Company Research Report – Tesco

1. Introduction

Tesco is a leading multinational retailer that operates in 12 countries and serves millions of customers each week. As one of the largest employers in the UK, Tesco offers a range of opportunities for internship and placement students to gain valuable experience in the retail industry. The company’s products and services include groceries, clothing, electronics, financial services, and mobile phones. Tesco’s size and structure are vast, with over 6,800 stores worldwide and more than 450,000 employees. The company’s culture and values are centred on customer satisfaction, innovation, and sustainability and they are firmly committed to corporate social responsibility. In terms of financial performance, Tesco has recently shown a positive trend, with a 9.9% increase in revenue in 2021. However, the company faces stiff competition from major players such as Sainsbury’s, Asda, and Morrisons.

Tesco has adopted an approach to sustainability and corporate social responsibility, setting ambitious targets to reduce carbon emissions and waste and promote healthy eating habits. The company’s future strategy includes further expanding its online offerings and reducing its carbon footprint through investment in renewable energy.

Overall, Tesco is a dynamic and innovative company that offers a range of opportunities for interns and placement students. Its strong commitment to sustainability and customer satisfaction makes it an exciting company to work for, and its future strategy promises continued growth and development in the retail industry.

2. Products and services

Tesco is known for its wide range of products and services, offering customers a one-stop shop for all their needs. The company’s core business is grocery retail, with Tesco being one of the UK’s largest and most popular supermarket chains. Customers can find various food and drink products in-store and online, including fresh produce, dairy products, meat, bakery items, and more. Tesco’s clothing range is also popular among customers, with the company offering a range of stylish and affordable clothing for men, women, and children (Tesco Plc, 2023).

In addition to groceries and clothing, Tesco also offers a range of electronics products, including smartphones, tablets, laptops, and TVs. The company’s financial services division gives customers access to credit cards, loans, and insurance, providing a convenient way for customers to manage their finances. Tesco Mobile, the joint venture between Tesco and O2, is also a popular choice among customers, offering a range of mobile phone plans and devices at competitive prices. Overall, Tesco’s wide range of products and services sets it apart from other retailers, providing customers with a convenient and comprehensive shopping experience (Tesco, 2023).

3. Size and structure

Tesco’s structure is designed to facilitate effective management of its diverse business operations and enable it to provide high-quality products and services to its customers across different markets. The company’s UK retail business, Tesco UK, is the largest of its business units, with over 3,000 stores and more than 300,000 employees. This division is responsible for the company’s core business of grocery retail and includes a range of store formats, including Tesco Extra, Tesco Metro, and Tesco Express (Palmer, 2015).

Tesco Europe operates stores in Ireland, the Czech Republic, Hungary, Poland, and Slovakia. The company’s operations in Europe focus on delivering high-quality products and services to customers in these markets, with a range of store formats tailored to meet local needs. Tesco Asia, on the other hand, operates stores in China, India, Malaysia, Thailand, and South Korea. This division is focused on leveraging the growth potential of these markets, which have large populations and significant economic growth.

Tesco Bank is the company’s financial services division, which offers its customers a range of banking and insurance products. This division was launched in 1997 and has become a significant player in the UK banking and insurance markets. The division’s products include credit cards, loans, insurance, and mortgages, designed to meet the diverse financial needs of Tesco’s customers.

Overall, Tesco’s structure is designed to enable effective management of its diverse business operations while also providing high-quality products and services to its customers across different markets.

4. Major competitors

Tesco operates in a highly competitive retail industry, facing intense competition from several major players. Sainsbury’s is one of Tesco’s key competitors, with similar products and services, including grocery retail, clothing, and financial services. Sainsbury’s operates over 1,400 stores across the UK, making it a significant rival to Tesco’s dominance in the market.

Asda is another major competitor, with over 600 stores nationwide. Asda is the UK’s third-largest grocery retailer, offering various products and services, including groceries, clothing, and financial services. The company’s low prices and focus on value appeal to customers looking to save money on their weekly shopping. Morrisons are the fourth-largest UK grocery retailer, with over 500 stores. The company’s focus on fresh food and produce sets it apart from its competitors, attracting customers looking for high-quality, locally-sourced products. Aldi and Lidl are also significant competitors in the UK retail industry, offering a limited range of products at lower prices. These discount retailers have gained market share recently, appealing to customers looking for value and convenience (East and Hogg, 1997).

Overall, Tesco faces significant competition from a range of established and emerging players in the retail industry. The company must continue to innovate and evolve its products and services to stay ahead of the competition and meet the changing needs of its customers.

5. Values and Culture

Tesco’s values and culture are essential to its business operations, guiding the company’s decisions and actions. The company’s core value of putting customers first is its commitment to providing high-quality products and services and ensuring customer satisfaction. Tesco understands that customers are the lifeblood of its business and strives to meet their needs by offering competitive prices, quality products, and excellent customer service.

Innovation is another key value that drives Tesco’s success. The company constantly seeks new and innovative ways to improve its products and services, such as introducing new store formats and online shopping options. Tesco is committed to investing in technology and digital solutions to enhance the customer experience and stay ahead of competitors.

