Headquartered in the United Kingdom, Tesco is a general merchandise and a British multinational grocery retailer. Measured by revenues, after Carrefour and Wal-Mart, the company is the 2nd largest profitable company and 3rd largest retailer in the world. It is the grocery market leader in the United Kingdom and across North America, Europe and Asia, have stores in fourteen countries (Jones, 2001, pp. 29). As a group of market stalls, the company was founded by Jack Cohen, in the year of 1919. The company has been increasingly diversified geographically and into areas, like, the retailing music downloads DVD rental, Internet and telecoms services, financial services, software and petrol, furniture, electronics, clothing, and books.
The company is built around multiple opportunities for growth and high-quality assets, colleagues and customers, around the world, and the vision of the company is central to these elements. This assignment will identify the different stakeholders of Tesco along with their interests. The different approaches available to Tesco for stakeholder mapping or analysis will be further discussed. Furthermore, the current strategic direction pursued by Tesco will be discussed briefly, along with issues related to clients, customers and markets.
The stakeholder is party, organization, group, group or people that have a concern or interest in a project or an enterprise. In a typical organization, suppliers, customers, employees and investors, are the primary stakeholders. To embrace additional stakeholders, like, trade associations, government and the community, the modern theory has gone beyond this conventional notion. The organization’s policies, objectives and action can affect the stakeholders. The unions, shareholders, agencies, directors are creditors, are some examples of key stakeholders from whom the resources of the business are drawn.
The employees of the company are not entitled to the same consideration as the customers of the company are entitled to fair trading practices. When a round of layoffs is planned by a company or costs are cut, is one of the example of a negative impact on stakeholders (Rowley, 1997, pp. 887). The local economy and in the area, the community of workers is affected by this negatively. However, one who owns shares in a business, like, Microsoft, is positively affected, like; the stock price rises when a new device is released by the company and look after its profit.
Tesco is a company who really care about doing the right thing, although this might sound strange, specifically, when coming from a significant business. The company believes that the business is required to be done in a responsible manner and listening to the people around them, is a large part of it. Acting on the concerns of the people is another factor that company observes greatly. Nongovernmental organizations, investors, suppliers, colleagues and customers, are the main stakeholders of Tesco. On the perspective of everything, the views of the customers are heard by the colleagues of the company.
These views can lie to the role of the company in the community, from the manner in which it is serving its customers. Meetings of Customer Question Time are invaluable for the company. Through the colleague forum process, colleague question time sessions and the viewpoint colleague survey, feedback is gained from the colleagues (Barrientos, 2000, pp. 559). In the supplier relationships of the company, the core value of the company is applied firmly, i.e. treatment of people in the same manner, in which we want to be treated. The investor relations teams of the company that represent our shareholders or invest in the company, regularly meet analysts from the financial institutions. To respond and understand the issues of concern, the company regularly meets with nongovernmental organizations.
In order to find the performance of the company, and places where it requires improvement and how it makes contributions to the society, by using its expertise and scale, the company need to work with its stakeholders. Using their insight to steer and shape the company’s strategy to use the scale for good, to assess the existing work, both at an international and local level, by engaging with over fifty leading stakeholders, the company has started its engagement program. It is fundamental to the company values, to engage with the different groups that are affected or influence its business.
The company is able to plan its CR program accordingly and can identify the relevant issues of CR by understanding the concerns and needs of its stakeholders (Whysall, 2005, pp. 1118). With many expectations and different needs, the company has a wide range of stakeholders, whose different needs and expectations can conflict sometimes. When balancing different consideration, the company can make sure that it has taken the views of all its stakeholders and has listened to them since the company cannot be all things to all people.
Providing a choice of products, like, affordable, healthy and sustainable options, operating honestly and fairly, good neighbor and good shopping trip are the expectations and interests of customers of Tesco. The company engages with its customers through various ways, to respond and identify to changing needs of the customer, the company is helped by its customer question time (Spitzeck & Et.al, 2011, pp. 560). To drive the community and customer plans, the CQTs are used. In order to deliver continues improvement in customer satisfaction; the company uses these plans that are the management tools.
