STRATEGIC MANAGEMENT

Strategic Management

Strategic Management

Introduction

Tesco is UK's leading retail store that has undergone many changes since its inception. It has made many changes in its operations deliver greater value to its customers. Tesco is best known for its top notch supply chain management which has earned them millions of satisfied and loyal customers. Tesco has spent much time and money in carrying out research and find out world's best supply chain practice. Tesco has got a centralized system of supply chain in which one department is responsible for supply chain decisions. This department makes plans and executes it accordingly. In this system, one department collects relevant information from each member of supply chain and makes decisions on the basis of collected information (Buxmann, Ahsen and Díaz 2008). Tesco has achieved to develop a well established communication system that offers flow of speedy and on time delivery of information among departments as well as to suppliers. For this purpose, electronic data interchange (EDI) has been installed. Other software are also been used to keep speedy flow of information, but, they are internally designed that are used for specific purposes. This has to be worked out to make better use of technology by incorporating multipurpose software that serves many functions to the process. Information sharing helps departments to plan operations accordingly, and suppliers are able to respond to customer needs. This has helped Tesco to reduce its cost as it drops the chances of repeat purchasing.

Tesco has saved its huge sum of money through its supply chain management and has been extending further efforts to make it even better. Continuous development through effective research and development is what differentiates Tesco from other retailing firms in the industry. In this connection, this study would analyze the supply chain strategy of the Tesco Plc, as this department's performance has been believed as the primary contributor to delivering superior performance in the past year. Thus, the supply chain management strategy of the company will be discussed in detail.

Organizational Structure of Tesco Plc

Before discussing the supply chain strategy followed at Tesco it is pertinent to discuss the merger, acquisition and consolidation of the organization, which will also provide a clear view regarding the performance and growth of the organization. Tesco is the giant of the retail supermarket, ranked third largest retail organization in term of revenues and second largest in terms of profit. Since, the beginning of the Tesco Plc till now, the company has made 44 acquisitions while taking stakes in 20 companies. Tesco plc has 29 divestitures during this period (Awad, & Nassar 2011, pp. 1).

Year

Acquisitions

Stakes

Divestitures

2011

3

2

0

2010

3

0

1

2009

1

0

2

2008

6

0

7

2007

2

2

5

2006

5

0

2

2005

2

0

1

2004

3

2

3

2003

2

2

1

2002

2

0

0

2001

1

2

0

2000

1

0

0

1999

2

2

1

1998

1

1

0

1997

6

1

3

1996

0

1

0

1995

1

1

1

1994

2

1

0

1993

0

3

1

1992

0

0

0

1991

0

0

0

1990

0

0

0

1989

0

0

1

1988

0

0

0

1987

1

0

0

Total

44

20

29



From the aforementioned acquisition and merger chart, it is explicit that the company is financially strong and is growing rapidly, because no company can and will acquire other organization if its performance is below average.

Trend of Supply Chain in UK retail Market

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