Change Management（828）

An organization may have to change its strategy. This may be forced upon changes in its environment or it may be a deliberate attempt to do things such as placing the organization in a new competitive position(María Jesús González González,2015). The strategic orientation of a company’s management enables their activation and the implementation of changes supporting the achievement of its long-term development objectives(Jan Skalik,2016). Change can be classified by the extent of the change required, and the speed with which the change is to be achieved. One type of change is a revolution which involves a rapid and fundamental change within an organization.It may follow a period of strategic flux and the organization is likely to be facing extreme external pressure for change.Many new initiatives are likely to be launched simultaneously in order to reverse the organization’s direction.

Impacts of Brexit on Tesco

Tesco is currently the UK’s leading retailer and ranks among the top three retailers in the world. The uncertainty of Brexit brings both opportunities and threats to Tesco. Because the EU has a strong and sustainable food supply capacity, it is the EU Group advantage of member states. Brexit will directly break this long-term business relationship. The UK food supply is not enough and the food trade has a long-term deficit. EU member states are the main trade targets for UK food import and export. Once the UK leaves the European Union, Tesco’s supply chain will bear the brunt. But on the other hand, imported food prices have risen markedly because of the weaker pound prices after the Brexit referendum. In addition, the UK inflation rate has reached a five-year high, many residents in the UK are frantically hoarding food, which directly led to the rise in the retail price of Tesco food.

The negative impacts of Brexit on Tesco include the following. The first is purchase issues in the supply chain. After the Brexit, the EU may limit UK raw material purchases and increase basic tariffs. (the Guardian, 2019)Secondly, Brexit will bring serious and complicated economic consequences, affecting shoppers’ expectations, confidence and demand. The UK IGD survey report shows that UK shoppers are cautiously spending. Next, British shoppers tend to choose a shopping experience with a wide range of supply capabilities. To achieve this kind of shopping experience, it cannot do without massive imported goods from the EU, especially agricultural products. Exiting any single market in the EU may affect the merchandise supply capacity of the store. Finally, the EU always attaches much importance to food safety. The UK’s food safety regulatory system is also relatively strong and can handle some unforeseeable situations. However, once leaving the EU, the UK must revisit its food safety issues.

Solutions to overcome the identified problems

To overcome uncertain external risks of breaking away from Europe, Tesco should temporarily adopt less risky measures to maintain and expand its existing market share after taking into account the painful lessons learned from the failure of opening up the Chinese market. (Yoder, Visich and Rustambekov, 2019)Also, Tesco was delisted in the United States due to the continuing downturn in sales performance. For Tesco at this time, a more long-term strategy is market penetration strategy rather than simply laying off staff and reducing labor costs. While other retailers increase their prices, Tesco will effectively expand their existing market share if it can offer consumers homogeneous or even better quality goods at a lower price than its competitors.

Action plan and approaches to overcoming resistance

Successful change is achieved through strong leadership. Kotter and Schlesinger set out several change approaches to deal with resistance. One of them is education and communication. This approach relies upon the hopeful belief that communication about the benefits of change to employees will result in their acceptance of the need to exercise the changes necessary(Kfknowledgebank.kaplan.co.uk, 2019). The acquisition of Booker Group Plc is helpful to achieve economies of scale. On the one hand, it can reduce purchase costs. And to a certain extent, it can make up for the economic burden of reducing layoffs to the company. On the other hand, after the acquisition of companies, because of the expansion of enterprise management scale, the demand for talent will also reduce the scope of layoffs. Tesco’s leaders can ease employees’ fear of unemployment by effectively communicating with employees. And it will largely solve the problem of resistance.

outcomes

The supply chain is always the lifeblood of the enterprise of the retail industry. Faced with negative circumstances purchase blocked, sales may be affected greatly. The way to maintain a competitive advantage is management changing. Blindly reducing labor costs can only bring short-term benefits to enterprises. When faced with the uncertain economic situation, business leader styles need to be changed from power to communication and pay attention to the satisfaction of consumers and employees. WIth the process of management change, firms adopting a market penetration strategy may bear the spread of cost more easily and win customers away from rivals.

the Guardian. (2019). EU referendum: how would Brexit change VAT and import duties?. [online] Available at: https://www.theguardian.com/small-business-network/2016/mar/22/eu-referendum-brexit-change-vat-import-duties [Accessed 29 Apr. 2019].

Yoder, S., Visich, J. and Rustambekov, E. (2019). Lessons learned from international expansion failures and successes.

Kfknowledgebank.kaplan.co.uk. (2019). [online] Available at: http://kfknowledgebank.kaplan.co.uk/KFKB/Wiki%20Pages/Managing%20strategic%20change.aspx [Accessed 29 Apr. 2019].