to do next. It is a way of measuring the performance of Tesco and action which
can be done to take control.
Objectives provide a focus for individuals and can be broken down to provide
targets for each area of the business. They are also used to analyze the
performance of employees as well as the entire business. The objectives that
Tesco set themselves must be realistic and they will be set depending on which
sector the business operates.
Tesco like all businesses have the main objective of making a profit. This
objective is extremely important to a business like Tesco as without it they
will be unable to do things they want to do. Employees would become unhappy as
they would not be able to get the income and pay rises they would like. If the
employees were to become unhappy with their work tasks, pay and even the working
environment, this would reflect onto the customers making the customers feel
like they should shop somewhere else. Shareholders may also feel unhappy as a
result because they will lose the value of their share and invest their money
into a business which be doing better or a new business which is making a good
name for themselves.
It is clear that Tesco are increasing in the market. By researching the Tesco
website I have found that in the last five years Tesco have been gradually
increasing their group sales. In 1999 the annual sales were £18,546 million.
For the next couple of years that total rose each year by around £2 million.
However sales of £25,654 million dramatically rose to last year total of
£28,613.
For Tesco, a big objective would be beating their competition such as
Sainsbury’s as every supermarket is looking to beat each other to gain customers
therefore make more profit. This means that increasing sales and market share
is extremely important. This is because having the biggest share of the market
is means receiving the biggest share of the profits. One way Tesco have tried
to achieve this is by creating more products as they will benefit from the cost
savings from producing their own materials rather than being supplied from Heinz
etc. Having a larger market share means more profit so this will ensure Tesco
have more money available to put back into improving their goods and services
and keeping employees happy by giving them the promotion or wage they require.
By Tesco becoming a Market Leader, this increases customer confidence and would
persuade them to buy from Tesco rather than Marks and Spencer or Sainsbury’s.
The objectives mentioned above are used by most businesses. However Tesco have
a wide variety of main objectives. These are listed and explained below.
1. Understand customers better than anyone
Tesco’s main aim is to understand their customers. Tesco are trying to understand their customers better that anyone so that they can keep providing high quality goods and services for their customers to buy which in turn will bring more money to Tesco through high amounts of sales. Tesco are doing this in a number of ways. For example Tesco issue loyalty cards which are becoming increasingly popular amongst Tesco customers.
2. Be energetic, be innovative and be first for customers
Tesco tries to follow and listen to their customers into new areas of retailing services. This has led Tesco to develop a whole range of successful new services such as Tesco Personal Finance and their website .
Tesco Personal Finance is now profitable and expanding in all areas. It is a success with customers as it brings new levels of service and value to the banking sector. Tesco’s customers love Tesco Personal Finance because its value for money and its very convenient. Tesco.com has been a real success in Internet shopping as Tesco have already been branded as the number one Internet business for grocery.
3. Use our strengths to deliver unbeatable values to our customers
Tesco try and do all they can to make sure that whatever they sell gives value to customers. This is so they don’t lose their customers to their competitors who are selling their goods cheaper that Tesco.
Tesco’s main purpose is to create value for their customers to earn their lifetime loyalty. Customers have seen the value in Tesco stores and they are able to offer this by operating more efficiently, by purchasing goods more effectively around the world and by selling more products to customers.
4. Look after our people so they can look after our customers
Tesco looked after their employees well so they can look after their customers because if Tesco do not look after their employees for example with pay rises, bonuses or profit sharing schemes then in turn they will not be motivated to help customers who are in need which will lead to Tesco’s customers going elsewhere to do their shopping. Tesco’s profits will then drop, as they don’t have fewer customers. Tesco have invested in a 240,000 strong team and they bring out the best in each and every one, so they can continue to do what they do so well, which is delivering for customers. Local managers, who know and understand their customers better than anyone, wherever they are around the world, run all the Tesco stores. By doing this, it allows their people to work even harder for customers.
