Management Analysis of Tesco Supermarket: Structure & Strategy

Introduction to Tesco Supermarket

Tesco Supermarket is a British multinational grocery and general merchandise retailer headquartered in Welwyn Garden City, Hertfordshire, England, in the United Kingdom. Tesco deals with a wide range of products that are in high demand in the market, aiming at full customer satisfaction. It was founded in the East End of London in 1919, with Dave Lewis serving as its first chief executive officer. Tesco was originally a grocery retailer, but it later diversified into various products across numerous geographical regions.

Tesco has opened many branches in different countries and aims to reach customers even in rural areas. The company has stores in 12 countries across Europe and Asia and is the leading grocery retailer in the United Kingdom, Thailand, Malaysia, Hungary, and Ireland. Tesco holds the largest market share in the United Kingdom, equating to 28.4% of the available market. With the current transformation to the digital era, Tesco has adopted and implemented online transactions, allowing customers to order products, pay online, and have goods delivered to their locations on time. Originally a UK-only retailer since the 1990s, Tesco has since diversified into different areas across various geographical regions, retailing in petrol, electronics, books, toys, clothing, and software.

Tesco's primary target is to expand the number of stores in the United Kingdom and to broaden the range of services provided to customers. Expanding stores will enable Tesco to reach more customers in different countries, leading to increased sales and a corresponding increase in profits. Alongside expanding into other countries, Tesco is targeting the growth of online services, which is the most preferred mode of transaction for many customers in the current technological era (Stankevičienė et al., 2015). This approach will save customers both time and money, as they will not need to travel to different locations to acquire products and services.

Tesco's Goals and Targets

Tesco is also targeting the provision of a wider range of products beyond groceries, including electrical goods, which are in high demand in the market according to surveys conducted by the company. Additional services Tesco is targeting include insurance, banking, and mobile networks — all of which are in demand in the markets where Tesco currently operates. Furthermore, Tesco aims to create brands that customers value, such as Tesco Finest and Tesco Value. Building the best possible teams is another central target of the company. Without high-performing teams in place across all departments, Tesco will struggle to meet its other targets. Since staff in various departments are the primary point of contact with customers, building strong teams will make it easier for Tesco to improve its services and expand its market reach.

Management consists of the interrelated functions of creating policy, organizing, planning, controlling, and directing resources within an organization so that it can achieve its stated objectives. Tesco needs qualified staff in management positions, as they are responsible for controlling all operations of the business both internally and externally. Management must plan how to implement all targets in order to achieve the best results. Before undertaking any activity, planning is a critical factor, as it guides how activities should be carried out in a logical, chronological order. Planning also includes the mobilization of resources needed to support the implementation of set targets (Schmitt, 2014).

Management must organize staff and equip them with the knowledge and skills required to achieve the company's goals. This includes training staff on how to approach and accomplish the targets set by Tesco. The management team is also responsible for leading by example in pursuing the company's targets and goals, which helps to motivate other staff to follow suit. It is equally the role of management to control all operations within the organization. In Tesco's case, management should oversee all operations aimed at achieving the company's goals and targets, remain aware of all activity occurring across branches, and be prepared to address any problems that arise.

Organizational structure defines how various activities — such as supervision, coordination, and task allocation — are directed within an organization. In the case of Tesco, the organizational structure is divisional, reflecting the range of services offered and the number of employees. The company utilizes a divisional organizational structure because it operates across a wide geographical area, with distinct smaller organizations in different countries functioning under the umbrella organization to cover various market regions and diverse product varieties. The structure is also hierarchical, as many employees are accountable to more than one person before information reaches senior leadership, and a large number of organizational levels are involved. One person manages each level (Egeberg et al., 2015).

Functions of Management

The structure features a sequence of commands with a large number of workers in a direct line of supervision from the lower levels to the apex of the organizational hierarchy. This structure allows workers at Tesco Supermarket to understand their responsibilities clearly without waiting for instructions from supervisors. It also enables Tesco to establish clear lines of responsibility and authority within the organization, along with defined consequences if tasks are not completed on time.

Tesco Supermarket must also maintain a supportive environment that reflects the ways employees perform toward one another and toward external companies, shaping how work gets done. Management continuously monitors managers' decisions and staff competence through control measures and formal arrangements (da Fonseca et al., 2015). Communications and meetings at each level of the company's hierarchy signal a strong organizational environment in which all activities are properly controlled and consistently streamlined.

Internal analysis of strengths and weaknesses focuses on the internal factors that give a company certain advantages and disadvantages in meeting the needs of its customers. Strengths refer to key competencies that provide the organization with an advantage in serving its target market. The analysis of a company's strengths must be customer-focused and market-oriented, because strengths are only meaningful when they help the company meet customer needs effectively (Zwijze-Koning and de Jong, 2015). Key strengths that any company should leverage include product quality, pricing, and market demand.

Before concentrating on the production of a particular product, a company must consider the quality that customers expect in the market. In doing so, the company can analyze the quality of existing products and introduce incremental improvements to better meet customer needs and encourage purchase decisions. Price is another crucial strength that companies must analyze. Pricing is a major competitive factor in the market, with companies competing by lowering prices for the same or comparable products. However, this approach carries risk — a company must carefully consider production costs to ensure that prices are not set at a level that results in losses (Sarooghi et al., 2015). Finally, a company must consider market demand before scaling up production. Producing large quantities of a product without first assessing demand can lead to significant financial losses if sales volume is lower than anticipated or fails to materialize at all.

Conclusion

Zwijze-Koning, K.H., and de Jong, M.D., 2015. Network Analysis as a Communication Audit Instrument Uncovering Communicative Strengths and Weaknesses within Organizations. Journal of Business and Technical Communication, 29(1), pp.36–60.