largest supermarket retailer. Customer feedback forms, in-store discussion groups and a continuous analysis of sales figures has enabled Tesco to recognise the importance of the key principles of price, quality and service.
The company owes its success to its emphasis on meeting changing customer needs through service and innovation, while maintaining its commitment to value and quality.
Underlying its business success is a commitment to upholding certain values and working and working principles and seeking continuous improvement in its ethical performance.
Companies are part of the society in which they operate and must take note of the interests and concerns of many different groups. For Tesco these includes its customers, its stuff, its shareholders, its suppliers and people in the local communities close to its stores and in the world beyond. Each group has expectations of the company which Tesco has to meet and manage if it is to maintain its position as a leading and successful retailer.
Tesco must serve its customers by providing the goods they want and the service they expect. By meeting customers needs better than its competitors, Tesco earns profits and creates value for its shareholders.
Tesco, like other large companies, however, recognises that its wider reputation depends on other things such as its stuff relations, its attitude to the environment, its support to the community, and its relationships with suppliers. Also as a leading food retailer, the company must ensure that its provides products which are safe to eat or use, as well as giving customers advice on matters such as healthy diets.
Tesco's main business objectives:
. to provide customers with outstanding, naturally delivered, personal service
. to earn the respect of its stuff for the values and appreciate their contribution
. to understand customers better than anyone
. to be competitive even on the basics
. give customers a broad range of strong relevant promotions in all departments of the store
. give customers what they want under one roof
. provide an environment that is easy and pleasant to shop in
. upgrade existing stores to the standards that is expected from Tesco
. to recognise Tesco has brilliant people, use this strength to make customers' shopping enjoyable in a way no competitor can
. use intelligence, scale and technology to deliver unbeatable value to customers in everything Tesco does
. to maximise profits to provide high returns for shareholders
. to increase sales or market share as much as possible
. advertising should appeal to all customers in a relevant
Tesco's main mission statements:
. To be world's best and largest supermarket retailer.
. Completely increase value for customers, and to earn their time loyalty.
How Tesco is going to achieve these objectives?
What Tesco expects from its staff in order to achieve this?
. Are all retailers, working as a one team.
. Trust and respect each other.
. Respect all customers, the community, suppliers and the competition.
. Strive for personal excellence in everything 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 and listened to: and their knowledge is shared, so that it can be used.
. Have fun, celebrate success and learn from failure.
What is the comment Tesco has to its customers?
Tesco customers want the best possible value for their money. Tesco is determined to offer its customers quality products, good service, attractive stores and low prices.
To meet this aims, Tesco:
. works closely with suppliers to ensure products are of the highest quality and are delivered to stores in the best possible condition.
. makes sure that its staff are committed to giving the best possible quality of service.
. aims to create in its stores an environment which makes shopping easy, interesting and comfortable.
For example, in 1993 Tesco introduced Value lines, which offer exceptional value for money, followed by New Deal Pricing on leading commodities and brands in 1994. In 1996, Tesco introduced Unbeatable Value with the pledge that nobody would sell the equivalent product for less price.
All organisations require resources to carry out their functions. One way of judging the success of a business is to compare the resources it uses with the value of the product that results. For example if it is a small business running by it's owner, for example small shop, so it doesn't need any workers, large piece of land and big capital, owner can work alone. But if it is a very large business like car manufacturing so it requires a lot of workers, very large piece of land and big capital.
The resources of the business.
One way of considering the resources used by a business is to classify them into the factors of production. The main capital of production are capital, labour and land.
- CAPITAL refers to any manufactured product used by the business to make other products. This category therefore includes all machinery, vehicles and office equipment used in businesses. It also includes the company's buildings.
- LABOUR is the human resources used by business organisations during production.
- LAND - site on which the business is located and natural resources it might use.
- ENTERPRISE - owners and shareholders.
All businesses combine factors of production as an essential part of their production activities. To combine these factors, to engage in production and to achieve their objectives organisations undertake a number of functions. The major business functions include:
. human resources
. research and development
Business requirements for functional areas depends on its size, for example small business might merge many of these functions within their administration department, with responsibility in the hand of one or two people. As a business grows the number of people required to carry out these functions increases.
The financial function.
Extensive use of IT
Customers Auditors Inland
(price list) (accounts)
Custom & Excise
to tax liability)
Figure 1.3: The financial function
A separate department normally carries out the finance function of the business. The finance department carries out a number of key activities:
. records all financial data
. chases up slow payers
. collects payments from customers
. provides information to external bodies
. analyses costs
. advises board of directors
. monitors and analyses financial data
. advices managers and budget holders
Production covers all the activities that must be undertaken to make the firm's products, from the receipt, of raw materials through to the output of the final product. The production function concentrates primarily upon planning and controlling the various stages of production so that the most efficient use is made of business resources.
Production manager responsible for:
. maintaining supplies of components and raw materials to ensure continuous production
. ensuring that the precise requirements of customers are met
. monitoring quality to insure that finished products meet the quality standards expected by customers
. using resources - people, machinery and production space - as efficiently as possible to make the business competitive in the markets in which it trades.
One of the most important issues in production is quality. Modern businesses compete just as strongly on the quality of their goods and services as they do on price.
For example it is vital for a washing machine manufacturer to produce a high-quality product. If the machine is not reliable or does not have a wide