Benchmark method of organization performance analysis is based on the comparative analysis of one organization against standards or another organization. The benchmark is based on the five key performance indicators objectives. The comparison of the performance of the organization in terms of performance objectives such as quality, speed, flexibility, dependability, and cost is compared with another organization. In this paper, the performance of Tesco is a benchmark against the performance of Sainsbury’s store.
Tesco
Tesco remains one of the largest retail within the United Kingdom retail market with several brands with over 3400 stores countrywide. The company has ventured into many different businesses that include an online store, grocery, mobile phones, and banking service among many other brands. The company has many different branches within the country and internationally through some of its branches were recently closed aboard leaving few international stores. The store remains the third largest retailer in the world based on gross revenue. The performance of the company has been varied given the changing economic and business environment within the country and the industry.
Tesco has various business and operation processes that have enabled the company to grow to its current state. The company has online and in-house stores that its uses to service customers. The company also has banking facilities that offer services to numerous customers. Lastly, Tesco has phone portfolio that sells mobile phone and phone related services or accessories (Simms 2007).
Performance objectives
Determination of the company’s performance forms an important aspect of an organization’s analysis. In order to understand the organization’s performance, it important to determines its performance based on the key performance indicators (KPI). The performance of Tesco can be analyzed using five key performance indicators. The five performance objectives of the organization include Speed, Dependability, Quality, Flexibility, and Cost. These five key performance indicators are used to show the performance of an organization based on these parameters.
Quality
Tesco when analyzed for its performance based on the quality that is based on the standard of services that customer expects or are offered. Quality standards can be analyzed based on the Gap model of quality that includes experience higher than expectation, quality reduces cost, waste materials, few problems, there are some advantages of offering quality and these include quality increases revenue, quality result in high sales volume, and quality of service also better the brand name. Having understood the quality aspect of the organization’s performance the standards are sued to evaluate the performance of Tesco as a premium company within the United Kingdom (Winterman 2013).
Speed
The second aspect of performance objective is speed and can be viewed as the time it takes for the company to serve its customers. For instance, the speed of time between order and service, the internal operation speed for staffs, the external speed that is used to serve customers. The speed of customer service also has some advantages that include the of customer service reduce risk, limited speed or complex service cause high price while fast and simple cause low priced. Layout and flow of processes within the company normally express the speed of customer service delivery and the level of customer satisfaction (Kelly & Winterman 2013).
Dependability
Thirdly, dependability is another objective of an organization that includes those activities that raise the dependability of customers on service or products offered by the company. Dependability can save time, money, give flexibility to customer service. In order to make customers depend on the organization. Some of the aspects of dependability include internal dependability raised by employees. The reliable of services offered by the organization, the consistency of the service delivery and the external dependability that include customers receives order or service on time (Leahy 2012).
Flexibility
Fourthly, flexibility is another performance indicator that is also used to determines the performance of an organization. Flexibility is the capability of an organization to be able to change operation due to the business environment. Flexibility is important for the introduction of new products within the company’s products line. The flexibility should cause high variation among products or services, high customization, a wide range of products, volume flexibility, backward integration, delivery flexibility that enhance faster customer service (McIvor, Humphreys & McKittrick 2010).
Cost
Lastly, the cost is another performance indicator that shows the performance of the organization. Cost performance of an organization means making good or cost-effective prices of services and products. In addition, low cost give a business a competitive advantage over other companies that sell similar products. On the other hand, it important to note that low price increase cost and contributes to the poor performance of an organization (Upadhaya, Munir & Blount 2014).
Findings of the analysis
The analysis of the Tesco based on the key performance indicators shows some areas the company has been doing well and other areas the company needs to improve on. The analysis is based on five key performance indicators (KPI).
Quality
Tesco as a company has been doing fairly when evaluated for its quality performance and this is evident through its various brands. Tesco has many different brands that enable the company to solidify its customer segment. These products are many as compared to its close competitor Sainsbury’s. There are many different quality check strategies that have been put in place to ensure that the company performs to its expected performance. Some of the quality check installation that the company has includes cameras, fridge for fresh goods, checkouts and many other monitoring systems that ensure that both staffs and products are far beyond customer expectation (Ryle 2013).
The quality check is similar to that of the Sainsbury’s that also tries to out-compete Tesco in the online grocery store. When Tesco is rate according to the expectation of most customers within the United Kingdom, the quality of the service delivery to the customer is fair as many customers have often rated the company performance. In addition, staffs working within the company have been viewed as committed and ready to assist any client or customer that needs their service (Humby, Hunt & Tim 2006).
