Table of Contents
Tesco is a multinational retailing company that deals with groceries and general merchandise. It is a British company. The headquarters of Tesco is in Chestnut, the United Kingdom. It is one of the largest retailers in the world, both in terms of profits, i.e. the second largest one, and in terms of revenues, i.e. the third largest company. Its vast size comes from its numerous branches located in fourteen different countries across Europe, Asia and North America. Its founder is Jack Cohen, a British entrepreneur, who founded it in 1919. Its original focus was on the grocery retailing in the UK. However, with the growth and market expansion, it has increased its business and diversified into books retailing, electronics, software, petrol, clothing, furniture, financial services, DVD rentals, music downloads, telecoms and internal services. This has enabled Tesco to appeal to people from all social groups, both to rich and poor. Nonetheless, it is still a market leader of groceries in Malaysia, the United Kingdom, and the Republic of Ireland and in Thailand. This has made Tesco realize the wealth maximization and it has listed its shares on London stock exchange.
The diagram above shows the overall group profits of Tesco, which were 1.6% higher at 3.9 billion Euros, but at a trading level, the company said it dropped 1% to 2.5 billion for the year. In January 2012, it had 24.4 billion Euros’ turnover of market capitalization, making it among the largest companies, i.e. the fifteenth one on the stock exchange with a primary listing (Fernie 2009). As a multinational retail company, Tesco uses its vast resources to take over new markets, attract and retain new customers, and still realize great yields as the returns on investment through its profit maximization strategies (Fujioka & Umemura 2012). The company has a motto designed by its founder that states, “Pile It High and Sell It Cheap”. This means that a buyer can purchase in bulk at Tesco stores but only spend the minimal amounts that are affordable to account for its goods. Another motto that works internally in order to motivate its sales force is “YCDBSOYA – You Can’t Do Business Sitting on Your Ass“. These two mottos propel the staff at Tesco to work even harder to ensure the customer satisfaction and market relevance. Hence, they remain a great force to reckon with globally. Tesco has a brand image that helps it to sell in foreign markets. This image makes consumers feel at home while they shop at any of its branches in other countries. Since this brand sells, Tesco engages into takeovers and acquisitions of competing firms in the market system.
Introduction to Kenya Airways
The Kenyan flag carrier is The Kenya Airways Limited, also commonly referred to as Kenya Airways. Kenya Airways’ brand name and acronyms is KQ. It has a brand image, a brand logo, a brand color, i.e. red, which is the official company dress code. There is a presumption that the inspiration to use red as the brand color for the KQ has originated from the red khangas adorned by the Maasai Morans found in Kenya and Tanzania. This is in line with its localized promotional strategy of using the cultural heritage, especially the Maasai tribe cultural practices in its advertisements, i.e. their dress code, hairdressing styles, ornaments, songs and dances. This makes KQ unique and easy to identify with. KQ began its operations in 1977, after the dissolution of the East African Airways.
The above diagram shows key trends for Kenya Airways over recent years as at year ending 31 March. Jomo Kenyatta International Airport (JKIA), Kenya’s largest and busiest international airport located in Embakai, Nairobi city, is a hub of KQ. This is where its head office also is. The Kenyan government had been a sole owner of KQ until April 1995, before a successful privatization program in 1996. This was the first of its kind in Africa. Currently, KQ is under a private-public ownership, with the Kenyan government and KLM as the largest shareholders. Other private owners are holding the rest of shares. These shares trade in the three East African countries through the Nairobi Stock Exchange in Kenya, the Uganda Securities Exchange, and the Dares Salaam Stock Exchange in Tanzania. KQ is a leading operator in the Sub-Saharan region, with a full Sky Team membership since June 2010, and the African Airlines Association membership since 1977. The company employs about 5,000 workers that strive to make KQ as “The Pride of Africa” as it slogan dictates. This is achievable through its flyer program known as ”Flying Blue” and its subsidiaries in the African Cargo Handling Limited, Precision Air, and Kenya Airfreight Handling Limited.
