Case Study: TESO’s Digital Transformation

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Executive Summary

TESCO is an international retail store and is known on a global level. The company used to earn

60% profits from its sales because they had a very successful retailing business in more than 12

countries of the world. But soon the sales started declining and they had to initiate such project

that can give a healthy boost to their sales and profits in order to maintain the status and reputation

of the company. The company has initiated a project which is starting their retail business online

so that they can digitalize their business and increase their sales to a great level.

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Table of Contents
Executive Summary ........................................................................................................................ 2
Introduction ..................................................................................................................................... 4
Project Initiation.............................................................................................................................. 4
Project’s Scope............................................................................................................................ 5
Project’s Stakeholders ................................................................................................................. 5
Challenges ................................................................................................................................... 6
Project’s Pros .............................................................................................................................. 8
Project’s Cons ............................................................................................................................. 8
Project Planning .............................................................................................................................. 9
Communication in TESCO ......................................................................................................... 9
Training Programs for Employees ............................................................................................ 10
Communication with Customers............................................................................................... 10
Risk Analysis ............................................................................................................................ 11
....................................................................................................................................................... 13
Project Execution .......................................................................................................................... 14
Project Monitoring and Project Control ........................................................................................ 14
Project Closeout ............................................................................................................................ 14
Recommendations ......................................................................................................................... 14
References ..................................................................................................................................... 16

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Introduction
TESCO is an international retail store and is known for is best retailing business in UK and in

other countries as well. The company has its vast range food in its retail stores and have a very

good reputation in the countries in which they operate their business. They operate their business

through their brands which are called Finest and Everyday Value Ranges. The company has a

global position and is running its business in more than 12 countries of the world. They have

achieved so much since their establishment. The company is based in London, UK and formed in

1919. Since then, they are crossing the bridges of success and have gone global due to the era of

globalization and modernization. The sales of the company has now started declining and that was

the alarming situation for such a huge organizations. For this purpose, company has initiated a

project of going into digitalization and start their retail business online so that it can give a good

boost to their sales and profits. There is no doubt that the position of the company was at stake due

to the decline and the fact that everyone in the global business world adapt the changes but the

company was not into digitalization. The online business is also feasible because it will be

benefited and required in this world of digitalization. The sales will be increased to a great level

and the decline will be minimized to a great extent

Project Initiation

Project’s Objectives

1. The first and foremost objective of TESCO under this project is to maximize the sales. The

sales of TESCO has been decline due to changing trends of business and market conditions.

Company is trying to reach their customers through two platforms (offline and online).

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 Online expansion of business will generate more sales, ultimately profit of company will

increase.

2. Another objective of the company under this project is to reduce the prices. Recent

economic events made the TESCO is think about to cut the prices.

3. Company wants to develop a large shopping site to cultivate online shopping experiences

with customers. TESCO should invest in IT infrastructure to increase the operational

efficiency of the business, as the main objective of the project is expansion of business

through digital transformation. For successful completion of the project it is very much

important to have an efficient infrastructure.

4. TESCO aim to develop a wide range of healthy food items to more customers who have

healthy eating habits. Moreover, company is also interested in introducing non-food items

to offer a large online shopping platform to its customers.

Project’s Scope

TESCO is coming up with new plan under the slogan “Build a Better Plan.” Company will have

leverage of technology to expand its business operation to greater extent. The overall efficiency of

business operations will also improve further. Company has vision to improve its business prospect

by focusing on multi-channel retailing.

Project’s Stakeholders

Stakeholders of the project are stockholder, suppliers, competitors, creditors, customers,

employees, media, communities and government. TESCO will meet the needs of its customers by

offering them lower prices, quality products and best facilities. TESCO will have an outstanding

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team of personnel through efficient management. Company will arrange workshops and training

for its employees. TESCO will also improve relations with its suppliers. Company is operating in

the highly competitive environment. TESCO cannot ignore its competitors. Thus company will

give due consideration to its competitors. Company will also value the interest of its stockholders

and competitors. It is highly important for TESCO to give due importance to its stakeholders for

successful completion of the project.

Monitor Keep Informed

Communities Customers

Employees
Low

Media

Keep Satisfied Primary Actors

Government Stockholders

Creditors

Competitors
Power

High

Suppliers

Low High

Level of Interest

Table 1: Power/Interest Matrix of Stakeholders

Challenges

Project is currently posed by few challenges those are required to be deal careful to ensure the

successful completion of the project. These challenges are explained below:

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1. TESCO has aimed to offer reduced prices to its customers to increase its market share in

both platforms. It will be challenging for TESCO to meet this objective. Company has to

find out the innovative ways to operate its business cost to minimize its cost. Otherwise,

this strategy will reduce the profit margin of the company.