Areas of improvement in terms of quality
Analysis of Tesco, when benchmarked with Sainsbury store, shows that the quality performance of the company needs some improvements. One area that affects the quality and needs improvement is the complainant department of Tesco that does not directly relates to Tesco as most products are affiliated to holding organizations. This affects the response to those complains that are advanced by customers. This is different from the case of the Sainsbury’s that have tried to improve on their contact information to ensure that customer can locate contacts easily online (Ahmed 2014).
Decision-making processes to improve performance
In order for the company to improve its quality performance, the company needs to improve its feedback processes. The feedback process is one way that the company can use to identify its weaknesses and make the right decision to improve those weaknesses. In addition, the feedback from customers in terms of complains, satisfaction and suggestions is important decision support process that will assist Tesco to realize high performance for its quality of products, services and customers service delivery (Fernandes, Raja & Whalley 2006).
Speed
Tesco as a company has also exhibited some speed aspect of company performance objective. Tesco has a high number of staffs that work with fair speed though they have been trying to improve on the speed to supersede the expectation of customers. For instance, one company’s brand the Tesco express has three employees per till to ensure that the company is serving clients to the full expectation (Wood 2015). In addition, the company has in the recent increased the number of customer service care staffs for its online stores to ensure that customer is satisfied with service.
Another area where the company has also been working on is the delivery of orders to clients that it has increased the speed of delivery to realize its performance objective. Operation of the online platforms is faster as compared to many other companies that are also currently working with the country (Molloy 2015). Sainsbury’s speed of customer service delivery is still low as compared to that of Tesco. The online Sainsbury’s store though has tried to fasten its speed, the corresponding order delivery is still slow as compared to that of Tesco. Some of Sainsbury’s stores such as Argo have been doing poorly in terms of speed of customer service delivery (Sainsbury’s 2018).
Areas that need improvement
The speed that the company has been doing services especially through its online platforms has been fairly good though with some areas that need improvement. The return policy is still poor as customers have often complained of poor order canceling and return issues. Due to the variation in the way the company has been handling it complaints and contact information. Returning of defective and unsatisfying orders has been an issue that affects the customer service delivery speed. Many customers have been complaining of various unsolved issues that the company is slowly willing to solve in time. This affects the speed of the company service or customer care services that determine the performance of the company (Wood 2011).
Decision-making process for improving performance
Tesco needs to increase the customer order delivery processes and with good return policies that are conducted within time. The company has to increase its response to complains especially those of customers that are not satisfied with products and therefore wants to return the product. In addition, the complex order canceling need some improvement to ensure that customer is allowed to purchase their choice products. Technology improvement and updating processes are also needed in the company to ensure that there is increased speed of customer support process that will in turn help increase the overall speed performance of the company (Hall 2007).
Dependability
Tesco has attributes that ensure that many customers are greatly dependent on the company. Some of the aspects of the company that has made the company reach its dependability objectives. The company has products that are ready for the customer upon their order and the customer is readily assisted that make the client come for more service. Moreover, the company has numerous products that customer may need and this is meant to attract more customers and customer that come to the company will always come as they know many varieties of products are available (Wood 2015). The introduction of various company portfolios that include phones, banking, and many other products help the company attract more customers.
This is to ensure that customer get nearly all products that under one company. One strategy that the company also uses to raise the dependability is through availing products in the morning so that throughout the day products are available. The performance of Tesco is high as compared to the performance of Sainsbury’s that has been poor especially when customers need service most. For instance, in the recent past, the Sainsbury’s has been experiencing high demand for clothes despite the poor performance of one of its affiliated companies (Sainsbury’s 2018).
Areas that need improvement
One of the areas that need improvement to increase the dependability of the company is on its cost of products that need some review. The cost of its products is very high as compared to other rivals such as Sainsbury’s. The price of goods and service is high and this has reduced the number of customers that come to purchase for the company. In addition, the complainant process is also complicated making those customers that want to channel customer complain to the department of complaints cannot do it in time. The company has also experience products outage within some of its international branches leading to the closure of those branches. This implies that the company has lost dependability in some countries where its branches have been closed (Stefanovi?, Damnjanovi? & Jaško 2010).
