case study of tesco leadership

Case Study: Tesco

Tesco is a British multinational groceries and general merchandise retailer with its headquarters in the United Kingdom. Not only is Tesco one of the most valuable brands in the UK, but it is also the sixteenth most valuable retail brand worldwide as of 2021. In the UK, Tesco is the leading grocery retailer with a consistent share of over 27 percent of the market and is classed as one of the ‘big four’ supermarkets.

​The executive team for Tesco is based across Ireland, Asia and Europe with all functional team leads reporting to CEO, Ken Murphy. In 2018, Natasha Adams, then CPO and now CEO Tesco Ireland, attended Wavelength’s immersive learning study tour, Wavelength USA 2018 alongside 20 other exec level leaders from different sectors/continents, and in 2019 attended our bespoke ‘Silicon Valley Immersion’ with fifteen members of the Tesco Executive team.

Between 2014-2021 under the leadership of Sir Dave Lewis, the Tesco leadership team orchestrated a spectacular turnaround, resulting in a 34% surge in profits. However, then, as now, the retail landscape was under intense pressure as consumer behaviours changed, which has had a profound impact on the way in which people shop and eat.

Mindful of the pace of change and increasing customer demand, Tesco needed to pay serious attention to how it was innovating to remain relevant in this fast-paced, disruptive environment. How could they create the necessary conditions to use innovation as their catalyst for growth?

Wavelength were delighted that Tesco thought of us as their ideal partners in their journey towards embedding innovation in their strategy and outlook.

Silicon Valley Immersion Trip

“As a leadership team and as an organisation as a whole, we had to ask ourselves some tough questions. How could we collectively open our minds to innovate in a different way and think about innovation in the longer term? We needed to understand and feed off the big disruptions happening globally and specifically within the retail market,” commented Natasha Adams, former CPO and currently CEO, Tesco Ireland.

“Having attended the Wavelength USA trip the year before, I saw very clear synergies between that experience and the experience we wanted to create in the Tesco Silicon Valley Immersion trip. It was an opportunity to do something bespoke to focus on strategically important key themes.”

Tesco were seeking some very clear outcomes – namely, to change individual leaders’ frames of reference, mindset and expectation of innovation in their individual areas of the business. They wanted to stimulate a collective disruption around what the business was doing – and still needed to do – to fulfil their overarching strategy; all whilst remaining relevant and at the forefront of retail innovation.​

“We wanted to answer the question: ‘how do we become an innovative business where innovation flourishes to the advantage of our customers?’ This trip was about getting the stimulus to start that journey,” added Natasha.​

The bespoke Silicon Valley Immersion trip that Wavelength created for Tesco in 2019 was a world-class, unique three days packed with stimulus and encounters with the innovators, the disruptors and the enablers from across the Valley. The trip was curated around Tesco’s key strategic themes: food, loyalty, data, future of payments and AI.

Hosts included Silicon Valley Bank, Salesforce, Grove Collaborative, Starship Technologies, Andreesen Horowitz, Mayfield and a unique special event with a range of Silicon Valley entrepreneurs, commentators and thought leaders.

Tesco Leaders' Event - Bringing Silicon Valley To London

Following the success of the bespoke Silicon Valley trip, Wavelength supported the next stage of the Tesco Innovation journey by designing a bespoke experience for the group which would recreate and build upon their Silicon Valley Immersion. This formed part of the Tesco October 2019 bi-annual two-day Leaders’ Event, which brought together 50 top global Tesco leaders.

Natasha was keen to involve elements from across the Silicon Valley programme in the Leaders event, with the aim of broadening the level of awareness for the need to innovate differently.

Experience and Results

For Natasha, the highlights of the Silicon Valley Immersion programme were in its breadth and diversity of content, and the top-notch quality of conversations.

“The openness and willingness of the host companies to engage with the Tesco Group meant that the brief for the trip was 100% met. And the real highlight was that the trip stimulated the disruption conversation and challenge we wanted and needed to move forward with our strategic plans” she said.

The participation of the Tesco top team in Wavelength programmes ignited serious change across the company.

As a direct result, Tesco completely re-examined and relaunched their approach to innovation – culminating in September 2020 with their launch of ‘Tesco Red Door’, their new approach to disruptive innovation. They invite innovators with new products, ideas, or emerging technologies with the potential to cause disruption in the future to contact this Group Innovation Team.

This team is now a single point of contact, responsible for quickly evaluating ideas, supporting partners to access Tesco, and helping them to develop and implement their ideas.

This team enables start-ups with products and services that could step change Tesco’s business to partner with them whilst the ‘mothership’ focuses on incrementally increasing service delivery to 24 customers every week. Current pilots include partnering with:

• Manna to deliver groceries by Drone,
• Turing to use AI to transform product development,
• WhyBuy offering the opportunity for customers to access products and services without the cost of ownership.

A new role has also been created – Group Innovation Director. This role reports directly to the CEO and has a small working team with 100% backing from the executive team.

Smaller outcomes, but no less important, are that the executive team now have a markedly different perspective, connecting with entrepreneurs with whom they have built – and continue to build – key strategic partnerships.

What SAGA said

You managed to do that difficult thing of getting people to think more broadly about their profession, sharing fresh thinking from other companies and weaving this into a stimulating and entertaining narrative – great result!

