retail management
The case describes Tesco's 'Steering Wheel' strategy and explains how it enabled the company to emerge as the largest retail chain in the UK. In 1997, Terry Leahy (Leahy) took over as CEO of Tesco. He aimed to make Tesco a 'Value Retailer.' Leahy named the strategy he wanted to adopt as 'The Tesco Way' which comprised of the company's core purpose, values, principles, goals and the Balanced Scorecard. Tesco adapted the Balanced Scorecard approach to meet its own requirements renaming it the Steering Wheel which had four quadrants - operations, people, customers and finance. The case highlights the approach of implementing the 'Steering Wheel' strategy in Tesco and the benefits reaped by the company after implementation.
On April 13, 2005, the UK-based Tesco Plc., a leading retailer in the UK, announced its annual financial results for the fiscal 2004-05. For the fiscal ending February 2005, Tesco reported sales of £33.97 billion and profits of £2 billion. It was the first time that a retailing company in the UK had achieved profits of £2 billion. For the fiscal 2003-04, Tesco had recorded revenues of £30.81 billion and profits of £1.6 billion, a year-over-year growth of 20.5% in profits.
A decade ago, Tesco's financial position presented a completely different picture. During the 1990s, revenue growth had slowed down and the company's profit margins were under pressure. Tesco had image of being a lower end alternative to Sainsbury's and could not compete with it. The company's stores sold cheap products of very poor quality. In the mid 1990s, the British economy was hit by recession, and Tesco was in deep trouble. In contrast, Sainsbury's announced record earnings and Marks & Spencer was labeled the most admired retailer in the UK. According to industry analysts, Tesco was squeezed between discounters like Asda on one side and higher end competitors like Marks & Spencer on the other
During the early 1990s, Tesco went in for a major change in its
On April 13, 2005, the UK-based Tesco Plc., a leading retailer in the UK, announced its annual financial results for the fiscal 2004-05. For the fiscal ending February 2005, Tesco reported sales of £33.97 billion and profits of £2 billion. It was the first time that a retailing company in the UK had achieved profits of £2 billion. For the fiscal 2003-04, Tesco had recorded revenues of £30.81 billion and profits of £1.6 billion, a year-over-year growth of 20.5% in profits.
A decade ago, Tesco's financial position presented a completely different picture. During the 1990s, revenue growth had slowed down and the company's profit margins were under pressure. Tesco had image of being a lower end alternative to Sainsbury's and could not compete with it. The company's stores sold cheap products of very poor quality. In the mid 1990s, the British economy was hit by recession, and Tesco was in deep trouble. In contrast, Sainsbury's announced record earnings and Marks & Spencer was labeled the most admired retailer in the UK. According to industry analysts, Tesco was squeezed between discounters like Asda on one side and higher end competitors like Marks & Spencer on the other
During the early 1990s, Tesco went in for a major change in its