Legal and Political Factors That Affect Tescos.
Managing sickness absence
‘’A new service to help employers and employees manage long-term sickness absence has been launched by the DWP. The Health and Work Service is a free occupational health advice initiative that will help employees who have been, or are expected to be, absent from work due to illness for over four weeks return to work more quickly. Both GPs and employers will be able to refer employees to the Service, which will carry out an occupational health assessment and develop a plan including a timetable for a return to work. The DWP claims the Service, which is expected to be operational by April 2015, could cut the amount of sickness absence by 20% to 40%, saving employers a total of £70 million’’
This law is when workers who have an absence from work for being sick or ill. If their sickness last after four weeks of absence then they will receive a service of offering them free occupational health assistance for employees, employers and GPs. People are going to be off sick from time to time. But absence because of sickness, or another unexpected reason, can put your business in a tricky situation
This employment law I think is a negative threat to Tesco because it puts the business down on the way they are performing for example the employee can lie about their absence for being off several weeks and still get paid for his excuse of being ill or sick. This can put Tesco in a tricky situation because the employee can be absence for a long time,
One strategy I could suggest for Tesco to avoid employees going away for such long time is to put a method in place which will allow them to double check the leave of their employees to make thy haven’t been lied to. One strategy I could suggest for Tesco to carry out these goals is to have a few staffs that will be in charge to check and double check the proof employees at Tesco would provide after coming back from their leave. This could be done by checking the dates and time on the proof provided, call to the hospital or wherever the proof comes from.
New statutory pay rates
The law says you can get £87.45 per week Statutory Sick Pay (SSP) if you’re too ill to work. It’s paid by your employer for up to 28 weeks. This is a negative threat to Tesco because they still have to pay the employee even if they are not working, this is only if the worker has been sick for 4 or more days in a row then he can get paid by the business.
The law says statutory maternity, paternity, adoption and shared parental leave will increase to 139.56 per week. This law for Tesco is a negative threat, this is because Tesco have to spend a lot more on workers who have new a new baby this is because the worker will have to stay home and look after the child and won’t work. This also means Tesco will be losing more money because of paying statutory pay rates. Employees will be happier on their return; this is because Tesco can give them a warm welcome back.
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One strategy I can suggest for Tesco to save them from spending a lot of money on employees who don’t work and reduce their budget on thing that will not bring them anything back is concentrate on maximising their sales and benefits so that they don’t feel the pinch from all the money will spend from non-working employees. The strategy they could use to carry this strategy would be to charge more money on the products people buy the most for example slightly raising the price of their best selling products or services.
Membership of EU
The European Union allows free movement of goods, services, people and capital between the 27 countries that are members. This is a positive opportunity because it helps Tesco expand by providing them with a viable platform to use to start trading on international markets. This opportunity will help them sell their products and trade more easily internationally around the world. This relates to the EU because Tesco are based internationally
One of Tesco’s objectives is being wanted and needed around the world and the membership of the EU allows them to grow larger as they can trade and sell their products to different markets around the world.
Government Support – Enhancing Skills of the Working Population
Enhancing the skills of the working population which includes training schemes and education to their employees and staffs. The government does this for public services so employees are well trained and are ready to overcome situations
This can be a negative threat to Tesco because they have to send their staffs to training days also have to pay to send their staff on these training days but a positive opportunity for Tesco this is because it can help their staff to be more productive and skilful. During the training program the employees will be able to gain more qualifications throughout their working life because they may learn more trades.
Tesco objective is to ‘’a clear vision for learning and development. We want to inspire all our colleagues to learn and have the skills they need to be their very best, now and in the future’’
Tesco Strategy is they offer their employees on-the-job training as the methods include
- Shadowing a person already in the job shows the employee how to do it
- Coaching a manager or designated colleague will help trainees work through problems and inspire them to find solutions
- Mentoring a more experienced member of staff acts as an adviser
- Job rotation or secondment the trainee has the opportunity of covering their target role, taking full responsibility on a temporary or limited basis
Shift in Multicultural Make up
Shift in the multicultural makeup in the UK is growing their fast because of immigration is becoming more and more each year, this is a negative threat to Tesco because they have to make changes to their markets and start understanding what their customers really want in their markets.
