Tesco Change Management Strategy

Change Management

Introduction: Company Profile-TESCO

TESCO is supermarket retailer which provide products and services related to household items. TESCO was founded in 1919 when Jack Coheh started selling an extra number of groceries to people in East London. This helped him to earn a profit one percent profit from daily groceries sale. The Supermarket dealer was turned into a brand in 1924 (Lukic, 2016.). The initial products were launch in the form of supermarket chains and this business started to grow for people.

TESCO Plc is the largest business retailer supermarket in the UK. It has more than 2291 stores and employees which are offered a job record to 580000.TESCO provide a range of products and services. These include the food materials and groceries. Materials are packed and stored in a clean environment to consumers (Müller, 2015). Other services include the furniture delivery system. TESCO has managed to form a place in the business of Garden furniture.

TESCO provides services related to Home electrical products in the UK. These are essential for the consumers because few items remain on the expensive list. The toys and leisure products are provided under the single hut of Tesco. In addition to the products TESCO also provides mobile payment services to customers (Kukreja & Gupta, 2016). There are additional setups added to the company for customers’ convenience.

2. Three issues with Overall Operations Transfer process, logistics, Escalation

2.1 Description of First Issue identified: Transfer Process

The first issue which is identified in TESCO is the transfer process of retail products to customers. The system which is used in transfer management relies on the services of internet applications. This produces a draw for company operations and daily practices are affected (Touboulic & Walker, 2015). The competitors like ASDA, Morison finds its advantages and uses the weakness in operation for their own product improvement. TESCO sales have been affected by transfer process and work operation is limited to hours (Lindner, et al., 2014).

2.1.1 Why there is a need for improvement

As the transfer process requires time in hours, TESCO customers have been affected. The company has faced the financial loss of 150000 dollars (Tesco, 2018). This also reduced the daily supply of groceries to regular customs. There is a need for change because it will improve the transfer process and allow the company to have increased in the number of sales from the Supermarket utility.

2.1.2 Benefits if improvement is made

This improvement will create an increase in a number of jobs for TECO which at the present state is declining to 9 percent (Altamony, et al., 2016). This will also increase the loyalty of customer as the grocery purchase will become efficient and a good reputation will be made in the retail sector. TESCO will attract chances of new investment and project and efficient transfer system will reduce the time-consuming operations.

2.2 Description of the Second Issue: Logistics

The current demand for business in retail requires Logistics. One of the key issues in the operations management of TESCO is the logistics sector which is not incorporated into the other management departments (Dalton, 2017). This has created complexity in business process as the stocks are not executed properly and the competitors use the advantage for Retail Market.

2.2.1 Need of Improvement

The logistics system is not capable to meet the requirement of groceries stores. It requires improvement in order to raise the profit of TESCO. In the modern world Groceries and food items are transported according to the specifications of the product (Cook, 2017). TESCO needs to manage its small sector as the there are frequent discontinuations to orders and the stock level is declining.

2.2.2 Benefits of Improvement

TESCO will have a good position in the market as compared to the competitors like Wait rose and Morrison. The UK market is competitive and by increasing the standard of logistics services it will help TESCO to gain profit from the logistic strategy (Venkatesh, 2016). It will also improve the inventory system and warehousing. Material Handling will be improving through proper transportation routes and resources for import and export strategy will be optimized

2.3 Description of the Third Issue: Escalation

The TESCO operations have been unable to record escalation in terms of stocks and existing market shares (Kelly, et al., 2016). This is due to the performance issues where the standards of grocery products are not met in regard to the consistency. This effect the regular operation where the company has to resolve the issue of growth (Tesco, 2018). The recent situation of the country suggests that due to less growth most of the people have lost their employment.

2.3.1 Need for Improvement

TESCO operations need growth in all of the important sector. This is requirement off the organization and it will change the number of employment standards (Morgan, 2015) (Fujita, et al., 2017). The growth is required as its an important part of the change management and it resides on the number of projects and their completion.

2.3.2 Benefits of Improvement

The growth will increase the number of projects for TESCO. The products quality and internal environment will be enhanced. The loyalty of the customer will increase the existing reputation of TESCO and it will affect the overall efficiency of Operations (Nishimura, 2016). The cost and expenditure will also decline to the escalation of TESCO management.

3 Literature Review: Project Appraisal and Methods

3.1 Definition of Project and Project Appraisal

The project is defined as a set of activities which are given to an organization under the completion time. These activities form a task which is required to be given at the desired deadlines. This whole procedure will require planning and motivation because all the necessary elements can be fulfilled with the help of specific cost and performance (Harrison, 2016). The quality is made the first area for people in order to understand the nature of project appreciate appraisal is taken out in support of the recent performance (Al-Ani, 2015). This performance is assessed and returns are given in the form of financial statements. The four project appraisal techniques which will be used under the contact of TESCO are Net Present Value, Payback, Internal rate of return and Profitability Index. These four elements will be compared with the change management for T Organization (Bunyan, 2015).