Ala’a Eraiqat Group Chief Executive Officer & Board Member Abu Dhabi Commercial Bank

Dave did a thorough job of understanding ADCB journey towards Service Excellence, where we were, and what our ambition is. Dave tailored his speech in line with ADCB’s Service Ambition and illustrated the service road map beautifully to the audience. His speech was a catalyst that has reignited our leaders passion for service excellence, which is clearly evidenced by the increase in the number of change initiatives that have been kicked off and successfully implemented since the event. Would definitely recommend Dave as a speaker to help put to the customers and the employees back at the top of the agenda where it always belongs.

Alain Moffroid, Regional Managing Director Europe, Rentokil

Thank you for the brilliant session you delivered. We have received extremely positive feedback and it was a key contribution to the success of the two days. Both content and delivery were truly excellent, congratulations!

Alan Webber, Former Managing Editor, HBR & Co-Founder, Fast Company Magazine

If you have a chance to work with Steve Cadigan - for any reason at all - grab it! You will learn a lot. You will enjoy the experience. You will benefit from knowing and working with Steve in ways large and small. And it’s not just about the work. It’s about what kind of person Steve is. Trust me: you want to work with Steve.

Alexandra Humphries, Group Learning and Development Manager, Rentokil Initial

Working with Wavelength and their speakers was really easy. Sarah helped us shortlist a number of different speakers that were suitable for our event. Tokunbo was a great speaker, he listened to our needs about the event and what we wanted to achieve. His delivery was fantastic and we received great feedback on the session. Tokunbo spoke about the importance of embedding a long-term strategy that celebrates difference, of developing a culture of mentoring, championing and sponsorship, and that excellence is everywhere - and how employees should find it and then nurture it.

Alexandra Pierce, Group Head of Organisation Development & Culture, Aldermore Bank

I feel grateful, inspired and humbled by the incredible work of Alder Hey Innovation led by Iain Hennessey and his team. Their customer obsession, outside the box thinking and bravery in pushing the boundaries of technology to save the lives of children faster and better is refreshing and inspiring. Aldermore Bank shares a unique connection in the name, which symbolises strength, confidence and determination. I’m really proud to be part of this business and am filled with hope for how we can take and implement learnings from Alder Hey to create more value for our customers.

Alice Webb, CEO & Co-President, Mercury Studios, Universal Music Group

Aravind is an inspirational example of how to do good business and do good at the same time. This trip is built in that image, feeding your brain and your soul in equal measure. I can’t recommend it highly enough. The impact will stay with you for years!

Anonymous Survey – Corporate Respondent

For me, the most significant impact has been a personal one. I have never felt more inspired by the experience and many have observed a huge lift in my confidence and leadership presence.

Wavelength Inspire

Find out more about Wavelength Inspire and how it can impact your business.

Tesco Change Management Case Study

Change is a necessary part of any business’s growth and success. However, managing change can be a challenging task, especially for a company as large as Tesco. 

The UK-based retail giant faced numerous challenges during its journey of growth, including increasing competition, changing consumer preferences, and economic uncertainties. 

To overcome these challenges, Tesco embarked on a change management journey that transformed the company and enabled it to become one of the world’s largest retailers. 

In this blog post, we will delve into Tesco’s change management case study, discussing the strategies the company employed to manage change, the challenges it faced, and the results and achievements of the change management program. 

We will also examine the lessons learned from Tesco’s success story and provide insights into best practices for effective change management

Background of Tesco 

Tesco is a British multinational retailer that was founded in 1919 by Jack Cohen. Initially, the company started as a market stall in London’s East End, selling surplus groceries from a stall. 

In the 1920s, the company expanded its business by opening its first store in Burnt Oak, North London. 

The company went public in 1947 and continued to expand its business throughout the UK in the following years. 

By the 1990s, Tesco had become the largest supermarket chain in the UK.

However, despite its success, Tesco faced several challenges in the early 2000s. Increasing competition from discount retailers such as Aldi and Lidl, changing consumer preferences, and economic uncertainties had a significant impact on the company’s growth. 

Tesco’s sales started to decline, and the company’s market share was shrinking. To address these challenges, Tesco’s management team realized the need for a change management program that would transform the company and enable it to regain its position as a market leader.

History and growth of Tesco 

Tesco’s success story began in the early 20th century when Jack Cohen, the founder of Tesco, started selling groceries from a stall in London’s East End. By the 1920s, Cohen had established his first store in Burnt Oak, North London, under the name Tesco. 

The name “Tesco” was derived from the initials of TE Stockwell, a supplier of tea to Cohen, and the first two letters of Cohen’s surname.

In the following years, Tesco continued to expand its business by acquiring other retailers and opening new stores throughout the UK. 

By the 1970s, the company had become one of the largest supermarket chains in the UK. In the 1980s, Tesco introduced new products and services, including Tesco Metro stores, Tesco Express, and Tesco Clubcard, which enabled the company to enhance customer loyalty and increase sales.

In the 1990s, Tesco’s growth continued, and the company expanded its business beyond the UK by entering new international markets such as Poland, Hungary, and the Czech Republic. By the early 2000s, Tesco had become the largest supermarket chain in the UK, with over 2,500 stores worldwide.

However, the company faced several challenges in the early 2000s, including increasing competition, changing consumer preferences, and economic uncertainties, which had a significant impact on the company’s growth. Tesco’s management realized the need for a change management program that would transform the company and enable it to regain its position as a market leader.

