Tesco has a well established and reliable strategy for growth, which has allowed them to strengthen their business and drive expansion into new markets. The underlying principle for the strategy is to expand the range of business to allow them to deliver strong sustainable long-term growth by following the customers into large expanding markets such as financial services, non –food and telecoms and new markets abroad, initially in central Europe and Asia, and more recently in the United States.
Tesco has grown from selling beans and biscuits to becoming a major player in almost every area to the retail market, clothing, furnishings, mobile phones, DVD, holidays, financial services, legal advice the list of products Tesco now offers seems endless. The following link below show how Tesco has grown 2000 to 2010. Tesco launched their website in 2000 this is one of the growth strategies that Tesco has adopted. They launched the website because they wanted to increase their market share, the website has enable Tesco to market their products effectively and thus the company has increased it market share and also promote their products.
In 2010 Tesco launched their new zero carbon supermarket due to the fat that now day’s customers are becoming more environmental friendly. So that helped them to get a good reputation and attract more customers within the organisations. The company is now well on its way to becoming a successful international brand, expanding in Asia by taking over the lotus supermarket chain in Thailand, where customers can now buy scooters (tescooters) and have them delivered to their homes. http://www. tescoplc. com/plc/about-us/tesco-story/# Oxfam Introduction
Oxfam opened one of the world’s first charity shop chains starting with a shop in Oxford in 1948. It roots are with a famine relief committee, for Greek victims of war, based in Oxford in 1942. Current Organisation Oxfam is an international business, with a consolidated group of 13 organisations, around the world, who all joined together to form Oxfam International. The fundamental idea of people donating things for free, still keeps the group functioning. Oxfam GB work with over 20,000 volunteers across the UK, in their shops & outlets. They raise together ?
17. 1 million towards helping Oxfam. Oxfam Mission Oxfam initially was concern with the provision of food to help relieve famine. Oxfam strategies to help people has expanded to specifically giving people of developing countries, the tools they need to expand their own efforts in food production, and medicine. They also work with the poorer regions of the world to create fair trade agreements, so that the goods from those regions can be sold at fair prices, and the producers can keep more profit, rather than the exploitation that currently happens.
They also campaign heavily to expand their messages & ideas throughout the world, and deploy people & resources in areas of natural disasters, and conflicts. Some of the other categories that Oxfam deal with are Trade justice Education Debt aid Health Hiv/Aids Climate change Animal cruelty. Definition one Marketing is the social process by which individuals and groups obtain what they need and want through creating and exchanging products and value with others. Definition two Marketing is the management process that identifies anticipates and satisfies customerrequirements profitably. The Marketing Concept The marketing concept holds that the key to achieving organizational goals consists of being more effective than competitors in integrating marketing activities toward determining and satisfying the needs and wants of target markets. The marketing concept rests on four pillars: target market, customer needs, integrated marketing, and profitability. Target market No company can operate in every market and satisfy every need. Nor can it always do a good job within one broad market. Customer needs
Marketing is about meeting needs of target markets profitably. The key to professional marketing is to understand their customers’ real needs and meet them better than any competitor can. Some marketers draw a distinction between responsive marketing and creative marketing. A responsive marketer finds a stated need and fills it. A creative marketer discovers and produces solutions that customer did not ask for but to which they enthusiastically respond. Integrated Marketing When all the company’s department’s work together to serve the customer’s interests, the result is integrated marketing.
Integrated marketing takes on two levels. First, the various marketing functions-sales force, advertising, product management, marketing research, and so on – must work together. Second must be well coordinated with other company departments. The company is doing proper marketing only when all employees appreciate their impact on customer satisfaction. To foster teamwork among all departments, the company carries out internal marketing as well as external marketing. External marketing is marketing directed at people outside the company.
Internal marketing is the task of successfully hiring, training, and motivating employees who want to serve the customers well. In fact internal marketing must precede external marketing. It makes no sense to promise excellent service before the company’s staff is ready to provide excellent service. Profitability The ultimate purpose of the marketing concept is to help organizations achieve their goals. In the case of private firms, the major goal is profit. Marketing managers have to provide value to the customer and profits to the organization.
Marketing managers have to evaluate the profitability of all alternative marketing strategies and decisions and choose most profitable decisions for long-term survival and growth of the firm. Broad business objectives People often use the words goals and objectives interchangeably. When it comes to drafting a business plan, it is important to understand that the two have very different meanings. Goals are what you would like to happen – they are general intentions with broad outcomes. Objectives on the other hand are precise statements relating to specific outcomes.
