TESCO DEMAND MANAGEMENT

Tesco Demand Management



Tesco Demand Management

Tesco Plc employs over 326,000 people and operates in 2,318 stores throughout 12 countries around the world. The company made a profit of £2,029m in 2005 and continue to show increased sales revenue. This report will give a critical and insightful analysis of Tesco's current strategy in order to discover what makes them so successful. It will analyse the relevant theories of corporate strategy and review how they are used by Tesco's strategic management. Clearly there is development in Tesco business, but which moves justify increase in profits. There's been long way from its origins as average grocery store to what Tesco is currently. Tesco invested heavily in every part of the offer that could bring more satisfaction to customer. Management understood that availability is very important for customers in effect Tesco is open 24/7(Humby 2003 pp.90-109). Customers can do the shopping any time any day. Tesco targets view variety of customers that's why Group diversified its range of products. From cheap products, available almost to everyone, to more expensive - satisfying more demanding customers. Company understood as well importance of local differences, by adjusting its offer to local customers' taste. Not having only standard products, allow company penetrate market and its niche more efficient. Another step in development of company was way of reaching customers(Krajewski Ritzman 2002 pp.56). Society differs in preference of how they like to do the shopping, which explain why Tesco modifies its format of retailing. Introducing e-sales through website it helps to minimize time spent for shopping, some customers must really appreciate this solution. Tesco also increased sales area in shops to just satisfy customers who came to do big shopping buying wide verity of products. Tesco place those big stores in city centre as well as on boarder of cities. The last parts of Tesco's selling chain are the small “express” shops that make shopping more convenient. It's quite popular in Poland, customers prefer to go out from home and buy few products in the nearest small shop then go with the car to the big store. Another big step for Tesco was to launch non food products in its offer. This appealed more people to come to big stores or website. It influenced culture of shopping; buying products became a family event.

Industry Sector

In February 2003 a RNCOS (a research and consultancy firm) produced a report on “Supermarket Industry In United Kingdom”. It stated that the market was at that time worth £66 billion, groceries make up £38 billion( www.datamonitor.com); fresh produce accounted for £21 billion while non-food products accounted for £7 billion. The sector is controlled by “the big four”; Tesco, Asda, Sainsbury's and Morrisons who control 75% of the industry with Tesco alone accountable for 34%. An article in the Guardian on the 21st October 2006 warned that “Tesco could have up to 43% of the grocery market within four years if the Competition commission does not take action to curtail its ...