The paper will provide information on the Tesco Company and also its innovative strategy that helps the firm to increase their business over the market both nationally and internationally. Furthermore, the paper will also provide the impact on operations, sales and profit of Tesco along with innovation and the role of the technological process of the firm.
Main context
Overview of the company
Tesco Plc. Or Tesco is a British biggest multinational groceries, and most profitable supermarket chain in England, United Kingdom. The company was founded in 1919 by Jack Cohen in Hackney, London, England, and United Kingdom (Tesco, 2018). The name of Tesco first appeared in 1924, and first shop was started in Burnt Oak, Barnet in1931. This company is considered as the third largest retailer in words concerning to gross revenues and the ninth largest retailer of the nation in concerning to revenue.
The headquarters of Tesco lies in Welwyn Garden City, Hertfordshire, England in the United Kingdom. The non-executive chairman and the Group CEO of the company are John Allan and Dave Lewis (Morrison, 2016). The company has shops in seven countries of the world including Europe and Asia, and the substantial market share is present in Hungary, Ireland, and Thailand. Tesco is considered the leading retailing industry in the United Kingdom, and their shops are present in about 6,800 locations of the world. About 440,000 employees are working under this firm, and they are present almost all over the world.
Originally Tesco is a grocery retailing shop in the United Kingdom, and the firm has diversified geographically since the early 1990’s. The product of Tesco are sell in the supermarket, superstore, hypermarket, convenience shop and also in online platforms. The main mission of the company is to be the champion for consumers by helping them to enjoy an easier way of living and better quality of life. The company manufactures the product as per the customers’ needs and values which they can buy easily from their stores. Besides this, the company serves around 80 million customers in the world, and it has more than 6,800 stores and through online website also (Boddy, 2002).
|
Results |
2017-2018 |
2016-2017 |
Constant exchange rate (Year) |
Actual Exchange Rate (Year) |
|
Group Sales |
£ 50,991m |
£ 49,887m |
0.6% |
2.3% |
|
Revenue |
£ 57,490m |
£ 55,916m |
1.23% |
2.5% |
|
Group operating profit before exceptional items |
£ 1,645m |
£ 1,282m |
25.8% |
28.3% |
|
Group Statutory profit before tax |
£ 1,298m |
£ 145m |
– |
798.2% |
Role of innovation and technological change
Technology is associated with the word innovations that can revolutionize the standard of our lives. In Tesco, they are simplifying the lives of men through their practical application in every sphere of life. They (Tesco PLC) introduced themselves in the market by their food industry, but as the corporate firm grew larger they launch products like foods, electronic, insurance, and telecommunication. Tesco is now producing their brand product and, has introduced an innovative strategy by which they can quickly reduce their staff, cost and time of the firm and this could be in the form of technology or use of creative strategy (Henfridsson, Mathiassen, and Svahn, 2014).
According to the company view, they think that serving customer by heart can increase the attention of customers towards their brand and this enhances to grow their business worldwide. In the stores of the United Kingdom, they serve about 66 customers every day and ensure that every customer would satisfy after using their products as well as services so that they can visit their stores again and again.
Not only through traditional marketing, but they also introduced modern methods like digital promoting, online advertisement to promote their brand and products. To say more precisely they do everything online. In the present moment, 440,000 colleagues work across the stores, offices and customer relation centers in the United Kingdom, Europe, and Asia. Today Tesco has Tesco Labs which generate new ideas and technologies to make them future ready. Tesco uses many innovative procedures that help the organization to enhance their business over the market and it also gives them a better market, sales, and profit. In 1990 Tesco started a new pioneer innovation (Norman, and Verganti, 2014).
Impact of innovation
Innovation defines as the process of generating an impression or discovery of products, goods as well as services which creates value to the customer and hence they able to purchase the innovative products from the market. To be more clear invention is a knowledge which must be applicable through an economical cost and it helps the firm to satisfy the needs of the customer must satisfy a specific need. Technological change for economic development of any country is an essential factor. Invention or technical refers as the important factor of economic progress, but when the technology causes problem then the creation of new products stops thereby it diminishes the business growth (Vargo, Wieland, and Akaka, 2015). One useful innovation of Tesco is replenishment application system which collects data of the selling process at the time of checkout of the customers.
Tesco’s advanced technology collects the data, fulfills the customer’s request, and it swaps the product from their store within certain time. The replenishment application system and information system helps the firm to low the price of the products. The supply department of Tesco easily access the management system and saves a considerable amount of money by using this procedure. Another factor of the Innovation programme of the firm is the support of chosen exterior start-up businesses. The firm cooperates actively with various number of businesspersons. Speed dating events are prepared at which people from the start-ups spend a short time in turn with several Tesco managers from different sections (Goldin, and Katz, 2018).
