Tesco Report Essay, Research Paper

Tesco History. 1 Recent history. 2 Field of Operation & Business

Strategy. 3 Marketing and Promation. 3 Loyalty Cards as a form of

Promation. 4 Customer Base. 4 New Technologies Affecting Tesco?s

Operation. 5 Investment6 Food scares. 6 Tesco?s ethical principles. 7Tesco ? A report?Tesco

HistoryJack Cohen who oringaly owened and started the Tesco

empirour, it was started 80 years ago on a market stall. He was the son of a

Jewish sailor and often the war he started by buying 30 pounds worth of army

surplus rations. He would reliable the cans and tins. The on his first day of

selling this stock at the market he made a profit of one pound. After selling

all of this he had made him self some money to work with. He used this money to

buy goods under handily these were often goods, which other stores would not

sell. ??????????? Tesco as a name was formed when jack

ha bought a large shipment of tea, in 1924. He then made the new labels for

them using the first three letters from the name of the tea suppliers name

?T.E.Stockwell? and then joined these will his own surname this then formed the

name ?TESCO?. He liked this name so much it became the companies own. ??????????? By 1939, his empire had groan and he

had opened up one hundred stores. Jack then went to America for a holiday.

Where he found the stores out there were all self-service, he thought this idea

was great and could save him a lot of money in shop staff wages. He brought

this idea back with him to England and set it up and found this method to be

most successful and then introduced every shop to this. Jack then invited

Critman his son in law to join his business. These pair often clashed over

views as Critman was a businessman and Cohen was a market stall trader. Tesco

then started their long running campaign to expand by buying up cheap chains of

shop. He then owned 400 stores worldwide and had spent one million on this. ??????????? He then also invited Lesley Port

another son in law. Lesley soon stepped in to the roll and had many ideas of

his own. He put forward an idea to create a non-food floor that would only sell

items such as clothes and kitchen items. This was so successful that it

promoted an idea to build a special designed ?super market?. The Tesco stores

then started to reduce prices, this started other companies to take Tesco to

court as they were in breach of the ?retail price maintenance law?(this was

were the suppliers set the prices and not the retailers this is to stop under

cutting on price like Tesco are doing.) He was not charged and the law was

abolish by just one vote. ??????????? In 1959 Ian Malcolm joined the

management as a trainee, he was the first person to join management who was not

family. Then in 1960 a great promotion was introduced this promoted the sales

to grow rapidly these were the ?Green shield stamps? which you were given if

you spent a certain amount of money these could then be traded in for products

such as sowing machines. ??????????? ?In 19970 Tesco was in trouble and had to call in a management

consultant this was because of a hard taking over of ?Victor Vaule.? Because of

this incident Critman decided he had no choice but to resign and steped down.

After a succesful time? the green sheid

stamps wich cost the company 20 000 000 pounds they removed these from

curcalation and plouged the money back in to the shops and repriced all the

goods, this then caused a great deal of intrest. All of this finally incresed

the turn over by 20% and bought Tesco?s out of Trouble ??????????? Jack then found another way to cot

prices on his products by building specily designed wearhouses which supplies

would not divlive to but tescos would send out specil lorrys to collect the

goods by doing this it would cut out the deviley costs. The mangment then

looked at their shops and stores and so dicided they were old fahoned and shapy

looking and were losssing ou because of this. They then started to redisgn the

stores to their present specifaction. This all lead to what we know as Tesco?s

today? Recent history??????????? Tesco is one of Britain?s leading

food retailers and has 586 stores though out Great Britain. From 1992 Tesco has

grown greatly and has increased its market share from 10.4% to 15.2%. This

increse in customers has also given Tesco a large amount of profit. ??????????? Tesco has 164,500

shareholders. Tesco?s profit is about 505 million pounds after the tax has been

deducted; about 50%of this is then distributed to the shareholders as

dividends. The rest ruffly 250 million pounds is held back for investment in

stores and improving sevices for the customers. The average shareholder holds

between one and one thousand shares, but also a large amount of shares are held

by banks, pension funds and building sercertys. Tesco?s share prices have risen

since February 1997 when it was 349p to 586p on the 21st April 1998.

The shares have peaked a high price of 603p. With this growth Tesco?s is now

the largest super market chain. Field of Operation & Business Strategy??????????? Tesco has a wide of operation and

wants every one to buy their products . This is though as it is normally people

who have moved out of their parents home and have accomadtion of their own.