Objectives can be validated – most of the time goals cannot. For instance, you might set the goal of becoming the leading retailer of green widgets in the United States. This is a broad statement, which you may or may not be able to corroborate. An example of an objective would be: to sell 10,000 green widgets Year One, 25,000 Year Two and 40,000 Year Three. This is a narrow statement that can be substantiated by reviewing your company’s sales reports. In business planning, larger goals often help to define specific objectives, so make sure you set these first. Smart objective
All businesses need to set objectives for themselves or for the products or services they are launching. There are a number of business objectives, which an organisation can set: Market share objectives: Objectives can be set to achieve a certain level of market share within a specified time. For example obtain 3% market share of the mobile phone industry by 2004. To increase profit: An objective maybe to increase sales 10% from 2003 – 2004. To survive: The hard times the business is currently in. To grow: The business may set an objective to grow by 15% year on year for the next five years.
To increase brand awareness over a specified period of time. Broad business objectives In February 2006 Tesco announced record profits of over ? 2. 2 billion. These were achieved not only through supplying customers with quality. Variety and value in its core food business, but also through impressive growth in non-food items such as clothes and electrical goods, combined with expansion overseas. The company has also diversified into financial services, gas and electricity supplies, is an internet service provider and estate agent. The next plane is to challenge Marks and Spencer for leadership of the high street clothing market.
Tesco originally achieved success through fast turnover of stock at low prices- a small profit on a lot of items equals a lot of profit. Tesco recent growth now means that it can now benefit from economies of scale by placing huge orders. This enables it to buy direct from producers (such as farmers) on very favorable terms. Tesco can then pass on these low prices to the customer Figure 1. 7 Tesco plc -profit for 2006 ?39,454m ?37,219m ?2,235m Sales revenue (earned by selling Goods and services Business costs Buying stocks, Wages, salaries Transport, light, Heat, advertising
Profit Taxation shareholders’ Dividends Ploughed back into the business Despite the need to make profits there may be occasions when a profit-seeking business is prepared to sell at, or even below cost. In March 2006. For example. 3 percent of sales by the big four supermarkets were below cost, these are a number of reasons why business log on to the Tesco website. www. tesco. com What are Tesco main aims? To compare prices with other leading supermarkets to make sure they have a competing chance with prices 1. To maximize sales 2. To grow and maintain the number one retail company in the U. K 3.
Tesco wants to outshine their competitors and remain the market leader 4. The main aim of Tesco is to maximize profit 5. To provide goods/services that is cheap and affordable to consumers or the public. Tesco want to be able to keep their carbon emissions down by making new buildings, they also want to make their business objects which have to follow this method Specific – this means that the business can make some specific objectives that the business wants to achieve, so if they want to hit a certain target of profit within a year they have to make a business plan or model to follow to achieve their goal.
Measurable – this means that if a business wants to make some money, they can measure it in a certain amount of time, so if a business can make ? 1000 pound in a month, then maybe next month they could forecast making an increase of that amount by studying the business activities throughout that month. Achievable – this means that a goal that the business can achieve with in a time period, so if a business wants to make ? 1000 pound of profit in a month, then they could make it happen with the products that they might have to sell.
Realistic – this means that a business has to make realistic goals which that they can achieve, so things like making ? 1,500 pounds in a week, this is a realistic goal because it could be made depending on the sales in the week. Time related – this means that each objective is set with in certain time, so it is like a dead line, if a business sets out to make and sell 5 computers in two weeks, then they now have time to create the product and then sell it within the time set. What are Oxfam Aims? To Aid third world countries in any way they can · to relieve poverty, distress and suffering· to educate people about the nature, causes and effects if poverty · to campaign for a fairer world · to encourage western nations to supply aid to third world countries. Marketing objectives marketing objectives should be based on understanding your strengths and weaknesses, and the business environment you operate in. They should also be linked to your overall business strategy. For example, suppose your business objectives include increasing sales by 10 per cent over the next year. Your marketing objectives might include targeting a promising new market segment to help achieve this growth. Objectives should always be SMART:
Specific – for example, you might set an objective of getting ten new customers. Measurable – whatever your objective is, you need to be able to check whether you have reached it or not when you review your plan. Achievable – you must have the resources you need to achieve the objective. The key resources are usually people and money. Realistic – targets should stretch you, not demotivate you because they are unreasonable and seem to be out of reach. Time-bound – you should set a deadline for achieving the objective. For example, you might aim to get ten new customers within the next 12 months
What are Oxfam’s objectives? Oxfam’s aim is to help the poor in developing countries. They try and make a difference in people’s life. To relieve poverty there several aims and objectives of Oxfam organisation which is quite famous at supporting the people who are in need in around the world whether is Asia or Africa and so on. One of this organisation’s aim is “to support children ( children ) who are in need whether is providing food to them or education” And “to work with others to find lasting solutions to poverty and suffering Tesco marketing objectives
Their core purpose is to create value for customers to earn their lifetime loyalty. Tesco’s objectives are to increase sales, increase market share, to maximise sale, to grow and maintain the number on Retail Company in the UK, and to kill off small businesses Task 1(b) Five Successful Marketing Techniques 1. Keep Adding Something New Every time you add something new to your business you create an opportunity to get more sales. For example, something as simple as adding new information on your web site creates another selling opportunity when prospects and customers visit your site to see the new information.
