Exploring Business Activity - Tesco And Nspcc

Unit 1 вЂ" Exploring Business Activity (P4 and M2)

Functions are the specialist areas that a business is divided into for example marketing and finance.

Tesco

Tesco want to expand locally, internationally, in non-foods and retailing services (Tesco Personal Finance). Tesco’s success depends on people; the people who shop with them and the people who work with them. If their customers like what Tesco offer then they are more likely to come back and shop their again. If the Tesco team find what they do rewarding they are more likely to go that extra mile to help their stores.

Tesco want to expand and extend existing superstores, express stores, metro stores and extra stores. Growth in the business comes from new space, extensions to existing stores and a multi-format approach. Tesco have four different store formats which are each tailored to customer needs:

Express вЂ" These store offer customers great value, quality and fresh food close to where they live and work. Tesco have over 500 stores selling a range of up to 7,000 lines.

Metro вЂ" This store format bring convenience of Tesco to town/city centre locations.

Superstore вЂ" This store type have an ongoing programme of extending and refreshing their superstore to improve the overall experience for customers. They have introduced a number of new non-foods into supermarkets such as DVDs, books and games.

Extra вЂ" These types of stores are one-stop destination stores which have proved to be extremely popular. Extra stores offer the widest range of food and non-food lines, ranging from electrical equipment to homeware, clothing, health and beauty and seasonal items such as garden furniture. Around twenty Extra stores are opened each year.

Tesco ensure they have broad appeal by continually innovating and investing in new lines to increase choice for their finest customers. Tesco’s Finest range are for customers who want something that extra bit special and has proved to be so popular that they now offer their Finest range in all stores. Tesco’s Clubcard is the UK’s most popular loyalty card scheme with over 11 million active cardholders. Information provided by Clubcard enables Tesco to understand their customers better and say thank you for shopping with them by offering vouchers based on the amount they spend. Tesco is the biggest private sector employer in the UK with over 250,000 employees. They offer a market-leading package of pay and benefits such as childcare vouchers and share schemes; save as you earn and buy as you earn.

The more they expand these stores the more customers they are going to have and this can increase profit. This activity of expanding improves the customer service of Tesco by giving the customers what they want.

Expanding internationally can increase seeking out new opportunities for growth and ways of generating long term returns for shareholders. Tesco operate in 12 markets outside of the UK including Europe and Asia. Over 100,000 employees work in Tesco internationally serving over 15 million customers and generating Ð'Ј7.6 billion sales and over Ð'Ј370 million profit.

Over more than ten years of experience overseas, Tesco have evolved a strategy based on six elements:

• Flexible вЂ" each market is unique and requires a different approach. In Tokyo, customers like to shop for small amounts of extremely fresh food, everyday. Tesco’s entry into the Japanese market was through the acquisition of a discount supermarket operator.

• Act local вЂ" local customers, local cultures, local supply chains and local regulations require a tailored offer delivered by local staff. In Thailand, customers are used to shopping at traditional wet markets, interacting with vendors and rummaging through piles of produce to choose hat they want. In Bangkok Tesco try to meet local customers’ expectations.

• Keep focus вЂ" to be the leading local brand is a long term effort and takes decades, not just a few years.

• Multi-format вЂ" no single format can reach the whole of the market.

• Develop capability вЂ" developing skills in people, processes and systems and being able to share this skill between markets will improve the chances of success in challenging markets.

• Build brands вЂ" brands enable the building of important lasting relationships with customers.

The Tesco strategy aims to be as strong in non-food as in food. This means offering the same great quality, range, price and service for their customers as they do in their food business. Tesco’s current market share of the non-food sector is less than 7% and they generate sales in non-food in excess of Ð'Ј6 billion each year in the UK alone.

The UK’s like-for-like non-food sales growth is currently running at around twice the rate of food. All Tesco stores sell some non-food, with their Superstores and Extra formats offering the biggest choice. By introducing these ranges to more of their stores they can bring don the prices and offer customers the convenience of shopping for great value non-food along with their food and household goods.

Tesco make this happen by having around 30 distribution centres, 5 of which are dedicated to non-food and clothing. Getting the right product to the right store at the right time means customers benefit from more staff on the shopfloor, better presentation and availability of products. They have dedicated in-store managers and specialists in key areas like Health and Beauty to offer good advice on products. They also have department leaders who take on extra responsibilities within other non-food departments such as electricals and home entertainment. Tesco no have a team of over 100 people sourcing non-food products globally, to make sure we can buy in the most efficient way and pass on the savings to customers.

Tesco have followed its customers into the growing world of retailing services. They aim to bring simplicity and value to complex markets. Tesco Personal Finance (TPF) is a joint venture with the Royal Bank of Scotland.

The relationship combines their knowledge of customers with the Royal Bank of Scotland’s expertise in financial services. Around