Will Tesco's large business development be beneficial???

University Degree Business and Administrative studies

Will Tesco’s large business development be beneficial???

At present Tesco’s, Highwoods is embarking on a major new building plan which will hopefully bring many more benefits to the customers and the worldwide business. This large development plan has many external influences which help to put together the business and the new lay out of the store. Many people will be influenced in different ways and their views and opinions but be taken into account. From this development Tesco may gain many more customers, but lose some of the other as they are not happy with the new design.

Tesco has been developing since 1924, it was founded by T.E.Stockwell and also his business partner Sir Jack Cohen. T.E.Stockwell and Sir Jack Cohen had been working together in a tea supplying company. The name Tesco came from the initials of T.E.Stockwell and the first two letters of Cohen.

Sir Jack Cohen was in the army and during Word War 1 he began to sell groceries in London’s East End Markets in 1919. The very first Tesco store opened in 1929 in Burnt Oak, Edgware. During the 1930’s period the self-service supermarkets were opened in the USA.

As Tesco began to grow and grow, they realised that selling a wider range of products and a large volume of stock that they could offer lower prices to the customers. Tesco made a lot of progress in the years of the war. Eventually the self-service stores came to Great Britain after the Second World War and the first one was opened by Cohen in St Albans in 1948.

I got my information from many sources the first was from the internet; this gave me information on then background information on how the business was established and who the main people and creators are. Another source that I used was a guest speaker called Mrs Regan. She is a Training Manager at the Highwoods store and she gave me information on her views and the opinions from the business and what the new features are going to consist of.

Mrs Regan believes that the new development will be a lot better than the store before, the store will be ...

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Mrs Regan believes that the new development will be a lot better than the store before, the store will be more sufficient and contain more new technology and a larger number of products will be on offer. We will be stocking new items such as a wider range of non-food products and more electrical items. The customers are the most important part of Tesco and they are the people who can improve the stores. Hopefully the wider range of products will attract more customers and be more profitable for Tesco on the whole. The store will have an all-new layout and have a lot larger floor space.

The aims of Tesco are to supply customers with a vast range of different products; they aim to provide them with a lower price to help the customer spend less every time. Everyday they reduce their prices and put certain products on special offer too help out the customer. All around the store they show comparisons to other stores.

Due to Tesco being an extremely large firm they have many external influences which have large affects on how the business is run.

Rivals and other major companies are strong competition for Tesco; they all put pressure on Tesco to keep their prices lower than their competitors. The customers are really the most important factor of the whole development going on at Highwoods. Keeping the customers happy is crucial as they have to keep selling the products that they want to purchase. The customers are able to spread the name of Tesco in good or bad ways, Tesco need to keep the customers happy because other wise it won’t just be one customer that they loose. Planning permission is also an obstacle that they have to climb over; before they can begin any building work they must first obtain permission from the local council. Although Tesco is quite up-to-date already they still have to change with the time, new equipment will always keep on arising and it is Tesco’s duty to make it as easy as possible for their customers. To group all the external influences we use the four letters that make the word: PEST.

P stands for political. This includes external influences that the government are responsible for through taxation, political duties and objectives and legislation. From these Tesco have to adapt to changes in the employment law, changes to the environment law which affects the business location or pollution levels. It is anything to do with the law that the government changes.

Economic this considers how the climate and the impact that it might have on the business. It may affect the interest rates and the investment decisions of the customers and the public.

Social is when customers social lives and lifestyle affect how they spend their money and what exactly they spend it on. The market size might change as new companies might target certain age groups and take away some of the customers that were previously put money into one business and have now changed.

Technical also is a major group I external influences this changes what people expect and would prefer to see. For example look how quickly the internet has spread. Business may need to get the new technology in quickly to remain competitive with the other companies and businesses on the market. Tesco has ordered in new self-service machines so that you can may for your items quickly and efficiently. This will speed up the queues at the shopping tills and allow people to have an easy service.

My information on the PEST groups and external influences came from an information sheet giving full explanations of each.

The idea of Tesco’s expansion came from their competitors as they are considering expansions to keep up with Tesco in the business of Supermarkets. Not all food sellers are able to expand their business due to certain restrictions and will begin to loose their customers as a bigger and better place will catch the eye of the customer. Eventually over time the large businesses will begin to take all the customers from the smaller businesses and cause them to shut down due to them not making enough profit.

Alternatively Tesco could move to a larger location and not have to go under all the pressure and stress of having building work done. This might not pay off however as they will loose a majority of their customers from one location and have to start from scratch attracting new one in the new area. Although staying at their present location they will have had to obtain Planning Permission and employ builders. The new location would take a lot of advertising and some extra stress, so probably staying at the Highwoods location is the most sensible idea. During the construction they will have many customers that are annoyed because of the building work. Tesco have employed many new members of staff who walk around helping people who are unable to find a certain product. Hopefully this will make customers happy and they will spread the word of Tesco and its new development.

Overall I conclude that Tesco made the correct decision of staying at the Highwoods location, they have many more benefits at this location although they only have a limited amount of space to use. They will keep most of their current customers and also attract new ones with there amazing facilities. All the development would be worth while as they will easily get back all the money that they spent and with it a large profit which will continue to grow. They will make more profit from the development as they will have a wider range of products and items on sale for the customer. This will make Tesco more convenient to a wider range of people. Hopefully they will begin to go and go and appeal to more people all over the board.

BY Daniel Lane MPA