Adding a new product or service to the list of those you already offer usually produces a big increase in sales. The added product increases your sales in 3 different ways: It attracts new customers who were not interested in your current products and services. It generates repeat sales from existing customers who also want to have your new product. It enables you to get bigger sales by combining 2 or more items into special package offers. 2. Become a Valuable Resource Look for ways you can be a resource for your prospects and customers. Supply them with free information. Help them do things faster, easier, less expensively.
You get another opportunity to sell something every time they come back to you for help. 3. Separate Yourself from Your Competition Find or create a reason for customers to do business with you instead of with someone else offering the same or similar products. For example, do you provide faster results, easier procedures, personal attention or a better guarantee? Determine the unique advantage you offer to customers that your competitors do not offer. Promote that advantage in all of your advertising. Give your prospects a reason to do business with you instead of with your competition and you’ll automatically get more sales.
4. Promote the End Result Your customers don’t really want your product or service. They want the benefit produced by using it. For example, car buyers want convenient transportation with a certain image. Dental patients want healthy and good-looking teeth without suffering any pain. Business opportunity seekers want personal and financial freedom for themselves and their family. 5. Anticipate Change Change is the biggest challenge to your business success. The days are gone when a business could constantly grow by simply repeating what it did successfully in the past … or even recently.
Aggressive, innovative competitors and rapidly changing technology make it impossible. Expect change and prepare for it. Don’t wait until your income declines to take action. Develop the habit of looking for early signs that something is changing. Then confront it before you start to lose business. Tesco growth strategies Tesco opened its first store in Edgware, North London in 1929. It gets its name from the combination of the founder of Tesco, Sir Jack Cohen and a partner in a firm of tea suppliers who Cohen worked with, T. E. Stockwell. Since that time, the company has grown and has reflected the changes in retailing.
Prior to the Second World War, most grocery stores served customers but self service stores were on their way and, once introduced, allowed stores to grow bigger to become the superstores we know today. The company floated on the stock exchange in 1947 with an initial share price of 25p. Tesco became a familiar name on the high streets of the UK and whilst it was able to take advantage of commercial economies of scale through bulk purchase of supplies, the existence of resale price maintenance restricted the ability of Tesco to be as competitive as trading conditions now allow.
The system allowed suppliers to insist that retailers sold their products for a set price. Tesco used other strategies to build customer loyalty including the use of stamps that could be exchanged for cash or goods. The Tesco strategy up to this time was encapsulated by the title of Cohen’s autobiography, ‘Pile it high and sell it cheap’, but the increasing affluence of customers and the changing needs meant that Tesco altered its approach and moved into opening out of town stores with more attractive interiors.
Such refurbishment was also carried out in the existing stores and with the onset of selling petrol at some of its stores it broke the ? 1 billion turnover level in 1979. The 1980s saw a continuation in the growth of new stores and also the development of new initiatives. In 1985, Tesco announced its Healthy Eating options with nutritional information and advice on some of its own branded foods. By the 1990s, the move to overtake the other major supermarkets was well under way. The emphasis was on finding new ways of satisfying consumer needs and building customer loyalty.
A range of new services and facilities were introduced, including Tesco Metro, a store concept aimed at the high street customer but offering the benefits of a large supermarket. In some respects, this was Tesco returning to the high street after selling off many stores in the 1960s and ’70s in the move to join the out-of-town shopping trend. Strategy “We have continued to make strong progress with all four parts of our strategy – a strong UK core business, non-food, retailing services and international – by keeping our focus on trying to improve what we do for customers: making their shopping trip as easy as possible constantly seeking to reduce our prices to help them spend less offering the convenience of either large or small stores bringing simplicity and value to complicated markets” Source: Tesco Preliminary Results 2004/5 (http://tesco. grouptree. co. uk/page. aspx? pointerid=401CA512F5314805AC6456FA62FD1D21) A similar move saw the advent of Tesco Express, a petrol station with a supermarket providing local shoppers not only with petrol at competitive prices but also a range of essential grocery items.