Tesco?s aim is to get full time loyaty from their costemers and to carry on

increaseing the value of their goods for the costemers. They want to under

stand and respect their customers better than other supermarket chains. Their

staff is very important to them so they aim to please their staf for tescos

valuesand also to relises their large controbutions in to tescos empirea. To

increase life for custimers tescos are all ways ready to take sensable risks to

improve this. They also want to make life better and custumers shopping

experance more enjoyable in no way other competative companyscan, they will do

this through using there bring people who work for them and also using

technolagy, intelligence and sales this all should help increase better? value. Tesco have also introged a range of

finciail services this was started in 1997. This includes newly started

pensions, investment sceams, insurance and credit cards.See back for

information investment Tesco?s.Marketing and Promation??????????? Tesco?s

obectives of product promation is to give a large and relivent range of product

promation in all of their stores. This then should be both relivent to both the

customer and the product. They aim to differentiate their market and they try

to make the promation stratergy aplie to the market they are aiming at.Fot

example they would aim chicken shaped as rabbits at the parents with young

children and not the elderly and retired population. They aim to opperate a

long side their normall goods a W.I.G.I.G stratergy. Which is a set of

one-off? promations, it stands for ?When

Its Gone Its Gone.? Which are when Tesco sell leading and expensive brands such

as Calvin Klien, but they sell these goods at very competive prices. They only

have a limeted number thow so it is once they are gone they are gone,most of

these goods are imported from sbroud often from America or other parts of

Europe where they can be percised at a cheaper price. Many company object to

this but the trys to stop them have always failed. ??????????? Tesco?s marketing

is manly used to promate them selfs as a store who represnts their customers

and gives good value for money hilst still providing high qualty goods. This

promation is seperated in too two very deffernt and distintive groups which are

as follows: 1.The name which is advertised

throw national advertising. 2.The promation of the products in side the store

its self, for example specil deals or say Telivitions. This a type of companing

is shown on telivion the national and local Newspapers. This is as ?it has been proven that two third of adults

will react because of seeing an advert.Durind the year 1997 Tesco?s adveryts

appeared 2000times in the news papers. Loyalty Cards as a form of Promation??????????? Loyalty or club cards are also a

form of promation and were first tested in the October of 1993 but when on

national release in the same month of 1995.This has brought the shopper closer

to Tescos. The ponits are earned from shopping trips and slowly are a cumulated

so after a while the customer will have many these are then processed and

turned in to money off vochers which can be spent throw any of Tesco?s stores.

This is so run as a promation to encough people who would normally shop at

other rivle stores to use Tesco as they will recive money off for the more

money which is spent there. This again is promoting their name a company who

rewards the shopper who are loyal to them. This throw does not always work as

many shoppers will have layatly cards at many shops so they recive bonues from

not just shopping at one store, this in all is anther way Tesco aims to get

more people shopping at their stores. See

back for leaflt on club card. ??????????? ?

Customer Base ??????????? ??????????? Many people buy products at Tsco?s

and they aim to attract as many more as is physicaly posible. The customer base

is say about ten miles around the store theis is their main market and is were

most of their customers come from. The people who are attracted to Tesco?s to

shop are the middle to upper class family members like the mother who has

access to or owns a car. This is as the familly needs a lot of shopping for a

week Tesco?s is one place the mother can get it done esily and the car is as

the shopping has to be taken home some why. They also always povide outstanding

sevice such as customer assistance, carry to car service and baby changing

facitys. They look to find an attractive shopping envorent so people will not

find shopping a chore but as a please and in many cases they succeded in this.

They are always trying to expand their customer base so there for will also be

trying to meet all of the customers old and news needs.The main amount of Tesco

shops are in out of town develments such as Church Langly as this is wear they

have found the money to be as there was a hole in the market for them; but now

they are expanding back in to the towns with small shops ?Tesco Express? which

aim to provide convence. They are also providing comption to the petrol

stations as? we have seen the spring up

of ?Tesco metro?s? which not only provide petrol but are also a small Tesco?s

just selling the esention iteams.New Technologies Affecting Tesco?s Operation??????????? New technolage has changed the

world, Tesco espilly has benifited from this especially. It has revolitioned

Tesco?s opperationin all aspects of the word. Computers and computer based

products control most if not all of tesco?s it would not run as smothly with

out it. Computers control ordering from the supplers throw to distribation and

store design. With out this technolage expanding their stores would have been servly

hammpered. ??????????? Computer aided design is used to

plan both the stores and how they fit in to their envorment and also inside the

store, so no space is wasted and products are so placed in the right position.

