In 19970 Tesco was in trouble and had to call in a management consultant this was because of a hard taking over of "Victor Value." Because of this incident Critman decided he had no choice but to resign and stepped down. After a successful time the green shield stamps which cost the company 20 000 000 pounds they removed these from circulation and ploughed the money back in to the shops and reprised all the goods, this then caused a great deal of interest. All of this finally increased the turn over by 20% and bought Tesco's out of Trouble
Jack then found another way to cut prices on his products by building specially designed warehouses which supplies would not deliver to but Tesco’s would send out special lorries to collect the goods by doing this it would cut out the delivery costs. The management then looked at their shops and stores and so decided they were old fashioned and shabby looking and were loosing out because of this. They then started to redesign the stores to their present specification. This all lead to what we know as Tesco's today
In my assignment I will be looking at where Tesco is in, in the European Union and that Tesco sells and operates there company, also how they set there rules and regulations to fit the criteria of Tesco’s European customers. I will investigate what services and products will change and that will remain the same. I will also be writing up how Hofstede and Ronan & Shenka’s model of cultural attributes affect Tesco.
Tesco’ s main office is as follows.
Cheshunt, Hertfordshire
Tesco Plc,
Tesco House,
Delamare Road,
Cheshunt,
Herts
EN8 9SL
Tesco has over 78 stores in different parts of different countries in Europe.
Tesco trade in the following countries:
As well as their 700-plus stores and many distribution centres, they have several office sites in the UK and Ireland, where their key support functions are based. The majority of office staff are based in Hertfordshire, with the Finance Service Centre in Cardiff and their Customer Service Centre in Dundee. Tesco Personal Finance has its main offices in Edinburgh.
Tesco is a well known supermart that sells most well known house hold products they have recently diversified into car insurance, house insurance, pension plan, e.t.c.
Tesco have a vast amount of products that are sold in all their stores around Europe. The range of products vary immensely, they sell all types of foods and household products. Their products range from Apples to Televisions.
Hofstede Theory
The concept of 'organisation culture' has become popular since the early 1980s. There is no agreement about its definition but most authors will agree that it is something holistic, historically determined, related to the things anthropologists study, socially constructed, soft and difficult to change. It is something Tesco has, but can also be seen as something Tesco is.
Organisation cultures should be distinguished from national cultures. Cultures manifest themselves, from superficial to deep, in symbols, heroes, rituals and values. National cultures differ mostly on the values level; organisation cultures at the levels of symbols, heroes and rituals, together labelled 'practices'. Differences in national cultures have been studied for over fifty countries. They show five independent dimensions of values: power distance; individualism versus collectivism; masculinity versus femininity; uncertainty avoidance; and long-term versus short-term orientation.
National culture differences are reflected in solutions to organisation problems in different countries, but also in the validity of management theories in these countries. Different national cultures have different preferred ways of structuring organisations and different patterns of employee motivation. For example, they limit the options for performance appraisal, management by objectives, strategic management and humanization of work.
The position of an organisation on these dimensions is determined in part by the business or industry the organisation is in. Scores on the dimensions are also related to a number of other 'hard' characteristics of the organisations. These lead to conclusions about how organisation cultures can be and cannot be managed. Managing international business means handling both national and organisation culture differences at the same time. "Organisation cultures are somewhat manageable while national cultures are given facts for management; common organisation cultures across borders are what keep multinationals together." Geert Hofstede defines "Culture as the collective programming of the mind which distinguishes the members of one human group from another". He emphasises that culture is not a property of the individuals, but of groups. Country boundaries are usually cultural boundaries, and national culture is instilled from birth. It has to do with what is considered proper, civilized behaviour in that country: It includes for instance how to act towards strangers, colleagues, family; how to address somebody, whether to look them in the face, when to invite them home Hofstede undertook a massive research project starting in 1966 involving a major multinational corporation identified only by the pseudonym HERMES. In the course of this project, some 116,000 questionnaires were completed by HERMES employees at all levels (unskilled workers to top managers) located in 50 developed and less developed nations.
Four key elements, or "dimensions", of culture
- Power distance, a measure of the inequality between bosses and inferiors, extent to which this is accepted
- Uncertainty Avoidance, the degree to which one is comfortable with ambiguous situations, can tolerate uncertainty
- Individualism v. Collectivism, degree to which one thinks in terms of 'I' versus 'we, either ties between individuals are loose or people are part of cohesive in group throughout their life’s
- Masculinity v Femininity. Also known as achievement- versus relationship- orientation - cultures high on masculinity rate achievement and success more than caring for others and the quality of life.
Ronan and Shenkar Theory
This is another cultural attribute and they talk about how the buying behaviour is very much or not so much different in other European countries. Ronan and Shenkar also share the same principle as Hofstede when they explain the grouping of countries.
Latin – Greece, Italy, Portugal and Spain
Anglo – United Kingdom and Ireland
Germanic – Germany and Austria
European– France. Belgium, Holland and Luxemburg
Nordic – Sweden, Finland and Denmark
The list above shows how Ronan and Shenkar’s Model is supported mostly on geographical attributes.
Ronan and Shenkar’s theories both need to be taken into account by companies, in order to be successful and not loose money. Companies will find it helpful and may benefit from the theories and save money.
Tesco have over 700 hundred stores around the world in which they trade in. Rather than being put into 500 hundred or more groups they can be bunched into just 5 different groups. Now they can make fewer changes to the features of their products in the European Countries. There are enough comparisons in order to group them together. Tesco only has to see the differences in all the countries, where they all have their lifestyle and cultural attitudes. Tesco have already adapted to some of these changes, which has saved them time and money. When Tesco was making these changes they did not need to include some countries because the countries already met the requirements. These countries are as follows:
And they had similar customs and share similar interest as people in the UK.
I have how Tesco had to adapt to meet the requirements of other countries:
- In the UK Tesco have proudly introduced ways in order to make customers feel happy and helped. They introduced quick packing, which requires staff to help people pack their shopping quickly and properly.
- Tesco also introduced healthy living and because these countries have similar customers as those in the UK, the countries to the ideas well and now use the products.
- Tesco recently introduced home shopping to their Irish customer and there was no flour, it was also a great idea.
- The main thing that Tesco had to take into consideration is the price change between Ireland and the UK. Tesco may need to cut back on there presentation and had to use cheaper packaging to reduce the cost of products. The prices will be priced in Euro and in Pounds.
- As seen in their theory, Ronan and Shenkar are right to say that UK and Ireland fall under the say category (ANGLO). This will also allow Tesco to use similar marketing strategies as the UK’s for Ireland.
The four p’s can also illustrate how Tesco use the market to decide exactly how to run the other stores in the European Union.
- Promotion – Tesco’s promotional methods will vary according to what group the countries are in, the Anglo group will be different to the Latin group. Tesco will need to research into it and find out how the can promote appropriately to win those particular customers. There television promotion will be written and said in the right language.
- Price – Tesco will need to change the prices to suit the average person living in the country, Tesco will vary prices according to each group. Tesco may find it easier now the euro has been introduced because the currency is the same.
- Product – Tesco sells there own brand of products in all there stores and they also sell products that are well known in the country and are used by potential customers. Some products will be very different, e.g. bread in European group will be very much different to those sold in the Anglo group. There is a large list in which products just do not change in any country.
- Place - Tesco sell products over the telephone and by internet users, this is a very usual thing in the Anglo and European Groups. There is a high number of users shopping this way and because of this Tesco have all their product available on the internet and also new products and update of events held by Tesco and promotional offers.
