The Successful Path Way To Tesco Commerce Essay

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1919: when Jack Cohen started selling surplus groceries from a stall in the East End of London. 1924: when he bought a shipment of tea from a Mr. T. E Stockwell. The initials and letters were combined to form Tes-co. 1929: Mr. Cohen opened the flagship Tesco store in Burnt Oak, North London.

1930s when Mr. Cohen built a headquarters and warehouse in North London

1932 Tesco became a private limited company.

1947 Tesco Stores (Holdings) Ltd floated on the stock exchange with a share price of 25p.

Tesco showed its expansionary zeal early on by buying up rival shops.

1950 the retailer bought 70 Williams stores and 200 Harrow stores, followed by 97 Charles Philips stores and the Victor Value chain.

1960s.During the 60s supermarkets started to expand rapidly by selling more products in ever larger stores.

1961 Tesco Leicester entered the Guinness Book of Records as the largest store in Europe and in 1968 Tesco opened its first 'superstore' in Crawley, West Sussex. Supermarkets revolutionized the way people shopped and by the 1970s Tesco was building a national store network to cover the whole of the UK, which it continues to expand to this day, while also diversifying into other products.

1974 Tesco opened its first petrol stations, and would become the UK's largest independent petrol retailer.

1979 total sales topped £1bn

1982 sales had doubled to more than £2bn.

1987 Tesco successfully completed a hostile takeover of supermarket rival Hilliard's for £220m. In the 1990s Tesco continued to tighten its grip on the UK with more store openings and an aggressive marketing campaign in an attempt to overtake Sainsbury's as the UK's leading grocer. 1992, the company launched is slogan 'every little helps', followed by the Tesco Value range in 1993. This was followed by the launch of the Tesco Club card scheme

1995, helping Tesco to overtake rival Sainsbury's as the UK's largest food retailer.

1996 saw the retailer introduce its first 24-hour store while it also expanded overseas opening shops in Poland, the Czech Republic, and Slovakia.

1997 Tesco appointed Sir Terry Leahy as chief was launched

2000 and the supermarket continued to expand its range of products, which now includes clothes, electrical and personal finance products.

2004 Tesco entered the broadband market.

2006, the retailer announced ambitious plans to open stores in the US under the name 'Fresh and Easy' and funded by existing resources. Tesco now operates in 13 countries.

2008 the retail giant took its conquest of the UK one step further by buying up some rival Somerfield stores on remote islands in Scotland, giving Tesco a presence in every single postcode area in the country. As it stands there is only one postcode in the UK - in Harrogate in North Yorkshire - which does not have a Tesco.

At present year 2010 Tesco operates

Business Development

Commercial - Clothing

Commercial - Food

Commercial - Non-food Hard lines

Corporate & Legal Affairs

Corporate Marketing

Corporate Purchasing


Group Security & Loss Prevention

Information Technology

Operations Development



Supply Chain / Store Ordering

Telecoms & Tesco Mobile

UK Support Office




Tesco Bank

1.1.1 Mission, values and key objectives


The statement of mission is the reason of a company to exist this present environment of business. It is always productive to feel and firm belief the upper administration entering a fair track in an organization. Charles Handy (1976) says, a good statement of mission inspires employees and provides a home and a direction to put objectives of lower level. The statement of mission must guide employees in fact to make decisions and establish that the organization makes. Statements of mission play a role mattering in the progress of the organization.

Stocks are incorrigible firm belief of what is precise and of the connecting rod and what is urgent and inconsequential. Stocks held in an organization have an important influence on its purposes and ways, that he works. Last but not the slightest he represents institutional philosophy and to support in the organization. Tow, C. (1993)


Mission, purpose or standard that can be practically achieved within the expected timeframe and with the offered resources, In broad-spectrum, an objective is broader in scope than a goal, and may comprise of several different goals. Objectives are the most basic planning tools underlying all forecast and strategic activities. They serve as the basis for policy and performance appraisals, and act as bond that binds the entire organization mutually. Charles Handy (1976)

1.1.2 Mission, values and key objectives of Tesco

Mission of TESCO

The mission statement of TESCO PLC is "Creating value for customers, to earn their lifetime loyalty".