Healthy and safe workplace, accessible opportunities, to be treated with respect, helping managers, interesting job and fair conditions and terms, are the expectations and interests of employees of Tesco. For a company, like the way it listens to its customers, it is vital to engage with its employees and listen to them. Through annual Viewpoint survey, the anonymous feedback of the staff of the company is collected.
Support for local initiatives and causes, more employment and good neighbor, are the expectations and interests of communities of Tesco. The company engages with its communities by working with them including charities, through consumer panels, focus groups and leaflets, public exhibitions and consultants and community initiatives.
Shared customer insight, growth opportunities, and long-term relationships, to be treated with honestly and fairly, are the expectations and interests of suppliers of Tesco. The company applies its core value to suppliers, i.e. treatment of people in the same way like we want ourselves to be treated as suppliers are vital to its business. Each year, in the supplier viewpoint, the key suppliers of the company participate.
Timely payment of all taxes, good quality training, family-friendly and stable job opportunities and legal compliance, are the expectations and interests of regulators and governments of Tesco. With political stakeholders, the company is also highly keen to have an honest and open relationship. On a range of policy issues that affect the communities and the business of the company in which it operates, the company engages with officials and governments.
Transparent and credible communication, clear principles and policies and leadership approach to CR issues, are the expectations and interests of nongovernmental organizations of Tesco. To respond and discuss their concerns and issues, the company meets with the nongovernmental organizations.
The process of identifying the groups or individuals that are likely to be affected or affect a proposed action and according to impact the action will have on them, and their impact on the action, sorting them according to it, is known as, stakeholder analysis in business administration, project management and conflict resolution. To assess how the interests of the stakeholders must be addressed in other action, program, policy or project plan, this information is used (Brugha & Varvasovszky, 2000, pp. 239). A key part of stakeholder management is stakeholder analysis. In stakeholder analysis, in the first step, the stakeholders are identified, then in the second step, they are prioritized and then in the last step, the stakeholders are according to their expectations, interests and needs. An interest/power grid is used by the stakeholder analysis.
The document information is provided for the key stakeholders’ influence in the suggestion and individual project for managing the relationship among each stakeholder, their level of interest within the company, their role in the project and their organization, this document information, is known as, stakeholder analysis (Bracke & Et.al, 2005, pp. 27). To know the expectations and needs of stakeholders in Tesco, the company can apply the stakeholder analysis system. From top to bottom, a lot of people are involved, when any company undergoes change. It is essential to involve them successfully in order to implement the change successfully.
Currently, to utilize the latest technology, to the save the time of customers, with point of sales to cut the labor cost, to accelerate the checkout processes, to compete with its competitors, to reduce congestion on checkouts, to increase sales and for business development, a strategic change within the self-check-out systems, is required by Tesco (Newcombe, 2003, pp. 841). Stakeholder engagement and analysis can be adopted by Tesco, for the self-check-out system. This change of self-check-out system cannot be introduced by Tesco without the involvement of internal and external stakeholders. Stakeholder planning and stakeholder analysis are the two major approaches to stakeholder management.
For the strategic change, the stakeholders are required to be identified by Tesco. Both internal and external stakeholders, like, suppliers, financers, shareholders, managers, the press, customers and employers are involved, in this change of self-check-out system.
In accordance to the interest in work and power over work, the stakeholders are required to be classified. Senior managers, employers, and customers are the high interested and high power people for self-check-outs (Soosay & Et.al, 2012, pp. 68). The company must make the greatest efforts to satisfy them, and these are the people with whom the company must get engaged with. The company must satisfy the low interest and high power people, till the limit that they do not get bored. Since they can be helpful in the change, therefore, Tesco, keep the high interest and less power people informed. The company must monitor the less interest and less power people.
The financial interest related to the change must be understood by the company. The kind of information expected from the company and in what ways the company can motivate the stakeholders, along with that, Tesco must also communicate to them directly, in order to know that how the company can win them around to support its project if they are not likely to be positive (Bather & Tucker, 2011, pp. 137). A huge difference to the career and success of the company can be brought in by engaging the right people in your project in the right way. For the strategic change, the company needs to engage their stakeholders.
