Assignment/Coursework Remit
Programme Title MSc Management
Module Title Operations Management
Module Code 07 38004
Assignment Title Individual Assignment
Level LM
Weighting 50%
Lecturers Somayeh Allahyari
Hand Out Date 26/09/2023
Deadline Date & Time 14/12/2023 12 pm
Feedback Post Date 15th University working day after submission (unless otherwise advised).
Assignment Format Essay
Assignment Length 1,500 words
Submission Format Online Individual
Executive Summary
The operations management (OM) practices of Tesco are examined critically in this article,
focusing on the Direct, Design, Delivery, and Development components. The paper
assesses its current procedures and recommends enhancements based on pertinent OM
theories. The backdrop details Tesco's rise to become a multibillionaire worldwide retailer
while navigating a volatile market. The research compares Sainsbury's and Tesco's
performance targets using a polar diagram. Tesco's "differentiation" strategy is emphasised
in the Operations Strategy Matrix. This research highlights Tesco's inventory strategy,
supply chain resilience, and capacity management by looking at process design, layout,
location, and delivery. It ends with suggestions critical to Tesco's continued success in the
cutthroat retail market: digital innovation, data-driven decision-making, sustainability, and
staff involvement.
Table of contents
Introduction 3
Background of the selected company 3
Analysis 5
Direct Strategy: 5
Operations Performance Objectives 5
Polar Diagram of Tesco vs. Sainsbury's Performance Objectives (Appendices 1) 5
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Operations Strategy Matrix (Appendices 2) 6
Design: 6
Process Design: 6
Layout: 6
Location/Global Operations: 6
Delivery: 7
Capacity Management: 7
Inventory Management: 7
Supply Chain Management (SCM) 7
Development & Improvement: 7
Recommendation 8
Conclusion 9
References 10
Appendices 12
Operations Strategy Matrix 12
Introduction
The operations management (OM) procedures of Tesco, a well-known international grocery
store based in the United Kingdom, are examined severely in this article. The report
examines how Tesco uses its existing operations and aims to optimise them for sustained
performance in the competitive retail context. It emphasises the four core areas of OM:
Direct, Design, Delivery, and Development. This article evaluates Tesco's present OM
practices, pointing out their advantages and disadvantages and offering practical
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suggestions for improvement using pertinent OM theories, ideas, and case studies
(Ngashang, 2020). Tesco's operations strategy, process design, layout, location/global
operations system, and possible areas for future expansion will all be extensively examined
in this report.
Background of the selected company
Tesco PLC is a well-known brand in the UK and other worldwide markets. It is a global
supermarket and general goods store based in Britain.Tesco, founded by Jack Cohen in
1919 from a single stall in London's East End, has expanded to fourteen countries in Asia,
Europe, and North America, becoming a retailing giant on a global scale (Tesco, 2023).
Figure: Tesco logo
Source: (Tesco, 2023)
The British firm Tesco PLC is headquartered in Hertfordshire, England, and operates
supermarkets and general merchandise stores worldwide. Tesco is a top five European food
and drink retailer and one of the most valuable brands in the United Kingdom. Along with
Morrisons, Asda, and Sainsbury's, Tesco is considered one of the "big four" supermarkets in
the United Kingdom. It typically has a share of more than 26% of the grocery market
(Statista, 2023).
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Figure: Tesco logo
Source: (Tesco, 2023)
The leading British supermarkets' market shares mainly were stable from 2017 to 2023.
During the research period, the most essential fraction was held by Tesco and Sainsbury's,
with 42.2% of the market as of October 2023. Discounters rose to prominence after the "big
four" supermarkets Morrisons, Tesco, Sainsbury's, and Asda—had controlled the food retail
industry for a long time. Due to price increases and Brexit-related uncertainty, customers'
tastes have shifted toward budget-friendly brands like Lidl and Aldi. It wasn't until September
2022 that Morrisons fell to fourth place in the grocery store rankings, surpassed by Aldi. April
2023 was the first month Aldi's market share reached double digits. As of October 2023, this
percentage was 9.9% (Statista, 2023). Tesco now operates a vast network of outlets, from
convenience stores and online platforms to big supermarkets and hypermarkets.
Along with running a sophisticated supply chain, the corporation also oversees the sourcing,
acquiring, and delivering a wide range of goods to its retail locations. With its wide range of
activities and broad reach, Tesco is a major player in global retail. However, the business
must also contend with difficulties in a fiercely competitive and constantly changing market.
