Managing Innovation In Business on Tesco Plc


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Executive Summary

This project is summarises as field of innovation being undertaken by company Tesco Plc. The main objective of project is to identify the drivers of innovation within a business and its environment. Leaders are the important people of company for successful plan, which is also discusses in report. This present report explains the importance of organizational knowledge which helps to assess the innovation capability. As apart from this, report shows about the new service of Tesco and activities performed for the successful development. The organizational development audit for the new service will be explained in this assignment.


Innovation is a new idea, device or method, which viewed as application of better solution. It is considered as easiest solution to the complicated problems of people (Altenburg and Pegels, 2012). The company selected for this report is Tesco Plc, is a British multinational groceries and general merchandising retailer. The company headquarters in England, UK. This report talks about innovation adopted by Tesco for simplification of business activities. Beside this, the role of leader in developing successful plan is being explained in project. The report discuss about importance of organizational knowledge and cross functional operations. The various key activities are required for development of successful plan is also explained. There is organizational development audit for new product or service is explained.

Main Body

1. Organization and Industry Overview

Organization Existing Innovation and Performance and its Capabilities

Innovation is the process of translating an idea or invention into goods or services that creates value or which customers will ready to pay for it. It should be unique so that it can create value in front of customers. Tesco applies innovation in its company to provide quality goods and services to the customers. Tesco is the largest grocery retailer in United Kingdom. It has been retail a leader in retail innovation both at home as well as abroad for many years. In 2014 sales of company goes down by 3% and organisation suffers from the decline. This business data shows that company needs to boost it sale in forthcoming year. The leaders of company have to focus on the enhancing sales. The leader faced various kinds of challenges to develop the innovative idea. The management and leaders had long term vision for Tesco instead of getting immediate success. Leaders could only identify the innovation because they knowing about details of organization. As leaders were aware that, what is the current position of company and where it stands when it comes to technology. This organizational knowledge assist the leaders about technological innovation in company. The cross function co-operation helped management and leaders to analyse the dynamic environment of innovation. And according to that develop the new technology for business.

Various Activities for Successful Development

The development of innovation is not that tough task but successful development needs various activities. The discover of positive inflection point can be a game changer for company, as it has the power to propel company forward. The best innovations drives from a sea of information about products, services, customers, competitors, market conditions and internal capabilities. Shifting perspective is necessary for going to get innovation right. As to see the new opportunities leader must be able to get out of own box. The successful innovators always question their own assumption and try on alternative and helpful points of view. Successful leaders learn to identify the opportunities in adverse situation. Apart from this successful development can be done by generating values for customers (Chesbrough, 2012). Value is at the centre of everything, with it company can hobble along in other areas and still score a goal. Value is what company want and what customer is ready to pay.

Identification of New Service of Tesco

To increase the sales of the company their management and leaders make strategy that they can make an online application for smartphones and tablets. They made an application through which consumers can place order online. It provides help to increase the sales of the organisation because of the following reasons such as follows- consumers were using the Tesco grocery shopping app in their mobile phones. The app offers benefits such as the use of an embedded barcode scanner for quick orders, as well as the ability to sync one's orders between multiple devices. Customers can give order online and food were directly deliver to their homes. Consumers have access to thousands of products online. They offered everything from food to hardware to sports equipment for to consumers (Davila, Epstein and Shelton, 2012). There were thousands of recipes,cooking tips and videos available on the “Tesco Real Food” site. People can know the recipe of food by using of mobiles phones. Customer can find recipes via Tesco's free 'Recipe Text Service' which enables the user to get recipes on their phone. They can place order by mentioning the key ingredients which can be used while cooking. These recipes are offered by company on basis of their knowledge and customers preference. Tesco has expanded the capabilities of its mobile application by offering consumers who are in South Korea. The app provides opportunity to shop while waiting for bus or at subway by simply pointing their phone at product billboards. The company received positive response to virtual store in Seoul, so company launched an interactive virtual grocery store at Gatwick airport in London.

Innovation capability of Tesco enhancing day by day. As recently company has launched its new discount store concept name Jack's. The new brand is offering customers lowest possible price in UK. The store named after Tesco founder, Jack Cohen. The company has planned to launch its 15 stores in next six months. The new store is competing with UK discounter Aldi and Lidl which have continued to take market share from the big groceries. Jack operates on low-cost business model, to keep costs and prices low, by simplifying its product range and keeping store fitting and fixtures a minimum. As an innovation company allows customer to use their smartphone to scan products as they shop. And then check out by simply scanning a barcode on their phone at the till point which total their bills for payment (Gassmann and Schweitzer, 2014).

2. Organisation and Its Innovation History

Innovation is the process of translating an idea or invention into goods or services that creates value or which customers will ready to pay for it. It should be unique so that it can create value in front of customers. Tesco applies innovation in its company to provide quality goods and services to the customers (Wang and Tsai, 2014). Tesco is the largest grocery retailer in United Kingdom. It was established in year 1919. It has stores in seven countries across Asia and Europe. To increase the sales and consumer satisfaction company did various innovative things such as follows-

Click and Collect Drive-Through:

This innovation was conducted in the year 2015 to offer the personalised service to their consumers based on its personal lifestyle and preferences, Tesco push towards e-commerce. “Click and Collect” grocery services offers a higher level of convenience for consumers who pick up items frequently, saving them from having to find a parking spot and enter the store to pick up orders. So consumers can save the time. Company is focuses to create efficiencies within the online store to minimise the cost of delivery and to keep its products competitive (Kapsali, 2011).

