The report helps in analyzing the supply chain strategy of Tesco wherein proper analysis is required to be done in order to understand the different environmental challenges. The external as well as internal supply chain strategies will help in addressing the different challenges faced by Tesco in the last few years.
The main aim and purpose of the report helps in understanding the different issues along with different environmental challenges that are faced by Tesco. Proper analysis is required to be done in order to understand the different measures that have to be taken in order to make the business sustainable in nature.
The structure of the report includes the introduction about the company along with proper analysis of the different environmental challenges that is faced by them. The different recommendations have to be provided that will help in making the activities of the company sustainable in nature.
Jack Cohen founded Tesco in the year 1910 and he introduced the first Tesco tea in their first store in the year 1929. The main theme of the respective company was to “Pile it high and Sell it” (“Tesco PLC”, 2018). In the year 1947, the major event of Tesco took place wherein they went public and after one year, the company started with their own business. In the present era, Tesco is the best retailer in The United Kingdom wherein they are operating in more than 14 countries with more than 2290 stores across the world.
The number of employees working in Tesco is above 290000 and their focus is to create value for the different customers, as this will help in earning lifetime loyalty. Tesco strives to be innovative as well as energetic in nature as they wanted to be first for their target customers in the entire competitive market.
The supply chain strategy of Tesco has evolved in a significant manner in the last few decades. The entire transformation in the supply chain management of Tesco has categorized into different initiatives that are as follows:
Figure 1: Supply Chain Strategy of Tesco
(Source: Turker and Altuntas 2014)
From the above diagram, it can be analyzed that the supply chain strategy that is followed by Tesco from the last 3-5 years is complex in nature wherein in the last year Tesco dispersed more than 3 billion cases of different goods to the different stores all around the world. The main target of Tesco is to maintain proper flow of goods and services as this will help them in satisfying the different requirements of the customers (Brandenburg et al. 2014). Tesco regarding the different suppliers and the products as well does proper investigation. The division of the supply chain of Tesco includes ships, trucks as well as trucks in the global supply chain management (Touboulic and Walker 2015).
However, few cons in the supply chain strategy that is followed by Tesco are described as follows:
These are the cons of the supply chain strategy used by Tesco and these are becoming the weaknesses of the company as well. The realized strategies that can be adopted by Tesco are as follows:
External environmental challenges
The proper analysis of the PESTLE helps in analyzing the external environmental challenges along with different global factors that can affect the business.
Political
The entire European Union as an essential tool provides the different concessions in order to diversify the different European countries. However when they are entering into the European countries, Tesco has to consider the local governments rule and regulations. There can be different regulations that will help in protecting the local supermarkets and this will analyze the political situation of the entire country as well
Economic
The entire British pound is becoming stronger that is making the different supermarkets weaker with the respective different local competitors. This can help in negating by supplying from Wal Mart with established connections. The rise in the cost of the labor is the major concern in the business of Tesco and negates the influence of Tesco, can help in sourcing the goods from the different countries that are low in cost such as China and India. The proper automation of different services will help in reducing the cost of the labor.
Social
Proper sustainability is required in the business, as this will help Tesco in changing the perceptions of the customers towards the business. Tesco does not respect the cultural and social values wherein it operates and this is affecting the entire business in The United Kingdom. Proper value of understanding the business is essential in nature, as this will help Tesco in enabling to penetrate the entire market (Coyle et al. 2016).
Technological
Proper emergences of the small firms are operating online has huge rate of impact on the Tesco. The online shopping has distracted the different customers from the Tesco supermarket. The entire authority of Amazon is the good example of creating technological influence over the business of Tesco (Schoenherr and Speier?Pero 2015).
The automation of the replenishment and packaging systems in the supply chain management can be fastened over the other competitors in the entire market. The different advancement in technologies has to be adopted by Tesco supermarket, as this will help them in making their presence in an effective manner in all over the market against the competitors.
Legal
The control of price that is imposed by different regulatory bodies is one of the main factors in creating huge impact on the business of Tesco. The entire law can control two ends of the prices and these acts as the restrictions to charge more in the entire market and this will avoid monopoly through proper cost leadership (Monczka et al. 2015).
The different tariffs as well as other regulations create huge impact on the business of Tesco and this can have huge impact on the reputation of the business as well. The safety standards as well as minimum level of different wages while handling the business in an proper manner.
Environmental
The entire impact of the environment is one of the essential topics in the business of supermarket. With proper consideration of different number of stores of Tesco, the environment impact is huge in nature. The carbon footprint is becoming attraction for the different customers; however, the customers will like to choose the different goods and services that has minimum amount of carbon dioxide present in it. Tesco is withdrawing large amount of carbon dioxide in the logistics supply and there are different environmental groups such as Green Peace can highlight the entire fact and they are tempting the different customers to boycott Tesco.
