Tesco As A Food Retailer example essay topic

Swot analysis of Tesco plc We all know Tesco as a food retailer, and we know that they are in constant competition with other retailers such as Sainsburys and Asda, yet we do not know much about what goes on beyond the shelves and the tills, the marketing plans and the day to day tactics that have to be devised to stay the number one food retailer in the United kingdom today. I am going to analyse Broughton Parks Tesco and their possible competitors Swot Analysis Firstly, four main goals, under which these particular four are Strengths: 1. Tesco is about a strong UK core business. Last year the industry saw some very marginal growth as a whole, however Tesco continued to grow beyond the market by offering better value for money and through getting cheaper.

2. To be as strong in non-food as in food. The market for non foods (such as clothes entertainment cleaning products) is worth seventy five billion pounds in the UK today. You can see through the growth of their dot. com business which now has over four hundred and fifty thousand users and is the largest grocery online retailer in the world, and through the success of tes cos personal finance with over 1, 5 million customers that they are making some real in roads into non foods. 3. International growth, Tesco have 30% of their stores outside the United Kingdom and plan to make it 45% by the end of next year, and will be approached through central Europe and trough Asia 4.

To have the most loyal and committed staff. Tesco as a company uses clear values to underpin what they do. Their core purpose is based on "Creating value for our customers to earn their life time loyalty? Tesco have invested one billion pounds Tesco believe that one of they offer the best quality on a broad range of products and believe that they offer the best value. They have invested one billion pounds since 1996 on the campaign to reduce prices to customers and that continues to build as they go in to 2004.

They offer outstanding customer service, every customer is offered help at the checkout. Location and convenience is another reason to choose Tesco, they have introduced a staggering 200 in the last two years that stay open 24 hours a day and they plan another 1540 new express stores, which are Tesco mini stores linked on to es so garages and forecourts. Another key difference for Tescos is that they do not market to the average customer. Instead they use Customer Insight, to drive their actions, and to focus their starting point for all the different strategies. They have Club card segmentation data, which can give a real insight into Customer profiles and their shopping habits. Tesco use the Organics, Finest and Value brands to deliver to customer needs.

Their Customer Plan delivers the customer part of their strategy. It's an annual activity plan, and is an agenda for customers with these projects forming part of category plans. It is designed to drive trade, and to improve the shopping experience for customers. The Operational Plan is an annual activity plan, including for example upgrading, replenishing systems and better ways to build stores for the future. Lets now look at our store portfolio in the U K. This can be broken down into Hypermarkets, Superstores, and High street & Express stores. Tesco hypermarkets, of which some in the UK are now up to 100,000 sq. f t. such as Peterborough, Watford, have been designed to a footprint which is being used world-wide across our business.

They have 277 superstores including Broughton Park, 81 compact superstores, 27 Express stores, 41 Metro stores, and 229 other stores (mainly high street stores, which Chester's Tesco is). They also have Tesco. com, which has no walls so they could sell houses, garden furniture and trips to the moon! Looking at the number of stores in each category you can see that we have got 659 stores in total. Moving onto the Company Overview and Tesco figures, turnover is tremendously healthy, at nearly?

0 billion, including VAT, just in the UK, representing nearly 17% in market share. During the 1990's when Tesco started their international expansion, you can see that initially in central Europe it had always been through acquisition. Tesco acquired Global (41 stores) in Hungary, (32 Stores) in Poland, Kmart (13 stores) in Czechoslovakia, and in Ireland we bought 110 stores in 1997. Tesco acquired Lotus in 1998 in Thailand and then 1999 went in to a joint venture with Samsung in Korea. In the meantime in 1995 we became the UK's first retailer and last year the Group turnover reached?

0 million, Tesco are also now looking at Japan and China to continue worldwide expansion. They plan to have new space of nearly 1.5 million sq. ft. in 2004 so the growth does not just stop there, Tesco's overseas strategy, focuses on adding value to the customers who are living and working in those Countries and developing the hypermarket concept world-wide. Tescos world-class hypermarkets blue print is about having a common layout, common systems and common operations globally and then applying to that local people, and local marketing and services. Tesco now has 37% of its space overseas and the total number of hypermarkets will be 130 by the end of 2002.

Tesco will have 100 hypermarkets in four years, which will not only benefit shareholders but the global economy too. Tesco now operates in four Countries in Eastern Europe and no other retailer is in all four of those Countries. It's been extremely important to work with the regional and the local staff there, as they have got so much knowledge about the local produce and products. Tesco now employ over 27000 people in central Europe alone. Southern Ireland now has 75 stores and was acquired in 1997. The focus here has been on re branding since the acquisition, with 3 new stores opened in 2002, and there will be a further 6 new stores opening there this year.