KQ promotes major businesses in the country; for instance, flying in tourists coming to see Kenyan wildlife and practice ecotourism (Weaver 2001). It markets Kenya as a tourist attraction and targets to transport these tourists from their home countries to Kenya to sample a taste of Kenya natural lifestyle and then return to their home countries. It also uses some scenes from geographic captions of the Kenyan wildlife such as the wildebeests’ migration to the Maasai Mara National Park in July; the Jumbo elephants found in Tsavo National Park, and the remainder of the big five wild animals found in Kenya, i.e. the lions, the cheaters, the leopards and the buffalos. Eventually, this helps KQ to keep its airplanes full and its flight schedule busy throughout the year (Silber & Kearny 2009).
The Service Concept
Service is an intangible economic activity; thus, it cannot result to ownership, neither is it storable. The consumption or the use of any service occurs at the point of sale. Services form one-half of the two key economics’ components, with the goods being the other half. The types of services include a transfer of goods, for example, delivering the mail through the postal service and use the experience and expertise as for doctors, nurses, teachers and pilots. The service concept is what defines what and the how of the service design and helps in mediating between the organization’s strategic intent and customer needs.
The service concept helps to enhance a variety of processes in service design such as the service recovery design and service design planning processes. This also helps to achieve the goals and objectives of the service definition. The process of service definition is a key in service management as it enables both the service provider and the consumer to know what not to expect and what to expect from the service. This clear definition of services enables customers to have a better understanding of service offerings, including what each service does not or does include some service limitations, eligibility, the costs, how to get help, and how to request services.
A service identifies the internal processes that are necessary in providing and supporting the service when defined properly. All consumer-facing services must have a high-level definition, i.e. what the service is and how to get it. How do you use the service? How do you get help? How much the services cost, i.e. the service pricing and costing. Consumer services need to exceed their expectations by creating a sense of satisfaction and a feeling of goodwill towards the organization. This, in return, encourages them to develop some positive perceptions and to return to the company for more services, i.e. creating the customer loyalty, as they gain confidence and develop trust into the brand (Halder, Kapoor & Paul 2011).
The Service Concept at Tesco
The service concept at Tesco is to provide the quality retail services to their customers at the point that is most convenient to them. Retail business is very tricky in that a consumer only decides to shop at a particular store because of the satisfaction they have derived from the said store. Thus, Tesco strives to satisfy their customers properly and even go an extra way to make them feel at home while shopping at their stores and retail outlets. This is by developing numerous branches around consumers where they can easily access their services, operating in a 24-hours’ economy schedule (Londhe 2006).
Therefore, creating the convenience for shoppers, especially those spending their entire day at their places of work, thus, do not have the time to shop during a day. Providing a variety of goods and services under one roof, making it a one-stop shopping complex whereby shoppers can get all the products they need at one place. It makes this all even more attractive to customers. Diversification of its services and products makes it as a major provider of consumer needs and wants, thus, a wider market for them.
Apart from retail, Tesco is also into banking, petrol stations, telecoms, and groceries. This helps it to serve consumers in a wider range, thus, developing a good impression among them. The quality of goods and services offered at Tesco also attracts loads of customers to their store, especially the quality of their groceries. They achieve this by employing the best distribution channels within the countries in which they operate to ensure their groceries are being fresh, in a good condition, and of the best quality. The automation of Tesco’s services goes a long way in developing its service concept. Tesco has a website where it can conduct online advertising, e marketing, e-commerce, and video conferencing. This all happens thanks to automation of its services. Shoppers can now log into their websites and search for the products they need within Tesco stores and even purchase them through the online shopping. Automation introduces efficiency and safety in a service delivery at Tesco stores and outlets. This was through security cameras to watch out for shoplifters, self-service at the point of sales and online billing. Thus, by clearly defining its services and developing an effective service design, Tesco now scales the heights of retail marketing with the branches and shops located in over 14 countries all over the world.
