Tesco Case Study
Tesco’s main activities: -Retailing -Financial services It’s a major global retailer 1) Retail activity 5 store formats: * Tesco extra * Tesco superstore * Tesco metro * Tesco express * One stop Non-food ventures: -Tesco Homeplus – Dobbies Since 2005, they have opened a member of non-food outlets: Tesco Homeplus, Dobbies( garden centres) 2) Banking activity Tesco Bank A will to extend their involvement in the financial services Service: credit cards/ loans/ mortgages/ saving accounts/ insurance It’s run separately from the rest of the business
It was a 50/50 joint venture with RBS( Royal Bank of Scotland) But the 28 of July 2008, Tesco bought out the shares of RBS . Internet: tesco. com .
Telecom: Tesco mobile, it’s a joint venture with O2 The scale of its operation: 1994: First move into Central Europe 1998: First move into South East Asia 2007: First move in California 2008: First wholly owned Tesco opened in Guangzhou, China China/ Czech Republic/ Hungry/ Republic of Ireland/ Japan/ Malaysia/ Poland/ Slovakia/ South Korea/ Thailand/ Turkey/ Uk/ US They entered the US grocery market in 2007 Through the opening of a new chain: Fresh & Easy
Over the past 10 years, the profits per year have constantly increased Tesco’s business strategy: “At the core of Tesco’s business model is a focus on trying to improve what we do for customers” .To create value for customers: In such way that “if the business is performing well in the eyes of the customers, then it will also be performing well for other stakeholders” Strategy in the UK: Growth is sought through expansion into markets such as financial services, non-food and telecom Strategy outside the UK: Growth is sought by entry into locations, most recently China, India and in the US
Targets are defined under: Five prospective of the steering wheel -community -operations -people -finance -customer To increase the customer loyalty is the single most important driver of long term financial performance Tesco’s corporate culture: “Customer is king” . a customer centric company . a customer focused company Maintaining a global staff retention The average longevity within the Tesco management is around 14 years e. g. : the CEO Sir Terence Leahy joined Tesco in 1979 after graduation It’s one of the KPI ( Key Performance Indicator) “everyone feel accountable for the company’s success”
Every little helps A relatively flat grade structure Five levels Whereas 470,000 employees e. g. : top grade 200 people The company’s values: .We treat people how we like to be treated * work as a team * trust and respect each other * listen, support and say thank you * share knowledge and experience No on tries harder for customers * understand customers * be first to meet their needs * act responsibly for our communities Tesco has a rather unique approach of risk management * diversification both geographically and in areas * risk devolvement at thedepartment level * absence of overall risk management