Tesco's Corporate Social Responsibility Initiatives

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Case Details:

Case Code : BECG059
Case Length : 21 Pages
Period : 1995-2005
Pub. Date : 2006
Teaching Note :Not Available
Organization : Tesco
Industry : Retail
Countries : UK

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Introduction Contd...

The report outlined Tesco's approach to CSR in the coming year and the achievements in the past year. Commenting on Tesco's CSR approach, Leahy said, "Corporate Social Responsibility makes sound business sense. The key to our approach is our integrated business system, where environmental and social performance is managed alongside financial performance. This means we have a year-on-year program of focused action to drive improvement."7

Background Note

Tesco was founded by Jack Cohen (Cohen) in 1919 using his bonus from his World War I army service. In 1924, Cohen bought a tea shipment from TE Stockwell. He put the first three letters of TE Stockwell and the first two letters of Cohen together to name his brand 'TESCO.'

The first Tesco store was opened in 1929 in Edgware, London, and the first supermarket8 was opened in 1956 in Maldon, Essex. The first superstore9 was opened in 1968 in Crawley, West Sussex. Initially, Cohen's strategy was to "Pile it high, sell it cheap." Though the strategy helped Tesco attract a large number of customers, it also served to brand it as a store for middle class customers and even gave it a low-end image.

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Tesco's image took a further beating when Imperial Tobacco Company which was considering acquiring Tesco, did not go in for the deal as it felt that the acquisition might damage Imperial's image. During the late 1970s, several analysts advised the company to change the name of its stores.

Till the 1970s, several companies that Tesco acquired like Burnards (1955), Williamsons (1957), Harrow Stores (1959), John Irwins (1960), Charles Phillips (1964) and Victor Value (1968). These companies were not integrated properly with Tesco, and most of their stores were not well maintained.

Moreover, Tesco's stores were themselves small and ill-equipped. The company competed only on price and the goods available at its stores were perceived to be of mediocre quality. With rising income levels, customers all over Britain were no longer looking for bargains, but for more high-quality merchandise.

To meet these changes in customer demand, Tesco closed down many of its stores to concentrate on larger stores with better facilities...

Excerpts >>

7] "Tesco CSR Review," 2001-02.

8] A supermarket is a store that sells a wide variety of food related products. Most supermarkets also sell a variety of other household products that are consumed regularly, such as household cleaning products, medicine, clothes, and some sell a much wider range of non-food products.

9] A superstore is a name for a large departmental store. Usually associated with large chains, a superstore sells a wide range of products, from toys and electronics to clothing and groceries and even furniture, sporting goods and automotive supplies.


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