Value of TESCO

The value of the TESCO classified into two groups those are:

No-one tries harder for customers:

Understand customers.

Be first to meet their needs.

Act responsibly for our communities

Treat people as we like to be treated:

Work as a team.

Trust and respect each other.

Listen, support and say thank you.

Share knowledge and experience. access on (01.11.2010)

Objective of TESCO

All objectives of Tesco unify in the one with other one. For instance; business

will not have customers if business does not operate well.

The possessors of part will not invest silver in business, if business

does not have customers. The company will not be capable of affording in

have any employees working for them if they do not have silver to be

invested in business. Therefore the objective of Tesco changes absolutely one period owing to a range of reasons

Some of these reasons are listed beneath:

Competition: Tesco might like to change their objectives, if another

competitor moves in the same area. For instance, if Tesco is

making a profit of per book, their books might not sell, because

the competitor is selling their books cheaper. So in order for the

business to survive they would have to put the prices down. For that,

Tesco will have to change its objectives probably from making a lot of

profit to making enough profit to survive.

Internet: Internet becomes a tendency for each, therefore Tesco having decided to take it on an advantage and decided to make an Internet site by which they can sell online. Tesco will change their objectives to make sure they accept each of the local regions to buy of they, in sale in each in the whole country. It is a social advantage for Tesco.

Diversify into non food: Since Tesco has diversified of being has the store which only sold the food in a supermarket of non-food; they changed their objectives to compete with only the markets which sold the food in the competition with each who sells anything, of cars in the mobile phone lines.

Go for multinational: Since Tesco went shopping at the market by the their way in one international market; they changed their objective of, being the main market in England to be the main market around globe. access on (01.11.2010)

1.2 Definition of Stakeholder

These are specific people or groups with an interest or with a partial stake in products and services which an organization provides. The internal gamblers include the administration, of other employees, the managers, etc. The external gamblers could include purveyors, investors, groups of community and governmental organizations. The customers / customers are gamblers also.

1.2.1 Tesco achieves the objectives of three stakeholders

Tesco operates especially with the following gamblers that those are:

Customers: the meetings of Time of Question of Customer are precious as the diamond which is cut off and polished. The personnel hears customers' views on everything of how they serve customers in their stores in their role in the community.

Personnel: the Personnel gives their feedback to the company by the inquiry of personnel of Point of view, the sessions of Time of Question of Personnel and by the process of Forum of Personnel.

Purveyors: the value of heart of Tesco is " people of pleasure how we like to be treated " and it is something that they apply firmly to their purveyor to grip the report access on (01.11.2010)

1.3 Responsibilities of Tesco and strategies employed to meet them

work as a team

trust and respect each other

listen, support and say thank you

share knowledge and experience

Training and development

Rewards and benefits

Diversity and inclusion


Customer service training

Health and safety

Schoemaker, Paul J.H. (1992)


2.1.1. Definition of Economic System

The economic system can be classified into four main groups those are

Traditional economy: "Where decisions about what, how and for whom to produce are based on custom and tradition"

Free market economy: "Where households own resources and free markets allocate resources through the workings of the price mechanism.  An increase in demand raises price and encourage firms to switch additional resources into the production of that good or service" 

Planned or command economy:  "In a planned or command system typically associated with a socialist or communist economic system, scarce resources are owned by the state (i.e. the government). The state allocates resources, and sets production targets and growth rates according to its own view of people's wants"

Mixed economy: "In a mixed economy, some resources are owned by the public sector (government) and some resources are owned by the private sector. The public sector typically supplies public, quasi-public and merit goods and intervenes in markets to correct perceived market failure"

Charles Handy (1976).

2.1.2 Definition of manufacturing industry

Industrial industry represents a significant part of the industrial area in the developed countries. The finished products can act as a good finished for sale to the customers or as the intermediate subjects used in the process of production

2.1.3 Economic systems attempt to allocate and make effective use of resources of manufacturing industry.

As if I take Tesco as the manufacturing industry there are Different approaches or economies systems are adopted by different countries.

