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Tesco Analysis (Case Study)
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3. � Tesco is one of the biggest retailers in U.K,
operating in fourteen different countries with more
than 2,291 stores spread globally.
� Tesco supply chain strength lies in increased
customer base, scaled business thus minimizing
waste of food while ensuring freshness and
quality.
� Also, the company has established a steady
partnership with suppliers hence making supply
management success.
Introduction
4. � However, due to its global expansion, the
company has experienced challenges in
packaging and delivery of perishable products to
customers.
� In addition, there have been short deliveries,
consumer complaints, deductions for unknown
and non -ordered items, as well as discrepancies
in the invoicing of the products such as duplicate
invoicing (Kamal, 2015).
Challenges
5. � These issues have resulted in a loss of goodwill
due to customer dissatisfaction.
� For this reason, other retail outlets such as
Amazon are taking away its customers thus
threatening the sustainability of the company.
� Therefore, there is an urgent need to address this
problem; otherwise, the company will not be able
to keep up with intensifying competition.
Cont’d
6. � Fishbone analysis is an essential tool for
evaluating the effectiveness of the business
processes.
� The fishbone analysis is also referred to as the
Ishikawa diagram(Kaiser, 2018).
� It was established by a Japanese quality control
statistician Kaoru Ishikawa.
Fishbone Analysis
8. � People are a valuable asset in any organization
(Foxall, 2015). Thus if they are not well motivated
and directed it is impossible for an organization to
achieve success.
� Employees at Tesco exhibit a low level of
coordination, and most of them are not aware of
their job specifications.
� Consequently, they failed to contribute positively
to the organizational goal.
Cont’d
9. � For this reason, the supply chain management
system has been unable to function properly thus
leading to loss of the company goodwill in the
eyes of the customers and suppliers.
� As discussed earlier, materials management plays
a critical role in the success of the organization.
� Notably, there is a duplication of invoices, and
short deliveries are made to the customers.
Cont’d
10. � According to Laudon(2016), top level
management should enhance their relationship
with subordinates to create a harmonious working
environment .
� These problems emanate from lack of proper
management of the inventory as well as lack of
accountability of invoicing staffs.
Cont’d
11. � Tesco needs to digitize all its supply chain
management system as well as train people on how to
use this equipment. This will ensure high utilization
and zero wastage.
� Also, Tesco should hire highly qualified IT personnel
to assist in solving the problems of stock out,
overstocking as well as a faulty ordering system.
� Solutions to materials problem is the incorporation of a
centralized ordering system that will ensure availability
as well as the elimination of the duplication of orders.
Solution
12. � In solving an environmental issue, the company
needs to involve employees in maintaining as well
as creating working standards that will eliminate
rivalry and resistance to change(Peeroo, Samy, &
Jones, 2015)
� The only way that Tesco can deal with
management problems is to attract new talents as
well as retain the existing ones and more so
involve the employee in decision making.
Cont’d
13. � Notably, Tesco aims at creating value for their
customers through offering high-quality products.
Tesco provides both physical and online services to its
customers.
� While Tesco remains committed to ensuring delivery
of quality service to their customers, recent problems
of stock delivery, wrong orders and duplicate invoicing
have resulted to low customer satisfaction.
� Even if a firm provides the best services to the
customers, the final interpretation of the quality of
service received lies with the customer.
Service concept
14. � Customer relationship management plays a critical
role in determining the sustainability and
profitability of the business (Felgate, & Fearne,
2015).
� Poor customer service hurts sales of the
organization thus resulting in decreased bottom
lines.
� For this reason, I will analyze customer
satisfaction using the fishbone analysis as shown
below.
Cont’d
16. � Due to bad leadership, poor support, bad
packaging, and inappropriate technologies, Tesco
is experiencing massive losses due to a
diminished number of customers.
� Since Tesco deals with e-groceries, wrong
packaging materials leave customers with no
option other than devising their packaging method.
� Also, incompetent employees are to be blamed for
increased instances of over-invoicing, under-
invoicing and wrong orders.
Cont’d
17. � Also, unqualified customer service officers offer
poor support to customer concerns thus resulting
in myriads of complaints from the
customers(Parise, Guinan, & Kafka, 2016).
Cont’d
18. � Tesco needs to digitize all its operations including
customer handling component by incorporating systems.
� System such as customer relationship management and
online ordering system provides a centralized platform of
handling customer complaints as well as processing
orders(Scherer, Wünderlich & Von Wangenheim, 2015).
� In this context, the company also needs to train its
employees so as to be able to handle the ordering
systems and customer complaints.
Solution
19. � Tesco has a huge potential in the e-grocery market globally.
In this vein, Tesco requires strategic decision making as well
as effective marketing tools to increase its revenue and
compete favorably in the global market.
� Also, it needs to make a massive investment in supply
management systems as well as customer relationship
management.
� Employees are a valuable asset in any organization, to
reduce human errors and inconsistencies; it should invest
hugely in training and development of employee’s skills.
Recommendations
20. � According to Rajan (2015), Sales are the lifeblood
of any organization . For this reason prompt
customer feedback drives customers to
satisfaction .
� For this reason, it should upgrade its e-commerce
platform to provide an unforgettable shopping
experience to customers.
� While Tesco has huge customer worldwide, its low
price strategy leads to diminished profit margins.
Cont’d
21. � To address this, it should benchmark with other
retail outlets pricing strategies such as Amazon
undercut policy to persuade more customers into
buying their products.
� Tesco profitability is hampered by increasing costs
of raw materials.
� There is a need to expand the current supplier
base to get competitive pricing on raw materials.
Cont’d
22. � Felgate, M., & Fearne, A. (2015). Analyzing the
impact of supermarket promotions: a case study
using Tesco Clubcard data in the UK. The
Sustainable Global Marketplace (pp. 471-475).
Springer, Cham.
� Foxall, G. R. (Ed.). (2015). The Routledge
companion to consumer behavior analysis.
Routledge.
� Kaiser, A. K. (2018). Problem Management
Adaption. In Reinventing ITIL® in the Age of
DevOps (pp. 201-230). Apress, Berkeley, CA.
References
23. � Kamal Ahmed (2015). Where Tesco Went Wrong With
Its Suppliers. Available from
http://www.supplychain247.com/article/where_tesco_
went_wrong_with_its_suppliers/college_of_business_
at_illinois
� Laudon, K. C., & Traver, C. G. (2016). E-commerce:
business, technology, society.
� Parise, S., Guinan, P. J., & Kafka, R. (2016). Solving
the crisis of immediacy: How digital technology can
transform the customer experience. Business
Horizons, 59(4), 411-420.
Cont’d
24. � Peeroo, S., Samy, M., & Jones, B. (2015, December).
Customer engagement manifestations on Facebook pages
of Tesco and Walmart. In 2015 International conference on
computing, communication, and security (ICCCS) (pp. 1-8).
IEEE.
� Rajan, C. S., & Srinivasan, K. S. (2015). Sales force
effectiveness through technical skills–An empirical
observation in Indian pharmaceutical industry.
Mediterranean Journal of Social Sciences, 6(6 S2), 641.
� Scherer, A., Wünderlich, N. V., & Von Wangenheim, F.
(2015). The Value of Self-Service: Long-Term Effects of
Technology-Based Self-Service Usage on Customer
Retention. MIS quarterly, 39(1
Cont’d
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