This type of approach also extended to the Tesco Extra stores where both food and non-food items were sold. This proved a direct challenge to some of the larger Asda supermarkets that had sold non-food items like white goods (washing machines, fridges, etc. ), gardening equipment, kitchenware, clothing, CDs and so on for some time. Sainsbury’s meanwhile kept its food and non-food services separate with the development of the Homebase chain. Tesco’s Turnover, Number of Stores and Selling Space, 2001-2005 2001 20022003 2004 2005 Turnover (? m) 20,800 23,400 26,004 30,814 33,974 Number of stores 907 979 2,291 2,318 2,365 Selling space (000 sq ft) 28,362 32,491 39,944 45,402 51,772 Source: Tesco Annual Review, 2005 p. 2 [PDF, 3. 2 MB] (http://www. tescocorporate. com/images/Tesco_review_1. pdf) In 1995, Tesco introduced the Clubcard, a loyalty card for customers who were able to collect points from purchases and use them to exchange for goods. It also gave Tesco a massive amount of information about the customers who visitedits stores, what they bought, the regularity with which they bought them and how they responded to the in-store promotions and special offers. Sainsbury’s dismissed the card as a gimmick but were soon to lose out on sales to Tesco and in the latter part of 1995, Tesco became the market leader with a market share of 17%. Throughout the 1990s, Tesco introduced further measures to improve its service and the range of goods and services it offered its customers.
This included such things as making staff available to help customers pack bags and take them to the car, having a policy of opening checkouts if there was more than one person in a queue, linking in with the Airmiles group in relation to its Clubcard and the provision of facilities such as baby changing units, restaurants and coffee bars. Apart from the basic services it was providing, it was building on the range of products it was offering. It opened pharmacies in some stores, developed a range of financial services including a Visa card, mortgages, insurance and a bank account all in conjunction with the Royal Bank of Scotland.
The expansion of the non-food side included offering entertainment goods such as TVs, DVD players and home entertainment systems as well as white goods, household products, clothing and so on. Its well-publicised battle with Levi’s over the selling of jeans at prices considerably below that of Levi’s outlets was lost but not before Tesco had presented itself as a champion of the customer in its battle to bring quality and value for money to the retail supermarket scene.
In the new century, further developments pushed Tesco’s profits higher still; it introduced shopping via the Internet and home delivery, Internet service provision, and a range of foods reflecting different qualities from the ‘Value’ range which had been introduced in 1993 through to its ‘Finest’ products as well as a brand called ‘Free from’ for customers with special dietary needs. Tesco’s Summary Profit and Loss Account, 2005 2005 (? m) 2004 (? m) Sales at net selling prices 37,070 33,557 Turnover including share of joint ventures 34,353 31,050 Less: share of joint ventures’ turnover (379) (236)
Group turnover excluding value added tax 33,974 30,814 Normal operating expenses (31,845) (28,925) Employee profit-sharing (65) (57) Integration costs (53) (45) Goodwill amortisation (62) (52) Operating profit/(loss) 1,949 1,735 Share of operating profit/(loss) of joint ventures and associates 130 97 Net profit/(loss) on disposal of fixed assets 53 (9) Profit/(loss) on ordinary activities before interest and taxation 2,132 1,823 Net interest payable (170) (223) Profit on ordinary activities before taxation 1,962 1,600 Underlying profit before net profit/(loss) on disposal of fixed assets, integration costs and goodwill amortisation 2,0291,708 Source: Tesco Annual Review, 2005 p. 42 [PDF, 3. 2 MB] (http://www. tescocorporate. com/images/Tesco_review_1. pdf) Tesco has also taken steps to expand abroad. It has acquired stores in Japan, China, Taiwan, Poland, Slovakia, Ireland, Turkey, South Korea and Malaysia amongst others and has links with Safeway Inc in the United States. It continues to try to improve the quality of its customer service provision and the range of goods and services it is offering. It did make a bid to takeover the Safeway group when Morrisons initially put in a bid.
However, it was unlikely to ever succeed in this given the market share it now has in the supermarket business. Given this massive growth, Tesco announced a profit of over ? 2 billion for 2004 – the first UK supermarket to break this barrier. The fall in the share price reflects what analysts expect to happen in the future rather than what has happened in the past. So where does Tesco go from here? Have they reached a peak from which there is now only a downward trend or are there strategies that Tesco can put in place to cement their position in the market and continue to expand in the future?
