Essay on Operational Management Techniques at Tesco Inc
Number of words: 2438
Question 1: Value Chain at Tesco Inc
Tesco Inc. has grown from a market stall in London to become one of the largest UK retailers with a wide range of products for consumers. It is important to examine the organization’s value chain structure and establish parties that contribute significantly to the growth of business and increased operations (Strange and Humphrey, 2019). A critical analysis of its value chain can help gain a deeper insight into matters of strategic management in business. The value chain of a multinational retailer such as Tesco captures several aspects that must be taken into account. For instance, inbound logistics forms the most important and earliest part of the supply chain (Roberts, Kayande and Stremersch, 2019). Activities and other aspects that take place at this step include receiving goods and products from suppliers, storage of goods, handling of goods, and transporting the goods internally. It is important to highlight that inbound activities play a critical role in setting the base for upstream activities. One of the strengths of Tesco’s inbound activities is that it has a wide range of suppliers who are readily available to supply the required quality of products within the UK (Havice and Campling, 2017). The weakness of inbound activities at Tesco to its value chain is that they over-rely on the UK market for much of the supplies. Outsourcing of materials and goods from other places might make the organizations to sell at high prices.
The second stage of the value chain within Tesco Inc. includes operations that the organization undertakes within the industry. The company is reliant on provision of services and not the manufacture of products (Grosse, 2015). Examples of operations include opening each day as per the set hours and adhering to holiday requirements in a country. It is vital to examine weaknesses and strengths that are notable at Tesco based on operations as the second stage of the value chain. The fact that the organization operates metro and express stores for its customers is a strength that has helped it gain a competitive edge in the UK market. However, the idea that the organization has not established stores in some areas is a weakness that is derailing growth (Roberts, Kayande and Stremersch, 2019). The organization should consider extending operating hours and establishing outlets where none exists. The third stage includes outbound activities performed by the organization in a bid to gain a competitive edge within the market. For instance, delivering the product or good to the customer is an important outbound activity that can determine how well the organization can do in the market. The trolley deposit system and keeping tidy of products include activities that are outbound (Grosse, 2015). Tesco plays a significant role in ensuring that products are well packaged and delivered to customers. The lack of a uniform of a strategy to develop reverse logistics is a challenge for Tesco that has crippled operations for long.
The fourth stage of the value chain at Tesco Inc. includes marketing and sales. It is important to highlight that organizations should strategically place themselves in the market in a bid to build a reputable brand name (Havice and Campling, 2017). Both marketing and sales are placed under downstream elements of a value chain. Promotions that are held by the organization play an important role in promoting operations and other activities. For instance, clubcard gives customers a chance for improved discounts and loyalty in a significant manner. The fact that some of the products sold by the organization are environmentally unfriendly is a constraint that might create an ethical concern. However, Tesco has been consistent with its marketing and sales strategies as a way of promoting operations (Strange and Humphrey, 2019). Gaining a competitive edge in the retail market is a matter that requires management at various organizations to positions their operations in the right manner.
Question 2: Contribution to Business Effectiveness
It is important to evaluate critically the contribution made to business effectiveness through supply chain procedures and quality management practices at Tesco Inc. the organization has grown to become a top retailer in the UK due to its strategic operations in the industry (Bastas and Liyanage, 2018). The first contribution made is that its supply chain has led to increased convenience when shopping for most customers. Tesco has done well to establish an online platform that enables customers order for products and pay for them directly from remote locations. The online retailing service has taken effect as many find it easy and effective to transact online (Zimon, Tyan and Sroufe, 2020). Equally, express and metro outlets opened by the organization form an essential part of its supply chain. It is important to highlight that traditional models of conducting business did not give customers much convenience and appropriate options. However, with the advancement of technology, organizations such as Tesco have come up with a platform that allows customers to shop and operate conveniently (Tseng, Lim and Wong, 2015). The fact that the organization uses two models to business is indicative of the effectiveness and convenience in its supply chain.
