Tesco's operations stategy
Executive Summary
Operations Management plays a key role in achieving the main performance objectives of Tesco. Whether the current operation objective is to improve customer service or to increase profitability, the way in which Tesco utilises its resources will have a significant impact. As a consequence, there have been a number of innovative developments in Operations Management that have sought to make use of Tesco resources in a significantly new manner in order to make a big step change in performance. Tesco is an successful example of operations management, however, through our investagation they also have some demerit in their opertions management need to be improved.
1. Introduction
The Institute for Retail Studies's research (2003) reports that retail industry in the UK is quite competitive, dynamic, and innovative in recent years. And grocery retailers such as Tesco, Sainsbury's, Asda etc. are all compete on price, quality, range, and service in order to strive for business success. Within this intense competition of retail industry, Tesco can stand at market-leading position in recent years has mainly come from its strategies of expanding overseas, shifting to 'higher margin' non-food market and maintaining a strong core UK business (Corporate Watch UK, 2004). And its UK success has been built on low prices, cultivating customer loyalty, unbeatable quality, offering a range of different store concepts and expanding into retailing services (Tesco Plc annual review, 2005). Moreover, according to Business Engine, Inc. (2006), it reports that close control of internal resources and diligent monitoring of all expenditures are also the critical aspects for Tesco to maintain its leading position in the market. Therefore, Tesco's business success indicates that effective operations strategies have played a vital part in supporting and driving its whole business objectives which is "to create value for customers to earn their lifetime loyalty".
Accordingly,
Operations Management plays a key role in achieving the main performance objectives of Tesco. Whether the current operation objective is to improve customer service or to increase profitability, the way in which Tesco utilises its resources will have a significant impact. As a consequence, there have been a number of innovative developments in Operations Management that have sought to make use of Tesco resources in a significantly new manner in order to make a big step change in performance. Tesco is an successful example of operations management, however, through our investagation they also have some demerit in their opertions management need to be improved.
1. Introduction
The Institute for Retail Studies's research (2003) reports that retail industry in the UK is quite competitive, dynamic, and innovative in recent years. And grocery retailers such as Tesco, Sainsbury's, Asda etc. are all compete on price, quality, range, and service in order to strive for business success. Within this intense competition of retail industry, Tesco can stand at market-leading position in recent years has mainly come from its strategies of expanding overseas, shifting to 'higher margin' non-food market and maintaining a strong core UK business (Corporate Watch UK, 2004). And its UK success has been built on low prices, cultivating customer loyalty, unbeatable quality, offering a range of different store concepts and expanding into retailing services (Tesco Plc annual review, 2005). Moreover, according to Business Engine, Inc. (2006), it reports that close control of internal resources and diligent monitoring of all expenditures are also the critical aspects for Tesco to maintain its leading position in the market. Therefore, Tesco's business success indicates that effective operations strategies have played a vital part in supporting and driving its whole business objectives which is "to create value for customers to earn their lifetime loyalty".
Accordingly,
References: Austin, N. (2004). Exceeding Expectations Global retailer Tesco known for IT vision (updated 2005, accessed 15th February 2006) Corporate Watch UK (2004) (updated2004, accessed 13th February 2006) Datamonitor Europe (2004) Fernie, J., and Sparks, L. (ed.) (2004). Logistics and Retail Management Insights into Current Practice and Trends from leading Experts, 2nd Ed., London: Kogan Page. Infoconomy Ltd (2005), Re-tooling IT. (updated 2005, accessed 25th February 2006) Institute for Retail Studies (2003) Johnston, R., Chamber, S., Harrison, A., and Slack, N. (2003). Cases in Operations Management. London: Prentice Hall. Kočevar, M. (2003). Tesco Success Story - An Effective Supply Chain by using the most appropriate Information Technology (updated 2005, accessed 20th February 2006) Krajewski, L Nice Group (2006). Tesco and Business Systems UK Ltd work together to ensure a consistent approach to quality management. (updated 2005, accessed 25th February 2006) Slack, N., Chambers, S Slack, N., Chambers, S. and Johnston, R. (2004) Operations Management, 4th Ed., London: Pitman Publishing Tesco Plc (2004) Tesco Plc Annual Review ad Summary Financial Statement Tesco Plc (2005) Tesco Plc Annual Review ad Summary Financial Statement. Cheshunt. Tesco Plc (2005) (updated 2005, accessed 22nd February 2006) Tesco Plc (2005) (updated 2005, accessed 22nd February 2006) Tesco Plc (2005) (updated 2005, accessed 22nd February 2006). Morrisons 2958 2238 313 5509 Sources: Tesco web site, 2006