Key Reasons of making changes at Tesco 

There were several key reasons for the changes at Tesco, including:

• Increasing competition : The rise of discount retailers such as Aldi and Lidl had a significant impact on Tesco’s market share and profitability. These retailers offered lower-priced alternatives, which attracted customers away from Tesco’s stores.
• Changing consumer preferences: Consumer preferences were shifting towards healthier and more sustainable products, which Tesco was slow to respond to. This led to a decline in sales and customer loyalty.
• Economic uncertainties: The global economic recession of the late 2000s had a significant impact on Tesco’s financial performance. Consumers were more price-sensitive, and there was increased pressure on retailers to reduce prices.
• Internal issues: Tesco’s rapid expansion had resulted in organizational complexity, which made decision-making slow and inefficient. There were also issues with employee morale and engagement, which impacted the company’s ability to deliver high-quality customer service.

Steps taken by Tesco to implement change management 

To address the external and internal challenges, Tesco’s management team realized the need for a change management program that would transform the company and enable it to regain its position as a market leader. The changes that were implemented included a focus on cost reduction, improving customer service, and enhancing employee engagement.

To implement the change management strategy, Tesco took several steps, including:

• Leadership commitment: The company’s senior leadership team was fully committed to the change management program and provided clear direction and support throughout the process.
• Communication : Tesco developed a comprehensive communication plan to ensure that all employees understood the rationale for the changes and their role in implementing them. The plan included regular updates, town hall meetings, and training sessions.
• Cost reduction: Tesco implemented a cost reduction program to improve efficiency and profitability. The company reduced its product lines, renegotiated supplier contracts, and streamlined its supply chain.
• Customer focus: Tesco implemented a new customer service strategy, which included improving the quality of its products, enhancing the in-store experience, and increasing customer engagement through loyalty programs and personalized marketing.
• Employee engagement: Tesco recognized the importance of employee engagement in delivering high-quality customer service. The company implemented initiatives to improve employee morale, including training programs, recognition schemes, and improved working conditions.
• Technology: Tesco invested in new technologies to improve its operations and enhance the customer experience. This included the introduction of self-checkout machines, mobile payment options, and online shopping platforms.
• Measurement and feedback: Tesco established metrics to measure the success of the change management program and solicited feedback from employees and customers to identify areas for improvement.

Positive outcomes and results of change management by Tesco 

The change management program implemented by Tesco resulted in several positive outcomes and results, including:

• Increased profitability: Tesco’s cost reduction program resulted in improved profitability, with the company’s profits increasing by 28% in the first half of 2017.
• Enhanced customer experience: Tesco’s focus on improving the customer experience led to increased customer satisfaction and loyalty. The company’s customer satisfaction ratings improved significantly, and it was named the UK’s top supermarket for customer service by consumer watchdog Which? in 2018.
• Improved employee engagement: Tesco’s initiatives to improve employee engagement resulted in increased employee morale and motivation. The company’s employee engagement scores improved significantly, and it was recognized as one of the UK’s top employers in 2019.
• Streamlined operations: Tesco’s focus on improving efficiency and reducing complexity resulted in streamlined operations and faster decision-making. The company was able to reduce its product lines and negotiate more favorable supplier contracts, resulting in improved margins.
• Strong financial performance: Tesco’s change management program helped the company recover from a period of declining sales and market share. The company’s financial performance improved significantly, with revenue increasing by 11.5% and profits increasing by 34.2% in 2018.

Final Words 

Tesco’s change management program is an excellent example of how a company can successfully transform itself in response to external challenges and changing market conditions. The program was comprehensive and multi-faceted, addressing the company’s challenges from multiple angles. Tesco’s leadership commitment, communication strategy, and focus on cost reduction, customer service, and employee engagement were all critical factors in the program’s success.

The positive outcomes and results of the program demonstrate the importance of change management in driving organizational success. Tesco was able to recover from a period of declining sales and market share, and become a more efficient, customer-focused, and profitable organization. The lessons learned from Tesco’s change management program are applicable to businesses of all sizes and industries, highlighting the need for organizations to remain agile and responsive to changing market conditions.

About The Author

Tahir Abbas

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Style of Leadership in TESCO Case Study

Point of view, statement of the problem, areas of consideration, alternative courses of action, recommendation.

TESCO is among the most profitable and largest chain of supermarkets in Britain. Improper management of the company may make it lose its current competitive advantage.

Due to this fact, it is vital for the management to adopt an effective leadership style that can help TESCO to continue enjoying its current competitive level against its competitors.

Tesco focuses a lot on its customers by ensuring high levels of customer satisfaction through production and delivery satisfactory and high quality products and services.

In order to maintain the desired level of performance, the company requires a well trained and knowledgeable workforce as well as an appropriate team of leadership that is capable of developing the qualities of all the members within the organization.

Choosing the right staff is not a simple process since errors done during the selection process may have very adverse effects on the overall performance of the organization.

For instance, selecting members of staff who are not well conversant with traditional system used by the organization can be a major disadvantage to the company in the sense that some customers who are used to the traditional processes of the company may be affected in one way or another.

This may occur when the new members of staff decide to initiate new changes within the organization without ascertaining the impact of such changes. Selection of the staff depends on the type of leadership that exists within the organization.

Inappropriate leadership style is likely to negatively affect the performance of an organization while an effective leadership style is definitely roves to an organization.

