Involvement of the UK Supermarkets Inn TQM Evaluation - Essay Example

Running Head: UK Supermarket Wars - TQM Strategies UK Supermarket Wars - TQM Strategies of the of the Abstract This paper explores the application and significance of total quality management (TQM) strategies to supermarkets in the United Kingdom. The examination of the operating characteristics of supermarkets is essential in developing the competencies that are essential to build market positions and gain market share. In examining the strategies that are being utilized by the industry's leaders, this paper evaluates the direction of the industry, current levels of competition and the competitive advantages that are needed in the industry today. The recent vertical and horizontal expansions of these companies are seen not just as a bid to expand its operations but are also part of its objective to protect positions in UK retailing. The study shows that though economies of scale, access to technology and sales operations channels remain significant factors to the advantage of big companies, they remain vulnerable to price wars and product switching schemes initiated by smaller players in the industry. The conclusion is that companies need to focus globally competitive strategies while remaining local in approach to consumers. Table of Contents Introduction 4 Research Rational 4 Objectives 4 Research question 5 Critical Literature Review 5 Methodology 7 Research Design 8 Research Context 8 Procedure 8 Methods of Data Collection 9 Methods of Data Analysis 10 Discussion 10 Significance of Proposed Research 11 Research Limitations 12 Provisional Work Schedule 13 References 14 Bibliography 16 Appendix A - Opportunity Analysis for International retailers based on Global Retail Development Index 18 Answers to the Proposal Submission Sheet 19 Involvement of UK Supermarkets inn TQM Evaluation 19 Information Needed form UK Supermarkets 20 Sizes of population for the study 20 Potential Hazards 21 Ethical Considerations 21 Introduction According to the United Nations Conference on Trade and Development (UNCTAD) (2004), the retail and consumer industry is one of the industries exhibiting one of the highest growths today. Though the UNCTAD subsequently report reduced the expected growth rate projections in 2006, the industry remains to be an attractive industry (Awbi, 2006a; Tesco expands in Japan, backtracks on China, 2006). Research Rationale As early as 2001, analysts have already predicted a developing price war among UK's supermarkets due to jockeying in the UK for market position as a platform of expansion (UK 'poised for supermarket wars'). Another important factor contributing to the competition in industry has been due to the entrants of small and big players into the industry which included the vigorous expansion of Wal-Mart in the UK (Schrage, 2005) However, indicators from the second half of 2006 have indicated that earlier projections in 2004 may still be achievable due to market growth in Europe (Awbi, 2006b). The UK supermarket industry has is critical in establishing market presence in the European Union (EU) and this is the motivation behind most companies in the industry vying for position in the local supermarket industry. This highlights the importance of developing TQM strategies that secure a retailer's position in the supermarket industry (Easterby - Smith et al, 2001). Objectives At the end of the study, the research aims to be able to enumerate the key TQM strategy elements that companies need to be competitive in the UK supermarket industry. The study will be able to identify key industrial characteristics that drive the market's movement as well consumer motivations and expectations. The study will provide insights on the dynamics of the UK supermarket industry as it continues to grow in significance globally. The study does not aim to prescribe the strategy to be taken but rather highlights what TQM programs are being utilized in the industry and their value in the formulation of individual companies' strategies. Considering the diversity of the industry, it is essential to be able to have a base line reference of strategy not only for one's company but also in anticipation of other new entrants to the industry. Research question The key research questions in the paper are, first, what form the dynamics of TQM take at strategic, tactical and operational levels within organisations, and second, how effective is TQM framework in the case of British supermarkets (Limpard, 2001). Critical Literature Review Industry analysts and experts have raised concerns that there is little thought given to using those aspects of TQM to improve the internal processes. (Simms, 2003, p72). For example, little focus has been given by any of the studied supermarket industry leaders as to the s achievement of non-legal technical requirements that has implication on socio-political demographics Whilst the cost of losing customers is not usually an issue, a low level of conformance to what has