The Service Concept at Kenya Airways
KQ’s service concept is a leading airline services provider in Africa. This is by providing the most affordable, reliable, and convenient air transport services for both passengers and cargo throughout the globe. KQ seeks to achieve this by increasing its flight traffic through the increase in the number of aircrafts and an increase in flight destinations. This alone, however, will not work to KQ’s advantage, since the phrase ”Build It and They Will Come Maxim” does not always hold (Drejer 2002). Therefore, KQ plans to improve its in-flight service delivery so that it can satisfy maximally all the desires of its customers before the flight, during the flight, and after the flight. This will make them trust the airline and build loyalty towards it, thus, continued the use of the airline’s services. Some of the support services that KQ offers to its passengers are the medical insurance from a contracted medical insurance company, a travel insurance, for example, the Heritage Insurance Company, chauffer driven limousines for executive clients and taxi booking for ordinary clients, hotel bookings and flight meals and drinks.
The above table shows the number of fleet of Kenya airways for both cargo and passenger. KQ runs a pilot training program where it trains its own pilots so that they can handle the increased fleet of aircrafts and subsequently the increased number of flights. It also has a “Pride Center” where it trains airhostesses in the best ways to attend to its passengers, while being on a board. It makes sure it has an elite team of cabin crews attending to its passengers at all cost.
Good service delivery alone does not guarantee the brand loyalty, especially if the flight frequencies and flight timings are not reliable. Thus, KQ struggles to stick to its departure and arrival times of its flights, adhere to its stated destinations and routes in order to keep the customers satisfied and in time with the engagements unless under unavoidable circumstances. In this case, it makes sure it informs the concerned parties of changes or delays beforehand to eliminate any grapples and dissatisfaction. The IT further has enhanced the service delivery at KQ whereby passengers can now book tickets online and pay for them via their VISA cards or mobile money transfer services available in Kenya. They include such as M-pesa from Safaricom, Airtel Money from Airtel, Orange Money from Orange Telkom, and YuCash from Yu. This makes KQ a very reliable and trustworthy transport partner that the customers can bank upon their travel solutions.
Tesco’s Customer Experience, Journey, and Perception Points within It
Tesco’s consumer experience bases on its new move to replace the automation with workers by employing about 20,000 employees in the service-marketing department in order to boost their customers’ service delivery. This, in turn, boosts its reputation as it creates the employment for many unemployed youths in the United Kingdom. Customer experience also goes a notch higher as they get some personalized services from customer service attendants who are friendly and willing to assist them. Their previous lack of customer focus by emphasizing on automation as a cost cutting measure has caused it a massive drop in its profits. Therefore, this new move comes with wide expectations and hopes to improve its sales. The development and advances made in touch point has enabled customers to interact easily in the digital world. This is with the aid of smart phones whereby they can tweet, send emails, watch video, post photos to Pinterest and use the Facebook.
Tesco utilizes the avenue to create a positive customer experience by making it products and services easily accessible through online applications, social networks and social media marketing. They also provide a feedback system whereby customers ask questions about Tesco, about their goods and services they offer, and they get the answers immediately. This fast response to customers’ concerns makes them develop trust and confidence in their brand (Smith & Wheeler 2002). Tesco had a bid to become the number one retail store without necessarily increasing its number of stores made it develop smart touch points. This is because the today’s consumers have become smart and time-starved. Hence, they require what they want, when they want it, and where they want it. Thus, Tesco has launched a radical but simple innovation that aimed at bringing the store closer to people. It has set up virtual grocery stores in metro stations and subways. This has enabled shoppers to literally shop for groceries while waiting for their train, without paying a visit to the brick-and-mortar store. These virtual grocery stores feature larger-than-life photos of stocked grocery shelves with popular household staples and products organized similarly to a traditional grocery store. Shoppers simply scan the codes for the items they want using their smart phones and dropping them into a virtual shopping cart for the delivery to their doorsteps shortly after they have arrived home. These virtual stores save Tesco customers’ valuable time.
