Branding in Tesco and the retail Industry : Branding Globalisation Potential : Types of Tesco product lines : ( Ref no.

10 ) No. Of Lines 1200 1245 Strategy - Super Premium Product & Price - Limited to High value Added - Attract Upper market Shopper. - capture margin in new category. - Aim to provide complete Basket. - Same quality in national brand - To be the brand choice - Cheap and basic Limited to low value items - targeting specialty niches with product. - Recently renamed healthy eating to healthy living to stretch to non-food. - Aimed at children aged 5-11. - Help parents improve diet - Minimum use of artificial ingredients

Tesco Finest Tesco Organic

Tesco Tesco value Tesco Health Living Tesco Free From Tesco Fair Trade Tesco Kids

8000 1200 600

50

* From Private Label to Corporate Brand : ( Ref no. 11 ) 1st generation Branding form Private-label Unsupported own brand Strategy Objective Low price copy Increase margin, reduce manufacturers power, provide better value product (quality/price) Basic lines with a large volume Value-added Increase and retain the customer base, improve image, differentiation Corporate positioning Produce strong positive identity, first choice for consumer, satisfy stakeholders The corporation and its tangible and intangible attributes Quality and consistency throughout the organization 2nd generation Segmented retail brands 3rd generation Corporate brand

Product

Image-forming products Groups

Quality/image

Medium quality perceived as lower than leading manufacturers brands

Same or better than brand leader, innovative and different Equal or higher than known brands

Price position Consumers motivation to buy

10-20% below

Focus on delivering value Trust

Price is still important

Better and unique products

Among the five bases of power, there are three bases in which the success of Terry Leahys leadership is founded. These are legitimate power, expert power and referent power. Legitimate power stems from an individuals position within an organization and their right to require and demand compliance from subordinate. Legitimate power is a formal authority delegated to the holder of the position. Legitimate power was achieved by Leahy when he ascended as the CEO of Tesco. Through his position, he is able to lead the companys people. Expert power may include communications, interpersonal skills , scientific knowledge and so on. Such expertise is very valuable but specific to a task. It is based on the perception of the leaders ownership of distinct superior knowledge, expertise, ability or skill. Terry Leahy immediately joined Tesco straight after graduating from the University of Manchester Institute of Science and Technology (UMIST) in 1979. He entered the supermarket chain as a marketing executive, was appointed to Tescos board of directors in 1992 and by the time he was 40 he had worked his way up to become chief executive in 1997. His wide experience in the company makes him very knowledgeable of the company, its customers, and its operations. His years of experience in the company makes him a possessor of valuable knowledge of the company, its operations, customers and industry. Referent power is based on group members identification with, attraction to, or respect for the leader. It is a leaders charisma and interpersonal skills which causes subordinates to gain a sense of intrinsic personal satisfaction from the identification of being an accepted follower. Leahy is a very popular leader among his follower. This is because he motivates them and constantly empowers them. He is also charismatic The appointment of Terry Leahy as the CEO of Tesco marked a new era for the company. Leahy adapted a participative style of leadership wherein the employees are given voice in the decision-making process. The CEO also gives emphasis on the importance of appointing many leaders to handle organizational process. The organizational structure therefore became more flat where the roles and responsibilities of everyone are clearly stated. Leahy delegates leadership roles to individuals in the organization in order to ensure that the company, with more than 300,000 employees, operates effectively. The leadership style that is manifested by Terry Leahy and is imitated by the leaders in the company has changed the structure of the company. The company has adapted an organic for of organization. An organic system is characterized by low to moderate use of formal rules and regulations, decentralized and shared decision making, broadly defined job responsibilities, and a flexible authority structure with fewer levels in the hierarchy. An organic structure is more appropriate to those organizations where there is a need to be innovative. The pressure of innovation suggests a structure that can respond to environmental variations rapidly so it is necessarily loosely defined and flexible. The organization tends not to be formalized nor are roles too closely structured (Salaman 2001, p.106). Organic organizations are stratified primarily in terms of expertise, and leadership accrues to those who are the best informed and capable. There is much more commitment to the organization, with

the result that formal and informal systems become indistinguishable. A framework of values and beliefs, much like those characterizing a profession, develops that becomes an effective substitute for formal hierarchy (Miner 2002, p. 449). The company has adapted a simpler and flatter organizational structure