Wednesday, May 11, 2011

CEO Philip Clarke Launches A New 'Vision and Strategy' For Tesco

News & Analysis

Philip Clarke (pictured above), the new CEO (as of March 2011) of United Kingdom-based Tesco, which owns El Segundo, California-based Fresh & Easy Neighborhood Market and is the third-largest retailer in the world, is launching what he and Tesco are calling a new "Vision and Strategy for Tesco."

The new aspirational and strategic blueprint for Tesco lays out four key elements that comprise the global retailer's new "vision," along with seven key strategic elements that flow from the vision statement.

"We [Tesco] have a great business and I've been impressed by the very positive momentum which I have noticed over the past couple of months," Clark said today in introducing the new vision and strategy for Tesco, which has retail operations in 14 countries. "I expect the pursuit of our new vision, together with the application of our strategy, will make us even more successful in the years ahead," he added.

"Our previous strategy served us well for over a decade but we've updated it to reflect the changing needs of our customers and the global nature of our business. Much of it will be familiar but there are some important new additions," Clarke says.

"To help us achieve our ambitions, we need to keep focused on our Core Purpose - to create value for customers to earn their lifetime loyalty. This will remain at the centre of everything we do and together with our Values provide the framework for the way we do business and let customers know what to expect from us. Our success depends on all of us living the Values every day."

Clarke says now that he's the CEO of Tesco there won't be any changes of direction. But there will be a slight change in emphasis.

That change will be to put a greater emphasis than Tesco has in the past on becoming a multi-channel retailer.

"Tesco's always had a good relationship with customers at the store level. That relationship now has got to be a multi-channel relationship", Clarke says. "We've got to use all the media that's available to use to allow us to build a dialogue so Tesco goes from being a business which is respected by many to on that's admired."

One of Clarke' major initiatives since assuming the CEO position at Tesco in March has been to expand the use of social media, along with starting to make its use an integrated aspect of the global retailer's operations, marketing, communications and merchandising.

For example, while still in his previous position at head of European retail operations and corporate information technology, Clarke launched his own Twitter feed, which he uses primarily to communicate with Tesco executives and other employees throughout the world, including his deputy CEO Tim Mason, who's based in Southern California and is also the CEO of 175-store Fresh & Easy Neighborhood Market.

Shortly after becoming CEO in March, Clarke had senior executives at Tesco's corporate headquarters in the Unite Kingdom and at its various outposts in Europe, Asia and the United States, set up their own Twitter accounts.

So far some of the executives are using the accounts; a few regularly, others every so often. But many of the executives have yet to post an initial tweet. Clarke and Mason, however, average at least one Tweet per day during the work week.

Clarke, who went to work for Tesco stocking store shelves part time at age 13 and climbed the ranks to become CEO over what's now a near-four decade career at the company, replacing Terry Leahy who retired in March, says the new vision is for Tesco to be:
  • Most highly valued by the customers we serve, the communities in which we operate, our loyal and committed staff and our shareholders
  • A growth company
  • A modern and innovative company
  • Winning locally, applying our skills globally
The new strategy at Tesco that flows from its new vision, says Clarke, is described by the following eight bullet points:
  • To grow the UK core
  • To be an outstanding international retailer in stores and online
  • To be as strong in everything we sell as we are in food
  • To grow retail services in all our markets
  • To put our responsibilities to the communities we serve at the heart of what we do
  • To be a creator of highly valued brands
  • To build our team so that we can create more value
As part of his introduction of Tesco's new vision and strategy, Philip Clarke, who's already made at least two trips to the U.S. - one in February, before officially becoming CEO, and another in April, to meet with employees at Fresh & Easy's El Segundo, California headquarters and visit stores, along with visiting major Tesco investors in places like Omaha, Nebraska where Warren Buffett, who's Omaha-based Berkshire-Hathaway firm owns about 3% of Tesco, lives and works - has made a six minute video outlining he vision and strategy points detailed in this story. You can view the video here.

Launching the new vision and strategy for Tesco, however similar it may be to the current vision and strategy with a few key additions, is also an important coming out event for CEO Clarke. Terry Leahy, who during his 14-years as CEO became so associated with Tesco that people often called him "Terry Tesco," became a legendary retailer in the United Kingdom.

In other words, Sir Terry, a title given him by the Queen during his tenure as CEO of Tesco, is a hard act to follow, not only for Philip Clarke but for anybody assuming the corner office at the Tesco corporate campus in England.

Launching the new vision and strategy just slightly more than two months after assuming the CEO position should allow Clarke to put his imprint on Tesco early on, demonstrating he has his own leadership style and, while having worked under Sir Terry for many years, has his own vision for the global retailer rather than his tenure at the top being a mere continuation of the Leahy years, although the continuity - which is something very important at Tesco - is obviously there.

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