This then should make the customers shopping experance easyer and less

stressful as all of one type of product are in the same area. This is one of

the technolage advanses which helps the customer but is not seen. Though there

are advanses wich we all see and they help us to hurry up the shopping. Things

like moneters, tills, barcodes and scaners these also help fed back to the head

office computer were new stock can be orderd, take over cheked? and the store sprofomance in genral can be

regulated. All of these have be made possible by the introduction of the modem

alowing esey

communication. Tesco?s have now used this improvement in communtion

by computers to allow people to shop from home at any time on their computers

Using ?Tesco online.? They simply

connect to thye internet and then send over the order and also the time at

which it is to be divlered. This type of shopping is also becoming avaible

throw telivison the first example of this is sky ditaale. Tesco has also

created a free internet package, were the connection to the internet is free and

you just pay for the local phone call. The connection is also used to advertise

them selfs. See internet access pack at back ??????????? It

is also essentail to the club card system as whith out the systemof computers

it would not even be feasible to run it manually. As the detail that has spent

that day and the the information on this is recored on the computer baesed

check out system then the details are transferred over night to the main frame

compers at the head office where it is proccesed and worked out hen the nesseray

informartion is added to the customers accunt. It?s a changing world and with

out computers all of this would not be even drempt of.Investment??????????? Tesco?s group capital expenditure is

841 million pounds, this was mostly ploughed back into Great Britain.the mane

spending in europe was as follows: ??????????? £737m??? Great Britain ??????????? £63m????? Ireland ??????????? £41m????? Central Europe As

is shown above when the capiral expenditure rose in 1997 from 758 million

pounds. The exra 83 million pounds spendding being concentrated in Ireland and

central Europe.This sending has added 23 new stores to the uk. ??????????? Tesco?s has also started an over

seas investment program since 1994 so their name becomes a worldley know

brand.this investment looks like this: ??????????? 1994 France 1995 Hungary and Poland 1996 Czech Republic and Slovakia 1998 Northern Ireland and Thailand But

since the first investment in France in 1994 teco has decided to sell all but

one of their stores in favour of expanding elsewear due to expenditure not

being recoved as quickly as they would have aimed.??? Food scares??????????? Have all retailer been hit by the

affect of food scares? The answer to this is yes. Some times this can be more devosting than others , this is

often caused or esulated from wrong or misleading information most commanly

printed by the press. To combat this Tesco?s have a ?twin track approch.? This

consists of 1. Following trict guild lines to ensure heath and hygene standards

of their supplies. The supplyers of the goods also some times being subject to

Tesco technologests reular and rigorous inspeactions. 2.

To give the customer well informed information on the subject and what the

Tesco store tend to do to combat the situation. ??????????? An example of this the B.S.E beef

crises which with in weeks the sales of British meat in stores had fallan by

54%. Tesco then introducted strict rules on the quilty of the product from the

suppler. The abattoirs then under took viguares testing from Tesco?s. And to

inform the customer the products are marked with the country of oragin also

there was large amounts of information avalble about not mixing raw with cooked

meates and fodd hygine in the home in genrall.After this extensive program the

British meat market is beginning to pick up again so all of the investment from

Tesco?s was worth it for them. Yes food scares to frighten? customers away from a product and the

companys do suffer but if the siuation is handaled properly it can be sorted

out pretty quickly. See leflet on Heathly eating at back by TescoTesco?s ethical principles??????????? Tesco?s is Britains leading food

retailer and has gained this position in the market throw giving good value and

services to the customer. Even thow they are this succeful they still are

commited to their princables and values. This is shown by the fact that since

1997 the companyhas been at the top of the ?christian Aid league table for

ethical commendments.? For Tesco?s to keep this top spot as the leading

succesful retailer, it has to take in to consideration the concenes of each

sector of the community; such as its customer5s , staff , shareholders,

supplies and the local people who live close by. All of these have ideas they

want to see happen and so Tesco has to meet as many of these which are

practical ??????????? ?Conclution??????????? ?Tesco has come a long way since the first time the name appered on

Jack Cohan?s market stall. Tesco have become a large gaint company leading the

market and with the investment being made in to other countrys it will be

intresting to see if they can stay there. There will be compation in the futuer

for Tesco as the recent take over of Asda by Wallmart (a large Europen

supermarket chain) will soon also want the top spot. The technolage has grown

with the company and they too have always stayed up to date so I am sure there

will be intresring ways to shop on the future but am sure even if the super

markets are not here the name Tesco will still supply the customer with the

high standard of goods it expects.