been set out and promised does generate a social cost. TQM is a management philosophy which is widely implemented in companies and discussed in considerable detail in the academic literature, analysis of which indicates that most organisations and researchers have their own definition of the term. It is also found that a large number of interventions not related with TQM are grouped under this term. Several researchers have tried to define the different dimensions that shape TQM. Analysis of these dimensions reveals some commonalties, such as top management support, customer and supplier relationships and employee involvement. From these works and their own research the authors have selected ten dimensions of TQM on which to study its impact in public sector organisations. (Bryman, 1994, p. 398) TQM objectives imply an increase in quality with a decrease in costs and its impact on organisational profitability is clear. The cost of losing clients as a consequence of non-conforming quality is just one of the factors in the cost equation. However, this and other types of lost opportunity costs, as defined, do not exist to the same degree for public sector organisations. Otherwise, with a price war ongoing in the industry, maintaining profit margins will become very difficult. The internal rules under which public organisations work are different to those operating under competition, so, it is likely that the results of TQM intervention may also be different. (Cooper, 1998, p. 445). Researchers have developed the concept of system dynamics in organisations. In this concept, organisational actions are considered as a series of flows, for example, money, order, material, personnel and capital equipment. The flow of information within the organisation is seen as the integrating mechanism. (Adam, 2004). These flows are defined as the dynamics of an organisation (Saunders et al, 2003). New studies have widened the idea of systems dynamics in organisations by simply referring to dynamic models of organisations which are characterised by having a time dimension and as being applicable to structures, processes or change initiatives within the organisation and its environs. Researchers have concluded that the use of dynamic models for TQM in supermarket economy is essential for an "appreciation of a complex, dynamic system" which "enables managers in turbulent days to manage in a comprehensive way and to decide and act for long-lasting success" (Ahire, 2003, p. 23). Across the board in the supermarket industry, considerably more organisations were found to use tools and techniques than quality models reflecting the operational emphasis on TQM in most of the organisations and the lack of senior management involvement and direction (Zairi, 2004). TQM dimensions such as long term relationships with suppliers and, the development of reward systems for employees. In British supermarket arena, apart from the fact that they usually decide the customer's needs they will satisfy, the rest of TQM principles are of considerable value to improving their operating efficiency. The involvement of supermarkets in the environment, community, research and development can establish a more meaningful relationship is also becoming a critical for consumers. Consideration of social issues can help companies have a better local feel for the markets and consequently be able to develop more consumer-focused TQM strategies Methodology The evaluative framework for TQM dynamics of supermarket and retail companies has been used to construct an exploratory multiple-case research design. This approach is chosen based on replication logic. In this situation similarly occurring phenomena in different cases are equivalent to "replication" (Marson, 2003, p30). Research Design Statistical information regarding the performance of the supermarket industry in the third and fourth quarter of 2006 will be gathered and compared to projections for the year. Information regarding the performance of Marks & Spencer, Asda, and Tesco for the same period will be compared to the information as well. To determine the transitional changes that have occurred in the course of the said period, the gathered data will analyzed statistical for correlation and degree of significance. Research Context An examination of TQM strategies that benefit supermarkets in the context of the prevailing competition levels in the industry will be extracted from the study of the characteristics of their operation objectives, treatment of customer satisfaction issues and their drive and motivation to improve TQM processes (Robson, 2002). There will be focus on supermarkets that are not limiting their main TQM strategies by its consumer businesses and those that are also considering international expansion programs. The aim is to launch extensive services and related markets into new markets because this is the general direction of the major players in the industry. The two major motivations of these companies are in establishing their