Features Contributing To The Success Of Tesco
As Tesco is a British Profit making shopping retailer, it lies under the tertiary sector which provides goods and services to customers as well as external businesses such as transportation and wholesale sales. The main purpose of Tesco is not only to provide goods and services for customers but also for them to gain trust with Tesco as well as for customers to earn a lifetime loyalty with Tesco. Additionally Tesco’s main purpose is also to gain money for their business and investing as well as selling quality products. In relation to gaining more money and increasing the profit as much as they can, Tesco outshines other competitors and ty remain in the market lead and they undertake a scheme to provide goods and services at a cheap affordable prices as well as giving discounts and promotion to the general public which works towards another purpose for Tesco to which is to maximize their sales. Tesco (PLC. ) sells a variety of products varying from teabags all the way up towards televisions. The branches that are operated by Tesco are all independent in terms of location however each store varies in size and depending on the size of the store, the type of products will also vary. Small local stores which is similar to convenience-type ranging from food to drinks as well as stationaries and tobacco.
Additionally for stores varying from medium seized to large sized ones to superstores, because these stores are more advanced, the products they sell would include food products similar to small Tesco stores but additionally clothes as well as electronics, electrical products and DIY, books and homeware products. For customers that require medication, within these larger Tesco stores, a pharmacy would be available as well as an optician. From a small shop in Edgware in 1929 to now and present, Tesco like other retailer stores is able to offer online shopping which customers are able to purchase any item that Tesco sells in store but online and delivered right to their door also ranging from groceries, homeware and electricals and clothing. Online shopping for main retailers is now one of the most important factor that helps the business succeed as well as maximizing their revenue and profits. The use of shopping at retailers in store is gradually falling due to the convenience of online shopping. Tesco (PLC. ) follows a hierarchical structure which this structure mainly applies to businesses and retailers ranging from medium sized stores to large superstores.
In a hierarchical structure, the chain of commands are clearly defined as well as having a clear division of function. The narrow span of control enables supervision to be closer and this therefore leads to fewer mistakes as well as clear, defined instructions being passed down from top to bottom. The individuals that are higher up in the business tree are higher in status than the ones that are lower in the tree. Additionally the individuals nearer to the top have the most maximum responsibilities as well as authorities, however due to the long chain of command running down the business tree, problems can be poor meaning the information that is passed down from one level to the next can get distorted as it travels up and down the hierarchy, so therefore there has been discussions questioning the 4 layers of management within a business store could be time consuming as well as causing miscommunication and annoying bureaucracy with a poor effect of coordination between the staffs lower down the hierarchy and the managers towards the top, so therefore reducing the management layer within the business tree would not only improve the communications and reducing the long chain of command but a more rapid flow of information as well as freedom and more flexibility. Tesco has many functional areas within their business which includes finance, marketing, sales, Human Resources and customer services. Within the finance department of Tesco, individual employees are responsible for controlling the money and finance and the roles would include making and receiving payments on behalf of Tesco as well as recording Tesco’s financial transaction such as the cash inflow and cash outflow. One of the main roles within the finance departments in Tesco is the financial accountings. The department of financial accounting within Tesco purchases products from manufacturers such as Cadbury, Tesco would be saving more money and decrease their chance of money getting wasted. The reason for this is because they’re buying it straight from the manufacturer of Cadbury packaging the chocolates and charging more to deliver them to Tesco so therefore will be cheaper for Tesco. Like any other businesses, Tesco would not be flexible about their cash flow in terms of cash inflow (money coming into the business) and cash outflow (money leaving the business).
The aim for Tesco is not only to maximize their sales but reduce the chance of break-even which is the point at which the level of sales allows the total costs to equal the total revenue; in other words if Tesco reaches a point of break-even, they will not make any profit as well as loses so therefore a margin of safety is put into place which allows Tesco to measure how far and how much more money is to fall before Tesco starts making a loss, so to prevent a loss of money from occurring, Tesco’s financial accounting’s department will make sure the information regarding Tesco’s money and financial documents are stored safely conveniently so it is easily accessible. Within the marketing department of Tesco, the individual employees are responsible for identifying the needs of the customer and after identifying their needs to then work with a research and development function to ensure the products and services satisfy their needs. In relation to Tesco the use of marketing strategy is used effectively to help increase the use of engagement with customers as well as planning ahead and staying on top of the game of success of the competition with the market against other competitors. Additionally within the market function, Tesco shows a proficiency of skills where the products and services they provide is able to satisfy not only regular customers but also customers will low or little income, which the prices of these products are affordable with a moderate value of quality. In additional, customers towards the higher ends of income would have finer and richer quality products from organic to low fat products, concluding for Tesco, allowing them to satisfy customer’s need as well as earning a good amount of profit and revenue.
Within the Human Resource department in Tesco, their main role includes recruiting new employees which they would be assessed and therefore for Tesco’s Human Resource department to identify training needs as well as organising the required skills needed for their roles. Additionally the most important factor is to ensure the employees are receiving appropriate and a fair pay and prevent resentment where employees don’t get judged and treated unfairly as well as appropriate pay for however long they have worked for. In an unlikely event of employees leaving Tesco and working for another retailer, due to being treated unfairly, the Human Resource department as well as the manager will put retention into place and by processing the retention of employees within Tesco, it allows the managers and Human Resource to convince the employees to stay by offering as well as rewarding and praising the employees. Apart from offering and rewarding employees, the managers in Tesco would promote them to a higher position if they are well experienced on the job as well as being capable of handling the work. By doing this, it would encourage and convince the employees to stay as they would feel more special knowing Tesco and the managers appreciate the employees working within their business. Within the Human Resource, the staff training would not only include staffs being trained and fit for their job roles but also include knowing what actions to take in an unlikely event of an emergency. Additionally the Human Resource department will also provide employees with ‘on the job training’.
On the job training (OJT) is where an individual employee trains within their place of work whilst that individual is doing the current job which would benefit the individual employee due to them experiencing what it is like within a real life situation. Within the customer service department in Tesco, the employees are responsible for liaising with customers on a day to day basis. The customer service within Tesco are required to have an attitude where no matter the situation, they must stay polite as well as friendly. If the customer service staffs does not show this attitude, there will be a likely chance the customer won’t only walk away in discontent with an attitude but there will be a loss in customers which for Tesco’s profit and revenue would decrease rapidly, concluding for the customers to shop and change to another retailer which would increase the chance of the other retailer from succeeding compared to other competitors within the competition market. Within Tesco, the internal and external stakeholders both have a similarity which is that they both contribute to the success of Tesco. A stakeholder is an individual group or organisation that has an interest in how to run a business; internal being the people from within the business such as managers and employee and the external being the people who doesn’t own or work within the business but have an interest in business. As stakeholders contribute to the success of Tesco, each stakeholder contributes differently for the main ones would be employees, directors, managers, suppliers, owners and trade unions. In relation to internal and external stakeholders, the point of views for employees (internal) is for the business to succeed as well as getting a fair pay and good amount of profit for Tesco to take the lead of other competitors and on the other hand, trade unions (external) supports the employees to ensure that working conditions as well as pay is fair.
