Jack Cohen founded Tesco in the year 1919 and the first store was established in the year 1929 in London. The company was listed in the stock exchange in the year 1947 and the first store service started in 1948. The total area of Tesco in UK is around 41,097.000 square feet, which includes Tesco Superstores, Tesco Metro, Tesco Extra, One Stop and Tesco Express. The company has strength of around 476,000 employees and the ratio of male and female employees are almost the same in a recent study that was conducted.
The company offers a wide range of products and services ranging from groceries, electrical appliances, apparels, various kinds of insurances and the telecom services. The company has more than 6,350 stores worldwide out of which 3,376 stores are present in UK itself. The international stores are present in, Czech Republic, China, Hungary, France, Ireland, Japan, Malaysia, Taiwan, Thailand, United Kingdom, United States, India, Poland, Slovakia, South Korea, , Turkey, United Kingdom.
Tesco has a tall organizational structure. There is top CEO and board of directors for the organization. Moreover, the positions of the employees will be divided as per the department and the seniority of the employees. It helps in better management of the employees.
The junior employees in this organization will report to the immediate seniors. The senior employees will in turn report to the manager of that department
The department and the functions of the staffs are as follows:
The marketing department will look after the sales of the organization and the promotions and marketing. This department will work in close contact with the creative team who will be responsible for designing and making the advertisements.
Human resource department will look after the welfare of the employees and the recruitment process in the organizations. They are the backbone of the organization as they help the company by providing a better environment so that they are able to work properly.
The finance department will look after the money and will keep a check on the profit and loss, income and the expenditures. The employees of the finance department should be held responsible for any kinds of monetary issues in the organization.
They will be mainly looking after the design of the advertisements. They will be designing and preparing advertisements for physical promotions as well as the online advertisements.
Operations department will look after the floor operations and the duty of the staffs who are working in close contact with the customers.
Tesco is mainly a public limited company or PLC. It can be said that thousands of people are owning Tesco.
As per the data of 2014, the largest shareholder of Tesco are Berkshire Hathaway, Morges Bank, BlackRock. Out of these shareholders, Berkshire Hathaway, 7 percent share by Morges Bank and 5.1 percent share by BlackRock owns 3.98 percent share.
The mission statement of the company is to give to its customers the unmatched services and products. Moreover, Tesco plans to develop its services further. Mission statement of Tesco is not limited to the business or customers. They also think about the employees, they aims at giving the employees as positive, safe, healthy and accident-free environment for working. the idea of balancing between the employees and the customers help the organization gain more customers. The staffs are motivated and they work for the enhancement of the business for Tesco.
SWOT Analysis is an important tool for analyzing and auditing the strategic position of the business in an overall manner. The strengths help in understanding the qualities that the organization has to ensure that the targets can be achieved. The weaknesses help in preventing the qualities that the organization may face while striving to accomplish its targets. The opportunities help in identifying the environment where the company is in operation and the conditions that it needs to execute the strategies for maximizing the profits of the company. The threats help in keeping a check on the external environment of the company that will hamper the profitability of the company.
The company has its presence in many countries such as South America, North Africa, Europe, North America, and Asia, which helps in targeting many customers and maximizing the profits of the company. The stores in the market offer discounts to the customers so that they can attract more customers to purchase their products and services. The products are procured locally to be sold in the stores, which reduces the cost largely for the company. The company has diversified from its agro-based sector to non-food sector and sells books, apparels, electronic goods, provides financial services and internet services to name a few diversifications. The popular private brands help in building the equity of the company.
The recent controversies between the media and Tesco has led to a negative coverage of the brand by the media and hampered the image of the company to the public. The profit of the company had an impact because of the bad debts that it had in the market and the insurance claims with respect to households.
The company can use the digital media process to increase its awareness amongst the customers through various advertisements and promotions of the brand. They have shifted their focus on selling the non-food items and the growth of the private brands, which will help them in increasing their profits.
The profits of the company will be hampered due to the rise in the cost of the raw materials in the food and non-food sector on a global scale. There is a stiff competition from the other retail stores such as Walmart and Carrefour, which is negatively affecting the company.
The PEST Analysis helps in identifying the recent trends of the company, which happens in the external environment maximize its profits. The external factors may have an impact on a certain or most of the departments of the company and the analysis needs to be done so that the company can overcome these outcomes. The analyses involve skills that are cross functional and reduces the impact of potential threats that the organization may face. The strategical thought process within the organization is developed largely. Through the analysis, the organization can identify and exploit the opportunities that have been newly found out.
