Review of Business Case and Environment of Tesco in Regards to Training and Development



The net profit before tax of Tesco is approximately three billion British Pounds (The Times 100 Business Case Studies, 2012). Business Environment of Tesco In the opinion of Henry 2008, p.6, business organizations face “a constantly changing external environment and need to ensure that their own internal resources and capabilities are more than sufficient to meet the needs of the external environment”. The SWOT analysis is a suitable framework for identifying strategies to exploit changes in the external environment based on internal strengths of a business organization (Hill &amp. Jones, 2008, p.19). Leigh 2010, p.115, defines the SWOT analysis “as a process by which a group of stake holders (a) identify internal and external inhibitors and enhancers of performance, (b) analyse those factors based on estimates of their contributions to net value and approximations of their controllability, and (c) decide what future action to take with regard to those factors. SWOT Analysis of Tesco Strengths Opportunities Proactive remuneration policy Competitive markets Employee stake in organization Resilient Asian markets Training and development focus Improving American markets Weaknesses Threats Non-standardized application of Recession in European markets HR policies Rising consumer pricing demands Wide range of training needs High employee wage bill (Adapted from Haerifar, 2011, p.12-13). The PESTLE (political, economic, social/cultural, technological, legal and environmental) analysis is suitable way to look at the macro-environment or the “the set of factors that are not specific to an organization or the industry in which it operates, but that nonetheless affect them” (Haberberg &amp. Rieple, 2008, p.105). The main PESTLE element impinging on employees at Tesco is the economic recession and the slow-if-any recovery. Consequently, Tesco is reducing employee resources outside its headquarters in UK and shifting that work to its Headquarters. Thus, employee staff will need to be trained to take in these new responsibilities likely to be shifted back from overseas operations (Mulligan, 2010). Porter’s Five Forces Model helps to identify competitive forces and their activities in the external environment. According to Hill and Jones, 2008, p.42, Porter’s Five Force Model is made up of “the risk of entry by potential competitors, the intensity of rivalry among established companies within the industry, the bargaining power of suppliers, the bargaining power of suppliers and the closeness of substitutes to an Industry’s products”. From the perception of human resource management, it is quite likely that competitor’s may choose to use more economical labour from the Eastern European countries to reduce their wage bill in this period of poor economic growth. Tesco will have to factor this possibility in its HR practices (House of Commons Trade and Industry Committee, 2007, p.53). Training and Development at Tesco The ‘one stop’ shopping experience that Tesco offers its customers means that in addition to a wide range of products, it also offers a wide range of servicers from its outlets to its customers. Hence to cater to this need the work force of Tesco at its outlets needs to be knowledgeable, skilled and flexible (Vance &amp. Paik, 2011, p.219). At Tesco training is provided to its employees that allow them to choose their training towards getting specific retail qualifications to