Tescos Resources & Capabilities

Culture, Brand and Reputation The heart of the Tesco brand is customer trust. As Tescos core objective is to create value for customers to earn their lifetime loyalty (Terry Leahy quoted in Kelly, 2000, p. 3) , it is emphasized that their success depends on the people that shop with them and the people who work with them. Tesco works under the realization that having staff who understands the customers in the local marketplace will succeed. This is supported by Tescos policy of hiring local staff in their stores everywhere and helps them tie it into their Every little helps value. Tesco has emphasized on three words about its culture: better, simpler, and cheaper. Better is for customers, by doing everything they can to make shopping with them the best experience so that they keep coming back. Simpler is for employees to work more efficiently but with less stress. Cheaper is for Tesco itself which it recognizes is by by maintaining its customers loyalty and its staffs happiness2. In the UK, Tesco trains its staffs for a higher-grade position and to develop their skill and ability by sending them to Tesco Academy business schools. Employees from store managers to chief executives can learn from both in-house and external lecturers and tutors about operational efficiency and innovation. It tries to help their people to develop good cross-cultural and managerial skills as it expands internationally .
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Tangible Assets Tesco has managed to expand on a large basis both in the UK and internationally. However, this report focuses only the expansion in UK. Tescos growth in the UK business comes from the acquisition of new space, increasing in existing stores, and a multi-format method. It gains a huge advantage over other competitors in term of land. It owns a vast land bank of sites in prime locations; at least 185 sites belong to Tesco. This has allowed it to open more space than any other competitors over past decades. This land bank or buying up potential store sites obstructs its competitors such as Waitrose or Asda, from taking the site and expanding their businesses . At 33 million square feet, the group now has double the UK store footprint of its two nearest competitors combined. Tesco is regarded as the biggest property developer in Europe, with a portfolio of nearly 35 billion (2010), and there will be more stores to come in the future .
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Kelly, J. (2000). Every Little Helps: An interview with Terry Leahy, CEO, Tesco. Long Range Planning, 33(3), pp. 430-439. http://www.tesco-graduates.com/home/working/our-culture

http://www.ft.com/cms/s/0/a7899f4c-6c4a-11df-86c5-00144feab49a.html#axzz1fnpwX8p5

http://www.independent.co.uk/news/business/analysis-and-features/the-big-question-is-tesconow-too-powerful-in-britain-and-can-its-growth-ever-be-checked-1637575.html 5 http://www.ft.com/cms/s/0/3e8e8f54-c418-11df-b827-00144feab49a.html#ixzz1fTsvoboU

Integrated MIS/ R&D IT services/Technology Tesco realized as it expanded that it had to be able to maintain efficient data collection and reporting between its global and local stores on a whole for operational efficiency. This led to a centralized web based MIS approach in 2002 thereby increasing their efficiency two fold . Tesco even outsources its IT services from HSC (Hindustan Service Centre) in India to be able to produce appropriate business solutions for operational efficiency. Tesco even uses Cloud computing to a large extent. It allows for a virtual server which is low cost and has reduced power consumption. Even the loyalty card promotion web traffic is directed onto the cloud computing to improve operational efficiency. This ability to store huge volumes of information also allows them to profile their customers in turn helping them boost sales. This is definitely one of Tescos strongest capabilities and they invest a lot of money and time into this.
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Operational Efficiency Tesco has implemented several efficient operations in term of supply chain and supplier management. One of Tescos company policies is to create distinctively close and long-term relationships with suppliers. It uses a web-accessed extranet to constantly communication with their suppliers, in order for the information to be updated every 24 hours, and to link suppliers directly into its business. This allows suppliers to gain access to their customer needs in which is able to lower transport, distribution and storage costs. The direct suppliers of Tesco also use many premier sub-contracted suppliers, believing this can increase the operational efficiency.They also have a policy of paying their supplier only after 60 days (see activity map) which is another method to increase operational efficiency. Furthermore, Tesco also joined the Ethical Trading Initiative which supports good practice in implementing labour standards and rights which they realise indirectly can contribute to operational efficiency .
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http://www.brc.org.uk/Downloads/rsd_bo_Tesco.pdf,

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http://www.tescohsc.com/ http://www.ft.com/cms/s/0/0a399814-a77e-11de-9467-

00144feabdc0.html#axzz1fUW68ASi
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http://projectsigma.co.uk/RnDStreams/RD_supply_chain_strategy.pdf