5C analysis of Tesco (5C’s of Tesco)
This is a detailed 5C analysis of Tesco. It provides readers with important insights into the key drivers behind Tesco’s success. The key drivers analysed in line with the 5C framework are company, competitors, customers, collaborators, and climate.
Tesco Company (Tesco Plc)
Tesco is a British multinational grocery and general merchandise company. It has market experience of over 100 years. It has operations in a number of countries and serves millions of customers every week. It has different types of stores e.g. Tesco Express, Tesco, Metro, and Tesco superstore. It has a strong online presence as well.
Tesco has 27% market share in the UK grocery industry (Kantar, 2021). Its profits increased in 2020 as online orders had doubled. To run the operations efficiently, it has a number of committees under two broad titles i.e. Board Committee and Executive Committee. However, controversies affected it several times in the past. For instance, it agreed to pay a fine of £120 million to avoid prosecution for its accounting scandal 2014. SWOT analysis of Tesco sheds more lights on the company.
Collaborators of Tesco
Tesco works with thousands of suppliers and strategic partners. It sells both its own label and branded products, and therefore, suppliers are categorised as ‘UK own label suppliers’, ‘ROI (Republic of Ireland) own label suppliers’, ‘Branded suppliers’, ‘CE (Central Europe) own label suppliers’, and ‘Global growers’. Some of its top branded suppliers are Coca-Cola, General Mills, Kellogg, Nestle, PepsiCo, Princes, and Unilever.
Success of Tesco’s business largely depends on its relationship with the suppliers and strategic partners. There is no doubt that the relationship is solid; however, Tesco was found in the past delaying payments to suppliers to boost its own profits. Likewise, it had demanded suppliers to cut prices to help it battle with budget supermarkets such as Aldi and Lidl which many suppliers did not like and raised concerns about (BBC, 2020).
Customers of Tesco
Tesco places customers at the centre of everything it does. In fact, customers are one of the three pillars around which the business is organised (Tesco, 2021). The other two pillars are products, and channels. Tesco considers listening to customers extremely important to deliver the best service possible.
Tesco communicates with the customers directly and frequently. It sends around 15 million emails to them each week. It also sends Clubcard vouchers regularly to them as a gesture of appreciation (Tesco, 2021). However, compared to some of the competitors, its customer satisfaction rate is low in the UK.
Competitors of Tesco
In the UK, Tesco faces stiff competition from ASDA, Sainsbury’s, Morrisons, Co-op, Lidl, and Aldi. Therefore, it has implemented a number of strategies to beat the competitors e.g. matching Aldi price. Abroad, it is again challenged by Aldi, Lidl, and other giants such as Penny Market, CBA, Carrefour, Walmart, and SPAR. The article Competitors of Tesco sheds more lights on this topic.
The last topic in the 5C analysis of Tesco is the climate which is also called context. A number of macro factors impact on the operations of the retailer. For instance, it was fined £7.56m for selling out of date food in its stores in Birmingham, the UK (Sky News, 2021).
Likewise, the retailer offers a wide variety of products for ethnic markets as it is a very fast-growing category in the UK, and some other developed countries. It sells both own and branded products thereby addresses the needs of customers from different economic backgrounds. PESTEL analysis of Tesco offers more information on the context of the company.
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Last update: 29 April 2021
BBC (2020) Tesco demands supplier price cuts in discount battle, available at: https://www.bbc.co.uk/news/business-53284788 (accessed 29 April 2021)
Kantar (2021) Grocery market share, available at: https://www.kantarworldpanel.com/grocery-market-share/great-britain (accessed 29 April 2021)
Sky News (2021) Tesco fined £7.56m for selling out-of-date food, available at: https://news.sky.com/story/tesco-fined-7-56m-for-selling-out-of-date-food-12280744 (accessed 29 April 2021)
Tesco (2021) About us, available at: https://www.tescoplc.com/about/ (accessed 28 April 2021)
Author: Joe David
Joe David has years of teaching experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality, and tourism management. He holds a Postgraduate Diploma in Management Studies and a Post Graduate Diploma in Marketing Management.