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Challenges of Matching Customer Demands at Tesco

3269 words (13 pages) Business Assignment

23rd Nov 2020 Business Assignment Reference this

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These days companies got to work in exceedingly dynamic environments where key assets are rare and where uncertainty in trade openings is common. In order to stay relevant in business opportunities or environment companies need to make sure that customers are satisfied with services provided (Chisnal, 2005). The level of business competition is now high in the business environment so there is need of implementing strategies that helps the company to keep up with good standards and managing well to attract customers (Hague and Hague 2016). According to William (2009), operations management of a company should be active enough to meet the demand of the customers. Some companies tend to neglect the operations management particularly in small-sized ventures. In general operations management is a business function that is responsible for overseeing the process of making products and administrations and without it there would be no items or services to offer to customers. Operation management can be defined as an activity of overseeing the assets or resources which are devoted to the generation and conveyance of products and services. In operations management there is forecasting, work plan, stock control, aggregate planning, quality and control, maintenance, production, control and facilities location (Pearson, et al. 1990). The aim of this paper is to assess the challenges associated with Bay Campus Tesco Express store in operation struggle to match capacity with customer demand at peak times. Tesco Express is a popular store which is well known in the United Kingdom because of that everyone wants to see what the shop offers, and this has led to problems of capacity to arise at the Bay Tesco Express store. The essay will also offer recommendations or possible solutions to the Bay Campus Tesco Express store to counter the problems that are being faced which include delays on the operating machines, long queues.

Every trade organisation to be successful it need satisfy the customers because every business largely depends on customers. Customers play a crucial role on the success of a business organisation. It is safely for one to note that customer satisfaction is the priority of every trade organisation. For every business organisation the expand it must meet the customer demand and satisfy them with the services and products that they offer. By doing so this attracts many customers and the business organisation is guaranteed to grow. A customer in general can be defined as an individual who purchase goods and services from the market or business that meet their needs and wants. This means that a business must match up with the expectations of a customer. Customers buy items to meet their expectations in terms of their money. Customer satisfaction is defined as an overall assessment based on the total purchase and utilization involvement with good or service over time (Fornell, Johnson, Anderson, Chau and Bryant, 1996). Customer satisfaction is an indicator that predicts long term customer behaviour (Hill, Roche and Allen, 2007). In general, the customer demand is characterised as the willingness and capacity of customers purchase a quality of goods and services in a given period of time, or at a given point in time. The consumer demand unequivocally influences the performance of a business organisation (Hill, et al. 2007). Failing to meet the consumer demand means that the company is failing to satisfy the customer, and this results in the loss of customers due to poor customer service. It is very difficult to replace the customers lost through failing to meet the customer demand because every customer wants to go where there is quality customer service.

According to Stevenson (2009), capacity alludes to an upper restrain or ceiling on the load that a working unity can handle while capacity planning is a vital key component in designing a framework. Capacity encompasses many premise decisions with long-term results for an organisation. In order for an organisation to meet the customer demand there is need of forecasting and capacity planning. Forecasts are a fundamental input within the decision process of capacity planning since they give data on future demand (Mark, et al. 2003). This is the most important issue with forecasting to capacity planning because by providing estimated data it helps to prevent failure to meet customer demand. The diagram below shows the store structure and what is happening in the store.


 

Shelves operated by the staff

 

Store Shelves

People Queuing to assisted till service

 

People queuing to self-service tills

 

Entrance

 

Assisted till service

 

Self-service tills

 

The above diagram shows how the shop is operating showing how the queues in the shop, the way the tills are structured as well as the shelves. The queues are experienced during the peak hours. Some customers enter the shop and as soon as they see the long queues, they leave the store. There is need of a strategy to deal with the long queues which is resulting in the loss of customers. The customers that usually leave are the students because most of them will be having classes so they will not afford to miss a class whilst in a long queue.

Capacity decisions affect on the ability of an organization to meet future requests for either products of administrations. Meyer (1994) assets that capacity basically limits the rate of yield conceivable. Having capacity to satisfy demand can frequently permit a company to take advantage of colossal benefits. Capacity decisions influence working costs. Capacity and demand should be met without compromising because a business will loss customers. The Bay Tesco Express store has been affected with capacity challenges because many people cannot afford to spend close to half an hour standing in the long queue. Failing to match the capacity with demand led to customer dissatisfaction (Hill, et al. 2007). Customer dissatisfaction is unacceptable in a business environment. Customers demand should always be the priority of the organisation. Capacity issues surely affects the customer satisfaction. According to Hokanson (1995), customer dissatisfaction leads to loss of customers which can result in the company failing to meet the generate income to meet the costs. It is always vital to take a close look on the issues of capacity planning because it affects the business badly especially in the long run.

The problems being faced by the Bay Tesco Express store has mainly caused by the number of people that are at Bay campus compared to the shop space. The people that require services from the Bay Tesco Express store include students, staff of the university which include lecturers, security officers etc. The visitors that visits Bay Campus might also require services from the Tesco Express store. Looking at the size of the store considering that it has no competition it is bound that it faces capacity issues because everyone wants to purchase in the store. The Bay Tesco Express store is facing long queues from 1200hrs to 1400hrs and from 1700hrs to 1900hrs. From 1200hrs to 1400hrs the Bay Tesco Express store is facing many queues due to the fact that its lunch and many people they want to get something to eat. Long queues are also faced from 1700hrs to 1900hrs because that time is when most of lectures end and people wants to grab something for supper. Capacity issues has been also been raised by the meal deal being offered in the store which costs 3 pounds which include main meal, drink and a snack. This meal deal ideally is to attract customers to come and buy in the store, but it seems as if it has raised problems to the store as well. The meal deal is favourable because it incorporates everyone vegetarians, body builders, those trying to loss weight etc, so it is convenient. The meal deal has successfully attracted customers to come purchase in the store regardless of people spending much time standing in the long queues during peak periods.

