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Tesco's strategy to attract customers

Paper Type: Free Essay Subject: Environmental Studies
Wordcount: 2722 words Published: 11th May 2017

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There are many rivals of Tesco early 1990s Tesco rivals gave very tough time to Tesco, so on that time Tesco needed a good and newly trading strategy. Tesco old trading strategy was very good. But on that time Tesco was not attracting the customers due to bad customer services. In 1997 Terry Leahy Joined Tesco as a Chief Executive. Terry Leahy thought that why Tesco is not attracting the customers as compare to its rivals like Sainsbury’s, Asda etc. So from that time Tesco started additional services to attract the customers. These services are given below.

Online Shopping services

Tesco internet

Tesco Club Card

Excluding the above mentioned services Tesco recently introduced new additional services to attract the customers. These services includes Tesco Banks offer the credit cards, mortgages, loans, Tesco Insurance, savings and travel. (cn.tesco.com)

Tesco Corporate Strategy might be very valuable research and study as well as very broad. This strategy attracts the customer and gives very hard competition to its rivals especially Marks and Spencer, Sainsbury’s, ASDA, Morrison etc. Sometimes some Tesco rivals beat Tesco in some fields, therefore corporate strategy of Tesco continuously introduce additional customer services to attract the customers against its rivals.

” According to Jamier L. Scott Corporate strategy is a series of activities designed to enhance the level of customer satisfaction that is, the feeling that a product or service has met the customer expectation” (2002),

In the retail business or any company the customers are very important, almost every company try to attract the customers. This could be in different ways like in order to sold items, damage item may be exchange or refund with in specific time period with the receipt which is given to the customers at the time of the selling items. Many companies do this process on the customer services desk as well as some companies do this process on the normal desk like Tesco. But now day’s customers are expecting more than such kind of services. In other words customer’s desire is up to date customer service or upgraded customer services.

” According to Berman B. Evans upgraded products and services create connections. Additional customer service is the extra elements that enhance a retail strategy mix” (2010)

Upgraded services are good service like store atmosphere, store location, pricing, promotional methods and offers.

Many large organizations like ASDA, Tesco, Marks and Spencer and Sainsbury’s use its corporate strategy to up to date its products and service, which is very helpful to make a good relation with the customers.

” A strategy is a plan of action designed to achieve a particular goal. The word strategy has military connotation, because it derives from the Greek word for general” (Oxford Dictionary 2nd Edition)

Every company formulate strategies to enhance its business profit and customers as well as to innovate some products or services which can be attract to their customers.

Aims and Objectives:-

My Dissertation Topic is: How Tesco use its corporate strategy to attract the customers against its rivals?

My area of study:

Explanation of Tesco corporate strategy which is used to create up to date customer services.

To understand the Tesco corporate strategy which is using to create additional customer services?

Explanation of how Tesco corporate strategy attracts the customer by using ancillary customer services.

To understand the Tesco offers, goods, services and innovation how these are attracting to the customers.

Comparison of Tesco strategies with its rivals strategies that how to attract the customers.


Organization Overview:-

Tesco is the world largest 3rd retail organization which is based in UK. Tesco have more than 440,000 employees all over the world and almost 3700 stores in UK as well as 13 in other countries. In recent time Tesco opened its stores in the AMERICA, which is known as Fresh & Easy as compare to its international rival Wall Mart as well as Tesco have many stores in Europe and Asia like Poland, Slovakia, Hungry, Turkey, Czech Republic, Republic of Ireland, China, India, Japan, South Korea, Thailand and Malaysia.

MR Jack Cohen was the founder of Tesco. He started his business in 1917 as a small stall. Tesco opened its first store in 1929 in Edgware. After that Tesco unbelievably has developed its business in UK and worldwide. Tesco introduced many innovations to attract the customers.