Practical illustrations of innovation by TESCO
The innovation procedure of Tesco is mainly based on information system and technology. Tesco`s follows many procedures of innovation of which one of the most significant innovation is replacement application scheme which controls Inventory Supervision system of Tesco. Beside this, Tesco also possess certain supplementary change like the oracle trade warehouse supervision system as well as club card act. The whole procedure of innovation depends on technology as well as information system.
The executives get accustomed with new methods and technology say mobile technology and at the same time the entrepreneurs are given important advice on different topics from leading managers of the world. One of the most important system in Tesco is the house management system which help Tesco to mane the chain of business located around the world. The process of innovation is not blocked in one place in Tesco; their efficient management people takes care of the problems and try to find out new innovative methods to keep pace with the modern technology.
The introduction of Tesco customer loyalty strategies, the Tesco Clubcard, in 1995 has been considered as a milestone in the expansion in Tesco’s progress towards becoming the UK’s major supermarkets. The club card points provided to the customers gives attractive gifts to its customers like holiday trips, day trips, gift vouchers makes the business an attractive one to its customers. Tesco made its products more common to its buyers through “Videotex” on television, through which one can purchase goods from his nearby market (Adams, Jeanrenaud, Bessant, Denyer, and Overy, 2016). The company is always active to make its products and services accessible to its customers at the earliest.
Conclusions
The paper concludes that Tesco is one of the multinational groceries and innovate many technologies for the growth of their business over the market. In other words, the firm uses both digital as well as traditional marketing procedure to increases their sales and profit over the consumers.
References
Adams, R., Jeanrenaud, S., Bessant, J., Denyer, D. and Overy, P., 2016. Sustainability?oriented innovation: a systematic review. International Journal of Management Reviews, 18(2), pp.180-205.
Boddy, D. (2002). Management An Introduction. 8th ed. Pearson Press, ISBN 978-0-273-73896-1, pp.306 – 317.
Goldin, C. and Katz, L.F., 2018. The race between education and technology. In Inequality in the 21st Century (pp. 49-54). Routledge.
Henfridsson, O., Mathiassen, L. and Svahn, F., 2014. Managing technological change in the digital age: the role of architectural frames. Journal of Information Technology, 29(1), pp.27-43.
Morrison, M.J., 2016. The Global Business Environment: Challenges and Responsibilities. Palgrave Macmillan. 4th Edition, Palgrave Macmillan, ISBN 978 – 1 – 137 – 48374-4 Chapter 9.
Norman, D.A. and Verganti, R., 2014. Incremental and radical innovation: Design research vs. technology and meaning change. Design issues, 30(1), pp.78-96.
Tesco, Online Groceries, Banking & Mobile Phones. (2018). Tesco.com. Retrieved 3 August 2018,
Vargo, S.L., Wieland, H. and Akaka, M.A., 2015. Innovation through institutionalization: A service ecosystems perspective. Industrial Marketing Management, 44, pp.63-72.
The paper will provide information on the corporate governance framework and its impact on the company working process. In other words, the article will suggest that various model is used in the corporate governance framework of which shareholder model is considered the best, and it helps the firm to control the whole management procedure. Moreover, the paper will also provide information about the process that needed to overcome the weakness of the corporate governance framework
Corporate governance framework
Corporate governance defines as the way that company leaders manage the corporation as well as control the activity relating to the organization. In other words, corporate governance mainly refers to the boards of directors and the top management of the organization (Morrison, 2016). Corporate governance focuses primarily on the ethical conduct of a firm or in other words it defines as a system that is used to control and direct company process. There are various models of corporate management among which one of the models is relevant factors. This model of corporate management balances the elements that mainly influence the effectiveness of the firm leaders.
Relevant factors include the role of top management as well as the role of the board of directors and also board composition and structure (Elghuweel, Ntim, Opong, and Avison, 2017). These factors control and shape the process and ensure that stakeholder and shareholder interests are protected. Besides this, the model also allows the board to develop and oversee the firm vision and mission, find resources like leadership talent, access risks and monitor the firm performance.