5. All retailers, there's one team…The Tesco Team
Tesco are trying to build a world-class team so they can keep on being the number 1 retailer. This is key to Tesco’s business strategy. As Tesco expand around the globe they are creating a continuous demand for additional talent, by developing their staff’s qualities, sharing learning, recruiting the best locally and creating jobs where people are valued wherever we operate. All of Tesco’s 260,000 staff are encouraged to go the extra mile for customers to ensure customers keep on coming back to Tesco. Tesco look after their staff so that they in turn can look after their customers. Tesco invest in their staff by giving them pay rises, bonuses and shares to let there staff know they are grateful for them working in Tesco.
A great staff benefit when working for Tesco is a scheme called Save As You Earn (SAYE), which is cash saving scheme. Staff can invest between £5 and £250 per month for 3 or 5 years and when the schemes mature, they have the option to buy shares with up to a 20% discount. Staffs are then free to keep the shares as a long-term investment or sell them and keep the profits.
6. Trust and Respect each other
Tesco trust and respect staff and customers in a number of ways. They have an integrated policy for corporate social responsibility, backed by key programmes to support local people and communities and to protect the environment. They monitor performance by setting targets in each of their key areas to drive improvements year after year.
Tesco are working in some of the highest unemployment areas of the UK to boost job prospects for the long-term.
7. Strive to do our very best
Tesco are always striving to improve whatever they produce in their stores. Tesco aims to deliver excellent products and services to their customers through the best stores and by the best people. Tesco listening to customers has always been a key for Tesco’s success and they reinforce this through a number of things. For example through the Number One For Service initiative Tesco refocus their staff on how they serve their customers and the other initiative Every Customer Offered Help aims to ensure that every single UK Tesco shopper is offered assistance at the checkout. Tesco’s number one for service initiative encourages their staff to refocus on six steps to excellent customer service. Get customers around the store easily, take them to products they couldn’t find, make sure that they do not have to queue and pack their bags, help at the checkout and be friendly and helpful. Tesco builds partnerships with their suppliers and other organisations to drive up standards for their customers. Tesco and the National Farmers Union have developed a new industry standard, the British Farm Standard, recognised by a red tractor logo. This is called Nature’s Choice, which is a code of practice, which applies to all our UK suppliers of fresh fruit, vegetables and flowers, who have to meet strict guidelines, which protect wildlife and the environment. Tesco are also a member of the Marine Stewardship Council so they can conserve fish stocks and support sustainable fisheries. Tesco have received many awards for them striving to do their best. For example they have won Retailer of the year, e-tailer of the year in the Retail Week Awards and Tesco Computers for Schools won the Nestlé Social Commitment award at the Food and Industry Awards plus many more awards around the world. This is why Tesco are the UK’s leading retailer.
8. Give support to each other and praise more than criticise
9. Ask more than tell and share knowledge so that it can be used
Tesco has the fastest organic growth rate of any major international retailer. In Tesco if one store finds a way of improving the store in some way then Tesco would share that knowledge with other stores, not only in the U.K and Europe but all their stores around the world. Tesco offer their knowledge to companies in Europe. This allows Tesco to offer new products to their customers. Tesco aim to gain knowledge to help their business by opening a number of stores around the world. For example in Thailand, Republic of Ireland and Europe. Tesco are also prepared to receive information from other businesses in different countries to help them succeed. This is why every Tesco stores are always at a high standard.
10. Enjoy work, celebrate success and learn from experience
With this objective Tesco are telling staff they should enjoy working in Tesco. Tesco do this by giving them pay rises, bonuses and awards so their staff know they are acknowledging their staff. Tesco want to celebrate their success with their staff by shares given to them and other bonuses. Publicising their success by letting people seeing how well they are doing in places like their website. Telling others about their success for example how much they have made in that year. Learning from experience by making sure that they do not make the same mistakes twice.
Overall Tesco have been successful at meeting their objectives. Their objective every day is to please staff, their customers and to be successful. Tesco are continually creating and improving the range of products so they give their customers more of what they want.
Tesco are constantly trying to make their staff feel happy to work in Tesco with pay rises and awards. Clearly this is a good reason why Tesco have become the number 1 retailer in the UK because they have been able to achieve their objectives and run a profitable business.