Day by day Tesco is increasing its products and services to keep the customer loyal, this gives though time to its rivals. Tesco is first company which introduced self check outs to provide good customer services. Tesco is offering many services to its customer from tesco.com like home delivery services and online ordering/shopping and give return to the customer in the shape of Tesco club card. Tesco use its corporate strategy in different ways to attract the customer. A Tesco 2009/2010 interim result is showing that sale boosted from 11.4% to 14% and profit increase 8.6% from its original profit Tesco dividend growth rate is 9% and Earnings per share growth is 9.1% which shows very strong position of Tesco in international and national market.

Literature Review:-

In an organization corporate strategy is the base of all strategies. Corporate strategy expose and determines the purposes, objectives, goals and also produce, polices, plans and principal for achieving goals. It does also contribute to make the employees, stakeholder, communities and customers; usually corporate strategy applies to the entire organization. (Nicolai J. Foss)

Corporate strategy is very useful to achieve the goals in a challenging environment to meet the stakeholder and market expectation, whereas corporate strategy involves making business level strategies like marketing strategies those strategies are very helpful to attract the customers. (Richard Whittington, Kevan Scholes)

Marketing strategy is the most important strategy which organization makes from the corporate strategy to attract the customer. This strategy keeps the customer loyal and understands the behaviour of the customer, for an example a customer go to an electronic show room to buy some electronic things, and customer gets extra care and good service from the retailer then definitely the strategy of the retailer is to attract the customer. There is no doubt customer will come again and again and also to tell the other friends about that retailer. (TheTimes100.co.uk)

The research shows that many organization like Parcel force, Cadburys, Argos, Tesco, Sainsbury’s, Marks and Spencer giving high level of customer satisfaction to attract the customers. These organizations attract the customer by using their corporate strategy to do market research. (TheTimes100.co.uk)

The limits between corporate strategy and marketing strategy are unclear. The main purpose of corporate strategy is to attract and retain the customers. (Mintzberg, 1994)

Marketing strategy management as well as corporate strategy are very important tool for an organization to attract the customers and keep the customer loyal against the competitor’s organization; both strategies take the organization into accounts externally and internally to provide extra care of the customers. (J. Rea, Harold Kerzner)

Corporate strategy of any firm describes business according to the customer services. (Levitt, 1975)

All over the world every size of organization use innovative corporate strategy to motivate the customers. (John Toschohl)

The performance management externally and internally is very important to attract and retain the customers. Performance management sets the objective, responsibilities and goals for a manager. This gives permission to the organization team to do best for the satisfaction of the customer. Performance management takes very important key action like rewards, progress and training to improve the performance, such kinds of things are very essential to help, retain and attract the customer which is very beneficial for achieving the organization goals. The core purpose of performance management in an organization is to provide quality of customer service and satisfaction as well as manage the customer desire and give rewards. Its effectively attract the customers by managing the staff. The supervision of team and accountability may help to an organization to gain its objective and goals; with the help of this an organization may measure the entire performance, attainment can be rewarded and identified by using performance management. (Cook, S)

Organization can maximize the attraction of customer and keep the customer loyal by using innovative customer services, (Danon)

Corporate strategy for any organization plays very authentic role to attract and retain the customer without customer an organization cannot run the business in the market. Therefore companies innovate, provide good customer service and products guide and help the customer, provide different types of gifts and incentive these are the different strategies which company make to attract and keep the customer loyal. So that customers are the survival for any firm. (John A. Goodman)

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There are two focus of strategy which was integrated in to one focus. Many people are still debating that how two focus of strategy are different, differentiation strategy focus on different services and products which firm are offering to a small group of customers. Mostly this strategy adapts the small firms and new entrants. rather than large one. It provides products and services according to the small group of customer. (Philip A. Wickham)

Marks and Spencer (M&S) is a retailing company which is actually based in UK. M&S conduct its business review to check its falling profit and trading environment. M&S amended its corporate strategy to satisfy the customer as well as gain the competitive advantage.

M&S Corporate strategy:-

To expand business internationally.

To speed up for multi channel development.

Changing the all operation execution as well as increasing the pace.

