M RahmanStakeholders of Tesco (stakeholder analysis)
This is a detailed analysis of the stakeholders of Tesco (stakeholder analysis). It aims to examine both the internal and the external stakeholders of the retailer. It also aims to explore how they influence it and in what capacities.
Tesco is a British retailer headquartered in Welwyn Garden City, Hertfordshire, England. Its journey started over a century ago with its founder, Jack Cohen selling groceries from a stall in the East End of London.
Internal stakeholders of Tesco
The main internal stakeholders of Tesco are employees, managers, board and executive committee, and shareholders.
Employees of Tesco
Like any other organisation, employees are very vital for Tesco, so are the managers. It has 345,000 ‘colleagues’ worldwide (Tesco, 2023). It puts human resources at the heart of what it does.
However, Tesco needs to do more to ensure employee satisfaction. Some of its employees voted in thousands in the past to go on strike over pay and other issues.
Tesco Board
Tesco Board consists of the chairman, chief executive, chief financial officer, and a number of non-executive directors. They are very powerful and extremely important for the company.
Shareholders of Tesco
Shareholders are also very important stakeholders of Tesco. The major shareholders are BlackRock, Inc., Norges Bank, Fidelity International, and Schroders plc (Tesco, 2023).
It is worth mentioning that Tesco suffered shareholder revolts over executive pay in the past. Likewise, it had responded to shareholder demands for healthier food sales by announcing its commitment to improve the health profile of its products by 2025 (Cooper, 2021).
External stakeholders of Tesco
The main external stakeholders of Tesco are customers, suppliers, creditors, competitors, pressure groups, local communities, and the government.
Customers of Tesco
Tesco serves millions of customers every week. It cannot survive without them. Therefore, making them satisfied and retaining them are extremely important.
However, there are some decisions that can frustrate customers. For instance, Tesco’s decision to increase cost of its plastic bags by 50% made some of them unhappy. It has justified the decision for environmental reasons; however, customers questioned about the timing of the increase, during a cost-of-living crisis (Jones, 2022).
Suppliers of Tesco
To server customers with excellent quality, healthy and sustainable products, Tesco works with thousands of suppliers and producers. These suppliers and producers not only provide Tesco with required products, but also help it reduce food waste.
Competitors of Tesco
There are a number of big competitors that challenge Tesco in the UK and abroad. ASDA, Sainsbury’s, Morrisons. Co-op, Waitrose, Lidl, Aldi, and Iceland are the main competitors of Tesco in the UK.
There are a number of big competitors that challenge Tesco in the UK and abroad. ASDA, Sainsbury’s, Morrisons. Co-op, Waitrose, Lidl, Aldi, and Iceland are the main competitors of Tesco in the UK.
Globally, it is challenged by big names such as Walmart, Amazon, Carrefour, and some other Internet giants. The article ‘Competitors of Tesco’ provides more and detailed information about the competitors of Tesco in the UK and abroad.
Pressure groups and governments
Pressure groups step up pressure on Tesco over many issues e.g. employees pay, suppliers pay, social responsibilities, genetically modified feed, and many more. Similarly, governments of the countries where it operates can also impact on its operations with new rules and/or increasing/decreasing tax rates.
Local communities
Local communities are often impacted by the operations of Tesco significantly. If unhappy with any of its operations, it is unsurprising that local communities may come out in protest.
Influence of stakeholders on Tesco
All the stakeholders are important for Tesco. However, they are neither equally important nor equally powerful. Some stakeholders are far more powerful than the others. For instance, the chairman, directors, and other senior executives chart the overall and strategic direction of the company.
However, the shareholders must approve the major decisions. For instance, many shareholders were against the decision of Tesco’s takeover of Booker, a restaurant supplier. However, it finally sealed the £4bn takeover of Booker with majority shareholders’ votes.
Competitors impact on Tesco heavily. For example, competitors such as Aldi and Lidl put significant pressure on the pricing policies of Tesco in the UK as the formers are widely known as discounters.
Likewise, major suppliers have a huge influence of Tesco. It is worth noting that small suppliers cannot usually exercise any influence over the company.
Conflict of stakeholders in Tesco
Different stakeholders have different expectations. These differing expectations often become the sources of conflict. For instance, suppliers expect payment on time.
However, Tesco was found in the past to have delayed paying money to suppliers in order to improve its own financial position. This deliberate attempt angered the suppliers concerned. Tesco eventually apologised for the practices, admitting harms done to the suppliers.
Tesco hurts small and often indirect competitors severely. For instance, many small shops have closed down where Tesco operates. Likewise, the local community may not like another Tesco store to open in their area as it may increase the traffic, and house prices in the area.
Shareholders expect good returns on investment. However, the more Tesco pays to employees, managers, and others, the less is likely to go to the shareholders. Similarly, Tesco may anger ‘colleagues’ with pay cuts.
For instance, some workers took legal action against Tesco on grounds of age and gender discrimination after it had decided to cut its pay rates for night and weekend shifts.
Conclusion
This above analysis shows that conflict with stakeholders is common; however, how it is managed matters. While there are some limitations, Tesco has a good reputation in stakeholder engagement.
We hope the article ‘Stakeholders of Tesco (stakeholder analysis)’ has been helpful. If you have liked it, please share it with others on social media. This will be a great help for us.
You may also like reading Marketing mix of Tesco & SWOT analysis of Tesco. Other relevant articles for you are:
Stakeholders mapping (Stakeholders analysis)
Stakeholders in tourism development
Difference between strategic risk and operational risk
Brand identity vs. brand image
Last update: 07 January 2023
References:
Cooper, B. (2021) Tesco responds to shareholder demands for healthier food sales, available at: https://www.standard.co.uk/news/uk/tesco-government-b922529.html (accessed 06 January 2023)
Jones, J. (2022) Tesco customers furious at 50% price hike on item during cost of living crisis, available at: https://uk.news.yahoo.com/tesco-customers-furious-50-price-165411061.html (accessed 06 January 2023)
Tesco (2023) Board and Executive Committee, https://www.tescoplc.com/about/board-and-executive-committee/board/ (accessed 06 January 2023)
Author: M Rahman
M Rahman writes extensively online and offline with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He holds an MSc in Tourism & Hospitality from the University of Sunderland. Also, graduated from Leeds Metropolitan University with a BA in Business & Management Studies and completed a DTLLS (Diploma in Teaching in the Life-Long Learning Sector) from London South Bank University.
Joe David