This article aims to critically analyse Tesco's operations management (OM) systems,
highlighting its strengths and faults and suggesting enhancements to secure the company's
future success.
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Analysis
Direct Strategy:
Operations Performance Objectives
Speed, quality, affordability, reliability, and adaptability are the five pillars upon which
Tesco's 5-PO structure rests (Nakano, 2019). If an order meets Tesco's quality and pricing
standards, it will be processed.
● Speed: Deliver goods swiftly and effectively to consumers and retail locations,
reducing lead times, improving delivery times, and quickly adapting to changes in
consumer demand.
● Quality: Upholding strict requirements for product quality and putting strict quality
control measures into place. Provide a unified client experience via all channels.
● Cost: Diminishing operating costs using efficient resources and techniques,
negotiating applicable circumstances with suppliers, and maintaining aggressive
pricing tactics.
● Dependability: Delivering Supply chain management that is responsible and
consistent. Supplying goods complete and on the program, demonstrating
confidence and trust with suppliers and customers.
● Flexibility: Modifying swiftly to swerve customer needs and market circumstances,
pitching new goods and services quickly, and acclimating to unpredictable
tribulations and interruptions.
Polar Diagram of Tesco vs. Sainsbury's Performance Objectives
(Appendices 1)
The polar diagram shows the competitive nature of the food retail sector by demonstrating
that Tesco and Sainsbury prioritize efficiency and low cost. However, Tesco has a
distinguishable edge concerning customer satisfaction and responsiveness, most likely due
to its vigorous loyalty program and focus on amenities via digital channels (Wilson, 2020).
Sainsbury's does well across the board, although it is behind Tesco in some particular areas.
A comparison of Tesco and Sainsbury's across preparatory implementation targets is shown
in the polar diagram. Tesco's digital focus and loyalty program enables them to achieve
outstanding customer satisfaction and response. Cost and efficiency are the top preferences
for both companies; Sainsbury's lags Tesco marginally regarding flexibility.
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Operations Strategy Matrix (Appendices 2)
A matrix for an operations strategy Tesco has selected a "differentiation" approach after
considering the market dynamics and competitive environment (Beatriz, 2021). This
approach uses its well-established brand recognition, wide range of products, and easy-to-
use purchasing choices to set itself apart from rivals and provide a more client-focused
experience.
Design:
Process Design:
Through a standardised process design, Tesco provides consistent performance and
efficient procedures across its locations. Fundamental techniques include:
● Supply chain management: Operating with retailers to ensure instantaneous delivery
and quality assurance.
● Managing inventories: Maintaining supplies optimally to save expenditures and
control deficiencies.
● Merchandising is preparing product displays and shop layouts to increase sales.
● Checkout procedure: Adequate systems should be enforced to reduce client wait
times.
Layout:
Tesco shops typically consume a racetrack approach that enables clients to asses an
established way across numerous product diversities. This formation calms discovering
harvests and creating untimely acquisitions (Nguyen et al., 2022). Tesco similarly uses
premeditated invention preparations to capitalize on high-margin harvests and superior
contracts.
Location/Global Operations:
Tesco consumes an international grid of shops personalised to the requirements and
perceptions of regional marketplaces. Selecting locations sensibly and adapting product aids
to encounter the requirements of a wide variety of clients are vital mechanisms of this
method.
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Delivery:
Capacity Management:
Tesco uses several tactics to control capacity swings, such as
● information staffing is the method of modifying headcount in a comeback to mandate
outgrowths.
● Cross-training: Delivering the team the means to address several responsibilities and
supporting flexibility during active periods (Frankie and Henderson, 2023).
● Dynamic scheduling: Employing technology to arrange staff schedules and assign
resources.
Inventory Management:
Tesco uses data to inform its inventory management strategies, including
● Demand forecasting which uses market trends and previous data to estimate future
demand.
● Safety stock levels: Keeping buffer products on hand to reduce unplanned pinpoints
in demand.
● ABC analysis: Cost-demand inventory categorisation, with high-value products
prioritised for more rigorous administration (Mor et al., 2021).
Supply Chain Management (SCM)
Tesco has established a robust and effective supply chain network that includes:
● Direct sourcing is bargaining with suppliers directly to get better terms and quality
warranties.
● Cooperating with suppliers to improve demand forecasts and optimise inventory
levels is called cooperative planning, forecasting, and replenishment, or CPFR
(Catarina, 2022).
