MODERN AND POST-MODERN ORGANIZATIONAL PERSPECTIVE

Modern and Post-Modern Organizational Perspective

TESCO: MODERN AND POST-MODERN ORGANIZATIONAL PERSPECTIVE

INTRODUCTION TO TESCO

Supermarket giant Tesco was founded in the aftermath of the First World War in 1918. Jack Cohen used his army discharge money to set up a grocery stall in the East End of London. The first Tesco store opened in 1929, and a UK retailing institution was born. Throughout the rest, of the twentieth century Tesco continued to grow, with the number of stores opening increasing year on year. The philosophy of Tesco was to sell a wide range of quality products at reasonable prices. There was an added convenience factor for consumers by ensuring that a Tesco store was located within easy reach of the majority of customers. Stores were opened in many urban and suburban areas throughout the UK. The company proved profitable because of the economies of scale associated with buying in bulk and selling at high volume. This also meant that costs were kept low. By the early 1970s, Tesco was a major presence on the UK retailing landscape and maintained the philosophy of selling basic groceries at low prices. Indeed, the knighted Sir Jack Cohen recognized this overriding philosophy by naming his autobiography Pile It High, Sell It Cheap. The decade of 1980 saw Tesco continue to grow and expand its products and services. Greater emphasis was placed on the physical environment of the stores and management of Tesco sought out knowledge on the psychology of shopping from experts around the globe. The nonfood element of the business took on more importance as the company sought to bolster the brand image and build on the already significant brand loyalty it enjoyed. The strategy of becoming as strong in the non-food sector, as it was in the food sector was one of the key aims of the company into the 1990s. Alongside expansion internationally, the way Tesco sought to improve services to customers was identified as providing financial services and information and delivery services via the internet. Tesco benefited from having a customer-focus to its operations. This was evident in a number of different ways. The 'One in Front' initiative was designed to ensure that queues of customers did not exceed two at any checkout. Although it cost the company many millions of pounds to implement, the plan worked since customers appreciated the quick and efficient service provided. Tesco was also a first-mover in providing loyalty cards in the UK. Launched in the year 1995 the loyalty cards rewarded customers for shopping with Tesco. By 2000, there were nearly ten million Tesco Club card members throughout the UK. The company has built on its success and has been Britain's biggest retailer since the mid 1990s. In 2005, Tesco broke through the 30% market share in the grocery market for the first time. The company was also the first UK retailer to register profits of more than £2 billion. This is hardly surprising given that, for every £8 spent by UK consumers, ...