The supply chain used by Tesco has proved worth as it enables the organization keep a large pool of information through a cloud based system (Zimon, Tyan and Sroufe, 2020). Using a cloud based customer relationship management tool is a strategic way of reducing physical work at the organization. Tesco uses cloud based system to keep information for future use. Use of technology in business has improved operations for many organizations to a large extent. For instance, technology at Tesco can be used to improve security and manage people. To some extent, business effectiveness at Tesco Inc. has improved in a significant due to application of technology as a strategic measure (Tseng, Lim and Wong, 2015). However, the new model of transacting online has exposed many people to other risks that make such operations risky both for the company and the customer. For instance, some customers before have faced challenges when ordering for products including delayed or failed deliveries. Equally, the fact that some suppliers might delay delivering products for Tesco makes the new model to business less effective (Lambert, 2017). Supply chains of the company have contributed positively and negatively to operations at Tesco in a significant manner. Equally, delivering of goods and providing assurance to customers adds value to the final good or service provided.
Tesco is reliant on supplies from within the UK to supplement the high demand for retail products. Overreliance on internal suppliers might risk the sustainability of the supply chain that Tesco uses in the industry (Lambert, 2017). There is a need for the organization to develop and open supply chain networks that can promote its operations and coverage in a significant manner. Equally, the fact that the organization has a wide network of suppliers is an advantage for it to effectively conduct business (Tseng, Lim and Wong, 2015). It is also important to examine the role of marketing and sales in promoting the effectiveness of business for Tesco Inc. For instance, advertising is an important part of a supply chain that helps improve brand visibility and reputation. Tesco has done well in advancing its marketing operations to an extent of capturing the attention of many customers, especially within the UK (Bastas and Liyanage, 2018). Notably, a brand that wants to do well in any industry must increase awareness through marketing and push sales for improved performance. Human resource operations for Tesco contribute to effective business operations by hiring competent and qualified staff.
Question 3: Reflection on Findings
It is important to reflect on findings and establish whether operational techniques applied by the company are appropriate and convenient. Tesco has done well in hiring professionals who have helped the organization gain a competitive market in the retail industry (Heller, 2017). An examination on various strategies used by the company is indicative of its willingness to promote operations and become a global leader within the industry. Businesses that maintain business and ethical standards during hiring and promoting employees have a better chance of doing better. In essence, human resource operations in any organizations contribute significantly to effective functioning of the supply chains that are in place (Cole, Stevenson and Aitken, 2019). For instance, Tesco’s HR department has done well in the pat in ensuring that the organization has hired professionals who can drive the company agenda forward. Exploring concepts on operational techniques used by various organizations has helped widen the scope of knowledge on the discussion topic. Using Tesco as a case study is a strategic step that informs practice on how to handle and run various operations (Waters, 2019). In essence, a reflection on supply chain operations of the company indicates that strategic management of partners in any industry is a strategic step towards improving business efficiency in a significant manner. Tesco should purpose to strategically plan its operations in a bid to improve and grow in the retail industry.
Learning various aspects of quality management practices is an important step that can widen the scope of understanding of an individual. For instance, learning Tesco as a multi-national retailer can help gain a deeper insight into management practices that are crucial (Cole, Stevenson and Aitken, 2019). Inbound logistics within the company form an essential part of the upstream process that has helped it gain a competitive advantage. Each organization should purpose to strategically organize its inbound activities in a bid to promote effectiveness in business. Failed inbound logistics can be detrimental towards achieving set objectives for an organization (Singh, Shukla and Mishra, 2018). Equally, operations and outbound logistics form two important stages that organizations need to consider when conducting businesses. Each stage of the supply chain adds value to products, which is why quality management practices are essential. Tesco improves its operations through promotions and other marketing strategies. Strategic marketing is the backbone of company success in most industries across the world (Evans and Mason, 2018). Examining various aspects that encompass management practices at Tesco is a step towards gaining a deeper understanding of value chain and other crucial management practices.