New Stock Replenishment Systems:

This innovation was conducted in the 2013. New stock replenishment concept was introduced by Tesco to minimise the food wastage by using auto matted ordering system, Group Ordering System (GOS) by Oracle. This system helps the retailer to maintain the minimum inventories. Company optimize fresh food forecasts by programming pre-defined acceptable waste levels into the system. GOS helps in forecasting the sales before one or two hours prior to the order is placed by the customers. So it helps in reduction of food wastage in the stores.

Retail Ready packaging Initiatives:

This innovation was conducted in the 2013. Tesco was the leading innovator in Retail- Ready Packaging. It continues to work closely with manufacturers and vendors to store display, shelves and pallets to improve product packaging and replenishment productivity in store. It helps in removing various steps from product movement to storage and placed directly on the shelf. The bread suppliers of the company develop one style of tray and trolley which can be used by the all the suppliers to reduce inefficiencies in work. The supply chain of organisation was improved by using the K-roll pallet. K-roll pallet was by the store manager and it is a foot- activated mechanism (Sommer, 2012).

Application for Smartphones and Tablets:

This innovation was conducted in 2015 to increase the sales of the company, Tesco makes an online application through which consumes can place order online and food is directly deliver to their home. Recipes of food and cooking videos were also available in the application. It provides help in customers satisfaction because consumers can order as per their likes and food can be deliver at their home.

These innovative ideas help the company to increase the sales and maximum customer satisfaction with better quality product. Innovation is the need of every business and it gives the competitive advantage to the organisation. So company can sustain for a long time in the market and capture more market share (Storbacka, 2011).

3. Industry in 2018

In year 2018 retail industry have faced various challenges and adopted different changes that can help the sector to maximise profits and to contribute higher percentage in the national income of the country. This year has brought various challenges and trends for this industry. In January, February and March moths of the year has resulted in disruption in retail market. As this the season of winter than it has reduced the sales of various different food and drinking items that are sold by retain industry. The inflation rate has also fallen in year 2018 which was expected which has affected the consumer confidence in this sector.

When the weather has changed in next month than it has resulted positively as sales of food and beverage items has been increased. Various challenges has been faced by retail sector in year 2018. These challenges are reduction in customer demand, changes in weather, reduced inflation rate etc. While the industry was facing challenges at the same time different trends are introduced for the industry in order to increase its sales and profits. The major trend was of mobile application that help the customers to reach at the store from their house. They can order all the items online and get it whenever they want. If organisations are using digital media than it can help them to acquire higher market share.

The comp[any who always be on the top of the retail industry in UK is Tesco. This company is a retail company and also provide online services to its customers. A new mobile application has been adopted by the company in which bar code is provided to the custoemr sand they can search the products with the help of this bar code. It also provides an easy way to make payments to the customers. There are end number of products that are provided to various customers of different region in the UK.

As the application has facilitated the customers to place order and get the food item quickly the is very beneficial for company also because it can reduce the work responsibilities of the employees. The organisation can assign them different works that cannot be done with the help of mobile applications. It has increased profits for the organisation by reducing cost of employment. Now Tesco do not want higher number of employees as customers may order products online which will b e delivered to them on time.

Mobile application as the trend of current market in which all the business enterprises benefited and able to attain organisational goals. The main objectives of Tesco are to acquire a large amount of market, satisfy customers, increased profits and reduction in food waste in stores. This application can help to reach these objectives because customers get satisfied by good quality of product and effective services which will result in increased profits and large number of customers. Food waste will be reduced as food will be ordered online and company will buy only necessary items that are mostly demanded by customers.

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To conclude the report, it can be said that company Tesco has reached new heights by applying new innovations in business activities. The company is providing simplest ways to its customers for shopping and making the payment of bill. A successful innovation needs to perform various activities in business like value generation for customers and company, exploit disruption and shifting of perception. To sustain in the market and to grab market share innovation is important for today's dynamic environment. The company has done various innovation like click and collect drive through, new stock replenishment system, retail ready packaging initiative and application for smartphones.


Books and Journals

  • Altenburg, T. and Pegels, A., 2012. Sustainability-oriented innovation systems–managing the green transformation. Innovation and development. 2(1), pp.5-22.
  • Chesbrough, H., 2012. Open innovation: Where we've been and where we're going. Research-Technology Management. 55(4), pp.20-27.
  • Davila, T., Epstein, M. and Shelton, R., 2012. Making innovation work: How to manage it, measure it, and profit from it. FT press.
  • Gassmann, O. and Schweitzer, F., 2014. Managing the unmanageable: the fuzzy front end of innovation. In Management of the Fuzzy front end of innovation (pp. 3-14). Springer, Cham.
  • Kapsali, M., 2011. Systems thinking in innovation project management: A match that works. International journal of project management. 29(4), pp.396-407.
  • Sommer, A., 2012. Managing green business model transformations. Springer Science & Business Media.
  • Storbacka, K., 2011. A solution business model: Capabilities and management practices for integrated solutions. Industrial Marketing Management. 40(5), pp.699-711.
  • Wang, C. J. and Tsai, C. Y., 2014. Managing innovation and creativity in organizations: an empirical study of service industries in Taiwan. Service Business. 8(2), pp.313-335.
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