This paper aims at finding out the style of leadership that should be employed by TESCO so that the organization can gain competitive advantage.

Before deciding on the style of leadership to be adopted, it is important for the top management to consider factors such as the task to be performed and the availability of resources.

Determining the manner in which the company has been operating in the past is also extremely crucial when deciding the leadership style that should be adopted. In my view, the above areas can be well addressed if the top leadership at TESCO adopts a democratic form of leadership.

The latter type of leadership can offer significant contribution to the company in different ways and consequently make it easy for TESCO to realize the set goals and objectives.

For example, a democratic form of leadership highlights the importance of respecting suggestions given by the employees during the decision making process. Respecting employees is one way of motivating and encouraging them in order to continue providing satisfactory services to customers.

Apart from relying on the employees as a tool of improving the performance of TESCO, it is necessary for the company’s top leadership to delegate authority to other staff member in all the departments of the company.

Such a leadership style helps employees to have adequate understanding of their roles without necessarily consulting the top leadership. In some cases, it is not easy to access the top leadership especially when the leaders are out of the company for official functions.

The staff tasked with the responsibility of managing the various departments within the organization should ensure that they conduct either a weekly or daily audit.

This assists in identifying and providing solutions to issues that can negatively affect the smooth running of the organization. This process should go hand in hand with inspection of other activities within the department to ensure that customers are provided with high quality services.

Another important factor that should be considered is the method of communication within the organization. Democratic form of leadership helps leaders to ensure effective communication among various teams and departments.

This can be achieved by holding regular meetings and making frequent staff inspection to make sure that all the members within the organization are undertaking their duties and responsibilities as required.

Putting in place this kind of leadership at TESCO can greatly help the company in managing the increasing rate of competition.

There are other alternatives that TESCO can use to reach the desired level of performance. For example, the organization can attempt to establish appropriate ways of attracting and retaining its customers.

Giving gifts or discount to customers who make bulk purchases is a viable strategy of retaining customers. The company can also decide to increase the level of advertisements and promotions in order to increase the number of customers on the type of products and services offered by the company.

From the above discussion, it is evident that democratic leadership style can help TESCO to reach the desired level of performance and also meet the set goals and objectives. This form of leadership provides employees with the opportunity of airing their views during the decision making process

In my view, I believe that TESCO should use appropriate techniques when carrying out various processes (such as recruiting new employees) in the company.

It is also important for the management of the company to portray a democratic style of leadership so that all the members of staff within the organization are given equal chances of expressing their views regarding the performance of the company.

• Chicago (A-D)
• Chicago (N-B)

IvyPanda. (2021, July 21). Style of Leadership in TESCO. https://ivypanda.com/essays/style-of-leadership-in-tesco/

"Style of Leadership in TESCO." IvyPanda , 21 July 2021, ivypanda.com/essays/style-of-leadership-in-tesco/.

IvyPanda . (2021) 'Style of Leadership in TESCO'. 21 July.

IvyPanda . 2021. "Style of Leadership in TESCO." July 21, 2021. https://ivypanda.com/essays/style-of-leadership-in-tesco/.

1. IvyPanda . "Style of Leadership in TESCO." July 21, 2021. https://ivypanda.com/essays/style-of-leadership-in-tesco/.

Bibliography

IvyPanda . "Style of Leadership in TESCO." July 21, 2021. https://ivypanda.com/essays/style-of-leadership-in-tesco/.

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• Harvard Business School →
• Faculty & Research →
• December 2002 (Revised October 2006)
• HBS Case Collection
• Format: Print
• | Language: English
• | Pages: 20

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TESCO – British Retailer that redefined Grocery Shopping

The first time I visited a ‘Tesco Extra’ store was at midnight, making an emergency run for next morning’s breakfast. The store seemed to occupy the area of an entire football field in Ashby-De-La-Zouch, UK. Even at an ungodly hour, Tesco was well-lit with visiting customers.

Inside, there were never-ending aisles lined up with groceries, food items, clothing, electronics, and whatnot. It was easy to lose way and lose track of time in the colossal supermarket.

I thought to myself that this would be the only store of its kind in the county, but I was wrong.

Tesco has 4008 stores across the UK and Republic of Ireland , with 7005+ stores and franchises across the world. In Europe, Tesco has established itself in Hungary, Slovakia, Czech Republic, Poland and Turkey. In Asia it has stores in Thailand, South Korea, Malaysia, Japan and China.

TESCO is much more than a chain of supermarkets selling a million products. It’s a giant conglomerate, spanning across so many verticals. It’s the equivalent of one of the FAANG companies but in the Grocery & Retail sector. It becomes imperative for business enthusiasts like you and me to understand the business model of this retail giant called Tesco.

It’s considered a part of the ‘Big Four’ supermarkets alongside ASDA, Sainsbury’s, and Morrison’s in Europe.

The Birth of Supermarkets in Britain

Founded in 1919 by a war veteran – Jack Cohen , Tesco began as a grocery stall in the East End of London, making a profit of £1 on sales of £4 on day one. Tesco’s first store was launched in 1929, selling dry goods & its own brand of Tesco Tea. A hundred more Tesco stores were opened in the next 10 years.