Decision-making processes for improved performance
Cost evaluation processes and cost calculation process is also important for ensuring that the company performs in terms of dependability. The product prices and the cost have rocked customers leading to some customers hoping to another store such as Sainsbury’s that charge relatively low price as compared to Tesco. In addition, product availability process needs to be looked into reducing the number of branches that sometimes lack products leading to closure. For instance, when the company was about to close its 43 branches with united kingdom signal that there is a problem with products and general running of the organization (Radojevic, Stefanovic & Velimirovic 2009).
Flexibility
Tesco is one of the flexible companies within the country owing to its products flexibility that has been witnessed through its ability to change products with time. The schedule of customer service has been made flexible that give the customer coming to the company get service at any time. The company has also increased its number of staffs during busy hours to ensure that customer is satisfied with their service. Sainsbury’s has a limited number of staffs as compared to Tesco and this reduces the flexibility of its operations especially internal flexibility. In addition, the variation in the number of staffs that are serving a customer is meant to make the company service delivery very flexible depending on the time and number of customers.
This implies that the company has various flexibility strategies that are meant to ensure that the company has customer satisfaction at all time. The adaptability of the company to the changing business environment is another area that shows high flexibility (Pfeifer 2013). For instance, the company has highly invested in the online platform with a variety of technologies that make the customer experience interesting. Technologies that are used to enhance the online business sector of the company has changed with changing business situations. Sainsbury’s on the other hand, the company has a flexible online store as compared to Tesco. The only weakness of Sainsbury’s is on the number of staffs that the company has that is low as compared to Tesco (Sainsbury’s 2018).
Areas that need improvement
Tesco has limited price flexibility that is deemed to effects future operations within the United Kingdom market. The product’s pricing is not flexible to allow changing economic conditions within the country. Most people have argued that tough economic time that the country is facing need retail company with flexible prices that can change with the business environment. The future performance of the company hangs on the flexibility of the company to the changing living conditions of the country. The company there needs to review its price flexibility to adapt to the faster-changing conditions (Butler 2018).
Decision-making process for improving performance
Price review process is important for the improvement of the Tesco in terms of flexibility of the company’s operations. The company needs to review its price policies that can allow future changes with the changing economic conditions of the country. The management can evaluate the level of inflation and the living condition of the country to ensure that the price is flexible with the prevailing conditions (Mason & Barry 2015).
Cost
Tesco has a cost-effective business performance objective that is a couple with some standards that ensure that the cost setting is effective for the company. The cost of most products that are sold within the company is of high cost as compared to many big companies within the country. This does not reduce the company’s sale volume as the company supplemented the price with a discount that makes many customers keep coming to the store (Rankin 2014). In addition, the organization has policies that are used to offer customers discount based on the slogan of buy one, get one free. This has encouraged many customers to come and purchase products and services from the company. Despite having a high cost of goods and service, the company has remained one of the most popular stores with the country performing more than most of its kind (Hawkes 2012).
Areas that need improvement
Cost setting of the various processes within the company has been challenging as many cost-benefit analysis show that the company still need adjustments. The current cost of the company’s operations has been affecting the company’s smooth operation leading to the closure of many of its branch within the country and abroad (Craven 2014).
Decision support for improvement
The company through its senior management can set the cost of its operation based on the internal analysis to ensure that there are not disparities in terms of high cost that affects the company. The company has suffered in many places leading to closure and poor image of the company and therefore need to review its cost. The cost of the company needs a proper review that will correlate to the economic situations within the country (Al-Tmeemy, Abdul-Rahman & Harun 2011).
Recommendations
In light of the performance analysis of the Tesco benchmark with Sainsbury’s, there are some strategies that can help improve Tesco. Firstly, the Tesco needs to improve its customer support services since the department is slow and performs poorly and may result in poor organization image. Secondly, the Tesco needs to review both it is cost and pricing strategy as this makes it perform lower as compared to other stores such as Sainsbury’s. Thirdly, Tesco needs to improve on its flexibility as most of its operations and price are not flexible and this has the implication of its future performance within the UK’s retail industry (Liu & Iijima 2015).
Conclusion
In conclusion, understanding the performance of an organization is important as it reflects on the organization management and overall capability within an industry. A benchmarking analysis of Tesco against Sainsbury’s shows some disparities and similarities. In addition, there are some areas that the Tesco needs to improve on in terms of performance. Tesco needs to improve some of its decision-making process that leads to the improvement of the organization performance. For instance, feedback decision making process need improvement as contact information is complex leading to poor response.
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