going
out, Tesco recruited 16000 permanent employees and opened up for recruitment in other
countries.(The Guardian, 2020)
 Government’s increase in the base pay has also changed the recruitment processes in the
Tesco.
Internal and External Factors affecting
Operations Management at Tesco

 The operations management also changed the Chief Financial Officer of the Tesco, Alan
Stewart stated that the operations at the Tesco has changed so much, which hasn’t
changed in almost 10 years now
 The staff had to be trained to comply with the safety guidelines such as sanitization, social
distancing and so on.
Internal and External Factors affecting
Marketing Management at the Tesco.

 Internal factors like all the other department can cause an hinderance in the marketing
strategy, such as the finance department can limit the budget for the marketing
department.
 However, this is not the case for the Tesco, as on their 100th anniversary Tesco decided to
spend around 80 million pounds on the advertising.
 Another major factor that affects the marketing strategy of the Tesco is its competitors.
 Along with Tesco, there are four other Leaders in the grocery sector, Sainsburys, Asda and
Morrison are biggest competitors of Tesco. (Downie, 2018)
 German stores like Aldi and Lidl are providing unbeatable prices and giving the 4 giant
stores a big competition as well. (Downie,2018)
Internal and External Factors affecting
Marketing strategy of the Tesco
 Tesco works with wide range of suppliers at a certain time, various brands
may not like to work with the Tesco, and they might choose its competitors
over working with them.
 This can seriously affect their marketing strategy.
 Company’s image and brand equity also plays an important role. Tesco has a
very good company image and brand equity but because of certain scandals
like the accounting scandal of 2014.
 Apart from that Tesco has done many promotional activities which helps its
brand image and equity to remain at the top.
Problem relating to Tesco

 Recent events relating to BREXIT may affect the future of the retail business in the UK.
 Right now BREXIT is in the transition period which will be over in January 2021.
 To cope up with the recent times of COVID-19 along with the BREXIT and changing
policies and political situation in the country is going to be a quite challenging task for not
just Tesco but the other retailers as well.
Problems relating to the Tesco

 This will affect all the key practices from Human Resource to Operations, every
thing will be done differently.
 Finance management will be affected deeply because the prices of the products.
“Almost 80 per cent of all the food that UK retailers import comes from the EU,
making the EU negotiation particularly important for these essential
goods,”(BRC).
 In the Human Resource practices as well, Brexit has changed the immigration
policies. Leading many Europeans in the country to moving back to their home
country. This will create a war between the HR managers, trying to acquire the
best talent. This can also mean that they may have to pay higher salaries.
Problems relating to the Tesco.

 Tesco’s supply chain operations also seems to have an effect of Brexit, the food supply
that the retailers sent to the northern Ireland also seems to be changing.
 “Supermarkets have warned that shoppers in Northern Ireland could be faced with empty
shelves unless there is clarity about their trading status when the Brexit transition period
ends “(The Times £).
 This suggests that there are tough times ahead of retailers especially Tesco due to the
ongoing politicial issues such as Brexit.
Summary

 All and all it can be said that, Tesco’s key practices are efficient and they
are moving ahead strongly than ever. The recent times of difficult
pandemic has thrown various challenges towards Tesco, but has came out
of it more strong than ever and it will continue to do so.
 Of course like every organization, Tesco is not perfect but it has without
all the problems and faced them head on by overcoming them more
efficiently.
References

 BBC (2011) VAT Rate Rises from 17.5% to 20% (online). Available from: http://www.bbc.com/news/business-12099638
 BBC (2014) UK Economy Grew 0.9% in Second Quarter, says ONS [online]. Available from: http://www.bbc.com/news/business-29422267 
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References

 Gopalia, A., 1970. [PDF] Effectiveness of Online Recruitment and Selection Process : A Case of Tesco: Semantic Scholar. [PDF] Effectiveness of
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0
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 Rosethorn, H., 2009 , The employer brand: keeping faith with the deal, London (Routledge).
 Fernie, J., Moore, C. and Fernie, S., 2003. Principles Of Retailing. Amsterdam: Butterworth-Heinemann.
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 References

 Ashley Armstrong, T., 2020. Danger To Food Supply In Ulster Supermarkets. [online] Thetimes.co.uk. Available at: <https://www.thetimes.co.uk/edition/business/danger-to-food-
supply-in-ulster-supermarkets-x0w0r2jgb>
 Fleming, M., 2020. Tesco on how Covid-19 helped it to 'really be at its best'. Marketing Week. Available at: https://www.marketingweek.com/tesco-covid-19-brand-be-at-best/
 Anon, Adapting to COVID-19: the Tesco story. ICAEW. Available at: https://www.icaew.com/insights/interviews-and-profiles/2020/july-2020/adapting-to-covid19-the-tesco-story.
 Anon, 2020. Tesco says U.K. supply chain critical in Covid-19. FreshFruitPortal.com. Available at: https://www.freshfruitportal.com/news/2020/04/09/u-k-food-supply-chain-steps-
up-after-initial-panic-says-tesco/ [Accessed November 27, 2020].
 www.ETHRWorld.com, 2020. Tesco to create 16,000 more permanent jobs in online boom - ETHRWorld. ETHRWorld.com. Available at:
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 Butler, S., 2020. Tesco gives permanent jobs to 16,000 staff taken on in Covid crisis. The Guardian. Available at: https://www.theguardian.com/business/2020/aug/24/tesco-gives-
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