Type of paper: Report

Topic: Development, Tesco, Leadership, Business, Company, Management, Workplace, Employee

Pages: 5

Words: 1375

Published: 2023/02/22

Executive Summary

Tesco PLC is regarded as one among the prevalent and highly acknowledged companies of the Britain. In the beginning, Tesco was just a marketplace stall set up during 1919 by Jack Cohen (Wrigley, 1988). Ever since the time of its establishment, the company has been showing continuous growth and advancement. The efforts of Tesco are completely directed towards one key mission i.e. “pile it high sell it cheap” that means selling a huge range of products at an affordable price (Tesco, 2015). The stores of Tesco are located in the close reach of the majority of customers and this proves to be an added benefit for the company. The Tesco divisions have been started in several suburban as well as urban areas within the United Kingdom and also, there are several stores in around 13 different nations outside the United Kingdom taking in Slovakia, Hungary, Malaysia, Thailand, U.S., Japan, Republic of Ireland, China, Czech Republic and others (Tesco, 2015).  Currently, Tesco operates more than 3,700 outlets across the globe and provides recruitment prospects to over 444,000 people. The annual sales of the company have surpassed 3 billions and Tesco has shown a considerable increase in the profitability levels (Tesco, 2015).
At present, the company is ready to put in an extra effort just to provide maximum satisfaction to their customers. It aims to enhance the living standards of the people in each and every possible way (Tesco, 2015. It also ensures that it has the ability to attract the individuals and make them visit Tesco outlets again and again. Having said this, the organization reacts to all the variations in wants, preferences and living standards of the consumers in a very efficient manner (Tesco, 2015. Moving ahead, Tesco follows a very comprehensible approach for extension and growth by establishing fresh outlets that are in every possible aspect best suitable for selling the manufactured products and also developing superior goods and services. The company was drawn towards cut throat competition in the beginning of 1990s and their arrived an urgent need to develop some new innovation (Tesco, 2015).
In order to analyze this retail giant from all perspectives, the following section will first explain the SWOT Framework (Strengths, Weaknesses, Opportunities and Threats), and PEST Framework of Tesco Plc. After this the paper puts forward ways in which John Lewis can effectively deal with employees’ resistance towards change and appropriate leadership style for Dave Lewis.
What are the Current Challenges Facing Tesco? You need to Analyse the Internal and External Forces for Change, this may include Economic Conditions, Competitors etc.

SWOT Analysis

According to Houben (1999), SWOT (Strength, Weaknesses, Opportunities and Threats) can be defined as a paradigm which brings to light a sharp contrast between the internal and external environmental aspects. Hill and Westbrook (1998) state that SWOT is basically employed for premeditated scheduling and providing assistance to the judgment making procedure of a company. SWOT has several features like it is convenient to utilize, lays more stress on interdepartmental alliance and merges qualitative and quantitative investigation (Piercy and Giles, 1989). The following paragraphs provide a detailed overview of the four dimensions of SWOT Framework along with the exploration of Tesco Plc.

SWOT Analysis of Tesco Plc

Strengths comprises of internal forces including abilities, possessions, resources, advertising extend and attentiveness, know-how, location, modernization facets etc which help in achieving goals and fulfilling objectives. Strengths of Tesco includes powerful superior administration, continuous increment of the level of investments, proficient allocation, development of non-food sector, well built hypermarket portfolio, committed and proficient employees, wide coverage which includes locations situated inside and outside of UK, it provides a huge range of products and services and its size suits the competitive trade conditions (Euromonitor, 2010).


Weaknesses are just opposite to Strengths i.e. they include internal forces which work as barriers in the path of mission. Tesco faces weaknesses like Credit card debts, household insurance claims and bad debts influence the profitability levels of the company, few markets are faced by macroeconomic complexities, dependency on UK market is more, incapable CSR, its vast spread makes it hard to concentrate on particular industrial issues, huge investment is involved in worldwide extension etc (Fame, 2010).


With the help of SWOT analysis, one can get answers to several questions related to opportunities such as worldwide impacts, market tendency, volume, and competitor’s susceptibility and industrial enlargement. Opportunities of Tesco Group include expansion of non food sector, working in collaboration with distinct organizations, development of compressed and expedient hypermarket layouts, scope for innovating new, advanced products and services, extensions in the Asian markets and basket size can be enhanced by successful utilization of the records of the club card (Keynote, 2010).


External forces for example Environmental effects, loss of main employees, climatic conditions, viewpoints of various competitors, IT growth, supporting internal potentials etc that can prove to be detrimental for an association constitute the threats. As far as the case of Tesco is concerned, the biggest threat is competition with big competitors like Asda, Wal-Mart etc (Fame, 2010). Second biggest threat is rapid advancement in technology and continuous changes in demands of consumers, which requires constant work and training in almost all departments.

