Training and development are of greater importance than before. Employees using brain power and knowledge are very valuable to Tesco and add value to products. Tesco by giving training and development add value to their products and have a competitive advantage over their competitors. This is true for the economy as well as Tesco and its competitors. The government have placed a vital importance on education, training, and development particularly on ICT and communications technology.
Tesco offer opportunities for jobs and the economy rests upon the flexible working practises employed within service and knowledge based industries. Tesco want to keep their employees and want them to be satisfied in their job, because students are hired as a main percentage Tesco don’t want to lose them, when say the student may want to go to university they can find them a job wherever they are moving, and send someone from there to their current store, a job swap. This is competitive as no other store does this.
Tesco being an intelligent organisation recognise that their strength and the strength of their balance sheets comes from the intellectual capital rather than physical capital. The brainpower which is vitally needed to have a competitive business enables Tesco to identify customer needs and requirements. Tesco engage in product research and development.
Tesco need to have the best training and with so many being having degrees or further education they need to cater for these people as well as those who have little education but as much potential. Tesco have various training schemes which compete with Sainsbury’s, Budgens and Waitrose.
It is cost effective to train staff that you already have as Tesco do not have to pay for the recruitment process which is expensive and they know that they have the right candidate and their will be no complications.
Tesco builds and maintains a competitive advantage against its competitors. Tesco is also one of the fasting growing supermarket chains in the country, and is reducing the market share of it’s competitors. This makes Tesco ideal for analysing how Tesco maintains it’s competitive advantage, as it is currently very successful.
Competitive advantage in relation to Tesco is it’s ability to build and maintain a distinctive edge, through its reputation, innovation, and through its relationship with it’s suppliers. Tesco operates in a highly competitive market with many rivals such as Asda and Waitrose, so to make a profit and attract customers it must be different to, and better than it’s competitors. Maintaining an competitive advantage is important because if Tesco did not then its profits would fall, as customers would go to other more dynamic supermarkets. This is why Tesco continually advertises, promotes, and minimizes its prices in order to keep and attract customers away from a crowded market.
Tesco’s mission statement tells me much about the aims and goals of the company and in what way Tesco’s tries to focus it’s ideas and new developments which is important for Tesco’s as it not only defines Tesco’s purpose but defines Tesco’s entire work ethos and strategy which is at the heart of Tesco’s competitive advantage. Tesco’s mission statement is as follows:
‘To be Britain’s best value fresh food and clothing superstore, by satisfying the weekly shopping needs of ordinary working people and their families who demand value.’
Tesco also emphasizes the need to:
– The need to keep low prices and increase quality
– Reduce waste to a minimum
– Listen to the needs and wants of the consumer
– Strive for better results and a good all round service
Tesco’s mission statement reveals that Tesco’s main concern is providing economical goods for a broad consumer base this is important as to maintain a competitive advantage Tesco must carefully identify its target consumer group, and cater for their needs in this case those with lower incomes, unlike another company like Marks and Spencer’s who focus on quality, although Tesco maintains that it’s products are of good quality.
Tesco is about to merge with Morrison’s, which is one of the largest supermarket chains in America. This gives Tesco the ability to offer it’s goods at cheaper prices than it’s competitors and match the quality and offers of the major supermarket while still making more profit that it’s rivals due to the large economies of scale involved in bulk buying by Morrison’s. A simple price comparison of generic goods can demonstrate Tesco’s competitive edge over rival supermarkets in price. I chose Asda’s because it is one of the largest Supermarket’s in the UK at this time.
100 Bin Liners
Own brand 60 Multivitamins and Iron
Double Bar of Galaxy
6 Jam Tarts
Heinze Cheese Supreme
100 Safety Matches
This is a major advantage to it’s competitors as they can compete against it’s British rivals however there are those who dislike foreign companies and prefer to buy British, so this is a mixed blessing for Tesco it does not seem to be a major factor as Tesco has worked hard at promoting the fact that it ‘buys locally to support the local economy’ and ‘supports British farmers giving them fair prices’ which has helped Tesco’s impact a great deal and has attracted customers.
Tesco, like it’s competitors has many schemes and programs operating to make extra money and give a feeling of ‘added value’ value to the consumer. This is one of the many vital ways in which Tesco gains a Unique Selling Point, in this saturated market.
The introduction of the internet has also been important to Tesco in maintaining a competitive advantage a spokesperson for Tesco said ‘ people who may struggle to use the internet (e.g. Disabled, infirm etc.) can now do so via the internet. By offering this service we maintain our standing as one of Britain’s top retailers!’
Tesco’s use of the internet is definitely proved useful, although in a survey I conducted only 1 in 10 used this service it was conducted in Farnham common where this service is not available Tesco maintains that it’s internet site has ‘many users’ and is ‘growing in popularity all the time. Asda and a few other supermarkets offer a similar service, but Tesco was one of the market leaders, and offers it at the lowest cost rate than other competitors, attracting customers away from more expensive websites. This is important to Human Resources within Tesco as it shows that there is a lack of delivery service within a 3 mile radius which may need recruitment.
Tesco also offers other banking and useful services such as Pet Insurance and Tesco calltime which have proved most popular with Tesco and other supermarkets such as Sainsbury’s. Although Tesco was one of the companies that pioneered this other companies such as Somerfield have followed suit proving that it is indeed popular and gave Tesco a competitive advantage while other companies had to reactively start their own up.