leadership in these developing markets and maximizing existing capacities (Corporate Watch UK, 2004). Procedure To be able to accomplish these goals, there will be a need to compile the related literature and limit accordingly to the parameters of the study. It is important to be able to gather enough data for future comparison to survey information. The survey information will be studied using the best statistical method applicable. Consultations with a statistician will be done before the survey to be able to build questions in line with the objectives of the study and afterwards to analyze the results. Consultation with field experts regarding the preliminary results will also be done for valuation of the results and to asses their opinions. There is also a need for the guidance of an experienced academic to directly guide the study and critique its progress. For this purpose, a thesis adviser will be needed as well as a separate adviser for the statistical analysis. The research will also turn to existing institutional studies regarding the topic to guide the research. Also, the research will follow closely online forums that tackle the topic and the issues that are related to it. Methods of Data Collection A literature survey regarding the impact of the existing TQM programs of Marks & Spencer, Asda, and Tesco will be done to assess customer opinions on the effectivity of programs. The questionnaire will range from the evaluation of their experience in buying from the store, their understanding of the companies' existing strategies and their expectations for the supermarket industry in the UK for 2007. An optional component of the survey will also ask what strategies they believe will be most effective supermarkets in the UK for 2007. The information gathered will be catalogued and utilized as indicators of the change in TQM initiatives being utilized in the industry. After the data gathering, the results of the literature study and statistical analysis will be presented to academics knowledgeable regarding the field of retailing and strategic management for critique. This part of the study can either be done through another survey or through interviews. The phase will not utilize questions about the topic but rather the respondents' critique to the information. One of the key strategies that are to be explored for the phase is the feasibility of conducting the survey online to be able to gather more opinions on the results of the preliminary study. Methods of Data Analysis The main objective of all the analysis to be done is to be able to establish the significance of TQM strategies to the performance of supermarkets in the UK today. Whatever results will be compared to other existing researches to determine if the developments reflect what was anticipated of the industry. Researchers can extrapolate from the activities of these industry leaders that TQM strategies in "supermarket wars" have been focused on protecting existing market share. It is apparent that the similarity of the strategies adapted has effectively created a stalemate among supermarket industries leaving the niches and product or service extension as the channel for expansion. At the same time, TQM strategies that should be employed should utilize existing conditions to their advantage. This idea has been adapted particularly by Tesco and Asda in their intensification of petrol sales: they are keeping their prices pegged at industry prices however have offered modelled their sales mix for petrol to include car care services as well as loyalty incentives (Christian, 2003) Discussion As have been apparent in the TQM strategies of Tesco, Marks & Spencer, and Asda, all expressed considerably greater emphasis in TQM programs that involve the participation of all departments in the design process and there is a degree of working together to achieve a design that satisfies the requirements of the customer, according to technical, technological and cost constraints. Case in point: according to the Economist, Tesco's TQM practices "allows Tesco to do two things. First, it can lavish attention on customers by giving them discounts on things that they buy routinely Second, Tesco can adjust its shelves to suit the profile of the local area, or even the time of day" (Tesco Triumphs, 2005). However, there has also been hindrances to the success of their TQM, including inadequate definition of the customer, which in some cases may be the whole society and not the direct user, and the lack of flexibility that characterise much of the supermarkets, which makes it difficult to implement. Significance of Proposed Research The research is expected to show that a company that is committed to TQM can also be considered as committed to the needs of customers and consumers and their satisfaction have to be in the mind of all employees and considerable attention paid to identifying these needs and satisfaction levels. Customers' satisfaction is only important if an improvement in the level of satisfaction