FINANCIAL PERFORMANCE

Financial Performance Management

Financial Performance Management of Tesco

The company

The company that I have chosen to conduct strategic analysis is Tesco. Tesco PLC (Public, LON: TSCO) is an international seller. In this research, we have analyzed the three-year business and financial performance of TESCO Plc. For the purpose of analysis, we had compared the financial performance of TESCO with Morrisons, which is a competitor of TESCO in the UK retail market. In our analysis, we have seen that the financial performance of TESCO has been very good over the past few years. They have expanded their operations through the help of debt financing and they had not allowed this to make an impact on their financial figures. Furthermore, their liquidity and profitability position was also very good. Tesco Plc is amongst the biggest grocery and food retailers in the United Kingdom. TESCO has its operations in Asia, US and Europe, as well. Headquarter of Tesco is in Hertfordshire, UK and has workforce of nearly 472,000 employees (Plunkett 2009, 80).

In this research, we will make an analysis of the business performance of TESCO Plc over the past three years. To make an analysis of the financial performance of TESCO we will make financial analysis of TESCO through applying different financial ratios on TESCO and will make a comparison of TESCO with Morrisons Supermarkets, which is a competitor of TESCO in the UK retail market.

In 1919, Tesco Plc was established by Jack Cohen, by utilizing the bonus which he achieved for his services in the World War I army. Then in 1924, he purchased a tea consignment from the company TE Stock well. He decided to put the initial three alphabets of TE Stock well, and the initials of his name Cohen collectively to name his brand 'TESCO'. In 1929 Cohen opened the very first Tesco store in Edgware, London. Originally, Cohen's formulated the strategy of "Piling it high, selling it cheap"(Baker, 2004, p.56).

Despite the fact that this strategy assisted Tesco in attracting a great amount of consumers, it also assisted Tesco in branding itself as a store for average class consumers and even earned an image as a low-end store. Furthermore, Tesco had small and poorly equipped stores, as well. The only competitive edge Tesco had been the price. The products that were available at the store seemed to be of ordinary. Due to the rise in the income of customers in Britain, the customers did not want to look for bargains. They were now seeking high quality products. In order to cater these changing demands of the customer, Tesco decided to close down its numerous stores to focus on superstores to provide improved quality (Bennis, 2002, Pp: 102-105)

Mission

Tesco's mission is to generate worth for consumers to gain their loyalty for the life time. Tesco's success is reliant on the customers and the people, the customers who do the shopping and people who are working with them. Customers are likely to return if they like what Tesco is ...