● Logistics optimisation diminishes costs and delivery times by utilising effective
warehouse and transportation networks.
Development & Improvement:
Tesco invariably invests in invention and operational enhancements to sustain its
competitive advantage. Essential areas of attention consist of:
● Digital transformation: Using technology to provide individualised customer
experiences, mobile payments, and online purchasing.
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● Data analytics: Using data to forecast demand, streamline processes, and target
advertising campaigns.
● Sustainability: Putting plans into action to cut down on waste, lessen the effect on the
environment, and promote moral sourcing (Liu, Yi and Wang, 2020).
● Employee engagement: Creating an optimistic and authorising climate at work to
draw in and keep talent.
Through intended attention to these domains, Tesco can guarantee its sustained wealth in
the constantly changing retail scene.
Tesco's OM practices support its strategic goals. Tesco leads the worldwide retail industry
by focusing on low cost, efficiency, customer happiness, and responsiveness. Tesco must
innovate and enhance operations to be competitive in a changing market. Continued
investments in digital transformation, data analytics, sustainability, and employee
engagement are needed. Tesco can stay a retail leader by overcoming these hurdles and
seizing chances.
Recommendation
Tesco's operations management (OM) procedures were carefully examined, and the
consequences support the subsequent endorsements for refining the business's enactment
and confirming its longstanding existence in the cutthroat trade marketplace:
● Digital Invention: Tesco must remain supportive of digital revolution schemes in light
of the increasing position of online channels. Preserving its substance in digital
business manufacturing involves refining its online platforms, modifying customer
involvements, and mobile payment schemes (Fatima et al., 2022).
● It generates the Data-Driven Decision: To create more money-making conclusions,
Tesco highlights information analytics more. The cutting-edge analytics knowledge
might raise operational efficacy by permitting besieged skill exertions, enhancing
inventory organisation, and inspiring demand prediction.
● Sustainability Creativities: Tesco's long-term effectiveness hinges on arranging
sustainable observes. Employing into practice distinctive methods to decrease
excess, sustenance ethical obtaining, and decrease ecological effect connects
through fluctuating customer predilections and advances business social obligation
(Bharwani and Mathews, 2019).
● Employee Assignation: Appealing and preserving talent needs viewing a supporting
and authorising work situation. To nurture a capable and determined operation,
Tesco must assign possessions to exercise, career expansion, and creativity of
employee assignation (Xiao, 2022).
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Through performing these ideas, Tesco may stay at the vanguard of the international retail
segment, assuring its flexibility to alter market circumstances and preserving its standing as
a supportable and customer-focused product.
Conclusion
Tesco's dominance in global retail is firmly based on its operations management tactics.
Digital innovation, effective supply chain management, and a unique method were strengths
in the exploration. The main objectives of the suggestions are to support digital innovations,
improve data-driven decision-making, enhance sustainability, and encourage employee
involvement. By adopting these suggestions, Tesco may navigate changing retail
environments and maintain sensation, flexibility, and a customer-focused brand image.
Page 9 of 14
References
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– the case of the Indian luxury hospitality industry | Emerald Insight. Worldwide Hospitality
and Tourism Themes, [online] 15(3), pp.231–248. Available at:
https://doi.org/10.1108//WHATT. [Accessed 11 December 2023].
Catarina, A. (2022). Mitigation of Supply Chain Vulnerability Through Collaborative Planning,
Forecasting, and Replenishment (CPFR). International series in management
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Fatima, Z., M. Hassan Tanveer, Waseemullah Waseemullah, Shehnila Zardari, Laviza Falak
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Appendices
Axes Tesco Sainsbury's
Speed is moderately high, demonstrating Moderately high, like Tesco.
technology and automation
expenditures for speedier delivery
and order fulfillment.
Quality is High due to strict quality control High-quality goods and services are
and trusted sources. also emphasised.
Cost Efficiency, supplier negotiation, Competitive with Tesco,
and cost-cutting keep costs down. demonstrating cost-cutting and
supply chain efficiency.
Dependability is high, with on-time delivery and High delivery and customer service
reliable service. reliability.
Flexibility is moderately high, as shown by Lower than Tesco owing to the less
speedy product and service agile organisation and slower market
launches and market adaptation. reaction.
Table No. 1: Polar diagram
Source: Self-Made
Operations Strategy Matrix
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Figure: Operations Strategy Matrix
Source: (Winroth, 2022)
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