leads to an increase in consumers' demand. If this situation does not hold true, then there will be little need to listen, analyse and respond to consumers' needs and requirements. (Rovizzi, 2003, p95) New product and/or service designs have to be thoroughly reviewed before they are produced and marketed, and specifications and procedures clearly defined. (Sheshinski, 2006, p123). At the same time, their corporate TQM has indicated emphasis on developing suppliers through supplier chain management activities such as long term contracts, improved communication, open book accounting and sharing of information for the purpose of product and service development Research Limitations In general, there should be further quantitative and qualitative studies on the impact of TQM to industry performance levels especially for companies having significant bargaining power over it. Companies nowadays are not just commercial ventures; they also serve as highways of liberalization and social development. Therefore, companies will have to learn well from these experiences to be able to fair better. The value of the study is based on the need to understand the unique opportunities in having TQM strategies that are responsive to current trend in UK supermarket industry. Today's markets now globalize in unprecedented ways. Coupled with the developments in technology, specifically the internet and aviation, and the liberalization of international commerce, globalization is now becoming a reality to many people. Globalization presents business with new realities and therefore new challenges. Businesses are challenged not only to excel in their trade but now must be able to bring that trade to fresh waters and beyond their comfort zones. The TQM profiles model enabled the management involvement and direction in the organisations to be evaluated. Middle management was found to operate in two modes. First, as an obstacle and second as an isolated group trying to implement TQM in a tactical role like using TQM to implement strategy (Gill & Johnson, 2002), The lack of senior management commitment in a substantial number of companies was caused by TQM having initially been portrayed as an operational improvement programme and a subsequent lack of belief in TQM philosophy as a strategic driver. (Waltuck, 2005, p80). However companies have shown that to successfully integrate all aspects of the TQM environment model requires a strong dynamic philosophy of TQM and using it as a strategic driver in their organisations. Provisional Work Schedule Task Duration Start Date End Date 1 Gathering of Literature 7 days 19 February 2007 27 February 2007 2 Design of Survey Materials 2 days 28 February 2007 1 March 2007 3 Short listing of Industry Experts for Literature Critique 2 days 28 February 2007 1 March 2007 4 Contacting Industry Regarding their Participation 3 days 2 March 2007 6 March 2007 5 Finalizing List and Schedule of Industry Experts 1 day 6 March 2007 6 March 2007 6 Consultation with Statistician Regarding Survey Results 1 day 6 March 2007 6 March 2007 7 Conducting Survey 5 days 7 March 2007 13 March 2007 8 Summary of Survey Data 2 days 13 March 2007 14 March 2007 9 Correlation of Survey Data and Literature 1 day 14 March 2007 14 March 2007 10 Presentation to Industry Experts 3 days 15 March 2007 18 March 2007 11 Analysis of Experts' Opinions 1 day 18 March 2007 18 March 2007 12 Preparation of Final Paper 7 days 19 March 2007 27 March 2007 References Adam, E.E. Jr. (2004) An International Study of Quality Improvement Approach and Firm Performance. International Journal of Operations & Production Management 17(9). 842 Ahire, S.L. (2003) Development and Validation of TQM Implementation Constructs Decision Sciences. 27(1). 23 Asda reorganises as supermarket war heats up (2005). Food & Drink Europe. Retrieved on February 13, 2007 from http://www.foodanddrinkeurope.com/news/ng.aspid=61268-asda-supermarket-uk Awbi, Anita (2006a). Tesco shuns US retail graveyard for China. Retrieved on February 13, 2007 from http.//www.ap-foodtechnology.com/news/ng.aspn=64944-Tesco-hymall Awbi, Anita (2006b). Tesco to steal convenience crown from Spar . Retrieved on February 13, 2007 from Bauer, A. (2001) Organisational and Quality Systems Development. Journal of Total Quality Management. 11(4), p410 Bryman, A. (1994) Research Methods and Organization Studies. London: Routledge: 398 Christian, Nicholas (2003). Supermarket wars hot up with petrol price cut. Scotland on Sunday. http://scotlandonsunday.scotsman.com/uk.cfmid=480742003 Cooper, H. (1998) Synthesizing Research: A Guide for Literature Reviews 3rd ed. Thousand Oaks, CA: Sage Corporate Watch UK (2004). Tesco. A Corporate Profile Retrieved on February 13, 2007 from http.