Free market economy: government intervention is kept to the minimum while supply and demand and the ability to pay influence decision making. Most decisions are based on market mechanism. For e.g. Tesco sells their own brand goods and service to their own value (Tesco value food, electronics, other Tesco branded items).

Command economy: resources are centrally planned and controlled by the government. This, however, means that no freedom for individuals to choose what they produce and what they consume for e.g. Tesco has been instructed by government not to sell Tobacco and alcohol under the age of 18.

Mixed economy: A mixed economy combines elements of both free private enterprises and intervention, in varying general external appearance by the state. And also the producing industry will be stable where as the company owned by the public sector (government) and private sector for e.g. the Individual savings Account. accessed on 01.11.2010


2.2.1 Define Social welfare and how to initiative

CSCI (2005) recommends the social welfare is also known as charity programs that lending hand for the needy people and also social welfare helps to develop the environment, education and orphanage. Social welfare does not mean that the deed has to be done by only cash even by planting trees cleaning the surrounding areas donating to the blood campaign visiting to the orphanage to make the children and elders feel happy for example

Social welfare policies (Issuing Free Computer)

Science has invented many things. The triumphs of science are too many to be counted. Some of the latest triumphs of science are really wonderful. They are quite remarkable discoveries. It has made our life easier by the computer a few years ago. It is considered as the brains of the human beings. It has opened up new vistas. These can make any number of calculations, modes of particulars hypothetical situations can be produced & studied.

Further to the above mention statement there are people in some places where they have not even seen the computer for their lifetime so in this modern universe they won't be able to survive for those people issuing free computer and educate them in that field.

2.2.2 Industrial policy initiatives (Insurance policy)

Suitable accounting financial procedure are adopted to demonstrate current financial viability and to ensure there is effective and efficient management of business. It will service users are safeguarded by the accounting and financial procedure of the industry.

Insurance cover is put in place against loss or damage to the assets to the business.

Records are kept of all transactions entered into by the registered person

There is a business and financial plan for establishment, open to inspection and reviewed annually

Insurance cover also act when there is a emergency period such like disaster or loss in the operation

Insurance cover is provided for business interruption costs including loss of earnings as well as costs to operator of meeting its contrast liabilities.

2.3 How above mentioned social welfare and industrial policy initiatives can make an impact on an organization and wider community whose main product is computer games?

Commercial computer games may be fun and engaging but many critics fear that employing computer games within the classroom may have a negative impact upon learning. Some of the key disadvantages and potential pitfalls of using computer games within an educational context are listed below. Excessive gaming can result in low self-esteem and aggressive attitudes and behaviors such as gambling and stealing to finance play. (Ellis 1990; Anderson and Dill 2000) Computer games can distract from learning as players concentrate on the objective of completing the game rather than using them as a learning tool. As Clarke (2003) observes; "computer games require the suspension of disbelief, it may be difficult to retain learning acquired in that state". Excessive time spent gaming could negatively impact on schoolwork (Griffiths 1996). Computer games may have a negative impact upon impressionable young children who are particularly susceptible to copying behaviors and may struggle to distinguish between reality and a computer generated environment. Subrahmanyam et al. (2001) suggest that in order for a pupil's skills to be enhanced through game playing, "players must possess them to some degree already." Stoll (1999) suggests that; time spent in front of a screen could instead be spent, for example engaged in a sport or social activity" Loftus and Loftus, (1983) suggest that excessive game playing can cause "physical symptoms such as soreness in joints." In many games characters and environments tend to be violent and have stereotyped. Such games can encourage negative and socially unacceptable behaviors such as violence and aggression. (Cooper & Mackie 1986) . Some games which are highly engaging and motivational can become addictive (Anderson & ford, 1986), and lead to social isolation, (Selnow, 1984) low self-esteem (Dominick, 1984) and poor social interaction skills. The majority of computer games are gender specific. The vast majority of games are male orientated and this may alienate female gamers and pupils alike.