One of the weakness of this model is that it is corruptible but by this model, the board of directors provides better oversight of management. Another model is the models of stakeholder which include both the labor unions and the employees. In this model governance ties executive success to increase compensation whereas executives are willing to cut labor to ensure profitability but the corruption is considered to reduce its effectiveness. The shareholder model of corporate governance has gained much positive impact on corporations and with the help of this model they can easily track the management procedure of the company but .
it lacks in reducing the corruption which affects the entire business process. Corporate governance model does not helps the manager to achieve their goals and responsibilities towards the organization, but shareholder model does and it helps to create transparency in allowing investors to monitors the performance of the company (Elghuweel, Ntim, Opong, and Avison, 2017).
Another weaknesses of this model is that it is limited and confined within the use of the family owned companies and in addition to the shareholder model, another model is also used in the corporate governance framework known as the stakeholder model. Managers that follows the stakeholder model of corporate governance recognize that they must answer to their other stakeholders, including employees, customers, regulatory authorities, and communities but they lack in its proper execution.
One of the other weaknesses is that there are no separation of the role of chief executive as well as the chairman in this model of corporate governance (Ferrero?Ferrero, Fernández?Izquierdo, and Muñoz?Torres, 2015). In other words, the corporate governance framework also provides some level of leadership oversight in the firm but it lacks in separating the work role. In the private companies, the CEO and the executive officers mainly monitor and provides actions and decisions to their employees and this ensure the leader to provide their best for the shareholders and stakeholders (McCahery, Sautner, and Starks, 2016). While in the case of smaller business, the executive team normally maintain their role of enhancing employees of their firm and all these procedures are not properly discussed in the corporate governance framework.
In other words, this model helps the firm to meet the needs of the chosen stakeholder rather than every stakeholder related to their firm. Hence not dividing the role of the concerned executives as well as the chairman effectively great amount of negative impact on the execution of the business processes of the entire firm. The external factors also influence the corporate governance models due to the exerted pressure of corporations.
One of vital weakness is that there is existence of no remuneration committee within this model and it affects the entire work processes negatively. Apart from this, there are some key elements present in corporate governance among which direction is one of the critical factors (Filatotchev, and Nakajima, 2014). Providing overall direction for the business, employees, as well as the leaders all, constitute a major part of this corporate governance. The strategic decisions, discussion on the current and the future concerns of the firm all of these constitute direction procedure, and it is a part of the corporate governance framework.
Procedure for correcting weakness
The corporate governance framework possess much weakness, and for diminishing this weakness some procedure has to be monitored which are as follows:
Conclusion
The paper concludes that the corporate governance framework is mainly related to the broad of directors or the top management of the organization. The corporate governance primarily used to direct and control the company process, and it constitutes many models. The paper also concludes that among all models the shareholder models is most important as this model helps the company to manufacture their products and services as per the needs of the consumers and also it help to increase the satisfaction of the employee and the shareholder both. Furthermore, the paper provides information about the procedure for correcting the weakness of the corporate governance framework.
References
Aguilera, R.V., Judge, W.Q. and Terjesen, S.A., 2018. Corporate governance deviance. Academy of Management Review, 43(1), pp.87-109.
Bobby Banerjee, S., 2014. A critical perspective on corporate social responsibility: Towards a global governance framework. Critical perspectives on international business, 10(1/2), pp.84-95.
Elghuweel, M.I., Ntim, C.G., Opong, K.K. and Avison, L., 2017. Corporate governance, Islamic governance and earnings management in Oman: A new empirical insights from a behavioural theoretical framework. Journal of Accounting in Emerging Economies, 7(2), pp.190-224.
Ferrero?Ferrero, I., Fernández?Izquierdo, M.Á. and Muñoz?Torres, M.J., 2015. Integrating sustainability into corporate governance: an empirical study on board diversity. Corporate Social Responsibility and Environmental Management, 22(4), pp.193-207.
Filatotchev, I. and Nakajima, C., 2014. Corporate governance, responsible managerial behavior, and corporate social responsibility: Organizational efficiency versus organizational legitimacy?. Academy of Management Perspectives, 28(3), pp.289-306.
McCahery, J.A., Sautner, Z. and Starks, L.T., 2016. Behind the scenes: The corporate governance preferences of institutional investors. The Journal of Finance, 71(6), pp.2905-2932.
Morrison, M.J., 2016. The Global Business Environment: Challenges and Responsibilities. Palgrave Macmillan, 4th Edition, Palgrave Macmillan, ISBN 978 – 1 – 137 – 48374-4) Pages 19 – 23, and chapter 11
Morrison, M.J., 2016. The Global Business Environment: Challenges and Responsibilities. Palgrave Macmillan, 4th Edition, Palgrave Macmillan, ISBN 978 – 1 – 137 – 48374-4) Pages 394 – 406.
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