M&S again will refocus on brand communication

M&S is working and launched a new program to implement above strategies under the 2020 slogan. (Lan Dyson)

M&S has declared a plan to close its some unprofitable store for achieving its objective and goals. M&S corporate strategy is describing that M&S is expanding its business chain internationally to gain the customer satisfaction and keep the customer loyal. The move of M&S in the international ramp is giving the tough time to its rivals in all kinds of product and service. M&S is also looking formats for its food and non food products for expanding its business. (Ms-corporate-strategy/8601465.article)

Sainsbury’s Corporate and Business Strategy:-

Sainsbury’s is a well retail leading company in health and food. Sainsbury’s goals is attracting the customer by giving the quality of products at reason prices and their aim is to motivate the customer to eat good and reasonable healthy diet food by promoting the energetic lifestyle.

Sainsbury’s does not compromise on quality, taste and services. The main objective of Sainsbury’s is to make the healthy and low fat food to keep the customer loyal.

Sainsbury’s purpose includes providing best food for health which keeps their customer life style healthier.

The main belief of Sainsbury’s while selling its products to their customer that customer have full and clear information about our products, quality and price.

Sainsbury’s corporate and business strategy also includes that provide good customer services with its healthier food to retain and attract the customers.

Tesco Corporate strategy:-

Tesco is the third largest retail organization. The commitment of Tesco is to develop the shareholder values by via innovative customer focus strategy.

To provide quality of products at lower price to customers.

Customers are unique and we are leading to deliver the first class services to the customers.

To keep the customer loyal we reward the customer by using club card.

To provide the high range of products with the high quality.

To expand business globally to compete the rivals.

To provide the flexible and clean environment to customers. (Tescoplc.com)

The main objective and elements of Tesco strategy is given below:-

To become strong in food and non food.

To get better in retailing services like Telecoms, Tescodirect.com, Tesco personal finance and Tesco.com

To boost up the core UK business.

We lay society/community at the spirit of what we do.

Tesco wants to be a victorious international retailer. (Tescoplc.com/Plc)

Chief executive of Tesco Terry Leahy said to Sunday Times that Tesco will be the largest online world grocery retailers as well as our aim to achieve the UK no.1 online business. (1999, Lorenz)

Terry Leahy chief executive of Tesco stated that we are retaining and attracting customers by giving extra care, products and services to customers as compare to rivals, additional customer services and care is giving though time to Tesco rivals. Tesco is giving wide range of its products and services online according to the customer desire to attract the customers and keep the customer loyal. (Tescoplc2000)

Research Methodology:-

The research involves redefining and defining problems, creating hypothesis, collecting, suggesting, and organizing analysing the data reaching on conclusion, at the end list down the conclusion to decide whether creating hypothesis is fit. (Clifford Woddy)

Research standardized the effort to get new knowledge. (Redman and Mary)

Careful inquiry to find out some new facts and knowledge is called research. (Advance learner Dictionary of Current English)

To determine and discover knowledge which is hidden at the heart of research. (Lee)

The main purpose of the research is to determine and discover the answer of the question as well as try to find out the hidden truth which still have not been determine and discover. (Rajendar Kumar)

The main purpose of while doing research is to find out relation between theory and practice. In particular whether the research is directed by the research (Inductive approach) or the research is directed by theory (deductive approach). Both approaches will provide very good understanding of my research. To the better understanding of topic the thesis will complete on the investigation of quantitative research as well as qualitative research. (Rowley)

Data Collection Resource:-

For my research we shall be gather secondary data form authentic articles, books, magazines, newspapers, news, and websites as well as published journals. The purpose of collection of secondary data is too explicit and very useful to use. The collection of secondary data may be very helpful and useful as this data is already collected.

Definitely for my research we shall use primary data. This data we shall collect from interviews, surveys, managers and staff face to face meeting. Meetings and interviews will be conduct in the form of prearranged questionnaires.


The main objective of my research is to understand the logic behind the effectiveness of corporate strategy in an organization and how Tesco use this strategy to attract the customers as compare to its rivals like Marks and Spencer, ASDA, Morrison’s and Sainsbury’s. The parameters which we considered are quality of products and services, innovations, time taken in processing the request, reputation and pricing.


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