A Detailed Report For Tesco Commerce Essay

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I will be looking at the objectives, organisational structure, culture and communication channels that operate within the business as well as explain how quality assurance and control systems help the business to add value to its products.

I will also consider alternative methods of quality assurance and control and how well the business is meeting its objectives.

This coursework will also explain the impact of ICT upon the internal and external communications of the business.

After these have been looked at an examination of how these factors inter-relate in a way that can affect the success of the business will be considered.

Tescos activities over the past years

Its main activity is the selling of different types of goods to consumers, most of which are food items. This year sales in our core UK market have grown by 7.9% and underlying operating profit by 6.9% reinforcing its position as the number one food retailer in the UK.

Tescos growing success has been down to the ever-rising percentage of people going into tertiary area of the industrial sector, which is mostly concerned with the performance of services for customers i.e. Teachers and bankers. Today services produce more than 70% of the value of all goods in the USA, Britain and France and just over 60% in Germany and Japan. Most of these changes are down to the revolution of computers and ICT in the 21-century has caused people to concentrate more on their creative skill now that they are released from their mechanical functions.

Tescos' strong UK performance allows it to achieve its main aim of expanding into retailing services and international markets.

Tescos ability to expand is due to its ownership of business, which will be explained under the subheading below.

Type of business

Tesco is a public limited company. This means that it members of the general public and other businesses and financial institutes can buy shares from its company. This enables it to raise a lot of capital.


The share holders at Tesco have a limited liability

The shares in the company can be easily bought and sold.

Tesco can easily raise its amount of capital needed for expansion and development.

Tesco benefits from the economy of sale; hence they have cheaper borrowing and bulk purchasing.

The amount of capital that can be raised due to its ownership of business allows tesco to achieve its set aims and objectives (expanding sales to an international level).


The founders of Tesco can loose control of the company since shares can be bought on the stock exchange

Since Tesco is such a large company it can become difficult to manage efficiently.

Starting a plc is expensive as compared to other types of businesses and requires a great deal of documentation.

Aims and objectives of Tesco

Its aims is to achieve their core purpose through core values, which are

To earn the respect of their staff for these values and to appreciate their contribution to achieving them.

To understand their customers better than their competitors do. e.g. no. 1 for service these consist of six steps in trying to make the customer service better. They are;

Clean and tidy stores

Take the customer to the product

Every customer offered helps SOS. Say hello, offer help, say goodbye.

One in front at the checkouts- this means if there are more than one person in front of you at the checkout then Tesco will open another checkout until ALL checkout have been open, this means they cannot do anymore and they have fulfilled their promise.

Help customers to bag their shopping, when the customer reaches a checkout the operator will ask him if they wish to have their bags packed, if they do another member of staff e.g. shop floor will be notified and will then go to the checkout. (Not all customers want their bags to be packed as they fill they will be able to do it themselves)

To be energetic and innovative and to take risks in making life better for their customers.

To recognise that they have brilliant people working for them, and to use this strength to make customer shopping enjoyable in a way that no competitor can.

To use intelligence, scale and technology to deliver unbeatable value to customers and every thing they do.

In other to achieve these core purposes, Tesco staff are expected to provide certain functions;

Tesco staff

Are all retailers, working together as one team

Trust and respect each other

Respect all customers, the community, suppliers and the competition

Strive for personal excellence in every thing they do, leaving no stone unturned in order to get it right

Are encouraged to take risks, give support and do not blame others.

Are rewarded for creating value for customers.

Are talked to and listened to: and knowledge is shared so it can be used.

Have fun, celebrate success and learn from failure.

Are Tesco achieving their objectives?

I can say that Tesco are achieving their objectives, this is because in the annual report it shows that sales are at an all time high to £10.1 billion where as in the period last year they were down to 10.7 %, this shows many more people are coming to shop in Tescos' they obtain their objectives as many see Tesco are doing everything they say they e.g. no.1 for service.

Over the past few weeks Christmas stores right across Europe experience the most busy time in the year, it is then we can see if the company is making money, one particular store set targets of the amount of money they hope to receive during the busy season every day their sales total were either doubled or tripled. In order for Tesco to remain no.1, they must keep renewing their objectives, in other to do this they must train their staff, with the profit received the company will make decisions on what to do with the money, they may decide to build a new store, upgrade new ones etc, here they are helping customers through every aspect of their shopping experience.

By upgrading stores and building new stores, Tesco are achieving their objective(s),

To be energetic and innovative and to take risks in making life better for their customers.

