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Product Evaluation and Quality Assurance within Tesco plc.
What product evaluation and quality assurance in Tesco plc.
Tesco products are continually monitored and tested for their quality and
customer acceptability; this is product evaluation. Tesco staff and
management procedures are also monitored to ensure that they maintain the
highest standards; this is quality assurance.
Why does Tesco carry out product evaluation?
Product evaluation is carried out for a variety of reasons. These include:
testing new products under development
testing existing products when a change of supplier is being considered
testing Tesco products against those of competitors
to update information on the packaging
to monitor quality and safety standards.
Changing of packaging information
Even when a product remains the same, packaging information may have to be
altered because of a change in legal requirements, changes in nutritional
concepts, or advances in food preservation and cooking. For example, a
product might have its packaging altered to indicate that it could be
suitable for microwave cooking. It will therefore be necessary to test the
product in company’s laboratory. Here Tesco inserts fibre optic probes into
the product. This allows us to monitor the temperature of the product
whilst it is cooking, in order to ensure that it reaches a high enough
temperature for it to be consumed with safety.
Tests on existing products
Quality control tests are conducted regularly on all existing own-brand
products at Head Office, in Consumer Advice Centres, and in specialist
laboratories. These include tests on food safety.
Consumer Advice Centre
The purpose of five Consumer Advice Centres in Sandhurst, Shoreham,
Southport, Cheshunt and Perth is to carry out practical research with
customers into new and existing products. Each centre is staffed by two
consumer service officers who are qualified home economists. Their most
important role is to conduct consumer acceptability tests and sensory
analysis. Over a four-day period, six to eight products will be tested.
Their role also includes being available to the customer for any queries
concerning diet, health and nutrition, PR work at a local and national
level, quality control, and giving talks and demonstrations to local
community groups.
Organising a taste panel
Market researchers will recruit customers who are shopping in the store.
These customers take part in the test only if they fulfil the recruitment
criteria that have been established for the product being tested. For
example,Tesco might ensure that all participants are heavy users of the
product, or a product aimed at children will be tested on children only.
As far as possible, consumers test Tesco products against a benchmark. This
other product is normally the market leader; testing against it allows us
to ensure that product matches or exceeds this quality standard. Products
are tested "blind" and identified by codes so that consumers do not know
which one is the Tesco product and which one is the benchmark.
The questionnaire is designed so that consumers give scores for various
questions, such as their opinion as to the appearance of the product; they
are also asked to tell us what they liked and disliked about the product.
Sensory analysis
Sensory analysis is a more technical evaluation of a product which is
carried out by consumer service officers who have been specially trained to
analyse the product using uniform objectives and technical descriptions.
They will evaluate the product and forward a description of it to Head
Office for use in the final report.
What is done with the data?
Data from sensory analysis, questionnaires and customer comments are
collated and subjected to statistical analysis at Head Office which will
lead to a product either passing or failing the tests. If it is failed, the
product is reformulated according to the comments made by customers in
response to the questionnaire. Products are then re-tested and will be
launched only when they achieve a pass result.
Implementing of quality assurance
Quality assurance is implemented at all levels in Tesco. Everyone is
"focused" on giving the customer the best possible shopping experience in
terms of service, quality, availability, price, car parking facilities and
store design. This "focus" is set in Annual Trading Plan and is implemented
through various departmental objectives and through specific training
programmes. Tesco invests large amounts of money in training, so that Tesco
can achieve specific objectives, for example First Class Service
initiative.
Usually each initiative has a sponsor, normally a Main Board member. It is
the directors and managers who brief the teams, and then it is up to
individuals to "buy in" to an idea. Tesco has found that this process works
well as it is not prescriptive and it allows people to implement new ideas
in their own way.
Setting standards for quality
A common tool for creating "benchmarking" standards is called SWOT
analysis. This stands for "strengths, weaknesses, opportunities and
threats" and it provides a useful way of evaluating quality standards.
Standards cannot exist in isolation, and SWOT allows comparison with
competitors to be taken into account. Tesco therefore uses SWOT a good deal
for specific products, for example in evaluating a new range of
merchandising or evaluating a new process provided by a supplier.
Tesco Packaging design.
Tesco has many "Own Brand" products, and in order to promote its own brand
correctly Tesco has its own Packaging Design Department. Products sell for
a variety of reasons; in the first instance, the visual appeal of a product
is important to attract customers to the product initially, as it is only
after the first purchase that the customer is attracted because of the
quality of the product and its value for money.
How does Tesco add value to its product?
Usually value for product depends on one very important key – quality of
the product, better quality – more tests are done – bigger value, but Tesco
tries to keep prices lower than all other national supermarkets. Tesco adds
value to its products by means of buying it from contractor for lower
price, testing it, and selling it for higher price.
C1
Success of the business in meeting its objectives.
Tesco is one of Britain's leading food retailers and has 586 stores
throughout Great Britain. In Europe Tesco has 41 stores in Hungary, 32 in
Poland, 13 in the Czech Republic and Slovakia, 33 in Northern Ireland, 76
in the Republic of Ireland and 1 in France, to prove that business meets
its objectives successfully I’ll present some diagrams and company’s
financial records.
Turnover and profits of Tesco in 1997-1998
The turnover and profits for the year ending 28th February 1998 were as
follows:
1. Group Turnover (incl VAT) - Ј17.8 billion (Ј17,800 million), an increase of 18.7% on the previous twelve months. This figure is for 53 weeks compared to 52 weeks for the previous year and includes the newly acquired businesses in Northern Ireland and the Republic of
Ireland. On a comparable basis with the previous year, excluding the
Irish acquisitions, turnover was Ј16.4 billion, and increase of 9.2%
2. Profits on ordinary activities before tax, integration costs and disposal loss - Ј832 million, an increase of 10.9% on the previous twelve months.
Changing of company's financial fortunes 1992-98
The changes in the company's financial fortunes are shown in graphs 1 and 2
Graph 1,2: Group turnover and operating profit 1992-8
Graph 3: Share earnings and dividends 1992-8
Profits share
In 1998 the profits from Tesco after tax were Ј505 million. About 50% of
the profits were distributed to shareholders as dividends. Subsequently
approximately Ј250 million was retained by the company for investment in
new stores and improving their service to customers.
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