With 100+ mom-and-pop stores in Britain, Jack wanted to expand his product range. He traveled to the US in 1946 and noticed the self-service system, where customers would select different products on the shop floor and finally checkout at a counter. Jack brought this concept back to Britain, giving birth to Tesco Supermarkets and changing the face of British Shopping. His motto was to “stack ‘em high, and sell ‘em low (cheap).”

Tesco has a wide range of supermarkets depending upon their size, range of products, and location. This also helps regulate their Supply Chain to reduce wastage.

Tesco Business Model is based on various verticals

Tesco has deep-rooted its businesses in the European market so well, it’s difficult to miss out on the Tesco hoarding anywhere. Its Businesses and subsidiaries are:

A glimpse into the Complex Supply Chain

A supply chain is one of the critical aspects of the business model of a giant retailer like Tesco. Tesco has its priorities set when it comes to procuring products from different parts of the world:

• Use expertise to offer a better range of products at reasonable prices
• Use economies of scale to buy more for less
• Leverage and maintain relations with global branded suppliers
• Grow the brand

It procures goods from over 44 countries, majorly China. A stock of up to 90,000 different products (30% are food & beverages) is transferred via the global sourcing office located in Hong Kong. Keeping wholesalers out of the loop, Tesco procures directly from suppliers. The conglomerate has developed and maintained long-lasting relations with suppliers’ world over—the main ones being General Mills, Kellogg, Mars, and Princes.

Tesco has set up a separate division to regulate its supply chain, “the machine behind the machine” – Tesco International Sourcing (TIS). It can be compared to the East India Company of the 18 th -19 th Century, catering to only one customer – Tesco.

TIS is connected to over 1000+ suppliers across 1200+ factories . It’s responsible for over 50,000 Tesco product lines in terms of quality control, sourcing, production, designing, timely delivery, and sorting trading/customs documentation.

All activities are coordinated centrally at TIS, with just 533 staff members. These staff members undergo rigorous training to detect & analyze Supplier-violations and conduct Auditing.

Tesco coordinates with TIS on a daily basis to procure products in the following ways:

• The local team uses customer insights to create a Product Brief (new or modified) specified for each region.
• TIS analyzes the product brief and develops a Product Sourcing Plan depending upon – stores that need this product and figuring out minimum transport time and cost, as per the region.
• The Plan is executed, and specific demands are handed out to Suppliers all over the world. Expert TIS Buyers make sure the best deal is made.
• Inbound logistics are consolidated at specific Tesco Depot to receive the product efficiently from Suppliers.
• Local teams then make sure the product is distributed to different Tesco stores from the Depots.

Tesco adding eCommerce to the mainstream business model

Being in the Top 50 retailers globally as of 2021 , Tesco’s annual revenue worldwide in 2020 was £58.09B , a 9.1% decline from 2019 (due to the Pandemic & disposing of its Asia operations , to focus on the core business in Europe).

It shifted from Brick & Mortar to Brick & Click stores. The Click+Collect functionality on its website accounts for 43% of E-grocery sales in the UK. The Click+Collect concept enables customers to place their orders online and collect their orders a few hours later at the nearest Tesco Depot. Tesco created these specialized Depots for online orders only.

Despite shutting down most its mall operations, Tesco survived 2020 through its online retail store Tesco.com , with double the orders. Its E-commerce net sales had shot up by 31% from 2019-2021.

A Global Operations & Technology Center in Bengaluru was also set up in 2004. This center serves as the backbone of distribution operations for Tesco worldwide. Its business functions are- Finance, Property, Distribution Operations, Customers & Product. The employees at this Center are Engineers, Analysts, Designers, and Architects.

Tesco’s Marketing Strategy

Tesco has always believed in acquiring loyal customers and regaining stakeholders’ trust. It aims to reach customers from all financial backgrounds. So it launched 2 of its own sub-brands – Tesco finest for the affluent customers and Tesco Everyday Value for the rest of the crowd.

Tesco also launched the Club Card in 1995 as a Membership card, to maintain customer loyalty and keep them coming back. The Card operates on a point-based system with discounts on products, & other subsidiaries like double data on Tesco Mobile. With 5 Million subscribers in the first year , Tesco finally overtook its competitor – Sainsbury’s to become No.1 in the UK.

The Club-card strategy was used to obtain customer data and observe buying habits. This data was analyzed, allowing Tesco to put the right products on shelves while eliminating unpopular ones. Tesco realized that the Club Card isn’t just a quick fix & temporary promotional tool; it’s a promotion in itself. This made the Tesco Club Card unique and long-lasting.

Tesco also realized that spending Billions on traditional marketing efforts and maintaining a ‘one-size-fits-all’ brand image wouldn’t work. It decided to hyper-target specific customers and to earn their trust. For starters, thousands of head-office staff and senior executives were sent to work in stores – to demonstrate how Tesco values its customer. Customization became key for its new marketing strategy; sending out discounts on birthdays via Emails and campaigning from door-to-door.

Tesco also made a partial shift to Digital Marketing which costs much lesser and has a wider outreach. It created well-tailored profiles on all social media platforms. On Twitter, it has more than 15 accounts, separate for each of its business units. The online customer care account on Twitter is active 24-7.

All supermarkets commonly advertised themselves to have quality products at a reasonable cost; Tesco wanted to differentiate itself as a unique brand. It introduced step-by-step Recipes prepared from ingredients available at any Tesco store, with Chef Jamie Oliver as its Health Ambassador . Tesco Food and its variety of recipes were a massive hit. Later on, the monthly Tesco Magazine as a food & lifestyle magazine was also launched, with 4.65Million readers worldwide.