The internet is also a cost efficient and effective way of advertising which Tesco utilizes on it’s website to make money, and to show it’s promotions online, which was an advantage which some supermarkets were slow to utilize like the Co-operative Supermarket Chain Rainbow.
One of the main ways in which businesses maintain a competitive edge is through extensive market research and ‘continually studying the needs of our customers and change to suit that need.’ To carefully identify those who are potential or existing customers is vital to ensure a competitive advantage will be long lasting and targeted at the correct consumer group for maximum effect. Tesco carries out many surveys on:
1) Customer Care
2) Price Comparison
3) Product Development
4) Advertising Campaigns
5) Consumer Issues
Tesco does other surveys but as far as competitive advantage is concerned these are the most important ones. ‘By Utilizing various market research techniques Tesco can meet the demands of a dynamic market’ and continually stay one step ahead of the competition, this is important to Human Resources so that they can keep on top of competition they need who and where to train within Tesco and when and where they need to recruit and what time.
Innovation is also important, market research is important, as well as customer feedback, but Tesco also has a highly trained teams of market analysts and development teams that come up with new ideas, such as the recently introduced Tesco delivery service, they also spot changing trends in the market and adapt the company to meet those demands. This is why conflict between departments has to be minimised. Human Resources will have to work with Marketing to know when they need to recruit more staff.
Tesco also concentrates on providing a high level of customer care and satisfaction, each store has a greeter that helps people and provides a friendly a secure atmosphere from entering the store. Each greeter is trained in customer care, and there are incentives for the greeters with extra money and prestige with voluntary extra training, as they can become a ‘golden greeter.’
The ‘no quibble’ refund scheme and other innovations such as ‘bag carriers’ help to exceed customers expectations, and attract business. This innovation in customer care also helps Tesco’s reputation as it is seen as a caring and Co-operative supermarket, where large companies are perceived as being heartless and uncooperative, although other supermarkets do offer a similar service I have not seen it so widely displayed than at Tesco.
Tesco also implements local and national schemes to build, maintain, and improve it’s reputation within the community this kind of ethical business often attracts customers, for example the Tesco store in Slough supports local community projects most recently sponsoring the local St Bernards school in it’s Christmas show which helped to raise money for the school this gives Tesco extra promotion at a comparatively low cost and helps Tesco’s public image. Asda however also does this, and so does Sainsbury’s however not all supermarkets do this for example Waitrose does not. There does seem to be a battle between the local supermarkets to assist the local community suggesting that although many supermarkets are doing this, they are obviously still very lucrative!
All the promotions and innovations that Tesco does contributes to the Added Value of the products people purchase which is a necessity for Tesco to maintain it’s competitive advantage. By creating added value, the consumer feels that the goods they are purchasing are worth more than the cost of the composite materials that were used to manufacture the goods that were produced. Customer service is important for Tesco’s so Human Recourses have to train all staff to have great customer relations so that all customers will return.
This enables Tesco to make a profit on the goods it sells, and the greater the added value perceived by the consumer the greater the revenue. The ‘special relationship’ with Tesco’s ‘suppliers’ allows Tesco to get the most quality at the lowest cost due to their ‘bulk buying techniques.’ Tesco’s highly promoted ‘rollback’ actually means that prices on selected goods actually go down, similar schemes have been used by Tesco’s competitors such as Sainsbury’s and Asda, but Sainsbury’s could not compete and had to discontinue while Asda still operates their scheme, Tesco was the first, and ‘continually strives to out compete’ it’s ‘competitors.’ This is used in conjunction with other marketing ‘gimmicks’ such as ‘linksaves’ where you ‘buy one get one free’ which have proved very successful for all the supermarkets who use it and helps to get rid of excess stock, or stock that is not selling well.
Like most businesses Tesco has to rely on its ability to continually innovate, build up and maintain a reputation, and forge new and better relationships with it’s customers and suppliers for it to have a competitive advantage. Tesco does all three of these and well as is it one of the top retailers in this country and is also one of the fastest expanding, showing that Tesco is indeed successful, due to it’s low prices and high levels of customer care, Tesco is one most innovative supermarket chains, and is always developing better ideas, and giving the consumer what it wants, by doing this it maintains a competitive edge and although other companies are doing the same and copying from each other, by continually striving for better quality and lower prices it will continue to attract customers, and therefore maintain it’s main and hard to copy competitive edge. Human Resources realise this and have to make sure that to keep ahead of competition that they have the correct number of staff who are trained to the best of their ability, and that they plan ahead to maintain their status of competition within the industry.
To make sure that Tesco’s employees have the greatest knowledge and skills of their job role Training and Development make sure that work is carried out at a good speed and to efficient standards. If a cashier has the knowledge of the location of objects within the store it will give customers good satisfaction as well as the knowledge that they can return and have good till service, this will evidently maximise the number of sales Tesco will have, gaining a higher market share within the food market, and gaining a competitive advantage over their rivals.
Recruitment and selection must ensure that their employees are capable of their job role and that they hardworking employees, they do this during the recruitment and selection process when hired through a detailed job specification and job description. Tesco’s employees give a good service and this leads them to have a good reputation for food and quality, and great customer service. By giving a better service than rival companies such as Waitrose it is likely that customers will return giving Tesco a competitive advantage over their rivals.