Tesco offer their customers different range of foods from different countries to satisfy their needs because the rising of immigration each year and people would like multicultural foods in their stores for example Italian, Asian, Mexican so when people migrate to the UK and will able them to purchase foods that was available from their country.
when foreign people travel on a holiday to the UK this has a big impact on Tesco because some foreign people might not like the food that is made in restaurants or takeaway’s so they might go shopping buy their own kind of food in the markets. Tesco have different kind of food’s all around the world this also might attract foreign people when they go shopping.
Tesco could give their customers questionnaires and surveys on what they need and what they should bring into their stores, this strategy will help Tesco to do better in the future because they will know what their customers need for example if a customer needs product from another country, they can listen to that customer and build a better relationship with them.
Future technology can help food retailers in a very big way for example ‘’Australian grocery chain to install radio tags on grocery items that could be read as you leave the shop, with the bill paid via smartphone from your credit card. Now that would really cut down on checkout time’’ if Tesco get hold of this technology in the future, it will help them in a very big way. It will save a lot of time for customer and no more waiting in lines to pay.
Tesco has its own product scanning; you don’t have to wait in line to pay for the product but a faster way that their technology allows you to scan the things you have bought and pay rather than waiting. People are always looking for new technology doesn’t matter if it’s a service or a product. It can help people do things faster also Tesco are introducing new technologies to the world, BBC news technology article say that Tesco is installing face-scanning technology at its petrol stations to target advertisements to individual customers at the till. It will use a camera to identify a customer's gender and approximate age. It will then show an advertisement tailored to that demographic.
Tesco are expanding their technology changes as the chief Philip Clarke said ‘the company will launch new digital music and book services in the UK, expand online food shopping into Bangkok’ Tesco are making changes not only in the UK but in other countries. Tesco making these technology changes helps them grow because more consumers will be happy with their work this is because it makes it easier for them to do things faster also more profit will be earned.
Tesco objective is to ‘’provide shareholders with progressive returns on their investment by improving profitability through investment in efficient stores and distribution depots, in productivity improvements and in new technology’’. For example Tesco’s new high-tech checkout that automatically scans products loaded onto the conveyor. Tesco said ‘’checkout staff would be re-deployed it help customers unload trolleys onto the conveyors. This will help them cut down on queues and increase customer service.
One of Tesco strategy is their clubcard service as they reward their loyal customers through their club card service. The customer’s collects points each time they shop, you will scan your clubcard and once the customer gets 150 points they will start receiving vouchers and discount.
UK Economic Outlook November 2014: How robust is the UK consumer recovery?
Consumer spending growth has been relatively strong for the past two years despite this is due to strong employment growth, increased income tax personal allowances and low mortgage interest rates; all of these have boosted incomes. There also is, increased confidence and borrowing since mid-2012 have been reflected in a falling savings ratio, giving an extra boost to spending over and above disposable income growth.
This is a positive opportunity for Tesco’s because the consumer spending growth has grown for the past two years this is because the consumer confidence has increased and helps Tesco to earn more sales and profit because the consumer is spending more. And sales/profit has because of this.
Since this change is not a threat but rather an opportunity for Tesco, the goal i can suggest to them in order for them make sure they make as much sales, profits and benefits as possible is to simply attract more customers. One strategy I can suggest for Tesco to obtain the objective above is to make more eye-catching adverts and promotion to make sure their targeted customers hear and notice them loud and clearly.
Budget 2014 raised: Growth forecasts raised for 2014 and 2015
The official forecast shows that the UK economic growth have rose, the predications show that gross domestic product is expected to rise by 2.7% in 2014 and the growth forecast for 2015 has been raised from 2.2% to 2.3. This is a positive opportunity for Tesco’s because they will start making more sales and profit.
Tesco key objectives is to keep growing globally and internationally this is done by ‘’Creating new opportunities for millions of young people around the world’’. Because more people will come through the door, more money in the tills, more opportunity to cover the overhead costs of the business and make more profit
Tesco strategy is to attract more people to their markets by doing promotions, , giving out vouchers through their clubcard so they can keep loyal to their customers and their sales will increase. With the money they can build new stores.
In this task I think there are a lot of threats and opportunity for Tesco to do better. For example the threat ‘’managing sick absence’’, if this law was not set up than employees could have had fault reasons for being sick and put a lot of pressure on businesses for shortage of staff. Laws are set up so it can improve the system for businesses, it will make people behave better, and more productive.