Tesco is a multinational grocery in Britain and its general merchandise retail headquartered in Cheshunt, United Kingdom. Measured by the revenues, the Tesco is the third-largest retailer around the world (after Wal-Mart and Carrefour) and measured by profits, the Tesco is the second-largest around the world (after Wal-Mart). The Tesco is the leader of grocery market in UK and the Tesco has a market share of around 30% in UK. The Tesco now has stores in 14 countries across Republic of Ireland and Thailand, Asia, North America, Europe and, Malaysia (Mark 2012 pp83-84). Tesco has developed into a company spreading aroung the world and is accepted widely around the world. The reason that why Tesco can achieve such a big success is that the Tesco has the competitive advantage (Lucy 2010 pp6-7). This essay will focus on the resources and capabilities of Tesco to gain the competitive advantage of the Tesco. And then, the big success of Tesco will be clearer and more convincing.
The resources of Tesco are obvious rich and huge due to their whole company spreading around the world. Without the rich and huge resources, the business range of the company will be impossible. Originally, the Tesco is a UK-focused grocery retailer. And from the early 1990s Tesco has widen its business range around the whole world and widen into areas including the retailing of books, electronics, clothing, petrol and software furniture,; telecoms and internet services; financial services; music downloads; and DVD rental. During the 1990s, the Tesco reposited itself, and the Tesco develpo itself from its position as a downmarket "pile" highto sell "cheap" retailer. And this reposition is widely welcomed by all people around the world and encourage the development of the Tesco, from its Tesco Value to its Finest ranges. This is successful, and sees the chain grow from 500 stores in the mid 1990s into 2,500 stores after 15 years' development (Marcus 2010 pp16-19). From the history of the development of the Tesco, it can be concluded that Tesco has a rich and huge resources to gain its success.
The resources of the Tesco are huge and rich obviously. Apart from this, the using and finding of the resources are also very important. Even if there are huge and rich resources in the company, it will meaningless if they are not used properly. If the resources are not found and used, the Tesco today will still be the simple supermarket. In the process of development, the Tesco superstores are set up. Tesco superstores mean the large and standard supermarkets. The Tesco Superstores has a much smaller range of non-food goods than Extra stores and the stocking groceries. The stores have always previously been branded as simply "Tesco", but a new store in Liverpool was the first to use the format brand "Tesco Superstore"above the door (Justin 2004 p24). Because of the huge stocking of goods, then the Tesco superstores have the opportunity to be set up and spread around the world. However, if the Tesco remains as the superstore, it will never be successful as the present. The Tesco tries to find and use the large and rich resources to expand itself and gain the wonderful success. In the process of the development, the Tesco finds that some small shop can be set up in the town or the city to supply some commodity. The small shop will not occupy large space but can be very convenient to the people living by the shops. One shop is set up. One Stop means the smallest stores and it is even smaller than a Tesco Express. One Stop is the only Tesco store format in the UK and it does notappear in the the word Tesco in its name (James 2011 pp156-158).
Besides the forms of supermarket, one shop and so on, the Tesco also has the resources in other areas. With the building of the petrol station, it symbolizes that the business range of Tesco is developed into other fields. And the resources of the Tesco are becoming huger and richer to ensure the Tesco to be successful. In 1974, the Tesco first started selling the petrol. Tesco sells 95, 97 and 99 RON (a fuel developed by Greenergy and the shareholder is the Tesco) petrol from forecourts at most Express locations and superstore (Darby 2011 pp39-44). From the setting up of the petrol station, it can be concluded that the Tesco is always trying to find and develop the new resources. And also, just because of the huge and rich resources, the Tesco is successful as the present. Besides the petrol station, other fields of business are also be developed by the Tesco. The Tesco Mobile was launched in late 2003 and acted as a joint venture with O2. Then Tesco claimed that over 2 million UK customers were enjoying this service In November 2009. Afterwards, in Ireland and Slovakia, a similar O2 based service has been set up (Darby 2011 p54). With the development of the telecom, it means that the Tesco has the ability to operate cell phone, broadband businesses and home telephone. These are available to residential consumers in several countries and are they are sold through the website of Tesco and via stores of Tesco. By developing the resources besides the supermarket and petrol station, the Tesco enlarged their resources in the telecom. By developing these sources, the customers will be able to do shopping through the website and it will helpful for the development of the Tesco. Also, with the continuing development of the Tesco, many other resources have been developed and they all helpful for the Tesco to be successful. The setting up of the photo shops to increase the popularity of instant gifting products. The film making company are been setting up of to produce the Tesco exclusive direct-to- films. And the Beauty Salons are developed to offer services like leg waxing, haircuts, eyebrow and manicures. The Tesco has so huge and rich material resources to service the customers to ensure the competitive advantage and ensure the success of the company.