The beginning of the pandemic in March 2020 left people apprehensive about visiting a physical store to buy groceries. To deal with customers’ concerns, Tesco came up with an instructional advertisement in April ‘20. With crisp instructions similar to that of an in-flight safety video, this ad showed customers how to physically shop and behave at Tesco stores. It was considered to be the most effective advertising and communications campaign of 2020 as per YouGov BrandIndex .

Competition

Tesco’s earliest competitor has been Sainsbury’s since the 70s. The Tesco Club Card strategy in 1995 helped it overtake Sainsbury’s to become the No.1 Retailer in the UK, but not for long. The ‘Big Four’ supermarkets in Europe have been in close competition throughout the years. Tesco has acquired a 28% majority stake in the UK market.

The horse meat and accounting scandals were a real setback for Tesco, letting competitors take over the European market. The newest German entrants – Aldi and Lidl had caught customers’ attention and market share in a short span of time.

With a combined market share of 12%, these German retailers posed a threat to Tesco. So much so that Tesco began the ‘ Aldi Price Match ’ campaign to curb the growth of the German discounter and win back customers. Tesco started price-matching thousands of its products with that of Aldi, offering better quality and branded products at Aldi’s prices.

Tesco has a majority market share in Britain, with Sainsbury’s and ASDA in tow:

Tesco Adding Sustainability to its business model – The Little Helps Plan

It’s a well-known fact that giant conglomerate retailers are one of the major causes of rapid climate change and increasing carbon footprints. Tesco realized its impact on the planet and launched the Little Helps Plan as a core part of business in 2017. This plan serves as a framework to attain long-term sustainability. Its four Pillars – People, Products, Planet, and Places are aligned with the UN’s Sustainable Development Goals.

Until now, the Plan has enabled Tesco to:

• Permanently remove 1 Billion pieces of plastic from its packaging
• Redistribute 82% of unsold food, safe for human consumption
• Remove 52Billion unnecessary calories from foods sold

Apart from this, it also aims to increase sales of Plant-Based Meat alternatives by 300% by 2025. At present, it has 350 plant-based meat alternatives on the shelf.

Apart from partnering with various other organizations, Tesco entered a 4-year partnership with World Wide Fund for Nature (WWF) to address one of the biggest causes of wildlife loss – the global food system. It aims to eliminate deforestation from products, promote recyclable/compostable packaging and minimize food waste.

Tesco is one of the few successful retailers in the world, with a compelling history. Tesco has overcome numerous issues across its supply chain, faced global criticism, and still stands undeterred in the European market with its rock-solid business model. It has always adapted to its unpredictable consumers and continues to do so while caring for the planet.

The business is healthy. We said we would rebuild the relationship with the brand and consumers; you will see that in every measure of customer satisfaction we do that. The business is healthy, vibrant and there is a lot of optimism of what we can do going forward. CEO Dave Lewis, who took over Tesco in 2014 (during the struggle years) & stepped down in September 2020

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An Engineering grad, currently working in the fields of Big Data & Business Intelligence. Apart from being immersed in Tech, I love writing and exploring the business world with a focus on Strategy Consulting. An ardent reader of Sci-Fi, Mystery, and thriller novels. On my days off, I would spend time swimming, sketching, or planning my next trip to an unexplored location!

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Tesco  is a customer-orientated business. It aims to offer products that provide value for money for its customers and to deliver high-quality service. Tesco wants to attract new customers, but it also wants to keep its existing customers happy. Building customer loyalty is a cost-effective strategy to grow the business. This is because satisfied customers are a good advert for the business.

Tesco has more than a 30% market share of the UK grocery market, nearly double that of its nearest rival. In its 2009/2010 financial year, Tesco earned revenues of £38.6 billion in the UK and employed more than 280,000 people. To keep at the top of its game and to maintain its number one spot in the market, the company needs skilled staff at all levels and in all roles.

Roles in Tesco

Roles in Tesco range from business development, supply chain management and marketing to finance, store operations and personnel management. Each area of expertise requires leadership and management skills. Tesco aims to develop the leadership qualities of its people throughout the organisation, from administrators and customer assistants to the board of directors. It adopts a similar approach to leadership development for staff at all levels. This is in line with Tesco’s employment philosophy: ‘ We believe in treating each other with respect, with everyone having an equal opportunity to get on, ensuring Tesco is a great place to work.’

This case study will show how Tesco’s leadership framework is fundamental to developing the qualities of leadership needed at every level in the business.

Management and leadership

There is a difference between management and leadership. Management is about getting things done. Managers organise human and physical resources to achieve business aims and objectives. Leadership is about influencing, motivating and inspiring people. It is about coaching and developing people, treating them with respect but challenging them. Leaders seek to create strong teams, with people committed to the organisation’s overall goals.

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Unleashing leadership and management excellence at Tesco

Tesco’s strategy to diversify the business and rapid pace of growth has resulted in a number of challenges for the company including:

• Providing strong, inspirational leaders who have the awareness and development mindset to capitalize on their unique strengths and skills and those of the people they lead
• Ensuring the availability, development and effective deployment of people who have both the skills and energy/passion to meet planned goals and tackle new challenges with enthusiasm, resourcefulness and competence
• Ensuring high levels of confidence and resilience to deal with the rapid rate of growth and change which inevitably leads to increased work demands and pressures

Our solution

Strengthscope® partnered with Tesco’s UK and Asian Leadership Academies and division Personnel teams to conduct dozens of management and leadership development programs over a two-year period.

