Retailing Issues and

Applications
 Table of Contents

1. INTRODUCTION.......................................................................................................................1
MAIN BODY...................................................................................................................................1
2. Global sourcing as an issue................................................................................................1
4. How retailers are responding to this issue..........................................................................4
4.2 How other retailers are dealing with global sourcing.......................................................7
CONCLUSION................................................................................................................................9
References:.....................................................................................................................................10
1. INTRODUCTION
Nowadays, the environment of business has become more dynamic and complex when
talking about the retail industry. There are various challenges which the business face in
operating in the market. It is very essential for the companies to address these retail problems
and also identify the solutions. The report will examine the issues which which are prevailing in
the retail industry. The most common issue which the companies face is global sourcing. The
businesses are considering sourcing as the most suitable method as it helps in reducing the
expenses of the operations. This is the reason the overall journey of the life cycle of business is
not easy as it looks like. The companies which operates on a large scale face various problems in
customising their international activities of sourcing(Alam and Noor, 2020). The report will
select global sourcing as a retailer with regard to Tesco. Tesco is a big company that runs its
business in various countries like Poland, Ireland, Thailand, Asia, etc. The company was founded
by Jack Cohen in the year 1919. The headquarter of the business is situated in England, UK. It
deals in grocery merchandise and retail products. It is the third-largest retailer across the world in
terms of revenues. Even after all this, it is facing various challenges in the retail business in
which the issue of global sourcing is found to be the most essential issue which needs to be
solved. The report will discuss the challenges of retail globally along with various theories and
findings related to the problem. It will also examine how the company is dealing with this issue
as well as comparison with other retailers in the market.

MAIN BODY
2. Global sourcing as an issue
Global sourcing is considered as a acquisition strategy in which the businesses buys
goods and services from the international market for saving the cost. It is done with the help of
purchasing cheap raw materials or unskilled labour. The main target of this is to reduce the
overall cost of production and also maintain high quality standards in the products and services.
It has been seen that Tesco is facing many issues when it is trying to customise their international
activities. It is identified that there are mainly four elements of global sourcing which involves
people, process, technology and supply chain. All these play a very essential role in the system
of internal procurement operations of the business(Bandara, Fernando and Akter, 2020). There

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are different types of issues which arise in the process of international sourcing such as
accountability challenges, time zone variations, non maintenance of proper quality standards,
language barriers, issues related to compliances and long range logistics problems. All these
ultimately lead to delay of supply in the market. Tesco should address these challenges to be able
to sustain in the market for a long period of time.
In the retailing business, the companies not able to expand or increase the profitability
due to these issues. Many companies are using global sourcing in order to maintain the quality of
products and reduce the prices of the goods and services. This way the organisation will be able
to provide good quality products to the customer's at a reasonable price(Barile, Polese and Sarno,
2018). The businesses are trying to find methods of growth and expansion but due to these
challenges they are not able to succeed in the market. Every organisation wants to earn good
profit margins but they also realise that it is not an easy process. It is only possible when the
company have a good reputation in the market and a strong customer base.
2.1 Quality standard issue
It is found to be the most essential issue which is coming in the way of growth of
company. Then only Tesco will be able to achieve its objectives and targets within the specified
time period. Every business wants to satisfy the needs and requirements of the consumers in the
market. It can be achieved by offering good quality goods and services at a reasonable price.
This will attract a large number of customer's for purchasing from the company. The main issue
in all this global sourcing which is creasting hindrances in the path of the business. It has been
seen that other nations generally reduces the quality standards which are set. The reason behind
this is the acquisition of cheap and unskilled labour. It ultimately lead to reduction in the existing
customer base of the organisation.

