Stakeholders of Tesco (An analysis of Tesco’s stakeholders)
This detailed analysis of the stakeholders of Tesco aims to examine both the internal and the external stakeholders of Tesco. It also aims to explore their influence on the company. Tesco is a British retailer headquartered in Welwyn Garden City, Hertfordshire, England. Its journey started in 1919 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. Like any other organisation, employees are very vital for Tesco, so are the managers. As of August 2019, Tesco has 450,000 ‘colleagues’ worldwide (Tesco, 2019). It puts human resources at the heart of what it does.
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, Likewise, shareholders are also very important stakeholders in Tesco. As of January 2019, the major shareholders of the company are BlackRock, Inc., Norges Bank, and Schroders plc with 6.64%, 3.99%, and 4.99% holding respectively (Tesco, 2019).
External stakeholders of Tesco
The main external stakeholders of Tesco are customers, suppliers, creditors, competitors, pressure groups, local communities, and the government. Tesco serves millions of customers every week. To server the 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 the company reduce food waste.
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 step up pressure on Tesco over many issues e.g. employees pay, suppliers pay, social responsibilities, genetically modified feed, and many more. Likewise, local communities are often impacted by the operations of Tesco significantly. If unhappy with any operations of the company, it is unsurprising that local communities may come out in protest. Similarly, governments of the countries where Tesco operates can also impact on the operations of Tesco.
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, Tesco finally sealed its £4bn takeover of Booker as over 85 per cent of its investors had voted for the deal (Rovnick & Odell, 2018).
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, in 2016, Tesco was found to have delayed paying money to suppliers in order to improve its own financial position (Simpson, 2016). 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, in 2016, some workers took legal action against Tesco on grounds of age and gender discrimination after the company had decided to cut its pay rates for night and weekend shifts.
We hope the article ‘Stakeholders of Tesco (An analysis of Tesco’s stakeholders)’ has been helpful. You may also like reading Marketing mix of Tesco & SWOT analysis of Tesco. Other relevant articles for you are:
If you liked any of these articles, please feel free to share with others by clicking on the icons below. Also enter your email address at the bottom of the site to ‘Join us’ free for our newly published articles and newsletters.
Last update: 30 August 2019
Rovnick, N. & Odell, M. (2018) Tesco wins shareholder backing for £4bn Booker’s takeover, available at: https://www.ft.com/content/1f7c68d4-1c94-11e8-956a-43db76e69936 (accessed 26 August 2019)
Simpson, E. (2016) Tesco knowingly delayed payments to suppliers, available at: https://www.bbc.co.uk/news/business-35408064 (accessed 27 August 2019)
Tesco (2019) Board and Executive Committee, https://www.tescoplc.com/about/board-and-executive-committee/board/ (accessed 25 August 2019)
Author: M Rahman
M Rahman writes extensively online with an emphasis on business management, marketing, and tourism. He is a lecturer in Management and Marketing. He is a graduate of Leeds Metropolitan University and London South Bank University.