Communication strategy is the most effective way to involve the stakeholders. In a very co-operative and friendly manner, the company must talk to them. By making self-check-out systems, usable and easy for customers, the first priority must be given to customer satisfaction. The company can get their support by conducting survey feedback, for this purpose. In order that the senior managers can mentor their employees, they need to be given training for these machines by the company. A clear vision about the importance of these machines aligned with the strategy of the company must be understood by the staff of the company.
Whenever there is change, experiencing of resistance is normal. The company can check their assumptions through it, therefore it is good. The thoughts and feelings of the employee must be understood by the company as the employers have started feeling extremely insecure about their jobs, due to these self-check-out machines. In order to provide them job security and guide them about the use of these machines, various workshops for the employees can be arranged by Tesco (Nwagbara, 2010, pp. 57). Furthermore, regarding the profits generated from the machines and its successful implementation, the company can get engage with its financiers.
This is the method through which Tesco can introduce these machines in all of their stores and can more involve in change. By involving press, the company can do advertisements of these machines. To implement this change more successfully, the company can be helped by developing good relation with the stakeholders
Every little help is given importance by Tesco since it has been full-fledged. To providing everything, like, mobile phones and loans, from simply selling groceries, the Tesco has wider its business, in few years. The company has a risk of losing their way, by making involvement in all new directions. Therefore, for many years, the company has relied on every little help, in order to bind them all together and to act as common beliefs (Dyson & Et.al, 2007, pp. 3). The current strategic direction of the company is reflected within its current strategic objectives that are to provide services and goods that are easily available and low priced to customers, maximization of profits, wish to remain the market leader and to perform better than its competitors, to become the top retail organization in the United kingdom and to capture and grow the market share, and to make the most of the sale.
New buildings are desired to be made by Tesco aligned with the specific objectives that the company aims to achieve. This means that by setting limit time to achieve it, the company can measure if it wants to make some profits (Mudambi, 1994, pp. 32). By studying the business activities of the entire month, the company must be able to forecast their expected increase in the profits of next month. Within a given time period, the goal must be achieved. Products that can generate more revenue for the company and that can be easily sold in the market, must be brought in by the company, if it wants to achieve the desired profit (Hughes, 2004, pp. 32). Therefore, realistic goals can be made by the company. Within a certain time period, each goal and objective is set.
For any specific company threats, opportunities, weaknesses and strengths are the strategic factors. It also identifies the required resources through which the company can avail its opportunities and also identify the core competencies of the company (Bititci & Et.al, 2003, pp. 410). As it is a powerful and simple analysis for strategic development, therefore it is accepted worldwide.
By winning the world Retailer award in the year of 2008, a position has been secured by Tesco in the retail market. To take advantage towards demographic base for future sustainability and growth, this can be used for marketing promotions (Lindgreen & Hingley, 2003, pp. 328). For business expansion with income resulting from property development funds, funds have been reserved by Tesco.
From the house hold insurance, credit card amount outstanding, and the bad debt, were the sources from where the Tesco Finance profit level were resulted. In the exact area of products, the grocery outlets are not set to operate as a professional retailer and which by other smaller modified retailers can be capitalized. At the same time, success of key value communication is suggested to Tesco by the economic conditions.
The Opportunities of Tesco
To ensure the economies of scale, the level of buying power is specified by Tesco, who is the third largest global grocer, in accordance to the suggestions by the statistics. Within this technological area to be developed, further development and growth is suggested and profits have been increased by the growth of a one-fourth million customers of Tesco.
Through the credit crunch, the markets of the United States and the United Kingdom have been affected by the recession. The overall profit margins will be affected by the increase in the price of raw materials costs of non-food and food. As consumer buying patterns changes are developed by the technology that result in evaluation required by the product areas, further action will be required by changes to buyers behaviors. There is a threat from Wal-Mart for Tesco to take over as a market leader as to follow certain actions, both motive and means are acquired by the Wal-Mart.
The response of the individual retailer to the industry, describes, the general strategies. The two general strategies developed by Porter must be followed by a large retailer, like, Tesco, in order to gain a competitive advantage. Cost leadership is the first strategy, in which every effort to have cheapest services and products in the market, can be made by Tesco. The ability of Tesco to control their expenses, like, operating cost, is the basis of this strategy, so that the company is can attain a competitive advantage and is able to generate high profits and can be able to price their products competitively.