This included training all store directors and managers in the UK to help them identify, develop and stretch their strengths and reduce performance risks to improve the way they lead, increase employee engagement, customer loyalty and financial results.

• Feedback from all Tesco programs was excellent with up to 5,000 Tesco employees having used Strengthscope® and the strengths-based approach within the organization.
• Nearly 100% of delegates who attended Strengthscope® Certificate training indicated that they were very likely to talk positively about the training.
• The approach has been adopted outside the UK by the Asia Leadership Academy and is being used in several Asian countries, including India, South Korea and China.
• Tesco managers outlined specific benefits arising from the programs including: improved clarity on key strengths and development needs in the business, greater appreciation of different strengths leading to better problem solving, improved leadership confidence and capability, increased levels of positive energy and stronger employee performance.

100% positive feedback from delegates

I can see now how my strengths can make a difference, not just today, but for years to come.

Store Director, TESCO

Strengthscope® is a simple and really useful tool that has been an enabler for people to focus on and excel in what they are good at.

Personnel Manager, TESCO

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Making 10 years of team development progress in just 12 months.

In brief…, in 2017, the central europe (ce) businesses of tesco were in urgent need of leadership team improvement and a rapid turnaround. complete stepped in and started work to help turn the business around through individual and collective action with a focus on relationships, development and engagement..

Eight-day team development journey

Aligned to the four quadrants of our leadership model, Complete applied practical exercises, in-depth conversations and developmental tools to customise the eight-day ‘Team Journey’ according to the maturity of each team and the commercial challenges that they faced.

Significant results in just 12 months

Our work enabled the major retailer’s leaders to make 10 years of team development progress in just 12 months. Not only that, but the Central Europe (CE) businesses saw a 26% increase in its colleagues viewing the company as ‘a great place to work’ in just 12 months. The CE businesses are now scoring well above the company average on this critical measure of success.

A word from our client …

Tesco’s CEO for Central Europe said: “We are now networked rather than functionally siloed. We are coherent rather than disjointed. The leadership team has made that transition very successfully and now we’re starting to see the benefits permeate through the whole organisation.”

Discover more

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Case Study - Tesco

Tesco is one of the world’s largest retailers, with more than 6,000 outlets across Europe and Asia serving millions of customers every week. Here you can read more about Tesco's science-based targets.

Why did you set a Science-Based Target?

Tesco has a long-standing ambition to become a net-zero carbon company by 2050. It has been over ten years since we set our first business-wide carbon reduction targets in 2006. Following the Paris Agreement, we conducted a review of our short- and medium-term plans to ensure that our efforts were aligned with what the science tells us is required to help keep global temperature rise below 2°C. This review showed that although our long-term, zero-carbon ambition (2050) is aligned with this global aim, we needed to set steeper absolute targets over the short- and medium-terms. These targets have informed our revised climate change strategy, comprising energy and refrigerant efficiency, renewables deployment and policy engagement.

What was the process of setting your target?

In order to set our science-based targets we needed to answer three questions:

• What are credible climate change targets for Tesco?
• How can we realistically achieve these targets?
• What would it cost to implement the solutions?

To answer the questions we plotted the 1.5°C and 2°C warming trajectories and found that our long-term, zero-carbon ambition aligns with 1.5°C. We then modelled what it would take to realistically achieve this ambition. While our existing climate change strategy was already focused on efficiency improvements, 60% of our operational footprint comes from our electricity use so it was clear to us that we would need to switch to renewable electricity. We created a costed renewable electricity roadmap which, along with our efficiency projects, gave senior leadership confidence that the new interim targets were achievable.

In terms of scope 3 emissions, we conducted a full supply-chain footprint survey of our product portfolio to identify the hotspots that should be targeted for GHG emission reductions. Through this process we learned that we needed to set different targets for agricultural emissions and emissions from food manufacturing. This reflects the contribution of these life cycle stages to our overall supply-chain footprint and provides the best route to working with our suppliers to keep the global temperature rise below 2°C.

What are you achievements so far?

Efficiency improvements: Since 2006 we have invested over £700 million in energy and refrigeration efficiency improvements. This has reduced emissions from our stores and distribution centres by 41% per square foot and delivered absolute reductions against our 2006 baseline despite significant floor area growth. We will continue to invest in efficiency improvements to meet our targets.

Renewables: We have switched to 100% renewable electricity in the UK and the Republic of Ireland. In Asia, we invested £8 million in onsite generation in 2016, with a plan to expand renewable onsite generation further. We have successfully developed a cost-neutral renewable electricity plan to 2030 for the whole company. This includes a commitment to ensuring that the majority of our renewable electricity comes from renewable onsite generation and PPAs (i.e. less than 50% from certificates).

What the benefits of having a science-based target?

Climate change mitigation: The science-based target illustrates our commitment to the Paris Climate Agreement and quantifies Tesco’s rightful contribution to achieve the goals set out under it.

Motivation: Our target has also been a source of motivation and pride for colleagues.

Supply chain engagement: Our targets act as an example and offer us the opportunity to cooperate with our suppliers to address climate change impacts and risks.

