Bimo Assessment TescoEssay Preview: Bimo Assessment TescoReport this essayBusiness Information and the Management of Organisations Summative AssessmentQuestion OneTesco is a public limited company in the form of an international retailer, selling everything from fruit to personal computers to bicycles. Essentially, Tesco provides a link between the everyday consumer and the producers of aforementioned items. These items are sold in supermarkets of varying sizes.
Question TwoAn example of a Strategic decision made by Tesco may be “Shall we expand aggressively into Asia?” This is a strategic decision because it is a long-term issue which will have high impact of stakeholders; dividends and profits will be affected during the expansion in order to cover the purchase of firms/construction of new stores. This is also a one-off issue, as any company can only expand into Asia once. This decision would be necessitated from recognition of the fact that that Asia is the worlds most burgeoning economy, concurrent with Lee & Schneiderjans (1994 p. 136) thinking: “Strategic planning helps organisations recognize the need to meet changes in the external environment”. This is also a risky and speculative decision, as there is no guarantee of an outcome either way.
A tactical decision which may be made by Tesco could whether or not to purchase a small chain of retailers. This is a decision which will not be made very often but nor is it unique, a major identifier of a tactical decision. Also, with this decision there is less risk than with a strategic decision, as buying a chain of 4/5 stores would be a mere drop in the ocean for an international retailer the size of Tesco. This decision may not need the approval of the top manager (board of directors) as they will have delegated the details of the expansion to another manager.
An example of an operational decision made within Tesco could be deciding how many extra staff would be needed to cover a bank holiday. This is operational as it is a repetitious decision, which affects the day-to-day running of the business and will be remade every time there is a bank holiday. There is also little risk with the decision, as even if they get it wrong the worst that would happen would be some wasted man hours. This decision will also have minimal strategic impact.
Question ThreeInformation Tesco would need to make the proposed strategic decision would include economic report/forecast figures for Asia, as they would need to know approximately how much custom Tesco could feasibly expect from Asia over the coming years. This would include breakdowns of separate countries so Tesco would know the most profitable countries to expand into. Quality of information issues which may arise could be outdated reports or inaccurate forecasts which fail to account for current economic/political state of in the countries in question. Other information needed would be the current financial figures for Tesco, as the decision-takers would need to know if Tesco was able to afford the expansion, and what other costs would have to be cut in order for the expansion to be funded. Quality of information would only be an issue here if the financial figures were inaccurate.
To make the proposed tactical decision, Tesco would need information pertaining to the finances of the company, including profitability and past/projected growth. The annual report should provide this information. Information pertaining to the quality of the current staff and availability of new staff would also be needed, this could be an information quality issue as the staff may be well trained, but trained in systems and procedures alien to those utilised by Tesco. A cost/benefit analysis would also be needed so that the decision-makers could see if it the purchase would make financial sense. There could be an information quality issue if the analysis is not detailed enough, or it fails to take into account relevant internal and external factors.
The information needed to make the operational decision would be easily at hand and plentiful, as the decision-maker would need to know the sales figures for previous years, the recommended transaction to staff ratio for Tesco, and the amount of money available for overtime at that specific time. This information would all already be at hand through the mandatory sales records kept and from perusing the budget store to store. There should be no information quality issues as the data would all be cold, hard facts.
Question FourThe retail industry is extremely competitive, and especially between the larger supermarket chains, due mainly to the fact that the majority of them sell virtually the same items at virtually the same prices in virtually the same way. In Tescos case, issues of competitor intelligence affect it in so far as the other chains knowing what they are selling, how they are selling it, and how much they are selling it for. The intelligence gathered can allow other chains, such as Asda and Sainsburys, to change their prices to match or even beat Tesco. In turn, Tesco can use the information they have gathered to do likewise. An example of this is when supermarkets will get a trolley-full of items from their store, and a trolley-full of items from a competitor and compare the prices, even displaying the two trolleys in-store with an itemised breakdown of all the items
The consumer is also faced with an increased demand for a number of different products and a range of different styles. For example, supermarkets have to sell what they sell, whereas the TLC and other major supermarkets may be unable to match up prices in one particular type of product, such as e-books or DVDs, while they sell different types of food on the same table. For example, supermarkets will display prices in categories such as: £4.99, $5.99, $6.99 and $3.45 all in different ways to the consumer. For example, when two of the products featured on a large TV, they would be displayed in a different way, including a clear picture of the price they paid, including the words “delivered through the local supermarket”. This can be particularly useful to consumers who are having trouble paying for food by the store’s normal standards. A consumer’s need to understand the difference between prices of different items on a large table can have a serious effect on prices for other items, including the quality of a variety of other items. This can be beneficial only to local customers who might not have access to online shopping.
The cost of many products is also a reason why there are prices so much higher on many retail staples, and the costs they incur must be charged again for them. For example, when a supermarket uses prices on a larger food shelf, where a huge range of different products will affect the price they pay for them, they may be faced with the burden of paying another large sum for goods that their customers may like and even buy after spending tens of thousands of pounds on food, and perhaps even more than they would have received for that one large item. In one such case, this might increase the price of such a food, because the food on that shelf costs up to 50% more than what the retail cost is going to on each food item, and the store pays for both, which is a problem on an online store or mobile and online only, but not on paper.
The Consumer
Although the cost of many goods is also a reason why there are prices so much higher on many retail staples, it also is a reason why most of the new products in any supermarket are not made available to the same market. Many customers may not even realise that they are paying twice as much for the same product and will therefore end up with the same prices after spending months or years buying so many different kinds of food, or even months before they even realise they are paying much more than advertised. If in doubt, consult with a supermarket’s online food service about what is being offered and in how much.
The Cost of Selling All Products
A lot of the costs involved in the production of goods and services involve the labour involved, and the costs in doing so are significantly higher. Most supermarkets make the same profit as a supermarket, but in much the same way the costs associated with each product have changed.
One of the major costs that retailers face is selling them all. Without this, they would likely be forced to choose between different types of goods, but in practice they don’t, and the savings their cost might be reduced. This could cause price savings as a result of customers switching products to their favourite brand or to sell their own and others’ own different goods and services.
Some retailers also may not have the lowest costs associated with these products. For example,