Tescos Action Plan - Essay Example

Case Study Involving Tesco Company By Student Name Course Code + name University Name City, name Date Case Study Involving Tesco Company Introduction Tesco is an international Company situated in the United Kingdom. The organization came into existence in 1919, under the leadership of John Cohen. John began with a small outlet, where he sold a few foodstuffs. Since then, the Company has grown to become one of the largest foodstuff retailers in the whole World. The firm operates over six thousand retail outlets all across the World. The Company also has a wide range of customers spread across the World. The organization currently ranks as the third largest retailer in the World, with its presence in over ten countries across the World. Some of these nations include China, America, Korea, Malaysia and India (Wood and McCarthy, 2014). The firm deals with a variety of products and services. Some of the products include grocery items, fresh foodstuffs, clothes, electronics and household items. The firm also provides financial services such as advancing credit to its customers. The Company enjoys a large market share, especially in the United Kingdom. To remain competitive in the market, the firm has undertaken several measures (Wood and McCarthy, 2014). For example, the Company has good working relationships with its customers. Also, through its brand promotion, the firm can develop customer loyalty. This paper analysis the SWOT analysis of the firm, action plans, evaluation of the action plans and the proposed action. Tesco SWOT Analysis The Internal factors determine the strengths and weaknesses of an organization. On the other hand, opportunities and threats depend on external factors. SWOT analysis is important for the purpose of determining the performance of a firm in the market. Strengths Tesco has one of the most powerful brands in the World. The Company offers high-quality products at an affordable price to its customers. The ability of the firm to produce a variety of products gives it an upper advantage in the market compared to its competitors. Further, the Company has immense potential to grow (Hill, 2008). Over the past years, the firm has grown from a small foodstuff outlet, into one of the largest retailers in the World. The Company also has a well-established online selling platform. The online platform for shopping offers customers an opportunity to access products with ease. Also, the firm has established a partnership with other Countries such as China. Such joint ventures allow the organization to gain exposure from other experienced players in the market. Further, the organization enjoys economies of scale, given the large size of its operations. The firm can purchase materials in large quantities. Therefore, it can save on cost. The firm is also able to establish long-term relationships with its customers, through the provision of loyalty packages. Weaknesses Despite, its tremendous strengths, Tesco just like any other retailer, has several weaknesses. First, the organization suffers from bad debts, this result from the inability of its customers to repay their debts. As earlier stated, the firm provides financial services to its customers. The customers’ failure to repay their loans may result in financial problems in the firm (Thompson et al., 2012). Also, the firm faces the risk of increased customers’ insurance claims. One of the ways, in which the Company builds customer loyalty, is through the provision of insurance cover. Some customers take advantage of the insurance cover to benefit from the organization. The firm also lacks sufficient experience in some of the markets it wishes to enter. For example; the firm would like to venture into the smartphone market; however, it does not have enough experience in the market. Opportunities Several opportunities are available to the organization. First, the firm can access more markets such as the digital market. The Company’s move to develop its smartphone broadens its chances of success in the market. Its online selling platform, further, increases the firm’s opportunity of reaching out to more customers (Thompson et al., 2012). Through online shopping, customers who may not have time to visit the stores can get what they need. Threats Just like any other retailer, Tesco faces several threats. The fact that, the Company is the leading retailer in the UK, presents serious threats from other retailers. There is serious competition in the market since all the other retailers want to become number one. Desired Outcome Tesco Company aims at achieving several outcomes. First, it focuses on giving its customers value for their money, through the use of competitive prices. Further, it aims at meeting the needs of its customers, through the provision of quality product and service. Second, the firm aims at meeting the needs of its shareholders, through increased returns. Third, it focuses on developing the skills of its workers, through training. Fourth, the Company aims at establishing a long-term relationship with its suppliers (Tesco, 2011). Finally, the firm focuses on improving the society and the environment, in which it operates. Action Plans Tesco’s action plan mainly focuses on meeting the demands of its customers. The organization does not believe in complex and elaborate business plans; rather, it focuses on satisfying its customers. The firm listens and understands the needs of its customers. Therefore, it can offer them the best services. Apart from customers, the firm’s action plan also focuses on its suppliers. It understands the importance of quality products. To achieve this, the firm establishes good working relationship with its suppliers (Woods, 2007). Further, the firm has set strategic plans, on how to remain competitive in the market. For example, it provides quality and affordable products and services. Evaluation of Action Plans Tesco has made great progress in establishing customer loyalty. It can reach out to many customers all across the World. The firm also enjoys a good working relationship with its suppliers. Finally, the Company continues to lead in the market, despite, increased competition. Proposed Action The Company aims to broaden its market share, through the adoption of international marketing strategies. One such strategy is the increased use of online shopping platform. The organization also has plans of venturing into other markets such as the digital entertainment market (Hill, 2008). Conclusion From the above discussion, it is evident that Tesco is one of the leading retailers in the World. The firm has a well-structured SWOT analysis. Some of the Company's strengths include economies of scale, customer loyalty and long-term relationship with suppliers. Some of the weaknesses include financial loss, through increased debts and insurance claims. Further, the analysis points out the opportunities and threats of the organization. Given its proposed action plan, the firm has an opportunity for increasing its customer base. Bibliography Hill, C., 2008, “International business: Competing in the global market place,” Strategic Direction, 24(9). Tesco, P. L. C., 2011, “Annual Report and Financial Statements 2014,”TESCO http://www. tescoplc. com/media/417/tesco_annual_report_2011. pdf. Thompson, C., Clarke, G., Clarke, M., and Stillwell, J., 2012, “Modelling the future opportunities for deep discount food retailing in the UK,” The International Review of Retail, Distribution and Consumer Research, 22(2), 143-170. Wood, S., and McCarthy, D., 2014, “The UK food retail ‘race for space’ and market saturation: a contemporary review,” The International Review of Retail, Distribution and Consumer Research, 24(2), 121-144. Woods, M., 2007, “Linking risk management to strategic controls: a case study of Tesco plc,” International Journal of Risk Assessment and Management, 7(8), 1074-1088. Read More