2. Company need to develop a robust supply chain management system. No doubt, company

is operating competently till the date with its existing supply chain. But it is also truth that

company was selling products offline. Now company is about to digitized its system.

Company is going to launch a large online shopping site where will serve the customers

belong to different countries. It will be really challenging for company to understand the

need of the customers and deliver them what they want efficiently.

3. TESCO is following the strategy of multi-channel retailing. TESCO is trying to reach its

customers through numerous ways. Company is using traditional selling stores like TESCO

Extra, TESCO superstore, TESCO Metro, TESCO Express and One Stop. Other than that

company is also have online stores to make it for customers to make purchase. Company

is operating in almost 14 countries. It will also be challenging for the company to

competently and efficiently manage this system. Company need to use innovative tools of

marketing to stay connected with customers.

4. Another serious challenge for TESCO is Aldi and Lidl. Aldi and Lidl posing serious threat

to the business of the TESCO by offering discounts to its customers. TESCO need to have

a new plan to deal with continuous rise in discounters.

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Project’s Pros

1. Company will be able to earn good reputation and strong brand image. Because company

is providing products at fair prices that will add value in its products.

2. A competent process of digitalization will increase the customer loyalty. Good customer

experience will make to more convenient for customers to shop online by staying at home.

Quality products and best online services will not let the customer to go anywhere else.

3. Company will have an improved product lifecycle management process to ensure

competent supply chain.

4. Present world is of digitalization where every business is going digital. Company will take

the full advantage of latest technology for the sale of its products and services. Company

will also used internet based facilities to contact its customers across the boundaries.

Project’s Cons

1. TESCO with multi-channel retailing will have a wide range of products. Changing

demands of customers from different regions of the world will its product line diversified.

It will be quite perplexing for TESCO to deal with growing demand of customers with

diversified product line.

2. Vast expansion of the TESCO business will increase the debt burden it.

3. Company has the objective to reduce the price. But there is prospective fall in purchasing

power of customers but prospective rise in prices of raw material.

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Project Planning

TESCO is using the strategy of multi-channel retailing to expand its business in 14 countries.

Company is using this strategy to expand locally and globally. The purpose of using multi-retailing

strategy is to build good customer shopping experiences. Company wants to make it reach

customers easily to make them purchase. Company is also following price reduction strategy to

attract more customers and to increase market share by increasing its sales. Company is also aimed

to improve the customer facilities at both offline and online stores to increase customer loyalty.

TESCO is targeting all customers belong to different demographics. It has established five types

of offline stores according to the need of the customers. Company is also using brand strategy to

sell its products. TESCO is selling its products under its own name at fair prices. TESCO is

offering wide variety of product to its customers including food, beverage, home appliances,

clothing and financial services. TESCO should have focus on two fields, including multi-channel

retailing and robust supply chain. Company should try to increase its market share with the help

of these two approaches.

Communication in TESCO

TESCO is also aimed to make it better place to shop and to make it better place to work. It is

important for TESCO to consider the things really matter to run business successfully in all spheres

of business like good customers experience with engaged workforce. TESCO is also emphasizing

its workers to deal the customers with full involvement to generate good experience. TESCO is

using two-way communication process to communicate with its employees. Employees are

provided with right to participate in the decision making process by sharing their thoughts and

ideas. While they are invited to share their ideas. They are provided with the platforms to share

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their thought with upper management, like they are provided with the facility of text and email.

On the other hand, leader communicate with the employees through emails, voicemails and blogs

to effectively deliver their message. Employees are asked to give their feedback anonymously.

They don’t need to tell their name and also are not supposed to tell about their IDs. They don’t

need to give their personal data, but information about the store where they are working is required.

TESCO team identify and analyze the key issues. The director of the store is informed about the

issues in the store. Most of the issues are easily fixed with this two-way communication. TESCO

also encourages the direct communication in its stores. Top managers ask the employees about the

issues within the stores. They regularly take the feedback from employees about the functionality

at the stores. Employees freely share issues and their ideas to deal the issues with their managers.

Employees also see improvement in the stores.

Training Programs for Employees

It is the time company is going to be digital. Employee doesn’t have understanding with the online

system. They need proper training to completely understand this system. Training will be given to

the employees to build their understanding with this system. A specific team will also be trained

to take the customer complaints to provide better facilities to customers in future. Customer

services training program will also be arranged to teach them how to satisfy the customer and how

to generate good customer experiences.