Moving on, another reason why the Bay Tesco Express store has faced capacity problems is because of the few operating tills that are available compared to the people that comes to the store. The Bay Tesco Express store is operating with 4 self-service portals tills and 1 assisted service till. These tills are not enough to meet the demand during the peak periods which leads to long queues. Most of the time there is always problems with some of the self-service tills they are down. Sometimes faults just develop unexpectedly and queues will just follow unavoidably. Also, another problem which has led to capacity issues in Bay Tesco Express store is the illiteracy on how to operate the self-service till from some of the students or other people that visits the campus. In particularly people or students coming from the developing countries where technology is far behind, they find it difficult to operate these self-service tills due to the lack of knowledge especially those people coming from Africa. Self -service tills are designed to be fast and efficient in terms of operations but because of the illiteracy on how to operate them it has led in delayal leading to long queues. These people that are illiterate on how to operate these self-service tills they always require assistance each time they get on the tills which is time consuming as well.

Adding on another problem that have contributed to the capacity issues at the Bay Tesco Express is that it has no competition on campus comparing the services that it offers. Regardless of the frustrations of spending long time in the long queues customers still comes back to buy in the store because the customers have nowhere to go on campus. So, this clearly shows that customers are forced to go into the store to purchase because of they have nowhere to go and the demand is always high in the store. Another problem contributing to the capacity issues at the Bay Tesco Express store is that there are always promotions in the store. These promotions are designed to attract to customers to come and buy in the store. Basically, promotions are a marketing tools to attract consumers in order for a business to bloom. These promotions turn out to be a problem now to the Bay Tesco Express store because the numbers of consumers no longer match the capacity. Space issues is also contributing to the capacity issues at the Bay Tesco Express store because it occupies small space. There is no room for expansion in order to accommodate more tills so as to meet the demand of the customers. In as much the Bay Tesco Express will want to add more tills the store is too small for that. Even to add more staff in the store to help when there is a problem it is hard because the store cannot accommodate many staff.

The problems being faced by the Bay Tesco Express store can be sorted out through educating people on how to operate the self-service tills, servicing the tills intensely to avoid faults, always making sure there is a staff on the self-service tills watching and assisting instantly when a problem arises. Teaching people on how to operate the self-service tills fast will help in the clearing the queues in the store because usually people buying in the store, they just buy the meal deal during the peak periods. Teaching people will enable customers to take less time like buying the meal deal should not take more than a minute to finish off to buy the meal deal. By doing so this will enable the Bay Tesco Express to meet the customer demand and to deal with the capacity issues. Servicing the self-service tills intensively will help reduce unnecessary faults on the tills hence there will be more tills working all the time. This will also help in dealing with long queues as well as time spend waiting to purchase. Increased efficiency on tills will deal with the capacity issues that the Bay Tesco Express is facing. The Bay Tesco Express store needs to continue to build the customer loyalty through offering the promotions. Griffin (2002), attested that building loyalty with the customers is essential in every business because the company will always value the customers through providing good services so as to maintain the relationship. Building loyalty with the customers will require the company to focus on the esteem of its products and services to satisfy the customers and this also helps in attracting new customers. The importance of building loyalty with customers has also been supported by Thomas and Tobe (2013), who pointed out that building loyalty with customers increases standards of the company and also encourages other loyal customers to invite other customers. The Bay Campus Tesco should do an online shopping and the customer all it will need to do is to come and collect the items bought and just scan the code with the payment. This will surely deal away with the long queues in the shop because it is convenient to the customers. 

Adding on the Bay Campus Tesco Express store can redesign the structure of the store by adding more self-service tills which will help the store to meet the demand of the customer. The diagram below shows how the shop can be redesigned:

Adding more tills will help the Bay Campus Tesco Express store to meet the customer demand. Customers will not spend most their time standing in the queues. More tills will deal away with customer dissatisfaction because customers easily get frustrated with poor customer services. The Bay Tesco Express store staff should also make sure that every customer is using the tills properly so as to increase the progress as well as efficiency. The staff of the Bay Campus Tesco Express store also needs training regularly so as to perform at their best always. The staff needs to perform well for an organisation to perform well. This has been supported by Aaker (1991), who noted that excellent performance of the staff brings better services to the customers. Another possible solution for the Bay Tesco Express store is to always match up with the competitive pricing strategy. This will always help the store to always compete.

In conclusion despite facing the challenges of capacity issues the Bay Campus Tesco store is performing well and it is the favourite store on campus. The Bay Campus should continue to offer services which are good and also the promotions to attract customers. It is vital for every organisation to continue to attract the customers. The best way to attract customers is providing best products and services, and this will guarantee customer satisfaction. Customer satisfaction is important because it helps the company to protect its image. Tesco Express is a brand that is respected across United Kingdom and it is a big brand. Forecasting plays a crucial role on the capacity demand, so it has to be done properly and always leaving a room for future change. The business environment is very complex, and it changes time to time so there is need of good planning.

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