Services and products with unique features in the market valued by the customer are required to be brought by Tesco if the company opts for another strategy of differentiation. For their offerings, the company will then focus on its brands reliability. Both the differentiation and the overall cost leadership are expected at the big and open market, in relation to this framework (Warnaby & Woodruffe, 1995, pp. 253). The company might select to offer smaller line products to a large market, or may stick their product to a particular market region. The main issue is many organizations get stuck in the middle, when they try to do the both differentiation and cost leadership.
Since the company has a clear strategy and mission, therefore it did not happen. It will serve as the growth strategy and revenue for the company, by entering in the new market, like, China and Japan. Since better movement towards retailing and an increase in customers spending are shown by the Asian market, therefore, the business of Tesco is likely to grow in Japan. In terms of demographically, these markets are also renowned opportunity markets. The international coalition with the local supermarkets in Asian market is one of the optional strategic options, in the case of Tesco.
It may be produced as, to use current proficiency and resources, and as a method of the development, it will be taken in to account. To deliver better services to the customers by putting its own skills, product development and supply chain, at the same time, proficiency, skills and local knowledge product development will be gained by the company, if in order to achieve larger presence in the market and larger economies of scale, by entering in to the joint business. The company might experience that being an initial mover is not essentially an advantage, due to the difficulty and potential of these markets.
Feasibility, acceptability and sustainability, are the three main success criteria, on which the success of the joint venture will be focused. The dealing of strategy with the working situation of the company will be the main concern of the sustainability, which is also for the expansion-market development strategy, is the justification (Babu, 2012, pp. 55). The likely action of stakeholders, the level of risk and the estimated return from the strategy, are the factors to which the acceptability is related. However, to deliver the strategy, the capability and the resources of the company, will be viewed by the feasibility.
2.4 The Assessment of the Match between the Stakeholder Analysis and the Strategic Direction
The match between the stakeholder analysis and the strategic direction is the aims of both of the factors. The strategic change due to which the stakeholder analysis was conducted had the aims of to utilize the latest technology, to the save the time of customers, with point of sales to cut the labor cost, to accelerate the checkout processes, to compete with its competitors, to reduce congestion on checkouts, to increase sales and for business development, a strategic change within the self-check-out systems, is required by Tesco. Where the aims of the strategic direction were to provide services and goods that are easily available and low priced to customers, maximization of profits, wish to remain the market leader and to perform better than its competitors, to become the top retail organization in the United kingdom and to capture and grow the market share, and to make the most of the sale.
In both of the factors, the competition and greater profits were the similar aims. Both internal and external stakeholders, like, suppliers, financers, shareholders, managers, the press, customers and employers, were the main stakeholders that were identified by the company, for the strategic change. However, the Cost leadership strategy adopted by the company, in which every effort to have cheapest services and products in the market, can be made by Tesco and the another strategy of differentiation in which the services and products with unique features in the market valued by the customer are required to be brought by Tesco, reflected the vast interests of the customers who want to avail good quality services and products at a low price.
To deliver better services to the customers by putting its own skills, product development and supply chain, at the same time, proficiency, skills and local knowledge product development will be gained by the company, if in order to achieve larger presence in the market and larger economies of scale, by entering in to the joint business, reflected the greater interests of the suppliers. Feasibility, acceptability and sustainability, are the three main success criteria, on which the success of the joint venture will be focused. The likely action of stakeholders, the level of risk and the estimated return from the strategy, are the factors to which the acceptability is related.
The internal and external factors that drive the strategic change in Tesco were technology, finances, employees, profits, competitors, growing customer base and value of the customer. It is attracting the new customers, with retaining the existing one and making the shopping experience interesting for them. Especially, when the customers are buying few items, the overcrowding checkouts were provided ease so that by standing in long queues, the customers do not get irritate. In the success of the organization, an essential role is played by the technology. With the implementation of self-check-out machines, Tesco improved its operational efficiency and enhanced its technology.
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