The above diagram shows the fall of Tesco’s shares due to over automation. Tesco shares plummeted after this shock of profit warning and did not recover for some time. Online shopping has increased in Tesco stores and other retail outlets by 130%. This has propelled Tesco to be the number one online solutions retail store. This has closed the offline gap with E-mart dramatically. This is Tesco’s journey in to m-commerce, m standing for a mobile. This makes Tesco make a major turnaround to increase its sales and consolidate its markets. Other processes that enabled it to create a positive perspective among customers is by ensuring the consistency across multiple channels, evaluating the customers’ journey to improve their experiences and leveraging the customer feedback to drive operational improvements.
Service Delivery Systems
Service delivery systems are the new tools that support a new and more balanced approach to the service delivery. The service delivery system is a method of bridging what was the missing link between the inside-out approach with design of efficient processes, operational environments, and outside-in approach with design of service experiences. The company can measure its service delivery system using seven dimensions. These dimensions are new services and products, customer participation, company operations layout, levels of standardization, push/pull orientation, human resource specialization, and the use of the Information Technology (IT). Thus, companies have to manage the service delivery systems so that they ensure they are offering the best and satisfactory services to their customers, thereby developing their trust and brand loyalty.
The benefits accruing from proper management of service delivery systems are the creation and implementation of winning business development strategies tailored to the service sectors. The company also acquires an internationally leading service organization managerial toolbox. It delivers differentiated value propositions, which reduce the costs by investing in services truly valued by customers. It creates the understanding of what it takes to cultivate and manage a high value relationship. By creating the understanding of the true nature of products’ service delivery, the company discovers what is scalable and what is not. Thus, they revisit the design of the organization and choose the intensity of client interaction. Management of service delivery systems brings relevance to the service industry by being sector specific. It also leads to insight by offering internationally leading service faculty, cases and peers. Finally, it creates a deep impact by delivering what likely is the deepest kind of a real-life sponsor of the company’s projects and participation learning (Birley, Rosenberg &Spinelli 2004).
Tesco and Kenya Airways Service Delivery Systems
The service delivery employed by Tesco is online and allows customers to shop for Tesco goods online. They can access Tesco’s website, choose the items that they want to buy, and then pay for them. They also specify their addresses. Then, the retail store delivers the goods to their doorsteps within a timeframe suitable to them. This is advantageous to both Tesco and their customers because it is more efficient for the customers. It reduces the overheads of the organization such as staff and wages. This has reduced cost means the reduced prices for customers in a long run. Furthermore, customers can browse easily the entire store’ goods in a short time. To eliminate any delays in the delivery of customers’ orders made through the e-grocery system, Tesco has developed a new system called Master. Master, which is now trailing in London, enables Tesco to identify the high traffic volumes along the routes taken to customers’ premises or homes and then informs them if their deliveries run late (Dennis & Harris 2008). Kenya Airways ranks as a three star airline in the product and service quality. This means it provides top-notch services for both passengers and cargo. KQ’s cargo handling has the excellent ground handling services and provides the modern, secure and spacious warehousing options to its customers. Its cargo center operates two air cargo-handling facilities at JKIA. These facilities assure the customers of their cargo’s security, efficiency in handling, advanced automation and proper document handling. Apart from the cargo handling, their passengers get a VIP treatment, as they are a key to the airline’s success (Plunkett 2009).
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Key Similarities and differences between Tesco and Kenya Airways Approaches to Delivering Services
The key similarity between Kenya Airways service delivery and that of Tesco retail stores is the use of the Information Technology. With the use of IT, both companies have automated their services and now provided their customers with the latest and most advanced quality services, for example, m-commerce by Tesco. This supports their virtual grocery, and online ticketing by Kenya Airways. This move saves their customers’ time, improves on their efficiency in a service delivery, creates the convenience to them and develops their trust in the company brands. The main difference between these two companies service delivery is the extent to which they automate their services. Tesco fully has automated its services to the extent of developing e-grocery and master for a faster goods delivery. However, Kenya Airways still maintains the use of qualified personnel to provide the personalized attention to their customers, for instance, the pilots, the airhostesses and the customer care.