3.1.1 Project Appraisal Method 1: Net Present value

The work of Ondrej shows the importance of Net present value approach which can be used in projects like supermarkets (Zivalsky, 2014). This method basically focuses on the techniques which can be used for true innovation of the project. This also provides benefits and advantages of the technique. The innovation of organization and projects is required to be measured using this criteria (Zokaei, et al., 2016). The first division remains under technical aspect ns second is classified in term of economics sector. Net Present approach is related to the future cash flows. The is a measure of investment need for an organization (Nakamura & Suzuki, 2015).

Net present values are measured with the of the mathematical equation where the organization values domains in the Numerous and Overall cash generation and the discounted rate remains in the denominator for summation (Johansson & Kriström, 2015).

3.1.2 Project Appraisal Method 2: Payback Method

The payback period can also have helped to manage the project appraisal techniques. The study made by Mawih Kareem present a strong idea of Payback ratio method and its importance in judging the criteria for project Appraisal (Al-Ani, 2015). One of the most important concepts for project appraisal is the Payback method. It helps to evaluate the capital budgeting decision and this technique is used in a variety of project for a number of years.

The variables in this technique are the profitability and profit. They are presented in the form of uncertainty (Pellicer, et al., 2016). The payback period is calculated with the help of dividing the cost with the annual sales for the organization. Liquidity and Payback period prove an important area for the organization.

3.1.3 Project Appraisal Method 3: Internal Rate of Return

The internal rate of return is also a technique used in project appraisal method (Zhou, et al., 2015). This forms the area of change management where the rates are calculated based on the fixed sales of the organization. According to D. Adrian. The Internal rate of return is linked to the budgeting techniques (D. Adrian Doss, 2010). There are wide varieties of project management present for private projects. Is require the attention of new investment plan which has an internal rate of return. This method relies on the project appraisal and can provide guidance for the investment decisions (Dalal-Clayton & Sadler, 2014).

3.1.4 Project Appraisal Method 4: Profitability

According to the studies of Jihane and Loubna, Profitability technique is used in project appraisal as it provides necessary information about performance and requirements for the investor. It is a reliable method which can be used to regulate all the risk for the project (Al-Qubatee, et al., 2017). Measuring the profitability of project in terms of change management is complexly exercised (Santiago-Brown, et al., 2015). The criteria for the Project appraisal can be used to monitor the particulars of each project and provide traditional methods for the performance evaluation. This criterion is simple to use and it will deliver the required results (Gharib & Benabbou, 2017).

3.2 Application of Project Appraisal Criteria and Method to improve the three identified issues

The table below evaluates the four project appraisal methods and their relationship to the project. All four methods are selected in regard to them to the application for the change. The areas which are highlighted for changes are evaluated for the basic concepts of project appraisal and the check is made on the base of criteria is a useful method as it saves times and provides instruction to implement form comparison of sources and changes proposed.



Three main criteria for Improvement in the Transfer process, Logistics, and Escalation

Simple Method

Concept Easy to Understand

Fast Implementation

Jihane Gharib 2017

Net Present Value


OndĜej 2013



D. Adrian Doss,2010

The internal rate of return


Mawih Kareem Al-Ani,2015



Table 1Project Evaluation Table

3.2.1 Improvement on Transfer process with Net Present Value method

The improvement will be made by collecting the total value of the organization and dividing with the present reserves. If the reserved are accounted for 200000 US dollars they will be divided by shares of 5000 US dollars. This will reduce the time of product transfer for TESCO and increase the project completion rate for the Supermarket company (Habib, 2016).

3.2.2 Improvement in Logistics with the help of Payback Method

The project appraisal technique will calculate the total cost of logistics for the TESCO records of six months to one year. This amount will be divided by the per day loss of funds. The equation will be made in such a way where total project funds will be divided by each day share of logistics cost (Buchanan & Bastian, 2015).

3.2.3 Improvement in Escalation issue with Profitability issue

This growth will be adjusted with the help of assessment of total records. This forms the whole area where change is required. TESCO main products are related to the supermarket supply. This forms the changes in profitability as the sales are divided by the total profit (Norman & Kabwe, 2015).

3.3 Selecting the Improvement issue to implement

The logistics issue will be easier to implement because it will only require a change in technology. This will be the core area for the net present value of TESCO. It will also ensure the products are sold on equal time limits and there is an increase in the standard of service (Lakshmi & Rao, 2017). The process requirement will be improved through payback method and growth will be implemented with the help of profitability criteria.

4.0 Literature Review on Radical Change and Continuous Improvement

4.1 Literature Review of Radical Changes

Radical change is defined a restructuring process for the traditional concepts of changes. According to Rodney Mc Adams, this change is quite wide and it is important to understand the basics of radical change for an organization (McAdam, 2003). He developed a conceptual model which is a suitable way of using this approach. The change management’s concept of Business process reengineering can be used for this method. This will help to reveal the methodologies which are outlined in conceptual model. According to Haydn, outcomes of radical changes are related to the public-sector agency (Bennett, et al., 2018). There is a difference between outcomes perceived. The Business research is an important area and it can be correlated for undergoing radical changes (Engen & Holen, 2014).