2.2 Time zone issue

The difference in time zones is another issues that is found in meeting time. When an
Industry is discussing to get a source from another country, then it becomes very crucial to run a
meeting for giving essential details to be the nation. But because of various time zone, it
becomes very complex for an industry to attend a meeting. It is analysed that difference in time
zones among another country is big issues that occurs in meeting.
2.3 Long range logistics issue in global sourcing -

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 This is becoming an essential hurdle in which an organisation requires to concentrate on
taking the correct step. Because of global sourcing the distance of transportation is raising in
peak which becomes the major issue as it delays the distribution of goods and services. In the
retail sector, industry want that their users not wait for their goods as it put negative effect on the
brand value. Because of long distance, it is analysed that there are delays in providing of services
to buyers.
3. Other issues in the global sourcing
as every nation has different language and culture due to which it create major problem in
global souring. In process of the global sourcing, every retailed should conduct a meeting with
the other nation, nut it is very difficult for a business to discuss the essential information due to
the different in the language and culture. In relation organization transparency is considered as
most significant aspect (Rezapouraghdam, Akhshik and Ramkissoon, 2021). It has been
analyses that there is increasing the social media outcome to increase spotlight on the supply
chain operation within retail industry. If an organization delaying in supply chain then,
individual set their mind set that become an issue in creating a customers base. Along with this,
it is also identified that a collaborative outsourcing is a significant key in managing an array of
the supply chain complexities within retail sector. Therefore, it should be done based on a mutual
interest and trust. But due to the global sourcing, the mutual trust and interest is also becoming
very challenging that create difficulties in establishing a collaboration. It is very significant to
considered that collaboration is most crucial in order to establish a successful relationship with
the suppliers. If due to any reason, retailer could not establish an effective relationship with their
suppliers that they can not make a deal with them that impact their transaction adversely. Global
sourcing is determined as very risky approach because it has risk of quality and threat of leaking
the confidential information (Sebald and Jacob, 2018). When an organisation is focusing on its
global sourcing then it becomes very challenging for the business to save their significant and
confidential information from the rivals or other competitors because the Global sourcing needs
all crucial information in order to manufacture goods and services for the market.
After study all the issues within global sourcing, it becomes very easy to understand
position of the Tesco. Main issue of Tesco is that respective firm want to enhance its business
within every nations but they also wish to offer a best quality products or services with a
reasonable or affordable prices. Due to the global sourcing issue, company is unable to attain

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their goals & objectives. It is crucial to know that firm should pay attention on identification of
essential ways that helps in reducing threat of the global sourcing within the market.

4. How retailers are responding to this issue

4.1 All responses
Relationship with providers
It is analysed that a connections is very crucial to have a healthy relationship among
suppliers, if company has an issues in having good relation with providers company can have a
huge issue in running business. Global sourcing can be possible only when the company is
managing a good relationship with suppliers. These are found to be crucial they supply goods
and services to the company which helps them to grow their brand image in the global regions.
The response of Tesco, in the relation of its connection with other providers is
examined to be very affirmative and healthy. They purposed behind this is to concentrate on
managing good connection with providers that why they regularly updating their services as
well as maintaining healthy relationship with suppliers. In current era, it is found that they
improve a new long term relationship and partnership approach with their contributors. Over the
past few years, Tesco, altered the manner of operating with providers. As per the Tesco, they
provide priority to their reputation which they are concentrating on certain crucial financial
issues. They took a decisions to redress the balance with the providers. They build a long term
relationship with their providers so that they can able to create a good values among partners
and providers that leads to be a good response towards business of Tesco. The company wants
to determine the best seller in the global country in the market place so that they can work in
many other international country. It is the major policy for their achievement as the providers
connection at complex level around 3 to 5 years which is presently because of management in
relationship. The prime aim of company chief management is to analyse the best seller in the
marketplace with their providers. As per the Tesco, it is analysed that success is depend on the
operations with providers. In instance to this company has concentrated on listening problems
that is faced by suppliers so that they can work on them ,and maintain a healthy relation. With
these operations and activity company can focus on improving loyal and confident relationship
so that all the crucial connection with international sourcing can be resolved and they are
capable to operate all together(Huang and Rust, 2022).