The government of United Kingdom in the recent time has adopted a new tax policy that affected Tesco in a huge way. The Value Added Tax (VAT) rate were increased by the government from 17.5 to 20 percent so that the revenue of the government can be increased by £13 billion per year. The increase in the VAT rate has lead to low spending power of the customers. Thus, it indirectly affected the revenue from the sales that the company used to generate previously. The UK government has also planned to impose a fat tax on the citizens of the country so that the obesity can be controlled and the medical issue can be reduced. These measures by the government affect the sales of certain products that the company sold. The year 2014 saw Tesco launching a new food range that was related to health.
The economy of UK showed signs of recovery after the financial crisis that it suffered. The growth in the GDP was around 2.7 percent higher than the previous years. This growth was a positive sign for Tesco, as it will lead to a rise in the supermarket sector, which is the target area for Tesco. Thus, it is seen that the financial condition of the company regulates in the economy because of the continuous changes in the economy.
The UK population has seen an increase in their elderly people due to the baby boom period, which has led to birth-rate being decreased and the expectancy of the people with respect to life on an increasing side. The shift in the tastes and preferences of the individuals needs to be considered by Tesco. The horsemeat scandal that Tesco faced with the quality of meat by the media in the recent times saw the customers had a negative impression on the company. Therefore, the company needs to respond to these scandals in a positive way so that the image does not get hampered.
The retailers in Tesco have developed an efficient supply chain system, which helps them in having a competitive advantage over the other firms. The core competencies of the company is well guarded and it is difficult for the competitors to imitate. The mobile technology used by the company helps the customers to order certain products through their mobile. The company is aware of the disruptive technologies, which is common in the retailing industry. The R&D division of the company handles these technologies in a proper manner.
The main role of the human resource department of Tesco is to look after the welfare of the employees and look into the recruitment process. Once the correct employee is selected for the organization and the employees are treated properly in the organization, it helps an organization to develop and prosper. Tesco has a strong presence all over the world and the functions human resource department helps the company is doing so.
Various motivational theories are available to the functions human resource department based on which Tesco is available to manage the employees.
X theory supports the fact that the employees are made to work for the organization. They do not have any attachment for the company but they work because they are paid for their work. On the other hand, the Y supports the fact that the employees are motivated and they are happy in the organization. They are looked after well by their leaders and they like their job that they are being assigned in the organization.
When a company looks after their employees by looking after their the needs, the employees are motivated and they work for the enhancement of the business of the organization. If the needs of the employees will be fulfilled as per theory of Maslow’s hierarchy of needs, the they will be motivated to work in the organization.
Asking the candidates to give a test for the recruitment process in the organization
The old employees are being promoted to the senior positions
The eternal HR agencies will be given the responsibility to recruit the staffs for the organization
Giving advertisements in the newspapers and online job sites to recruit new members
Hiring an employment agency will incur extra expenditure for the company. Headhunting will help Tesco get better employees as they will have a vast area to choose from. Internal promotions are important as there should be chance for the junior employees to grow and prosper in the organization.
Tesco is using headhunting and internal promotions. When the organization will have to look for junior employees, they will search for them with the help of Headhunting. For senior potions, they will promote the junior employees to the senior positions
The attendance records, contracts and the files of the employees will help them understanding the performance of the employees and depending on that, they will decide the benefits and the promotions of the employees. The records will help them to understand the right employee who will be eligible for the next promotion
While keeping a track of the contract of the employees it is important to keep the bio data of the employees. The documents that will show the starting and ending point of the contract and the clause of the contract will help in keeping a track of the employees.
Conclusion
After going through the case study of Tesco, it can be concluded that the organization performs in the competitive market in a systematic manner. They follow tall organizational structure that helps the company to keep a tack of the performance of the employees. The employees know whom to report when there is an issue with anything. The main departments that are present in Tesco are the marketing department, human resource department, finance department, creative department and operations department. However, each department has to work in close contact with each other for proper management in the organization. A number of individuals are the owners of the organization and hence, it is called a public limited company or PLC. Some of the major shareholders of Tesco are Berkshire Hathaway, Morges Bank, BlackRock. The strength of Tesco lies in the fact that they have a strong presence in many countries like Asia, North America, South America, North Africa and Europe. As a result, they get the opportunity to get a huge number of customers. The Tesco had some issues with the media and the bad image that is presented by the media about Tesco had a negative effect on the business of Tesco. Tesco had a number of changes to gel with the external environment. They had to go through the economic crisis and make the changes accordingly. They introduced low fat food so that they are able to combat with the problem with obesity. As far as the human resource management is concerned, Tesco will take the help of headhunting and internal promotions recruit the employees.
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