It is vital that the study provides a proposal of operational management techniques that Tesco should put in place in a bid to maintain and improve business processes. The technique that the giant retailer store should put in place is the use of big data analytics (Singh, Shukla and Mishra, 2018). It is important to note that many organizations have resolved to use statistics as the way to predict and forecast future trends in the market. Tesco should follow suit and store all information regarding customers and other stakeholders in the industry. Using big data approaches can help an organization reduce costs of hiring people to mine information for the required decision making (Sanders, 2014). Colleting and storing data in cloud based technologies is useful in helping Tesco improve its decision making approaches and void repeating mistakes. It is the duty of management at the organization to adopt the use of technology as a way that can reduce floor space. A traditional approach to storage of data consumes space and requires more staff to manage the information (Sparks, 2014). Using big data and other digital approaches can promote operations of Tesco Inc. in a significant manner. Tesco can do better given its consistency in applying the right technology to gain a competitive edge.
In conclusion, Tesco can do better in the market by advancing security measures for online customers. Data theft is a matter that is sensitive to many people across the world and there is a need for Tesco to advance privacy and security of personal information (Waters, 2019). Loss of financial information might be costly for any organization, which is why Tesco should be purposive in advancing security measures, especially for online transactions. Value chain within a company is a matter that requires proper management of people and resources (Evans and Mason, 2018). Organizations that do not manage employees well within any industry are likely to face challenges in gaining a competitive advantage. The Human resource department should be vigilant towards promoting employee relationship as a way of advancing operations. Equally, Tesco should purpose to diversify and open their network for supplies as a strategic option in advancing sustainability (Heller, 2017). Tesco can gain a competitive advantage and make more profits given its effective business practices and operations. In essence, maintaining of proper ethical standards within the market can help run operations in an effective and convenient manner.
Bastas, A. and Liyanage, K., 2018. Sustainable supply chain quality management: A systematic review. Journal of cleaner production, 181, pp.726-744.
Cole, R., Stevenson, M. and Aitken, J., 2019. Blockchain technology: implications for operations and supply chain management. Supply Chain Management: An International Journal.
Evans, B. and Mason, R., 2018. The lean supply chain: managing the challenge at Tesco. Kogan Page Publishers.
Grosse, R., 2015. Emerging markets: Strategies for competing in the global value chain. Kogan Page Publishers.
Havice, E. and Campling, L., 2017. Where chain governance and environmental governance meet: Interfirm strategies in the canned tuna global value chain. Economic Geography, 93(3), pp.292-313.
Heller, F.K., 2017. Technological innovation applied to walmart and tesco’s supply chain (Doctoral dissertation).
Lambert, D.M., 2017. The supply chain management and logistics controversy. In Handbook of logistics and supply-chain management. Emerald Group Publishing Limited.
Roberts, J.H., Kayande, U. and Stremersch, S., 2019. From academic research to marketing practice: Exploring the marketing science value chain. In How to Get Published in the Best Marketing Journals. Edward Elgar Publishing.
Sanders, N.R., 2014. Big data driven supply chain management: A framework for implementing analytics and turning information into intelligence. Pearson Education.
Singh, A., Shukla, N. and Mishra, N., 2018. Social media data analytics to improve supply chain management in food industries. Transportation Research Part E: Logistics and Transportation Review, 114, pp.398-415.
Sparks, L., 2014. 07 tesco’s supply chain management. Logistics and retail management: Emerging issues and new challenges in the retail supply chain, p.149.
Strange, R. and Humphrey, J., 2019. What lies between market and hierarchy? Insights from internalization theory and global value chain theory. Journal of International Business Studies, 50(8), pp.1401-1413.
Tseng, M., Lim, M. and Wong, W.P., 2015. Sustainable supply chain management. Industrial Management & Data Systems.
Waters, C.D.J., 2019. Logistics: an introduction to supply chain management. Red Globe Press.
Zimon, D., Tyan, J. and Sroufe, R., 2020. Drivers of sustainable supply chain management: Practices to alignment with un sustainable development goals. International Journal for Quality Research, 14(1).