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Response of Tesco in context of profit margin
Tesco uses the policy of competitive pricing strategy where the business is not able to
charge high prices from the customer's in the market. They have to offer the goods and services
at an affordable price for maintaining its position in the market. This is the reason it has been
seen that the profits of the company is decreasing. The organisation is focusing on increasing its
global sourcing to minimise the overall production cost which will lead to enhancement in the
profits margins of the business. The company need to understand that the issues which arise in
the business helps the organisation in becoming stronger by finding solutions of the problems.
Tesco is currently paying its attention on arranging meetings to receive suggestions regarding the
increase in the revenues and profits of the business. The company gave a positive response after
analysing these existing challenges. The business is trying to minimise the issues which are
arising in global sourcing process(Das Nair, 2018). Tesco is using various new technologies to
reduce the challenges of global sourcing in the retail business. There are various steps which are
taken by the company in order to boost their supply chain management. The business interacted
with more than 300 suppliers for developing a Tesco academy of suppliers. After the
implementation of this strategy, Tesco witnessed a 8.3% increase in the overall revenues of the
business.

Response of Tesco
It is analysed in consider company that they are giving the good quality goods to the users
as they committed to them. But it is also determined that because of increment in sourcing,
organisation has analysed certain quality standard issues. In response to those obstacles,
company has developed n industry that tends in fabrication benchmarks(Peiling and Tingting,
2018). Tesco, produces their own products which they supply to with the assistance of their
providers. In regards to manage good quality of goods and services, company is reviewed
standards on a constant basis so that they can have surety in all lawsuits development as well as
adaption and industry development are considered. The supplier audit program drives in 2019,
they accomplished a survey that consist 371 approved audits with 360 degree feedbacks of the
Tesco suppliers.
Response to Tesco

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 Time zone issue is being an crucial issue when the company is working business with
another country, particularly in the situation of global sourcing. Tesco, is a UK based company
and they are providing goods and products from various providers. It found very complex for
company to deal with their providers as the timing with another country is being varied. In
regards to deal with an issue, it is examined that company schedule a meeting with outsourcing
countries at a specific time so that they both can communicate suitably regarding the details
linked with the business and their services. With this response, Tesco, is capable to decrease this
issue as now they are able to connect them as per the schedule timings and networking
connection has provided them a good way to connect with any supplier easily(Priporas, 2019).
Response of Tesco
It is determined that because of long distance trading at worldwide level, Tesco is having
an issue as they getting late in providing goods to buyers on time. This becomes an essential
issue particularly after the pandemic condition due to all the supply chain network was disturb
because of limitation and other governing rules that has to follow by the company. It become
difficult for an industry how they can manage the worldwide value chain network which deduct
in providing. It is an essential to record the business requirements to respond quickly so that they
are capable to attain their goals and aims in an effective manner. For coping up this issues,
company ha taken quick actions by driving a meeting with the providers that how they will
manage distribution with providers(Lajante and Ladhari, 2019).

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4.2 How other retailers are dealing with global sourcing
Essential competitor of the Tesco is Sainsbury's that also faces various global sourcing
challenges. There is a discussion about comparison between two organisation that are Tesco and
Sainsbury's in the relation to global sourcing issues and how organisations are tackling them. It
is identified that Sainsbury's and Tesco are most leading retail organisation within UK as they
are running their business in excellent way. Both of the companies are outsourcing various
product with the purpose to cut and enjoy several benefits. Therefore, a comparison between the
Sainsbury and Tesco is discussed below:
In Tesco, it is identified that sourcing is most significant part of its all business
responsible practices. Respective company is sourcing in the non food product across the world.
Its sourcing headquarters is situated within Hong Kong. Tesco is dealing with the Asia and some
other subcontinent (Troiville, Hair and Cliquet, 2019). Recently this business is looking for the
sustainability for the future generation & main reason for that is they are more emphasising on
the responsible sourcing. For the aim of a responsible sourcing, respective company is mainly
focusing on the zero carbon by 2050 & that's why it set a science-based targets with the motive
to reduce the greenhouse gas emissions. Such greenhouse gas emissions in the organisation are
produced in supply chain and this is main reason that company is focusing on the responsible
sourcing. Tesco committed to leading the industry by addressing the challenges or issue related
to sustainability in supply chain. Additionally, it is also improving the way of sourcing. It is
very significant for the company to build a term that focus on the issues. For this purpose, Tesco
is paying more attention on using a multinational and diverse workforce and due to this, it have
various colleagues within 23 nations. Its major hub is situated in China, Turkey, India, Sri Lanka
and Bangladesh.
In relation to Sainsbury, it is identified that this company is mainly focusing on
building a string and effective heritage of the sourcing with an integrity. Respective company is
sourcing its working and farmers with the small scale business (Tyrväinen and Karjaluoto,
2019) But in this, they are facing many challenges, for instance climate change, Global Trade
system is currently not favoured by the smallholder farmers, unavailability of the finance and
inputs, unlimited access to data and information. They are targeted by the 2030 to enhance 50%
more energy than present. They are also concerning on building closer relationship with its