2.4.1 Define Macroeconomic

The field of economical science known as macroeconomic sets up itself on the national behaviors of an economy, or a regional economy, as a body. The macroeconomic is a very general field that concerns itself principally with the big informers of ladder, as the unemployment rates, and with the model creation that is meant to explain relations between these informers. The macroeconomic also is considered the complement to the microeconomics, that student the actions of individuals instead of the biggest ladders

2.4.2 Impact on the on the UK based Organization by the macroeconomic

As the above cash study referring to the UK Based organization I am willing to take Marks and Spencer Clothing sector and there stake holder to give you a clear picture how the macroeconomic effect.

Sri Lankan economy has registered a strong growth in the first decade of 21st century, despite suffering civil war from 1983 to 2009 and some major natural disasters. Further to this action srilanka has stopped the exporting to the United Kingdom. Similarly recent disaster in Pakistan and china has stopped distributing their cloth materials to United Kingdom.

As provided issue those three countries are unable to export the textile from their own nation but india did not effected so india textile exporters are well aware of the problems the other countries facing so the next step of them will be raising the demand by increasing the value for their product as in the side of marks and Spenser textile sector have no option to go for so they accept the demand of india and marks & Spenser buy there textile

By getting for the higher price Marks & Spencer does not have any option rather than increasing the value from £4 to £7 because of this action marks and Spencer will be losing their customer.

2.4.3 Impact on the on the Stakeholder by the macroeconomic

Dissatisfaction customer

Loosing customer




Risk of losing internal stakeholder

Increasing demand on local suppliers


Increase in the bargaining power of customer and suppliers

Losing the shareholder

Brand of the company


3.1.1 Perfect Competition

The perfect competition is a structure of the theoretical market. It principally is used as a reference point against which the others structure market are compared. The perfect competition is a structure of idealized market that is not observed in the true world. While not very realistic, it furnishes a point of excellent departure that can be used to analyze the true structures of world-wide market. In particular, perfect the competition allocates efficiently resources. The perfect competition is a structure of the theoretical market. The porter, ME (1980)

A market structure in which the following five criteria are met:

1. All firms sell an identical product.

2. All firms are price takers.

3. All firms have a relatively small market share.

4. Buyers know the nature of the product being sold and the prices charged by each firm.

5. The industry is characterized by freedom of entry and exit.

Porter, M.E (1980)

Further to the above mention detail the below examples might help

Mobitel Dialog  

Identical product: Mobitel Upahara Dialog Blaster  

Free Minutes       :   1000 1000

After 1000 to       :           Rs 0.5 Rs 2.0


After 1000 to       :       Rs 0.5     Rs 3.0

Other fixed

After 1000 to       :         Rs 3.0 Rs 3.0

Other Mobile

Monthly Rental    :           Rs 240.0                                     Rs 300.0

Connection           :               Rs 1500.0                                   Rs 1500.0

Share percentage : 47.1% 23.5%

Freedom of entry

And exit : No Yes

Source: Dialog and mobitel websites

The reason why the mobitel doesn't have freedom to exit because they are collaborated with government where as the dialog is owned by Malaysian government so they can exit the business whenever they need.

3.2 The relationship between market forces and organizational responses

The forces of request and of provision that represents collective influence of interested automatically buyers and salesmen on the price and the quantity of the goods and offered services in a market. Usually, the required excess causes prices and the quantity of provision to rise, and the additional provision causes them to fall. accessed on 02.11.2010

For example

We will take a Tooth paste product for Tesco in the UK. I am going to analyze how Boots Oral Hygiene department will respond to the market forces.

Another reason to see the market in the terms of segments of the market is that it allows the matters to concentrate on what it is better to. Each of these corresponding processes are composed from the Mixture of marketing. (Kotler and Dubois 1994)


Price Product base



In the above marketing mix the first 4P's will apply to products base, additional 3P's will be apply to service base company. However Boots is the Product and service base organisation. Tesco provides and take care the people oral hygiene.


