Tesco's Global Operations: Strategies, Challenges, and Solutions Case Study

Tesco's Global Operations: Strategies, Challenges, and Solutions

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Introduction: Tesco's Global Operations: Strategies, Challenges, and Solutions

Tesco is a multinational grocery and general merchandise retailer that was established in 1919 in Hertfordshire, England, in the United Kingdom. Its headquarters are located in England. Tesco Company is currently active in 11 different countries across Asia and Europe, assisting over 80 million customers every single week. The wholesale and retail sale of a wide variety of goods, including food, electronics, apparel, and home goods, is the primary focus of this organization's operations. Tesco is a major player in the sector of the retail industry that deals with universal products. Additionally, the corporation has a robust presence on the internet and offers a variety of online services, including mobile banking and payments, as well as online shopping. As of the year 2021, the corporation will have over 6700 locations across the world and will have employed over 450,000 individuals. According to Biliska-Reformat et al. (2019), Tesco has become an industry leader in sustainability and has set goals to reduce the company's contribution to greenhouse gas emissions and the amount of food that is wasted.

Figure 1: EVERY LITTLE HELPS Tesco Black Friday 2016 deals: best bargains to look out for

The various operations management concepts, models, and techniques

The several OM concepts, models, and techniques are discussed below:

• Supply Chain Management- Tesco could utilize supply chain methods, for instance, vendor-managed inventory (VMI), to improve its inventory (Dogru, 2020). VMI permits the company’s suppliers to handle their inventory stages, which may minimize inventory goods prices and improve supply chain effectiveness.
• Quality Management- the company could utilize Total Quality Management (TQM) values to develop the quality of goods and services. TQM concentrates on constant improvement and consumer fulfillment and may assist Tesco in recognizing and dealing with quality concerns.
• Inventory Management- Tesco may utilize Economic Order Quantity (EOQ) model to maximize their inventory standards. According to EOQ models, it decides the best order amount and rearranges points to reduce inventory product prices and minimize stock-outs.
• Lean Management- the company could implement Lean values to decrease waste and enhance efficiency in their work. Such as, Tesco may utilize the value stream mapping (VSM) model to recognize waste activities in their procedures and reduce them.
• Six Sigma- Tesco could use Six Sigma models to improve procedure efficiency and minimize fault. Six Sigma concentrates on data-directed decision management and constant development and may help the company recognize and address issues' core details.
• Capacity Planning- Tesco may employ capacity planning methods, for example, aggregate planning to maintain their resources proficiently (Moura, 2021). Aggregate planning supports Tesco in stable demand and supply and successfully allocates resources.

Recommendations

The Tesco Company may put into practice strategies that aim to improve their operations by increasing their productivity, accomplishing their goals, and increasing their profitability. It is able to make use of strategies like Lean Management, Overall Quality Management, and Six Sigma (Upadhyay, 2021). It is also possible for it to improve its management of its inventory and supply chain by making use of concepts such as the Economic Order Quantity and the Bullwhip Effect. Tesco may be able to improve efficiency while simultaneously reducing waste and increasing customer pleasure if it implements the relevant models, concepts, and practices.

Address the critical issues facing the organization when managing its operations

There are some issues faced by Tesco when handling their operations discussed below:

• Balancing supply and demand- Tesco could utilize capacity planning and order ambiguous methods to predict changes in demand and allot resources efficiently.
• Efficient inventory management- Tesco may utilize inventory management techniques, for example, EOQ and Just-in-Time (JIT) to improve inventory stages and decrease product costs (Dhyana, 2022). The company can also execute VMI or Cooperative Planning, Forecasting, and Reformation (CPFR) models to decrease stock-outs and better goods availability.
• Digital transformation- Tesco could spend on digital technologies such as phone applications, e-commerce networks, and touchless payments to improve its online accounts. The company can also utilize data interpretation to improve understanding of consumer behavior and tastes and adapt its goods and services appropriately.
• Supply chain management- Tesco may better its supply chain network by executing lean practices, for example, material and information-flow mapping, to reduce waste and enhance efficiency. The company could utilize the Bullwhip Effect technique to reduce the effect of demand shifts on the supply chain.
• Worker training and development- Tesco may spend on training and growth programs to improve its OM performances (Chen, 2022). By offering workers the essential abilities, Tesco could better its goods and services quality, minimize errors, and enhance efficiency.

Figure 2: 12 Components of Operations Management

By dealing with these important issues and executing these solutions, the company could better its OM practices and increase its performance in the market.