Besides the huge resources to provide to the customers, the Tesco also has the huge and rich human resources. In the development of the company, the range of the business is becoming larger and larger. Then, the human resources are also need to be enlarged. The huge and rich human resources ensure the operation of the company in good condition. The human and rich human resources are the competitive advantage of the Tesco and ensure the success of the Tesco. The below graph can show the success of the Tesco.
Table 1: The development of the Tesco(Zoe 2011 pp21-22).
52/3 weeks ended
Turnover (£m)
Profit before tax (£m)
Profit for year (£m)
Basic earnings per share(p)
26 February 2011
67,573
3,535
2,671
33.10
27 February 2010
62,537
3,176
2,336
31.66
28 February 2009
54,300
3,128
2,166
28.92
23 February 2008
47,298
2,803
2,130
26.95
24 February 2007
46,600
2,653
1,899
22.36
25 February 2006
38,300
2,210
1,576
19.70
26 February 2005
33,974
1,962
1,366
17.44
28 February 2004
30,814
1,600
1,100
15.05
22 February 2003
26,337
1,361
946
13.54
23 February 2002
23,653
1,201
830
12.05
24 February 2001
20,988
1,054
767
11.29
26 February 2000
18,796
933
674
10.07
27 February 1999
17,158
842
606
9.14
28 February 1998
16,452
760
532
8.12
The Capability of Tesco
The capability is a very essential factor of a company. If the company has the capability, it is very likely that the company will be successful someday. The Tesco is a successful huge company around the world today. It is obvious that the Tesco is a company with high capability otherwise the Tesco will never gain the big and fantastic success like today.
The capability of the Tesco can be divided into two parts, the internal capability and the external capability (Neil 2008 pp76-77). Firstly, the internal capability means the human resources, the services and the policy (Roy 2009 p9). The human resources in the Tesco are huge and rich. The customers, whatever goods or other services they want to get from the Tesco, the human resources will do their favour immediately. And the managers and bosses of the Tesco are very excellent. They can make the decisions helpful for the company to develop combining with the situation of the market. Besides, the Tesco also has good capability in their service. No matter whether the customers will buy the commodity or not, the service will be good and can make all the customers be satisfied with it. The staffs in the Tesco are all very professional, patient and nice. So no matter what the problem the customers will be faced with when they buy or after the buy the goods from the Tesco, their service will quick and makes the customers very be satisfied with it. So the capability of good and excellent service is the competitive advantage of the Tesco and helps the Tesco to gain success. Moreover, the policy of the Tesco is also the competitive advantage. The Tesco often makes the policy to return its profits to their customers. The Tesco makes their goods at discount to give a lot of welfare to their customers. By setting this policy, the Tesco is becoming more and more popular around the world.
The capability of the Tesco also includes the external capability. The external capability means the capability to make the Tesco famous and makes it as an image of good company in the minds of the customers. In order to achieve of the external capability, the advertisement and the range of business are important for a company. The Tesco does well in the advertisement and the range of the business. Thus the Tesco has its competitive and enjoys the success at present.
Firstly, in order to make the company has the competitive; the Tesco pays much attention on the advertisement. Many television adverts have been used by Tesco over the several years. In July 2007 the DVD that containing adverts from 1977 to 2007 were attributed to all the staff in Tesco. The advertisements made earlier emphasized the cheap prices and the measures to keep "The cost of life in the check." Then an advert was made in 1977 and the advertisement is a till that showed the prices of many items (Murphy 2009 pp98-101). The Tesco pays attention to develop its capability in doing advertisement. They do very good advertisements and the company's image is good for the customers. Because of this, the Tesco has its competitive advantage in this and keeps being a success and popular around the whole world. Secondly, the range of business of the company is also very important. When the range of the business is big and wide enough, it means that the customers can buy more goods and enjoy more service from the company (Lucas 2010 pp33-35). According to this reason, the Tesco has been trying to enlarge its range of business and developing many departments. As mentioned above, there are many departments and business in the Tesco. The Tesco not only has the supermarket and one shop to sell goods and commodities, but also has the petrol station, the film making company and the beauty salon to do more services to the customers to make them enjoy from it. By doing this, the customers will get everything they want instead of going other place to but them. The wide and huge range or scope of the business is the competitive advantage of the Tesco and make it possible that the Tesco gain its success.
Conclusion
The resources and capability are two essential factors to determine the success of the company. The Tesco has large and rich resources and the Tesco also has a good capability to ensure the success and the popularity of itself. This essay studies the competitive advantage in Tesco's. Because the Tesco has its competitive advantage in resources and capability, the Tesco is successful and popular around the whole world.