PESTEL Analysis

PESTEL (Political, Economic, Social, Technological, Environmental and Legal) analysis is considered as one among the highly effective concepts for examining market position, objectives and the business growth (Porter, 1985). With passing times, this concept has been considered as exceedingly advantageous for advertising, product modernization, scheduling and business growth. The conception involves four aspects i.e. political, economic, social, technological, environmental and legal forces. The section below will now demonstrate the PESTEL analysis for Tesco Plc.

PESTEL Analysis of Tesco Plc

Political Factors
An important function is performed by the political factors in the field of commercial trade. Principles, policies and legal issues according to which a company should operate together make up the political forces (Fame, 2010). It is essential for Tesco to follow the laws and safety acts formulated by the government. In other words, it is the government who decides the functioning of any particular company. When we consider present situation, it can be clearly noticed that their exist a lot of legislation due to which there is not much flexibility among alike businesses and also the companies are not much allowed to present their views in most of the situations (Mintel, 2009).

Economic Factors

This particular factor takes into account market demand and supply chain and the buying potential of the perspective users. Thus, Tesco should lay emphasis on exploring the buying patterns and needs of the customers by maintaining a balance between production and consumption (Euromonitor, 2010). A regular financial analysis should also be performed to mitigate future risks.

Social Factors

It has been greatly observed that the trends in social factors have an effect on the demand for any particular company's services and products and also how that company carries out its operations (Euromonitor, 2010). Thus, Tesco need to have in place various management strategies in order to adapt to such social patterns. At every level Tesco needs to properly understand the needs of the customers and respond to them by making available innovative products.

Technological Factors

Drastic variations have occurred throughout the world due to speedy progression in science and modernization. These technical advancements in a sense have resulted in up-gradation of living standards of the individuals. Further, in order to ensure fast response of such developments by fabricating policies, it is very important for Tesco to offer facilities like online shopping, promotional offers, loyalty cards, discount coupons etc. Firms operating in retail industry undergo continuous technological advancement so as to offer new and innovated services and products to the consumers (Fame, 2010). Additionally, a healthy relationship between retailers, firms and consumers should be maintained by Tesco by constantly organizing knowledge sharing sessions.

Environmental Factors

For companies to ensure long term-success and sustainability it is highly important to ensure that they do not cause any harm to the business environment as well as the overall community in any manner. Likewise, Tesco must make sure that all its operations and procedures are environmentally safe and don’t result in any harm to any individual, society or environment.

Legal Factors

There are certain policies and regulations governing every sector, which need to be strictly followed by every company operating in that particular industry. Likewise, there certain policies and regulations application for retail industry that Tesco needs to follow at all times. These policies are related to employees, customers, suppliers, investors and other associated stakeholders. In case if Tesco fails to comply by the set regulations it might have to face the penalty. The company in no way involve in any type of unethical act.

Change Management at Tesco

According to eight step change process model, the process of change management at Tesco includes the following eight steps as below. The initial partnering phase involves a background check of the organization including its main product or service, target market, performance and other details. This has been conducted and documented in the previous section with a SWOT analysis and PESTEL analysis of the industry. The second phase involves problem definition, need for change and the impact of change on the organization. The third step involves defining roles, tasks and processes for change process. The fourth step involves diagnosing what data is to be collected for the organization. In this case, it could be the financial performance of Tesco including sales figures and the performance of its competitors. The fifth step involves providing feedback and recommendations to the staff in the form of what changes need to be implemented in the organization. The sixth step involves action planning which means setting project related goals, determining the impact of proposed change, defining tasks, planning for change resistance, and measuring the progress of change. The seventh step involves preparing the organization for change process, implementing and monitoring change. The eighth step involves evaluating the change process at the organization (McArdle, 2006).
As a Large Organisation, Tesco is about to Undergo a Major Change Programme, it is very likely that there will be Resistance to Change from Employees. What Recommendations would you provide for Dave Lewis (new CEO) to Manage Resistance to Change within Tesco?
It is quite common for companies to face resistance at the time when there is some change. Same is the case with Tesco Company that is planning to implement change. Thus, it is important for John Lewis of deal with employees’ resistance to change in the most effective manner. Properly comprehending that there would be resistance to change would help a lot in anticipating resistance, identifying its reasons and sources and modifying efforts for managing the change issues for ensuring the success of the change endeavours (Marshak, 2005). The leader must take adequate time for understanding resistance. The leaders must be capable of understanding what the staff members are feeling and thinking (Anderson and Anderson, 2001). Additionally, an effort should be made to motivate employees to accept the proposed change by properly demonstrating the need and advantages of change. The same has been proposed in the expectancy theory.
Expectancy theory asserts that a person would make decision for behaving or acting in a particular manner since they are encouraged to choose a particular conduct over other conducts. In real meaning, the encouragement of the behavior choice is decided through the appeal of the result. Nevertheless, at the basis of this concept is the cognitive procedure of the manner in which a person processes distinct motivational aspects. This is performed prior to forming the final choice. The result is not the sole deciding force in forming the decision about ways of behaving. Additionally, expectancy theory is related to the mental procedures related to choice, or making choice. It outlines the procedures, which a person faces for making choices. This concept lays focus upon the requirements for companies to link rewards straight away with outcome and making sure that the incentives offered are those rewards wanted by the recipients
Dave Lewis can take several measures for reducing resistance to change. These include involving interested groups during change planning by asking them for putting forward their suggestions and integrating their opinions and clearly defining the requirement for the set change through way of communicating the strategic decision in person as well as in written form. It is important to address the needs of people of those engaged. Disrupting only what requires to be altered. Helping employees sustain friendships, group norms and comfortable settings wherever doable (Kotter and Schlesinger, 2008). Designing flexibility in the desired change through phasing it in wherever doable makes the change implementation easier. This would enable individuals to finish present endeavours and incorporate new behaviours simultaneously. Allow staff members to redefine their responsibilities at the time of implementing change (Kotter, 1996). Being open and honest towards the employees is highly important for ensuring successful implementation of change. Focusing constantly upon the constructive sides of the proposed change and being specific wherever possible. Delivering training programs which build fundamental abilities as opposed to procedures like arranging meetings, teambuilding, communication, self-esteem and lastly, coaching (Burnes, 2009).
Taking a step ahead, it is suggested that Dave Lewis should follow 8 steps change management process suggested by Kotter (1996).