The products only are bought if they bring the advantages that the customer wants. According to Antil (1988) every product has a life cycle. It crosses five steps, the Sales grow slowly to the introduction step when the product is new on the market and few the people knows of him. Then the increases of sales quickly during the growth phase, it is now that the competitors between the market and move their own products. Earlier or late the growth of rate slows down. This is the maturity date period. And then the market the at last declines and the product in his current form become not very profitable

Source: Ansoff (1987) Corporate Strategy


The toothpaste of Tesco principally in any Boots chemist, the pharmacy or the pharmacy. Is Toothpaste available in the just quantities, in the just place, to the just time? The item distribution finish that nourish the first matters to the manufacturer, and there also the internal distribution that arrives in the business that furnishes itself. The place implies chains of marketing by that the business attains its customers - obtaining the just products to the customer to the just time. The ultimate goal of any project of distribution is to do the available just items to the customer to the just time


How much the customers of will good to pay? The product evaluation can be illustrated by the gate of Boston. During the life cycle that a successful product will progress cat wild by the step of star and becomes finally a types - the cow. During that treats the capacity of gain of the increases of product. The evaluation project must examine the role products individual play in the coporate strategy of the business, when a product is new and also during the high phase of growth of the cycle of life of product, the price has tendency not to the customers the primary consideration. The request is high.


How Tesco can inform or educate groups of customers about its product. Delivering desired message to target group.

Innovation within the power toothbrush sector. Like buy one toothpaste gets one toothbrush.

Free leaflets, magazine to people about oral hygiene, mouth care etc.

Encouraging better oral hygiene routines

Boots also can promote to the mix, with gum and mints competing in the oral health and health supplement market.

Price promotion to get a competitive advantage

Television Advertising (Short)

3. 3

I have taken the same example of Tesco oral hygiene product competitive strategies and organization behavior

Competitive Analysis Model for Tesco Toothpaste plus

This model also will help to identify the competitive advantage or differential advantage of the product or company

Competitive resources

Factors to take into consideration

Competitive Superiority Test

It's all about research and development for the product before do marketing plan, It determine the competitive advantage. Most marketing department find difficult to convince finance director of that particular company to implement the market plan. The Finance director will argue why should we take risk to developed some product which unsure. Financing directors are act as risk averter.

Imitation Test

It will reduce the research development cost by imitate the product (existing product) rather than find new.

Duration Test

Measures to what extent our resources will be produced in the future. This will include such factors as recruitment and training in relation to competitors.

Appropriateness Test

Tesco have enough supplier for its manufacturing department, Can take ingredients from smith blend for prepare the toothpaste for elderly

Substitutability Test

By introducing tesco Toothpaste Plus, Tesco will be a market leader and make competitive advantage. It's something doing different that their competitors

Role of the Competition Commission and regulatory bodies

The CC replaced the Monopolies and Mergers Commission in 1999, following the Competition Act 1998. The Enterprise Act 2002 introduced a new regime for the assessment of mergers and markets in the UK. The CC's legal role is now clearly focused on competition issues, replacing a wider public interest test in the previous regime. The Enterprise Act also gave the CC remedial powers to direct companies to take certain actions to improve competition; in the previous regime its role was simply to make recommendations to Government. accessed on 11.11.2010


4.1.1 What is International Trade?

Economical interaction among the different nations that imply the exchange of goods and services, that is to say, the exportations and the importations. The principle leader of international commerce is the comparative advantage, that indicates that each country, does not import their development level, can find something that it can produce more inexpensive than another country. The international finance, the payment study between the nations, is a secured sector of international economical science. A summary of international commerce undertake by a special nation is given with the commercial balance. Rugman, in the morning, Collinson, S., & Hodgetts, R.M (2006)

4.1.2 What is economic integration?

The economical integration is the term that is used to describe how the different aspects between the economies are integrated. As the economical increases of integration, the commerce barrier between the markets diminishes. The economy the done more integrate today, between the independent nations, is the European Union and his Euro divides in zones. The degree of economic integration can be categorized into six stages:

Preferential trading area

Free trade area

Customs union

Common market

Economic and monetary union

Complete economic integration

4.1.3 What is global market?

A global market is the force of principal driving behind the finance and the international commerce. It treats concepts on a microphone and macroeconomic ladder. The concepts as the futures, the exchanges and the options are a centralized worry in the terms of the world-wide economy, influencing the investment success in the different markets. While a geographic region can furnish a better value for the certain commodities or the industries, of others reward often the investor with a higher rate of return for the same quantity of flood capital. Rugman, in the morning, Collinson, S., & Hodgetts, R.M (200