Tesco has now got worldwide sourcing in Hong Kong, India and Thailand, to assist in the development of the international business, 30% of tes cos products are sourced internationally and continue to grow. To conclude, Tescos international business is an incredibly important part of the Tesco business and Tesco future strategy. Tesco will have 130 hypermarkets by 2001, with 45% of space overseas by 2002 and the International sales target was? million by 2002, which was met. The way in which tes co devises its Swot, is very good, Now all stores will want to have the four goals stated above, these are set out by the directors, but tes co staff can also help with view point, a questionnaire designed to help the director get an opinion off the staff. It is also a good way to see where they have gone wrong with the last year's analysis. Brief Outline Of Tescos SWOTStrengthsNational store network (638 stores) UKs largest food retail purchaser Multiple store formats competing in different sectors Customer focused philosophyTescos BrandOpportunitiesNo-food and Tesco Extra hypermarkets Overseas developing markets in Eastern Europe and Asia Financial Services Tesco DirectWeaknessesLack of Global Scale Large portfolio ageing stores Threat of takeoverThreatsUK recession / Price war Entry of Wal-Mart Other competitors Development of Sainsbury's Local Tescos financial services was set up around three years ago and comprises of House and car insurance policies, offering competitive rates against the insurance company leaders of the likes of AA and RAC.

Tesco also have a club card scheme which overtook the stamp savers, now for spending a certain amount or buying certain products you are allocated with so many points and every month are sent vouchers entitling you for money off your shopping and is an amazing advertising ploy, but Sainsburys have been sending tes cos customers letters telling them that they can use theses vouchers in their stores, a threat from such a major runner against tes co could be very expensive for tes co, instead we are now accepting vouchers. Another ploy on tes cos behalf to win the customers loyalty it that of vouchers for schools a scheme where one voucher I given for every five pounds that is spent in store, not only does this encourage adults to help their children but will make the children encourage the adults to shop at tes cos to help their school. Tesco Direct, the dot. com company, enables customers to shop from the comfort of their own home and they have left no stone unturned, setting up a site for blind shoppers and forging a deal that will segue into digital television when its adoption becomes a little more widespread. A new strength that has been adopted among the staff at tes co stores is called future, instead of having criteria to meet every store, the strength's, weaknesses, opportunities and threats are discussed with staff in each store and problem are sorted out, making each stores swot that little bit different, although the main goals are not ignored. The development of Sainsburys local will have a big impact on many of the city centre tes co stores, as many store are superstores and not situated in built up areas, which is why tes co snapped up the opportunity to put very small Metro shops in high streets, the result was a success and Sainsburys are soon to up the competition. Its profits are proof that doing things pays off in the end.

One major operation that is carried out in tes co stores and is saving them millions a year is that of reductions, these are mostly carried out on produce and provisions, such as meat and dairy and ready meals, and also bread and cakes, many of these items have are fresh therefore hold a very short out of code date, when the out of code date come, instead of throwing them away a computer will indicate how many will sell without a reduction and how many to reduce and at what percentage. Tesco at Broughton Park, situated on Map, was opened in 1998 and the villagers in Broughton were extremely sceptical about the retail park. Many people were used to the quiet and didn't want the hustle and bustle, but now it has been in the village for five years we can all see the boost it has had on the economy, tes co alone employs four hundred staff, many of which are from the village and the park has at least another thirty shops and free ample parking, attracting people from up to 20 miles around to come and shop without walking too far. Due to the amazing impact the park had on the public Tesco decided to change its hours to being a 24-hour store, although this was frowned upon, as being a waste of peoples time it has been a major success.

So in the end Tescos Swot has made them The largest multiple retailer in the UK 15.8% market share, sales per sq. ft of 9.5 per week Operates from 639 stores in the UK nation-wide International store portfolio Multi-format store operator UK's most profitable retailer Multinational store Tesco plc Text book version Annual Report and Accounts Version Consolidated profit and loss account 23 Feb 02 Consolidated profit and loss account for the year ended lb m for the year ended Sales 23,653 Turnover Cost of Sales -21866 Cost of sales Gross Profit 1,787 Gross profit Operating Expenses -465 Operating expenses Net Profit before other income / costs 1,322 Operating profit Other income / costs 32 Other costs / income Net Profit before interest and taxation 1,354 Profit before interest and taxation Net interest receivable (payable) -153 Net interest receivable (payable) Net Profit on ordinary activities before taxation 1,201 Profit on ordinary activities before taxation Tax on profit on ordinary activities -371 Tax on profit on ordinary activities Net Profit on ordinary activities after taxation 830 Profit on ordinary activities after taxation Equity minority interests 0 Equity minority interests Profit for the year 830 Profit for the financial period Dividends -390 Dividends Retained profit 440 Retained profit Tesco plc Text book version Annual Report and Accounts Version Consolidated balance sheet 23 Feb 02 Consolidated balance sheet Fixed assets lb m Fixed assets Intangible Assets 154 Intangible Assets Tangible assets 11,032 Tangible assets Investments 317 Investments Total Fixed Assets 11,503 Total Fixed Assets Current assets Current assets Stock 929 Stock Debtors 454 Debtors due within one year Short term investments 225 Short-term investments Cash at bank and in hand 445 Cash at bank and in hand Total Current Assets 2,053 Total Current Assets Creditors -4,809 Creditors: Amounts falling due within one year Working Capital -2,756 Net current assets (liabilities) Total assets less current liabilities 8,747 Total assets less current liabilities Long Term Liabilities -2,741 Creditors: Amounts falling due after more than one year Provisions for liabilities and charges -440 Provisions for liabilities and charges Net assets 5,566 Net assets Represented by Capital and reserves Ordinary share capital 350 Called-up share capital Share premium 2,004 Share premium Other reserves 40 Other reserves Profit and loss account 3,136 Profit and loss account Ordinary shareholders' funds 5,530 Equity shareholders' funds Minority interests 36 Minority interests Capital Employed 5,566 Total capital employed.