Critically Discuss the Most Appropriate Leadership Style for Dave Lewis to Adopt in this Time of Change

Considering the present situation at Tesco, it would be appropriate for CEO, Dave Lewis, to take on the approach of democratic leadership. The democratic style of leadership involves the leader sharing the decision-forming capabilities with members of the team through promoting team members’ interests and practicing social equality (Martindale, 2011). This leadership style involves discussion, sharing of ideas, debate and motivation of individuals to feel good of their engagement. The limit of democratic leadership is likely to be outlined by the company or the team requirements and the influential importance of individual’s attributes (abilities, attitudes and others) (Yulk, 2002). This style of leadership includes the notion that everybody, through virtue of their human position, should perform a role in the team’s decisions (Foster, 2002). Nevertheless, the democratic leadership style still needs control and guidance through a particular leader. This leadership style requires the leader to form decisions about who should be contacted in the group as well as who is offered the right for participating in, making and voting on decisions (Foster, 2002). There are few traits that should be present in leaders practicing democratic leadership and John Lewis has all those traits. These include:

Honest: Showing sincerity and integrity in all acts.

Competent: Grounding the actions upon reasons and moral values. Avoiding decisions based upon emotional feelings or desires.
Forward-looking: Setting objectives and having a clear future vision. The vision needs to be followed all through the company. Efficient leaders envisage what they desire and ways for getting it. They select priorities arising from their fundamental values.
Inspiring: Displaying confidence in all that is done. Through exhibiting endurance in physical, mental as well as spiritual stamina, the leaders would motivate others for reaching for new heights. Taking charge when required.
Fair-minded: Showing equal treatment for all staff members. Prejudice is considered as being the enemy of impartiality. Displaying understanding by being sensitive towards the values, feelings, interests, and safety of others.

Broad-minded: Seeking out diversity.

Courageous: Holding the firmness for accomplishing an objective, in spite of the apparently issues. Displaying a confident at the time when under stress.

Straightforward: Making use of sound judgment for making right decisions at correct time.

Imaginative: Making appropriate and timely modifications in thinking, methods and plans. Showing creativity through thinking about new and superior objectives, solutions and ideas for issues and being innovative (Burnes, 2009).
It has been observed that this style of leadership is one among the highly effective and results in greater outcome, superior contributions from the team members as well as augmented group morale (Johnson and Hackman, 2003). This type of leadership could result in superior views and highly imaginative solutions for problems since the team members are motivated for sharing their ideas and thoughts (Woods, 2010). As a result, by adopting democratic leadership styles, John Lewis would be able effectively manage change and employees’ resistance towards it.

Conclusion and recommendations

In such a situation, Tesco needs to have in place appropriate strategies and practices for effectively managing operations and employees. Effective leadership is the most important driver of change (Hayes, 2014). The senior management needs to encourage the employees to support change management in the company. They need to use their position and leadership skills to motivate employee and involve them in the change management process to meet the future goals of the company (Lynn, 2001). The focus needs to be highly on strategy formation and implementation to effectively use the existing competences, resources and capabilities of the human resources for smooth transition process and reduce resistance to change. To make the employees feel involves and get them to share ownership of the change process, it is important that they are made an integral paper of change management process. The key employees who are highly motivated and drive the change process needs to be rewarded appropriately (Hayes, 2014). In this context, having the right leadership quality is crucial. Transformational leadership is the key to an effective change process. Moreover, the leadership needs to be of democratic or participative leadership style to fulfil the change management process.


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Appendix 1
SWOT analysis

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