4.1.4 The importance of international trade, economic integration and global markets to Farm industry in UK.

We will now tabulate some of these advantages and disadvantages of international trade to farm industry



position to join the world's GDB (making up more than 90% of the world GDP)

International investment controls which limit the amount of foreign direct investment

Reputation all over the world and Leadership

Improve national harmony

Improve the relationship with all the country

Pressure on business to minimise the cost of operation

Political Changes (Unsterilized)

Able to take contracts from other company

Facing difficult to implement Just in time inventory management system

Manage to identify new markets and cheaper resources, so movements of good created new demands for the transportation

Created demands for speed and accuracy

Tariffs - Tax on goods that are shipped between countries

Financial gains to the own country indulging in trade.

Ideological differences may emerge between nations with regard to the procedures in trade practices

More range and quality of goods available for consumers.

Competition both at the international level well as local level.

Quotas that restrict imports to a particular quantity

Technological imbalance

Can obtain Cheap labours in third world countries

Cultural differerences in countries

Political unstable in third world countries

Environmental instability

4.2 Analyze the impact of two policies of the European Union on UK business organizations

Farming policies

Politics of farming of European Union kill more than 3,400 people in the United Kingdom every year, according to a report published by Health Organization World-wide. The common agricultural politics (the CORK), with its subsidies for the fatty foods as beef and as the butter, encouraged unhealthy systems and released early deaths of the disease of heart and the blows, the report discoveries. Under the CORK, the farmers heavily were subsidized to produce excessive quantities of food, to take to a "the beef mountain" and a "the milk lake". According to the report, by the public experts of health to the University of Liverpool, this took to an increase in availability and to the consumption of saturated greases, bringing a health problems legs in to participate country of E.U. As prepared THE E.U. to a major ravale of his firm politics of for the post-2013 eras, the European Commission stresses it 'the net polluting one' the role of farming and recognizes his contribution to the climatic change. During this time, the framework of E.U. underlines more and more the potential one of farming in the climatic change and deliver lessening ecological other the advantages, as the improved grounds and as the water quality. While the Commission stresses that the European farmers must slash the agricultural transmissions of greenhouse gas by at least 20% by 2020, principally while producing the biomass and store the carbon in the ground (EurActiv 16/09/09) - the future CORK can do well the support for the farmers to expose to deliver on the biological variety, to the practices of farming viables and to CARBON DIOXIDE objectives of reduction (EurActiv 27/10/09).A Report recent by the Institute of World-wide watch, a thought reservoir, stresses the potential one of reduction of climatic change of farming also. It disputes himself that the direction of farming and earth did not receive enough attention of the scientists and the politicians, while a number of innovations in the production of food and the earth usage could help the warming of the atmosphere of fight (EurActiv 09/06/09).

4.3 explain the economic implications for the UK of entry into EMU

The European Monetary Union (EMU) is up and running. The choice the UK faces is whether to join and, if so, when. Public opinion, business opinion and professional economists are divided on this issue, as are the main political parties. It is clear that the decision is a political one and that political arguments are critically important in this debate. Monetary unions are usually, after all, preceded or accompanied by political union. Nevertheless, monetary union is an economic issue and economic analysis is vital.

Most of the EMU members get more advantage then disadvantage to join in Euro. Euro creates a large market in the Euro zone. Three core members of EU (Great Britain, Sweden and Denmark) still not participate in European single currency. Many European countries are very excited to join in EU, some of them decided to implement European rate mechanism- 2 (ERM-2). If Britain accept euro then the country poses both advantage and disadvantage. Productivity and living standard will increase if Britain joins in Euro.

European Union

European Union is the union of twenty-seven countries. Most of the members of European Union come to join in EU from European Continent. The origin of European Union associated with foundation of European coal and steel community. They allowed free movement of labor and capital. Free trade also allowed. They abolished internal tariffs among them and set external tariffs

There are some disadvantage due to free movements to Britain there is a risk of high population, job losses for British people, poor service in NHS and transport, risk of abusing the benefit system etc.