//archive.corporatewatch.org/profiles/Tesco/Tesco1.htm Easterby - Smith, M., Thorpe R. and Low, A. (2001) Management research: An introduction Sage Publications: 107 Easton, G.S. (2000) The Effects of Total Quality Management on Corporate Performance. Journal of Business 71(2): 253 Gill, J. and Johnson, P. (eds) (2002), Research Methods for Managers. London: Sage Publications: 294 Limpard, N. (2001) Grounded Theory Methodology and Practitioner Reflexivity in TQM Research. International Journal of Quality and Reliability 18(2): 180 Marson, B. (2003) Building Customer-focused Organisations. Organisation and Administration Quarterly 17(1): 30 Partington, D. (ed.) 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Appendix A - Opportunity Analysis for International retailers based on Global Retail Development Index Answers to the "Proposal" Submission sheet According to IGD Research, "development of the UK grocery retail market will continue to be restricted by a combination of slow population growth, price competition and growth in the foodservice sector as an alternative channel." (Asda reorganises as supermarket war heats up, 2005). The application of TQM concepts lie in increased quality performance with a simultaneous decrease in costs and improvement in productivity and therefore should gain significance considering current industry analyses. A number of researchers have analysed the relationship between TQM and company results and indicate that there is a positive relationship. Involvement of UK Supermarkets inn TQM Evaluation Supermarkets are considering and utilizing TQM models such as the business excellence model (BEM) and the other three major evaluative TQM award models, which are each based on a perceived definition and model of total quality management (Robson, 2002; Saunders et al, 2003). These models are applied by using self-assessment based evaluative frameworks. Self-assessment of individual companies and the industry itself takes on average a few weeks, depending on the sampling size and extent of variable to be tested. Most supermarket companies even established ones like Tesco, Asda and Marks & Spencer, rely more on "snapshot" evaluation of performance in developing their TQM operational programs and use more intensive studies mainly for corporate planning. The main objective of TQM programs of companies in the UK supermarket industry is being focused in providing total products and services for the people who frequent its stores: aiming to diversify its operations by focusing on customers' needs and lifestyle. The TQM objectives are supporting recognition of the limitations of the BEM in regard to TQM dynamics modelling in the industry. This suggests that the industry is giving more emphasis on identifying new criteria for retailing: dynamics of innovation that encompass new technologies, markets and channels and product development that covers product and service extensions. Thus responsive competencies assessing consumer trends and behaviors figure the most significantly in strategic objectives (Tesco, 2006b). Information Needed form UK Supermarkets 1. Statistical information regarding the performance of the supermarket industry in the third and fourth quarter of 2006 2. Information regarding the performance of Marks & Spencer, Asda, and Tesco in the third and fourth quarter of 2006. 3. Identification of the transitional changes that have occurred in the third and fourth quarter of 2006 in the UK supermarket industry 4. Correlation and degree of significance of perceptions of the TQM strategies of Marks & Spencer, Asda, and Tesco to their performance in the third and fourth quarter of 2006. Sizes of population for the study 1. The study must be able to include in the research three out of the top five UK supermarkets in 2006 2. For the survey regarding perceptions on the TQM strategies of the said companies, qualified respondents should not be less than 50 3. For the industry expert evaluation the results of the survey and literature gathered, participants must not be less than 10 Potential Hazards The researcher's success lies in the quality of the survey results and the literature gathered. Therefore, the researchers must be able to create a survey that answers all the key elements for the research while at the same time literature gathered must yield information that has significance to the survey results. However, using the BEM within a limited learning process or within a limited industrial context can result in limited dynamic representation. Similarly, the comment on the need for "continuous change from continuous learning and analysis" in regard to TQM in organisations is advocating dynamic learning loops incorporating the calculus of Kaizen instead of static models. There are some researchers who refer to these loops as "positive spirals" involving the dynamics of TQM as integrating all activities in a supermarket setup. (Easton, 2000, p. 253) Ethical Considerations The identity and opinions of all respondents must only be used for the purpose of the research. Information gathered at any stage of the research can not be used to undermine a company. Since the paper will utilize a significant amount of opinion, utmost consideration for freedom of expression must also be observed at all times. Read More