In early 90’s Tesco faced a stiff competition from various other retailers in the industry and thus its revenues showed a downfall. At that point Tesco could not differentiate itself from the other competitors. Later under the leadership of then CEO Ian Mac Laurin it went through an image makeover, and acquired other retailing outlets like William Low; with which it reached just up to the sustenance mark. Later Terry took over as the CEO of the Company and aimed to make the company value driven

Tesco in early 70’s had acquired a lot of other retailer companies but faced a problem of integrating them, more over Tesco stores were small and ill equipped. The company only focused on price where as the goods available at the stores were perceived to be of mediocre quality, but with rising income customers looked forward to expensive and luxury merchandise. Answering to this change Tesco closed some of its outlets to concentrate to give stores a better facility. It also started off the revamp of it’s a product portfolio. It launched a price reduction campaigns so as to counter the threat from competitors. Also it centralized its distribution system and its own label for food products. Tesco developed its own brand labels targeted at different target sector. Tesco value for low income customers, Tesco brand for medium range products and Tesco finest for high end products. It also came up with special ranges like Tesco organics, Tesco whole foods and Tesco kids.

The Tesco Way

Tesco doesn’t want one leader. We want thousands of leaders who take initiative to execute the strategy.´ This is the statement made by Sir Terry Leahy, CEO of Tesco

Tesco came up with the concept of The Tesco Way´. They aimed at improving its competitive position in the market by becoming more customer focused and concentrated on differentiating itself from other retailers through the services it provided. Tesco had principles like Better for Customers, Simpler for Staff and Cheaper for Operations. To make this goal a reality, in the early 1990s, Tesco went through a process to clarify its mission, values, and strategy. Tesco communicated its new strategy to its employees via a steering wheel,´ a simple symbol and metaphor for a tool intended to drive performance and help employees navigate into the future. The Tesco steering wheel has four 90 degree arcs, representing the four BSC areas of focus: financial, customer, operations, and employee performance. With the ‘community’ arc added recently. Every store gets a monthly steering wheel update, a summary of its metrics within each of the four arc