Communication with Customers

TESCO is using different way to communicate with its customers. But priority is given to the

mobile phones. TESCO is effectively communicating with its customers with the help of mobile

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 phones. Today’s customer prefer to shop anytime and anywhere through mobile phones. That’s

why, TESCO is aimed to launch different marketing tools like shopping app for smartphones and

tablets. TESCO online portal provide access to customers to thousands of products. They can order

by single click. Company is using 32 facebook pages to interact with customers. They regulary

post something in their pages that is interesting for customers. Customers find this material

interesting and communicate with them regularly. They interact with their customers to know

about their interest and needs. They also post the material to get recognition in the market and to

promote their products and brand name. Other than facebook pages, company also have 16

intagram accounts where TESCo has more than 48000 followers. TECO social media is managing

all these accounts efficiently.

Executive Committee

Digital Customer Social

Commercial Compliance IT Team
Retailing Service Networking

Risk Analysis

TESCO decision to expand online is good decision from a business perspective. There are many

benefits of going online and expanding business operation in multiple countries. But at the same

time, TEASCO expansion project also involved some risks. Every high profiled project has some

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prospective projects, similarly TESCO’s project of expanding online has some risk those need to

be analyzed before executing the project. These risks are explained below:

1. The prospected risk associated with this project is failure to have good customer

experiences. Eventually TESCO will lose the market share. It would be less competitive

relatively. TESCO should focus on continuous customer segmentation and differentiating

the brand. To develop good customer experience TESCO need to deliver quality products,

best service and customer value. Company should closely monitor the business activities

regularly.

2. There is possibility of poorly understand the process of transformation. Resultantly,

company will have ineffective process of digitalization and fail to deliver required

technology. It will ultimately affect the profitability of the company. The process

transformation demands the continuous improvement, technological changes and more

investment. IT infrastructure of the company may also fail. There is possibility of losing

important information. Company required big investment to efficiently implement new

technology to avoid technological failures.

3. Company is obliged to follow the regulatory requirements regarding data security and

privacy to context of the business undertakings. If company fails to meet these

requirements and lose the customer data, then it will damage the repute of the company

and customer will not trust company anymore. Company should keep continuous check on

data security system in order to avoid any threat.

4. There is also possibility of poor inventory management and inefficient supply chain. Poor

product safety standards and late deliveries can annoy the customers. TESCO should give

due consideration these two prospective risks.

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 WBS

Phase 1 Phase 2 Phase 3 Phase 4 Phase 5

Hiring Logistic Performance Project

Risk Analysis
Project Team System Tracking Report

Hiring Cost Digital Performance

Estimation Launch
Project Team Devices Improvement

Hiring Communicati IT Risk

Project Team on Process Infrastructure Management

Social
Networking

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Project Execution

In the phase of project execution, the company will first of all arrange its supply chain management

process. Because company is expanding and traegeting more customers. There is need for more

vast distribution network to ensure the timely delivery and to give best experience to the customers.

It will ultimately increase the customer loyalty. Company hire the IT team and install the digital

devices to start the process of digitalization. IT team will design the infrastructure of the website.

The process of social networking will be start from here. Social media like facebook and instagram

will be used for the promotion and propagation of the brand name.

Project Monitoring and Project Control

Close monitoring of project is very important to avoid the risk. The company will keep close check

over the performance of the digitalization process. Timely improvement will be brought in the

business activities when there will be need.

Project Closeout

The key success indicators are rise in price, greater market share, more profit, reduction in price,

powerful online presence and string brand image.

Recommendations

TESCO strategy to start the process of digitalization is well defined and well-established. This

strategy has broad scope for business. There are more chance of successful completion of the

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project. There is only need for serious efforts for this. The implementation of this strategy will

ensure the sustainable long-term growth and will provide large number of customers. Moreover,

it will also increase the customer loyalty and create the brand recognition.

1. TESCO should have focus in its international retail business. It should consider all of its

customers and should a different image in the market.

2. TESCO should also grow in its local UK market. There are also untapped markets in UK.

TESCO has option to increase its sales by expanding in the UL. Company should keep

continue its healthy growth in UK along with expansion in international markets.

3. TESCO should develop best retail service to digitalize the system.

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References
Edwards, G. (2011). Key Activities During the Project Closure Phase. Retrieved from

http://www.brighthubpm.com/monitoring-projects/102293-key-activities-during-the-

project closure-phase/

PETERMAN, R. ( 2016). Project Management Phases: Exploring Phase #3 – Execution.

Retrieved from https://project-management.com/project-management-phases-exploring-phase-3-

execution/

Pradip. (2017). Processes Involved in Project Controlling and Monitoring: How to Control

Overall Project Status? Retrieved from https://www.simplilearn.com/project-controlling-and-

monitoring-article

Safari. (2017). Plan Schedule Management. Retrieved from

https://www.safaribooksonline.com/library/view/a-guide-to/9781935589679/sub6.1.xhtml

WATT, A. (2017). Project Initiation. Retrieved from

https://opentextbc.ca/projectmanagement/chapter/chapter-7-project-initiation-project

management/

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