Reputation: The targets demonstrate our seriousness in tackling climate change, both to our investors and our other stakeholders. It is also part of meeting our business purpose to serve our shoppers and our communities.

Did you encounter any problems?

We successfully addressed a number of potential obstacles to ensure our science-based targets were approved.

Awareness and education: Outside of the sustainability and climate change team, the idea of science-based targets was new and we needed to raise awareness of the concept before securing buy-in from others in the business.

Coordination: As a food retailer, our science-based targets touch on various functions from property to procurement. This required active engagement and coordination across many internal teams to ensure their support and input.

Agricultural emissions: Emissions from agriculture represents around 70% of our supply chain emissions, while the world is also expected to produce more food to feed our growing world population. We incorporated these projections into our model to set a separate reduction target for agricultural emissions from other scope 3 contributors to recognise its unique challenge.

Implementation strategy: In order to secure executive approval for our science-based targets we developed a costed strategy with the Energy, Property, and Treasury functions of our business, demonstrating that the targets could be realistically delivered in the timescales proposed.

What is the wider impact of companies making such commitments?

Science-based targets have helped us, for the first time, to align our efforts to act on climate change with those of the global community. This alignment signals the direction of travel in the fight against climate change to all of our stakeholders – including our investors, suppliers and customers. With more and more businesses setting science-based targets we also have the opportunity to encourage policymakers to raise their national ambitions, which will be vitally important as they look to increase the levels of their Nationally Determined Contributions (NDCs) every five years.

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• For CEOs and Founders Unlock hidden capabilities, upgrade your energy and create time.
• For Senior Leaders Unlock hidden capabilities, upgrade your energy and create time.
• For Women in Leadership Navigate and overcome the unique challenges facing female leaders.
• For Leaders in Education Manage emotions, upgrade your energy and unlock potential.
• Complete Energy Audit Assess an individual’s physiology and emotional state to increase energy and focus.
• Complete Values Profile Identify the dominant value system of individuals, teams and organisations to drive performance.
• Our methodology
• For Executive and Senior Leadership Teams Unlock new levels of capability within your team.
• For Heads of Department Translate strategy into action throughout your organisation.
• Develop Future Talent Find the future talent in your company with smart, crowd-based analytics.
• Transform Engagement Learn what's driving engagement in your organisation.
• Eliminate Silos and Hierarchy Stop silos constraining collaboration and growth in your business.
• Drive Organisational Change Reveal the blockers to change in your organisation.
• Step-Change Wellbeing Empower and engage your people to feel better and do better.
• Organisational Network Analysis Discover, with incredible precision, how your company actually works.
• Network Analysis The org-chart is dead. Find out how your business really functions.
• The Complete Story
• Meet Dr. Alan Watkins

Making 10 years of team development progress in just 12 months.

In brief…, in 2017, the central europe (ce) businesses of tesco were in urgent need of leadership team improvement and a rapid turnaround. complete stepped in and started work to help turn the business around through individual and collective action with a focus on relationships, development and engagement..

Eight-day team development journey

Aligned to the four quadrants of our leadership model, Complete applied practical exercises, in-depth conversations and developmental tools to customise the eight-day ‘Team Journey’ according to the maturity of each team and the commercial challenges that they faced.

Significant results in just 12 months

Our work enabled the major retailer’s leaders to make 10 years of team development progress in just 12 months. Not only that, but the Central Europe (CE) businesses saw a 26% increase in its colleagues viewing the company as ‘a great place to work’ in just 12 months. The CE businesses are now scoring well above the company average on this critical measure of success.

A word from our client …

Tesco’s CEO for Central Europe said: “We are now networked rather than functionally siloed. We are coherent rather than disjointed. The leadership team has made that transition very successfully and now we’re starting to see the benefits permeate through the whole organisation.”

Discover more

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Research Roundup: How the Pandemic Changed Management

• Mark C. Bolino,
• Jacob M. Whitney,
• Sarah E. Henry

Lessons from 69 articles published in top management and applied psychology journals.

Researchers recently reviewed 69 articles focused on the management implications of the Covid-19 pandemic that were published between March 2020 and July 2023 in top journals in management and applied psychology. The review highlights the numerous ways in which employees, teams, leaders, organizations, and societies were impacted and offers lessons for managing through future pandemics or other events of mass disruption.

The recent pandemic disrupted life as we know it, including for employees and organizations around the world. To understand such changes, we recently reviewed 69 articles focused on the management implications of the Covid-19 pandemic. These papers were published between March 2020 and July 2023 in top journals in management and applied psychology.

• Mark C. Bolino is the David L. Boren Professor and the Michael F. Price Chair in International Business at the University of Oklahoma’s Price College of Business. His research focuses on understanding how an organization can inspire its employees to go the extra mile without compromising their personal well-being.
• JW Jacob M. Whitney is a doctoral candidate in management at the University of Oklahoma’s Price College of Business and an incoming assistant professor at Kennesaw State University. His research interests include leadership, teams, and organizational citizenship behavior.
• SH Sarah E. Henry is a doctoral candidate in management at the University of Oklahoma’s Price College of Business and an incoming assistant professor at the University of South Florida. Her research interests include organizational citizenship behaviors, workplace interpersonal dynamics, and international management.

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Leadership Issues in Tesco: A Case Study

Added on   2023-06-11

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