Recommendations for the organization to deliver a better value proposition to its customers

The suggestions outlined over must assist Tesco in delivering an improved value proposition to their consumers.

• By improving its OM practices, the company could enhance efficiency, decrease waste, and improve consumer satisfaction.
• Such as, by utilizing demand anticipating and inventory management methods, Tesco may ensure that goods are accessible when consumers need them (Rosnizam et al., 2020).
• By spending on digital technologies and analytics, Tesco could adapt its goods and services to meet better consumer requirements and preferences.

The critical issues relating to organizations’ choices in internationalizing their operations

Tesco's internationalization tactic has been the main driver of its development and success. Though, this strategy has been assisted by various vital issues which Tesco wanted to face that are:

• Cultural variations:Tesco wanted to navigate by cultural variations in the nations wherever it operates. These variations have intimations for Tesco's human resource management, marketing, and OM practices (Chkanikova, 2021). The company had to adapt its tactics to the local society to ensure they were effective.
• Political and legal system:Tesco works in diverse countries with diverse political and legal policies. This makes issues for Tesco relating to approving local constitutions and rules. Tesco must spend in acknowledging the home's political and lawful surroundings to assure agreement and diminish risks.
• Supply chain management:Tesco must maintain its worldwide supply chain successfully to ensure that goods are accessible in every one of its outlets globally. This needs coordination and partnership with suppliers and buyers in diverse countries, which may be difficult due to diverse time zones, traditional variations, and languages.
• Competition: the company faces extreme competition in multiple nations wherever it works. Tesco has distinguished itself from its opponents by providing unique goods, services, and consumer experiences (Li, S., 2023).

To deal with these critical concerns, Tesco has taken various actions. For instance:

• Tesco has spent time building local groups with expertise in local languages, markets, and cultures.
• Tesco has expanded its supply chain networks, allowing it to handle its worldwide supply chain successfully.
• Tesco has collaborated with local suppliers or buyers to ensure the accessibility of products in its outlets.

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Conclusion

According to the findings of this paper, a comprehensive understanding of the complex aspects that influence an organization's global expansion is required in order to conduct an analysis of the significant challenges that Tesco encountered while nationalizing its operations. Strong consulting abilities and the ability to think critically are required in order to develop viable answers to these problems. Having these talents, on the other hand, enables one to identify the root causes of problems and devise analytical and practical solutions to those problems. Tesco should continually invest in local groups, partnerships with distributors and providers, and supply chain networks in order to successfully handle the cultural differences, competition, and supply chains that are present in the other country markets. This can be accomplished by advocating that Tesco internationalize their operations.

References

Bilińska-Reformat, K., Kucharska, B., Twardzik, M. and Dolega, L., 2019. Sustainable development concept and creation of innovative business models by retail chains.International Journal of Retail & Distribution Management,47(1), pp.2-18.

Chen, J.J., (2022). Tesco Plc. In International Cases of Corporate Governance (pp. 27–44). Singapore: Springer Nature Singapore.

Chkanikova, O. and Sroufe, R., 2021. Third-party sustainability certifications in food retailing: Certification design from a sustainable supply chain management perspective.Journal of Cleaner Production,282, p.124344.

Dhyana, B. and Gupta, O., (2022). Evaluating the management model of information systems and its applicability in enhancing business operations in Tesco. Central European Management Journal,30(3), 353–357.

Dogru, A.K. and Keskin, B.B., 2020. AI in operations management: applications, challenges, and opportunities. Journal of Data, Information, and Management,2, pp.67-74.

Li, S., Leszczyc, P.T.P. and Qiu, C., 2023. International retailer performance: Disentangling the interplay between the rule of law and culture. Journal of Retailing.

Moura, M.B.L.D., 2021.Equity Research in Food & Retail Industry-TESCO PLC(Doctoral dissertation, Instituto Superior de Economia e Gestão).

Rosnizam, M.R.A.B., Kee, D.M.H., Akhir, M.E.H.B.M., Shahqira, M., Yusoff, M.A.H.B.M., Budiman, R.S. and Alajmi, A.M., 2020. Market opportunities and challenges: A case study of Tesco.Journal of the Community Development in Asia (JCDA),3(2), pp.18-27.

Upadhyay, A., Kumar, A. and Akter, S., 2021. An analysis of UK retailers’ initiatives towards circular economy transition and policy-driven directions.Clean Technologies and Environmental Policy, pp.1-9.