Internal environmental challenges
Proper SWOT analysis has been conducted in order to understand the different internal challenges that are faced by Tesco. The SWOT analysis is as follows:
Strengths
Weaknesses
Opportunities
Threats
From the different external and internal environmental analysis of Tesco, it can be analyzed that there are different external environmental issues that are faced by Tesco from last 3-5 years along with internal environmental issues that are the weaknesses of the respective company (Wisner, Tan and Leong 2014). The respective supermarket in The United Kingdom requires understanding the different strategies that can be utilized by Tesco. This will help them in maintaining proper reputation in the market and this will help them in creating proper reputation in the competitive market as well.
The strategies that can be used by Tesco Supermarket in The United Kingdom are as follows:
Tesco has applied the Six Sigma concept, as this is an approach data driven in nature. The Six Sigma helps Tesco in eliminating the different defects that has to be adopted by Tesco. The RFID technology has to be adopted by Tesco as this will help them in easy tracking of the goods and this helps in measuring every aspect of supply chain management. Proper promotion of faster processing of goods as this helped in increasing the efficiency of the employees in the organization (Beske, Land and Seuring 2014).
There are different issues that have to be addressed by Tesco that will help in choosing the right kind of strategies and this will help Tesco in execution of the proper strategy in the entire competitive market (Martínez-Jurado and Moyano-Fuentes 2014). Tesco has to maintain competitive advantage with the help of lowering the costs and simultaneously improving the satisfaction among the customers.
Figure 2: Supply Chain Drivers of Tesco
(Source: Carter, Rogers and Choi 2015)
Conclusion
Therefore, it can be inferred that there are different strategies that can be applied by Tesco in order to improve the supply chain structure of the company. Proper usage of the strengths is essential in nature, as this will help them in maximizing the profits of the company. These kinds of strengths will help in improving the sustainability of Tesco in the entire competitive market. As per the SWOT and PESTLE analysis, it has been seen that the strengths can be used by Tesco in such a manner that this will help them in targeting the niche markets through different model of stores and this will help in creating a strong customer base in the market as well.
Similarly, the sustainability is required to be adopted by Tesco, as this will help them in opening different stores in China and India as this can minimize the dependence of Tesco on the market of The United Kingdom. The supply chain management of the respective company named Tesco is appropriate; however, there are changes that have to be amended by them in order to gain competitive advantage. The complexities have to be reduced in such a manner that this will help them in developing the global supply chain management and strategy in the entire market.
The different advantages of the cost that is obtained by Tesco can help them in reducing the cost of the material and this will help in benefitting the customers as well in the entire competitive market. Lastly, Tesco can focus on their business as this will help them in handling the core businesses in the end and this will help them in being at the top against the different competitors in the market. The Tesco’s supply chain management is a long term goal as this will help in making different improvements in the operations and be competitive in nature than the other competitors namely Wal Mart.
References
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Brandenburg, M., Govindan, K., Sarkis, J. and Seuring, S., 2014. Quantitative models for sustainable supply chain management: Developments and directions. European Journal of Operational Research, 233(2), pp.299-312.
Brindley, C. ed., 2017. Supply chain risk. Taylor & Francis.
Carter, C.R., Rogers, D.S. and Choi, T.Y., 2015. Toward the theory of the supply chain. Journal of Supply Chain Management, 51(2), pp.89-97.
Christopher, M., 2016. Logistics & supply chain management. Pearson UK. (Christopher 2016)
Coyle, J.J., Langley, C.J., Novack, R.A. and Gibson, B., 2016. Supply chain management: a logistics perspective. Nelson Education.
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Govindan, K., Kaliyan, M., Kannan, D. and Haq, A.N., 2014. Barriers analysis for green supply chain management implementation in Indian industries using analytic hierarchy process. International Journal of Production Economics, 147, pp.555-568.
Mangan, J. and Lalwani, C., 2016. Global logistics and supply chain management. John Wiley & Sons.
Martínez-Jurado, P.J. and Moyano-Fuentes, J., 2014. Lean management, supply chain management and sustainability: a literature review. Journal of Cleaner Production, 85, pp.134-150.
Monczka, R.M., Handfield, R.B., Giunipero, L.C. and Patterson, J.L., 2015. Purchasing and supply chain management. Cengage Learning.
Schaltegger, S. and Burritt, R., 2014. Measuring and managing sustainability performance of supply chains: Review and sustainability supply chain management framework. Supply Chain Management: An International Journal, 19(3), pp.232-241. (Schaltegger and Burritt 2014)
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Tesco PLC. (2018). Tesco plc. Retrieved 5 January 2018, from https://www.tescoplc.com/
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