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    Primary and Supportive Activities for TESCO Plc

    University: University of Queensland

    • Unit No: 2
    • Level: Undergraduate/College
    • Pages: 9 / Words 2299
    • Paper Type: Essay
    • Course Code: LCBS5001
    • Downloads: 379
    Question :

    This assessment will cover following questions :

    • Tesco is retail supermarket chain. Describe the value chain model proposed by Porters.
    • Examine value chain model in the context of internal environment. Focus on the primary and supporting activities of the Tesco organisation.
    • What is the importance of the value chain model and explain internal business environment of Tesco.
    Answer :

    INTRODUCTION

    Value chain is an effective tool which includes several internal activities that helps an organization in prioritizing activities and analysing its core strengths and weaknesses (Lebherz and Hartmann, 2017). This study is based on Tesco Plc which is a British retailer and having headquarter is in England, UK. This study is going to show some primary and supportive activities of value chain model developed by Porter's which are being performed by all type of companies. It will further, show effectiveness of this model in analysing internal environmental factors such as strengths, weaknesses of Tesco with the main aim of taking competitive advantages.

    TASK 1

    Value chain model by Porter

    Value chain analysis is an effective strategy and tool developed by model which helps an organization in analysing its internal activities. The main aim of Porter's to develop this model is to support organizations in identifying that which activities are the most valuable that can give them competitive advantages opportunities. Porter's value chain analysis is also known as a business management developed for taking competitive advantages by the company. This analysis mainly focuses on some activities and system with clients as the central principle rather than departments. It has several activities which are divided into 2 parts such as primary and supportive. Primary activities of an organization consists of those activities who have direct and immediate impacts on the production, sales and support of products. As per the Porter's primary activities are described as below:

    Primary activities

    Inbound logistic: It includes all those activities which are concerned with receiving, storing as well as distributing of raw materials of products. It is important for manager of the company to create value of this activity and for that they need to maintain a good relation with suppliers (Porter and Kramer, 2019).

    Production: It includes all functions which converts raw materials into finished goods or semi-finished products. For creating value of this activity, operational system is the main principle and key.

    Outbound logistic: It includes those activities which are concerned with delivering products of the company to customers. For example: storage, distribution and transport.

    Marketing and sales: After producing products, it is important to introduce products to customers and bring products into the market. It includes activities of promoting products along with managing customers relationships. Maintaining relationship with customers is the main key of creating value of this activity.

    Services: It includes all activities that maintain value of products of the company to customers. It can be done by developing customers relationship based on the procurement of products (Lee, 2018).

    Support activities

    These are activities who support company in performing primary activities efficiently and make them successful. There is a strong connection between primary activities and supportive activities such as; HRM supports outbound logistic and other primary activities.

    Organization's infrastructure: It is a secondary and support activity which makes an organization able to maintain and perform its daily operations successfully. Some examples of this activity by Porter's includes: financial management, administrative handling and line management.

    HRM: It is concerned with the development of HRM. Some examples of this activity includes: recruitment of employees, training to them, compensating and retaining of them.

    Technology development: It includes all those activities which helps an organization is developing its products after producing them by making them innovative and creative. Some examples are: technology development and innovation and these create value as well.

    Procurement: All activities of this supporting relates to the procurement to services the customer from the organization. It includes managing relationship with customers and suppliers, negotiation with them to purchase products from suppliers at the best prices, outsourcing agreement etc.

    So, from the above it can be said that, companies use both primary and supportive activities as building blocks to create valuable products and taking competitive advantages (Lindman and et.al., 2016).

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    TASK 2

    Overview of the company

    This study is based on Tesco which is a British multinational groceries and retailer. It is considered as a leading retailer in the world as it has approximate 460,000 employees at its all 6,809 stores around the world. Headquarter of this retailer is in the Welwyn garden city, England, United Kingdom. It is founded by Jack Cohen in the year of 1919. It is stated that this company provides its services and products to millions of customers by offline and online. It operates in several countries such as; China, England, India which helps it out in generating and increasing sales as compare to others. It has its largest operations in the UK with having approximate 3,500 stores and 310,000 colleagues (Introduction of TESCO Plc, 2017). The first Tesco shop was opened in the year of 1931 in Burnt Oak and Barnet. It expanded its business rapidly and opened 100 stores in a speedy manner. It has supermarket, superstores, convenience shops and hypermarkets. In the context of products, it offers: bakery products, frozen food, beverages, pet care products, home electronic products etc. It has its own brand as well such as: Tesco loves baby, Tesco kipa, Tesco value, finest and many more. It has variety of products and different types of stores. It sells its products and services via social media platforms or online. The main aim and mission of this retailer is to make what matters better, together. Its vision, mission and values have strong interrelation which helps it out in shaping the company. It uses several strategies which creates value of its business and functions and Porter's value chain free samples analysis is one of them.

    TASK 3

    Internal environment of Tesco

    In the context of value chain analysis it can be said that it is an effective model that helps an organization in analysing and prioritizing its internal activities, By analysing and giving prioritizing activities, company can analyse its internal environmental factors on the basis of its activities. It can make a link between its strengths, weaknesses with its activities. The main aim of using value chain and analysing internal environmental factors is to make changes in policies and strategies to take competitive advantages and removing weaknesses. Value chain analysis consists of 2 activities such as primary and supportive. Primary activities are involved with the physical creation of products, marketing and after sales services. On the other hand, supporting activities are considered as secondary activities which support primary activities (De Marchi and et.al., 2019). Internal factors includes strengths and weaknesses of the company which Tesco can identify with making an effective use of Porter's value chain. Tesco's value chain model and analysis of both activities which helps it out in analysing its internal factors are:

    Primary activities

    Inbound logistic: In this primary activity, it can be said that the main strength of this retailer is brand image that leads its position and helps it out in bargaining cost to suppliers. It also makes sure the right time delivery at the right place by the right and affordable prices. This activity helps it out in maintaining competitive advantages by effective product selection and scheduling staff.

    Operations: Its operations activity is divided into 3 segments such as: retail, manufacturing and banking. For developing low cost leadership strategy it makes an effective use of its IT systems or Tesco digital program. This system manages it's all 3 types of operations

    Outbound logistic: It is stated that it has effective operations which has made it able in maintaining its brand image. For attracting and reaching larger base of customers, it has distributed its stores as home plus, superstores as well as metro.

    Marketing: Marketing and sales strategy used by this retailer is one of the main strength as it has introduced price campaign by proving its most of the products at lowest prices with having high quality. In addition, it has club card which also helped it in making this activity and increasing sales as well as loyalty of customers.

    Service: In this context and maintaining relationship with customers, it can be said that Tesco retailer provided online shopping facility to its customers in order to save time and cost. It has also implemented an effective dual strategy such as cost leadership and differentiation which has made able to reach to the top most position (Kukreja and Gupta, 2016).

    Support activities

    Infrastructure: It is stated that Tesco has implemented single vehicle and warehouse facilities to effectively collect and distribute products. It is its strength but it requires to more improve it.

    HRM: It provides effective training to its employees and also develop several programs and rewarding for retaining them. The weakness of this retailer is it mainly focuses on internal recruitment.

    Technology development: It uses latest and advanced technology for improving effectiveness of services and products. It is its other strength which helps it in taking competitive a

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