4.2 Literature Review for Continuous Improvement

Continuous improvement remains the first side of the change as there have been three decades for continuous improvement. According to Lidia, this improvement is related to the evolution of different fields and it combines the quantitative as well as the qualitative process (Sanchez & Blanco, 2014). They were the resistance of continuously improving for survey and research methodologies by the main focus remain on the survey tools. The studies of Jagdeep Singh also highlights the importance of continuous development because of another extensive amount of research present in this change tool. This methodology is implemented in the literature with the help of solid practices (Singh & Singh, 2015).

4.3 Application of Continuous Improvement to Implement Changes is TESCO

The continuous development tool will be used to implement final changes to the setup of TESCO. The factors which led to this decision are a change required for the supermarket are not technical and will be resolved by the software improvement.2) This technique has less installation cost and better productivity3) Economics are resolved 4) There are issues related to communication to operation department. The reason why Continuous development was choosing depend upon the techniques. In this case, it was linked with the context of TESCO.




Beneficial For Issue

Rodney McAdam

Fundamental concept Business reengineering

Marit Engen (2014)

Comparison of Methodologies

Lyndia Sanchez (2014)

Three Decades of Continuous Improvement


Jagdeep Singh (2015)

Continuous Improvement Philosophy


5. Draft Project Plan Summary

The Draft plan will use the 50 Task and develop a timescale for all the activities. The first area will be related to planning and second will be related to check the approach. In companies related to supermarket and grocery, there is continuous improvement available for all the operations project. The continuous improvements will be made through the concept of Lindia where the three decades of improvement were used, the project plan will of less than five months and it will start for June 1, 2018, to November 1st,2017.

The initial step will be planning made by the TESCO teams. This will use the whole logistic services where customer support services and product delivery services will be targeted. Then a software will be developed and all the necessary changes will be implemented in the final area of the plan.

6. Literature Survey of Risk Management

Mostafa provided an overview of the risk identification between projects. Risk identification is carried out with the help of effective techniques. The probability of risk is present in all the projects. This uncertainty cannot be avoided (Kotb & Ghattas, 2017). These risks are identified with the help of root causes of risk. Edward Cho has discussed the prevalence of risk in projects like supermarkets. These barriers need to explore with the help of proper risk framework (Cho, 2016).

Risk management and planning are areas which can in any project facility. It is necessary to mitigate the effects of potential problems. A risk in any uncertain even will depend on the nature of the project. There are no guarantees present in the project guidelines (Marcelino-Sádaba, et al., 2014).

The studies made by Ajay also help to explain the barriers which are present in the changing world in regard to risk option. Here the focus was on the developed countries where risk is also present for the construction projects (Gajanan.Bhave, et al., 2014).


Risk Management Process



Mostafa (2017)

Risk Planning

Risk Identification barriers


Edward Cho (2016)

Risk Management

Risk Management


Ajay Gajnan (2016)

Risk Management

Opportunities and approaches

Surveys, information collection


Risk Management


SWOT analysis, Surveys

6.1 Risk Criteria and Appropriate Evaluation Method




Problems may occur for the process design

Technical people

More time will be required

Technology limitations

Company products

Lengthy practices

Logistics issues

Miss communication

Materials will be required

Section risk

Poor understanding of Profitability

Pending tasks

6.2 Continuous improvement and quality assurance risk

There is risk associated with the quality of products and safe warehousing. The first area is the human resource and storage capabilities for TESCO. The reduction of a number of skilled people will provide a threat to changes. Change can also be reduced with the implementation of unions and groups present in TESCO. The systems and technical requirements can also impede improvement.

6.3 Qualitative Analysis

The qualitative analysis will be based on the risk associated with the Supermarkets. The high level of risk will be related to operations management. Low and medium level risk will be identified with the failure analysis as all the weak areas will be removed and a proper change will be implemented.

Table 2 Risk Management Analysis (Cho, 2016)

7.0 Evaluation of Final Plan

The final plan is made on the basis of risk assessment criteria. The radical and continuous changes philosophies are implanted and the final guidelines for risk are carefully prepared to support the draft. The final form is free from errors and mistakes.

8.0 Conclusion

This report was constructed to analyze a company situation of change management and propose a thorough analysis of the desired organization. Three changes were investigated in the TESCO organization and a proper evaluation was given for the project appraisal techniques. Appraisal techniques were applied to evaluate the change management and finally, the critical review of radical changes and continuous changes were applied. In the end, the risk was analyzed with the help of literature and project framework. The project plan ensured that risk is present in every part of an organization. It is required to have basic criteria of risk analysis and evaluation. The change was brought in three areas of operation. The final form will help project manager of TESCO to apply these changes again a net profit for escalation.


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