Sustainability is a vital aspect of Tesco’s values and culture. The company is committed to reducing its environmental impact and promoting sustainable practices. Tesco has set ambitious targets to reduce waste, carbon emissions, water use, and responsibly sourced products. The company is also committed to supporting local communities and improving the lives of its customers and employees through various community initiatives and charitable donations. Overall, Tesco’s values and culture are integral to its customer-focused, innovative, and sustainable retailer identity. By upholding these values and embedding them into its business operations, Tesco can continue to grow and succeed while positively impacting society and the environment (Tesco Plc, 2023).

6. Swot analysis

Strengths:

• Strong brand recognition and reputation
• Extensive product and service offerings
• Large international footprint
• Strong commitment to sustainability and corporate social responsibility

Weaknesses:

• Heavy reliance on the UK market, which can be affected by economic and political factors
• Intense competition in the grocery retail sector
• High levels of debt, which can limit investment in growth opportunities

Opportunities:

• Expansion into new markets, such as South America or Africa
• Growing demand for online shopping
• Development of new products and services, such as electric vehicle charging stations in Tesco car parks

Threats:

• Intense competition from major players such as Amazon and Alibaba
• Increasingly strict environmental regulations could increase costs and reduce profitability
• Political instability and economic uncertainty in some of the markets in which Tesco operates

7. Recommendation

Based on the research conducted on Tesco, it is clear that the company is a significant player in the retail industry, with a solid commitment to customer satisfaction, innovation, sustainability, and community engagement. Tesco’s diversified product range, financial services, and reliable online presence give it a competitive edge. However, to maintain its position and continue to grow, Tesco needs to focus on several areas:

• Addressing the competition: As discussed, Tesco faces stiff competition from other major retailers. Therefore, Tesco should continue to invest in technology and innovation to enhance the customer experience, improve its product offerings and pricing, and differentiate itself from the competition.

• Sustainability: Tesco’s commitment to sustainability is commendable, but the company needs to continue to focus on reducing its environmental impact and sourcing products responsibly. Tesco should also consider expanding its sustainable product offerings to meet the increasing demand from customers for eco-friendly products.

• Community engagement: Tesco is firmly committed to supporting local communities, but the company can do more to enhance its community engagement initiatives. By partnering with local organisations and charities, Tesco can demonstrate its commitment to positively impacting society.

• Digital transformation: Tesco’s strong online presence is an advantage, but the company should continue to invest in its digital capabilities to enhance the customer experience and keep pace with technological advancements.

8. CSR

Corporate Social Responsibility (CSR) is a critical aspect of Tesco’s business strategy. Tesco is committed to operating sustainably, reducing its environmental impact, and supporting the communities in which it operates. One of Tesco’s key CSR initiatives is its commitment to reducing its carbon footprint. Tesco has set ambitious targets to reduce carbon emissions by 60% by 2025 and become a zero-carbon business by 2050. The company has invested in renewable energy sources, such as wind and solar power, and has implemented energy-saving measures across its stores and distribution centres. Tesco is also committed to reducing waste and increasing recycling. The company has set a target to achieve zero food waste by 2030. It has introduced a range of initiatives to achieve this goal, such as redistributing surplus food to charities and community groups. Tesco has also introduced recycling schemes in its stores, encouraging customers to recycle their packaging and reducing waste sent to landfills.

9. Conclusion

In conclusion, Tesco is a prominent player in the retail industry, offering a diversified range of products and services, including groceries, clothing, electronics, financial services, and mobile phones. The company’s commitment to customer satisfaction, innovation, sustainability, and community engagement has helped it maintain a strong position in the market. However, to support its growth and success, Tesco must continue to focus on addressing competition, sustainability, community engagement, and digital transformation. By doing so, Tesco can continue to meet the evolving needs of its customers and remain a leading retailer in the industry.

Reference list

East, R. and Hogg, A. (1997). The anatomy of conquest: Tesco versus Sainsbury. Journal of Brand Management, 5(1), pp.53–60. doi https://doi.org/10.1057/bm.1997.29.

Palmer, M. (2015). Retail multinational learning: a case study of Tesco. International Journal of Retail & Distribution Management, [online] 33(1), pp.23–48. doi:https://doi.org/10.1108/09590550510577110.

Palmer, M. (2019). International Retail Restructuring and Divestment: The Experience of Tesco. Journal of Marketing Management, [online] 20(9-10), pp.1075–1105. doi:https://doi.org/10.1362/0267257042405213.

Serwaa Ofori-Nyarko, N., Wang, F. and Annoh, W. (2020). SWOT ANALYSIS: WAL-MART STORES INC. International Journal of Recent Research in Commerce Economics and Management (IJRRCEM), [online] 7(3), pp.32–35. Available at: https://www.paperpublications.org/upload/book/paperpdf-1595065803.pdf [Accessed 27 Mar. 2023].

Tesco (2023). Online Groceries, Banking & Mobile Phones. [online] Tesco.com. Available at: https://www.tesco.com/ [Accessed 27 Mar. 2023].

Tesco Plc (2023). Tesco PLC. [online] Tesco plc. Available at: https://www.tescoplc.com/ [Accessed 27 Mar. 2023].