Widely touted as a free market success story, Chile has been a laboratory for labour market deregulation. Yet the research conducted for Oxfam UK/I by Chilean, Fernando Leiva, contains a warning for countries wishing to pursue a similar route. Contrary to the predictions of orthodox economists, Chile’s flexible labour market has failed to deliver growth with equity. Employment expansion has taken place in low paid, low quality, precarious jobs creating a new class of working poor, many of whom are women. The report notes that: Between 1990 and 1992 the number of workers in small firms employing between 2 to 5 people increased by 143,000 of which 59,000 worked inside dwellings In 1964-65 there were 208,000 permanent wage workers in the agricultural sector, one of the main engines of Chile’s export industry, and 147,000 seasonal workers. By 1991-1992, the number of permanent wage workers had decreased to 100,000 and the numbers of temporary/seasonal workers had increased to 400,000. In the fruit exporting sector where more than half the workforce are women, 83% are now employed on a temporary basis and between 40-50% have no contract.
While unemployment has fallen significantly in recent years this masks widespread under-employment which is not captured by official figures: A supplementary survey by the National Institute of Statistics showed that 873,514 women officially classified as “inactive” in fact worked an average of three and a half months per year. These women represented more than half the “official” labour force. The spread of “flexible” working practices has allowed companies to bypass government legislation and collective bargaining agreements leaving workers vulnerable to exploitation.
Temporary and home-based workers are effectively denied the right to collective bargaining. Most have no job security and are not entitled to social security benefits such as sickness and maternity payments. The increase in jobs and wages helped reduce poverty from a high of 40% of households in 1990 to nearly a third in 1994, finally reaching the 1970 level before the free market experiment began. However, despite this recent achievement many Chileans believe that poverty is unacceptably high for a comparatively wealthy country which grew at an average of 11% between 1992-1994.
Low pay and the sporadic nature of work mean that many people are still unable to earn an adequate monthly income in 1992 43 per cent of salaried workers earned less than the minimum required to cover basic necessities, a factor underlying the increasing numbers of women and children entering the workforce. Overall inequality increased between 1992-1994 as workers wages have been unable to keep up with productivity rises while the rich increased their share of income. The richest 541,000 Chileans earns the equivalent of the bottom 10 million.
Between 1987 and 1990 rural Chile experienced one of the most dramatic increases in inequality on record, alongside a rapid expansion of natural resource based exports. These trends are contributing to a new generation of social problems, such as stress, depression, drug abuse, and crime which psychologists have linked to economic stress. Tesco survival strategies Survival strategies in a depression Article Date: Mar 11 2009 Tough decisions need to be made Times of economic turmoil require businesses to adapt quickly.
Sometimes that requires radical, even painful action, This is no ordinary recession: it is now generally agreed it will be the worst since the 1930s. Businesses need to be thinking about a long-term survival plan, one that will insulate them against a potential five-year profit squeeze. Cutting costs, accepting low profitability and focusing on retention of customers and staff might work for 18 months, but these are short-term fixes. Business owners must look further ahead and consider more radical changes such as business restructuring, forging deep partnerships or even merging with another company. Business restructuring
Think big, like a revision of product specification, a change of operational location or a different distribution method. An even more extreme strategy could be to withdraw from the current line of business completely and consider investing in an alternative more suited to the times. Such profound changes can be unsettling, but they can be remarkably successful if proper research is undertaken beforehand. Take Apple: there was a time when its iPod was playing second-best to the MP3 players on the market. In 2000 Apple acquired SoundJam MP and nine months later entered the digital music distribution market with the launch of iTunes.
Not only did this bolster the bottom line but also changed the way in which the music industry operated. As a testament to the success of this business strategy, over 5 billion items have been downloaded from iTunes and it is now worth an estimated $8. 4 billion. It might have felt different for Jack Cohen when he founded Tesco in 1919. Back then he simply sold surplus groceries from a stall in the East End of London. It wasn’t until 1973 when Leslie Porter, Cohen’s son-in-law, took on the role of chairman and revolutionised the business strategy that the familiar retail giant was truly born.
Both Apple and Tesco fully understood the needs, decisions and attitudes of their customers and their success speaks for itself. But what about those companies where the risks were too great and it didn’t work? Entellium, a supplier of customer relationship management software, redesigned its product to make it feel more like a video game. The new product enabled salespeople to win points on the system for performing relevant operations like entering data, all based on the stereotype that salespeople are competitive and an ongoing consumer trend of computer game consumption.
This ‘all in’ bet proved fatal as sales quickly dwindled and the situation at Entellium worsened. Last year CEO Paul Thomas Johnson and CFO Parrish Jones were arrested by the FBI and charged with grossly inflating their sales figures. Working partnerships There have always been strategic partnerships: take the example of automotive companies and parts suppliers. However, a different type of partnership can aid survival by sharing costs and resources and developing synergies. Economies of sc