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suppliers. For this, Sainsbury is paying more attention on the resources which drive the a
progress in the social, economic and environmental sustainability.

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CONCLUSION
From the above report, it is concluded that the relating issues are increased day by day.
Due to this, retailers are in a dilemma that how they practices to win over such challenges as
global sourcing is major issues which increase the company's burden. It is analysed that Global
sourcing has also include various issues such as compliance issues, non-adherence of quality
standards, language barriers, delay in the suppliers and difference in time zone. Therefore it is
recommanded to every retail organisation to adopt innovative technology and efficient strategy
so that they can overcome such issues and establish a sustainability within their business
efficiently and effectively.
Recommendation
Retail buyers and sellers are constantly tasked with sourcing new merchandising and
comparing to present goods to ensure their services lines to existing goods remain competitive in
the marketplace. With dual seasons and programs to support, it is challenged to determine new
supply sources, it is challenging to determine new supply sources. The global sourcing module
also automate and centralize the provider approval process and documentation needs into one
platform, which leads in developed process efficiencies, raised production and visibility as well
as developed supplier operations. With these ability retailers and brands reduce risk, mistakes
and delays in the production process.

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References:
Books and Journals
Alam, M.M.D. and Noor, N.A.M., 2020. The relationship between service quality, corporate
image, and customer loyalty of Generation Y: An application of SOR paradigm in the
context of superstores in Bangladesh. Sage Open, 10(2), p.2158244020924405.
Bandara, R., Fernando, M. and Akter, S., 2020. Explicating the privacy paradox: A qualitative
inquiry of online shopping consumers. Journal of Retailing and Consumer Services, 52,
p.101947.
Barile, S., Polese, F. and Sarno, D., 2018. Grocery retailing in the I4. 0 era. Symphonya.
Emerging Issues in Management, (2), pp.38-51.
Das Nair, R., 2018. The internationalisation of supermarkets and the nature of competitive
rivalry in retailing in southern Africa. Development Southern Africa, 35(3), pp.315-333.
Huang, M.H. and Rust, R.T., 2022. A framework for collaborative artificial intelligence in
marketing. Journal of Retailing, 98(2), pp.209-223.
Lajante, M. and Ladhari, R., 2019. The promise and perils of the peripheral psychophysiology of
emotion in retailing and consumer services. Journal of Retailing and Consumer
Services, 50, pp.305-313.
Peiling, Z. and Tingting, L., 2018. Understanding consumer preferences for logistics services
within online retailing of fresh products: A research conducted on SWEDISH
CONSUMERS.
Priporas, C.V., 2019. Competitive intelligence practice in liquor retailing: evidence from a
longitudinal case analysis. International Journal of Retail & Distribution Management.
Rezapouraghdam, H., Akhshik, A. and Ramkissoon, H., 2021. Application of machine learning
to predict visitors’ green behavior in marine protected areas: Evidence from
Cyprus. Journal of Sustainable Tourism, pp.1-25.
Sebald, A.K. and Jacob, F., 2018. Help welcome or not: Understanding consumer shopping
motivation in curated fashion retailing. Journal of Retailing and Consumer Services, 40,
pp.188-203.
Troiville, J., Hair, J.F. and Cliquet, G., 2019. Definition, conceptualization and measurement of
consumer-based retailer brand equity. Journal of Retailing and Consumer Services, 50,
pp.73-84.
Tyrväinen, O. and Karjaluoto, H., 2019. A systematic literature review and analysis of mobile
retailing adoption. Journal of Internet commerce, 18(2), pp.221-247.

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