To understand their customers better than their competitors do. e.g. no. 1 for service these consist of six steps in trying to make the customer service better. They are;

Clean and tidy stores

Take the customer to the product.

Every customer offered help.

One in front of the checkouts.

Help customers to bag their shopping

In order to achieve these objectives they are investing money in training their staff to meet customer needs;

To recognise that they have brilliant people working for them, and to use this strength to make customer shopping enjoyable in a way that no competitor can.

To earn the respect of their staff for these values and to appreciate their contribution to achieving them

Tesco achieve their objectives by giving staff extra holidays or having an award scheme. This is where staff nominate others who they think have done a little extra.

Organisational functions

Tesco combines factors of production (land, labour, capital, enterprise) to produce their products and services. Combining these factors means they carry out a range of functions:



Human Resources



Research and development

Finance and Accounts

The accounts section must keep a detailed record of all money paid in and out and present the financial balance sheet, sources and use of funds, profit and loss accounts and other financial records at regular intervals.

The financial department are broken down into two main subdivisions.

Financial accounting function

They are responsible for keeping record of all events that have taken place in the business as and when they happen, and to provide financial summaries of what has happened (e.g. balance sheet). They are also responsible for producing periodic records such as annual reports for discussions at meetings of directors.

Management accounting function

They provide managers with figures to help them with decision-making. (e.g. relating to costing and pricing divisions)

Within the department of finance and accounts there are sub functions such as cashier's department, which handle transactions and payments to banks and wages departments, which is responsible for supervising payroll.


At tesco the production aspect of the company are responsible for making sure the raw materials are processed into finished goods accurately. The productions management is often referred to as the operations management. Many operations are concerned with dealing with the customer in service organisation hence they are referred to when discussing the function of making sure that the core activities of an organisation are carried out smoothly.

In manufacturing companies the production function is split into five main subsections:

The production and planning department

The comparator

The purchasing department

The stores department

The design and technical support department

The works department

Human Resources

Human resource management has largely replaced the old-fashioned word "personnel", which was used in the past.the type of work covered by the human resource management may include the following;

A policy-making role - establishing major policies that cover the place and importance of people in the society.

A welfare role, concerned with looking after people and their needs.

A supporting role, concerned with helping other functional managers to develop their work (e.g. helping the production managers to appoint and train new production line staff.

A bargaining and negotiating role, concerned with acting as an intermediary between different groups and interests (e.g. between trade unions and management)

An administrative role, concerned with the payment of wages, the supervision and implementation of health and safety laws etc.

An educational and development role, concerned with helping in the development and education of workforce etc.


The marketing function is responsible for identifying, anticipating and satisfying customer requirements profitably. This will involve carrying out market research to find out who makes up a particular market, what they want, where they want it, how they like it and at what price.

Some examples of marketing activities are market research, advertising, packaging, promotions, distribution and pricing.


This department deals with enquires, communicating messages and producing documents for workforce. They are very important because they service the work of the organisation. Problems tend to arise when this department doesn't function properly.

Many large firms have central offices that are responsible for controlling key aspects of the firm's paperwork. The modern offices focus on management of work through ICT. The responsibilities of the office manager include;

Take responsibility for administration staff and train them.

Co-ordinate the supply of office equipment and stationary

Ensure that documentation, letters and administrative work are done to standard.

Provide statistics for the board of directors about the effectiveness of existing administrative practice.

Provide advise to different departments.

Research and Development

At Tesco the research and development has strictly commercial functions further the company's business aims by creating new and better ideas and providing expert services. Without these tesco as a company cannot hope to remain successful.

For this department a certain portion of tesco profits is allocated. The R&D work should always be related or linked to the company's aim in order for it to succeed.

How these functions inter-relate

The inter-relation of these functions leads to the excellent running of Tesco. A typical example of how these functions are combined to achieve a goal can be seen in the boom in doughnuts was handled.

The sales assistants at Tesco noticed that recently the number of doughnuts made were not enough to satisfy the demand from customers. The staff informed the production department about the need for more doughnuts, they in turn reported to the Human Resource manager to request for more staff to deal with the increase in the production of doughnuts, as the staff available were not coping. The Human Resource department inquired from the Financial department as to weather the company had enough funds to pay for more workers. They replied that there were enough funds but needed a statement from the Marketing department saying if the craze for doughnuts was just a passing phase or a permanent change in the customer demands.

The ways, which these departments inter-relate make the company successful in meeting its aims and objectives if they are performed efficiently.