All this has been very successful investment and increased Tesco’s profits to ï¿½2.2 billion. As you can see it suits Tesco to be a public limited company because they have managed to raise millions of pounds through the stock exchange and have given shareholders a good return on investment. They have also managed to invest in successful areas which they could not have done if they had a different type of ownership. They need to remain as a Plc and perhaps have smaller companies looking after different areas e.g. Non-food and financial services.
Why did Tesco locate near the town centre? Tesco located near the town centre because they knew the high street attracts thousands of people everyday every hour. Being nears the high street means shoppers needn’t go anywhere else apart from Tesco, for convenience they can shop at Tesco and get everything all under one roof. High street shoppers who need to buy there groceries will almost certainly go to Tesco because it is so close by, they do not need to go 20 to 30 minutes away by car and shop at Asda or Safeway they can go 1 minute away to Tesco.
Tesco were very lucky to find the piece of land that they did in slough, especially the fact that it was so near to the high street. Tesco is also surrounded by 02, a university, Yell, bus station and train station that attracts customers. The nearby companies employ hundreds of workers who can easily visit Tesco at lunchtimes and after work in order to complete their shopping. All this has helped Tesco to increase their sales and profit.
When Tesco wanted to buy that piece of land near the high street the price did not matter to them because Tesco knew that even if they pay a high price to be near the high street because it would become convenient for the shoppers to come into Tesco to complete their shopping. Another reason why near the high street was a good location is because there is no real competition, and this has been a major advantage. Overall I think Tesco made the right decision to locate in the high street as it has helped their business and now they have built a superstore to cater for their customers needs.
However there were some problems with Tesco being in the town centre as it already attracts a lot of traffic and this meant it would cause problems and therefore create more accidents. The local council solved the problem by creating another lane for the drivers which would lead straight into the store and therefore avoid congestion and delays for drivers. Another issue which was addressed by the company was to avoid delivery vans coming into the store during daytime as it would cause congestion in the area. The delivery vans come late at night and therefore do not cause any problems for anyone and there are no housing estates nearby to disturb the community.
Another advantage of this location is that rubbish tips are very close to the store and it does not cause too much pollution and traffic on the roads by the company Food and Drink Tesco’s core product is food and drink. Most of these products are imported from other countries, but not all of the products are imported, as some are home-grown.
For example, sugar, tea, coffee and exotic fruits would all have to be imported, as they cannot be produced in the UK. Tesco sells a wide variety of foods and drinks, in all kinds of sizes, such as small size, medium size, family size and etc. The reason Tesco sells such a large variety of foods is to satisfy the customer needs, making it convenient for everyone. They also sell a variety of different company brands. They have even got their own brand of products known as Tesco Value’, which helps Tesco to compete and overcome its command Tesco Finest’ competitors as it provides for all three different types of classes, the rich, the middle and the poor.
By doing this Tesco gets repeat business, and turns potential customers into loyal customers. Which means that they will accomplish their mission statement so will also achieve their aims and objectives. Tesco’s sales have risen steadily to success, as the firm is the UK’s largest food retailer. The food industry is a massive industry in the UK and is a highly competitive market with very low profit margins.
To be precise this profit made by Tesco was more then Next, WH Smith, Mark ; Spencer and Sainsbury. This all goes to show how good Tesco really did in achieving their aims and objectives of overcoming competition. One of Tesco’s aim changed as organic food became the latest fashion and trend, Tesco realised this and wanted to capitalise on it. The way in which they did this was by increasing their range of organic foods by increasing the number of aisles with organic products on them. Along with organic food the trend changed into Asian food products. Tesco responded to the desires of the customers and have began stocking a wide range of Asian products allowing customers to buy everything under one roof, and not needing to go to small corner shops.
Tesco’s main business activities are buying and selling in the food and non-foods sector. They have 1800 stores worldwide which sell thousands of goods. Tesco is in the tertiary sector and they buy from manufacturers and sell these in over 1700 branches. They also get the manufacturers to produce products under their own label. Tesco Value and Finest are sole in their branches and these products are very popular with the consumers. This has helped to increase their market share and satisfy every socio-economic group.
Tesco also sell the latest trends in food e.g. organic and Asian foods which have become very popular in the UK. Tesco responded to these trends and have begun to stock the products so that they can cater for the needs of the local population. Non-Food Tesco diversified into retailing things such as clothes, furniture, electrical goods, DVD etc. this diversification procedure that Tesco underwent attracted new customers as well as helped to retain old ones, which is Tesco central aim. They were so successful in this field that 30% of last year profit came from non-food. Tesco also sells more baby clothes than Mother Care; DVD sales also went up by 60% in 2004. Tesco also happened to sell more Harry Potter books than WHS in 2004. This all shows that customers are coming to Tesco and Tesco business strategy is working.
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