Analysis of Ten Tops’

Operations Management
Strategy and potential
improvements

Subject code: MGT310: Operations Management

Assessment: 1: Strategic Operations Management

Name: Angus Coates

Student ID:11685869

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What is Ten Tops?
Ten Tops is a large, privately owned Australian tertiary sector discount store that started in
2020 as a subsidiary of the Bernadi Group. with nine stores across Australia as of 2023 (Ten
Tops, 2021a). Ten Tops’ primary operations involves providing its customers with a variety
of low-quality products within its physical, warehouse-style stores, including food, hygiene
products, gardening supplies, and homewares (Ten Tops, 2021a; Hill & Hill, 2017). The main
unique feature that Ten Tops uses to differentiate itself from other discount stores, such as
The Reject Shop, Bargain Buys, and Costco is its operational pricing strategy that involves
pricing all goods sold to the consumer being $10 or less, as well as a bulk-sales model, with
products often appearing in large quantities for consumer purchase (Ten Tops, 2021b). Ten
Tops also employs a “first-come, first-served” inventory management procedure for its “Top
Picks”, with certain products being available for purchase for a limited period, until all stock
within a given store and its internal warehouse have been depleted (Ten Tops, 2021b). Once
this happens, the product is removed from purchase by consumers until an undetermined later
date. This develops a sense of urgency for consumers to continually enter the store, with
consumers not wanting to miss out on time-sensitive products, while ensuring that the
business has a steady inflow of cash (Meredith & Shafer, 2012; Kumar, 2006).

The role of operations and relevant strategies used by Ten Tops

Understanding the various roles that exist within a business is vital to its success, as it allows
for effective investment of resources and funds in crucial areas, while providing distinct
guidelines of the employees’ roles and responsibilities within the business (Jacobs, 2017;
Williams et al, 2020). For Ten Tops, the role of operations focuses on the effective
investigation, purchasing, and delivery of goods from distributors to its centralised
warehousing facilities, which are then delivered to various in-person stores for purchase.
These products are purchased by operations in vast quantities, with goods only being
delivered to stores once the surplus stock in each store has been completely diminished
(Kumar, 2006; Meredith & Shafer, 2012). Operations are also responsible for the continual
development of new stores into physical locations, analysing potential demand within areas

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of Australia, as well as the relevant infrastructure required, such as storefronts, utilities, and
the hiring/training of employees (Thompson et al, 2010; Hill & Hill, 2017).

Ten Tops utilises a demand-based operational strategy, attempting to compete with

businesses such as The Reject Shop by continually innovating on the products it sells with its
“Top Picks” (Hill & Hill, 2017). This involves Ten Tops continually analysing the types of
goods with high sales to understand the markets that are likely to visit their stores, with
operations creating contracts with distributors for large, one-off shipments to stores, creating
limited-time deals within their stores to bring in more consumers (Ten Tops, 2021a, Jacobs,
2017; Fitzsimmons & Fitzsimmons, 2000). The use of the resource-based operations strategy
also influences the role of operations, as operations have to continually analyse the sales
trends of the business, the success of different types of products, as well as prior performance
of other “top picks”. This provides operations with the necessary information to analyse
current market trends, adapt to the needs of consumers, and effectively compete within the
discount store market (Hill & Hill, 2017; Meredith & Shafer, 2012). Inversely, the role of
operations to continually create contracts with new and existing distributors created the need
for a resource-based operational strategy, with the business needing to manage the
resources/goods within the business and their delivery to various stores, requiring effective
communication and marketing of new products to consumers 2017).

The order winners and order qualifiers for Ten Tops

When analysing a business, it is important to understand how a business can stand out from
its competitors in the same target market, allowing for a business to invest its efforts heavily
in relevant areas (Thompson et al., 2010; Jacobs, 2017). This can be effectively analysed by
looking at a business’s order winners and order qualifiers (Hill & Hill, 2017).

Order qualifiers are the necessary components that the business must have to effectively
compete in its given business sector (Williams et al., 2020). Understanding how a business’s
order qualifiers impact operations allows it to evaluate what features the business needs to
succeed, whether these functions and features are performing effectively to keep up with
demand, as well as analysis into weaknesses in the business and ways it can improve to gain a
larger market share (Meredith & Shafer, 2012). For Ten Tops, its order qualifiers include its
physical distribution of goods through physical stores, the supply of bulk goods from

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distributors to the storefronts, as well as the wide variety of products sold in-store. This has
forced operations to invest funds into the effective and timely delivery of goods from
centralised warehouses to its stores, as well as effectively manage multiple contracts with
distributors of various products to ensure products can be sold in the physical stores
(Fitzsimmons & Fitzsimmons, 2000).

Order winners are the competitive advantages that the business has that allow it to both stand
out from its competitors, while bringing in consumers to purchase its goods/services (Hill &
Hill, 2017). Understanding how a business’s order qualifiers affect operations allows it to
evaluate the features of the business that differentiate itself from its competitors, whether
these unique features are helping or hindering the business, as well as what aspects of the
business’s operations can be improved to exemplify these features (Thompson et al., 2010).
For Ten Tops, its order winners are the exclusivity of the “Top Picks” that encourage
consumers to repeatedly enter the store, the low cost of products for consumers, as well as the
bulk-purchasing of goods from suppliers. This has forced operations to continually invest
funds into the investigation and procurement of new Top Picks to bring in consumers, while
ensuring the business is continually investigating new distributors to increase potential profit
margins (Kumar, 2006).

Value Chain Analysis of Ten Tops

Understanding a business’s mix of products and services, examples of each, as well as how
they impact a business is crucial for operations, as it allows for businesses to analyse their
prior growth, the current projection of the business, as well as what can be done to succeed in
the future (Hanson & Birkinshaw, 2007). One of the most effective ways of doing this is
through Value Chain Analysis. Based on Michael Porter’s research, this strategy analyses a
given business’s primary activities that allow for effective operations, including incoming
and outgoing logistics, as well as supporting activities that provide a competitive advantage,
such as the operational infrastructure, sourcing of goods and technology utilised (Porter,
2001).

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For Ten Tops, its product/service mix focuses heavily on the goods sold by the business, with
the goods being highly specialised to cater towards low Socio-Economic Status individuals,
as well as financially savvy consumers. For the business’ services, it primarily involves the
training of its employees, managing and procurement of new goods to be sold in-store, as
well as controlling the stock that each store has. (Hill & Hill, 2017; Williams et al., 2020).
This focus on the goods sold by the business allows it to invest its focus and funds into
effectively analysing the different target markets and high-frequency purchases within the
business. With the knowledge of the products frequently purchased by consumers, Ten Tops
can alter the purchasing of goods on a macro and micro scale, increasing the purchase of
goods with high rates of sales across all stores, with, as well as on a micro scale, with
products being reallocated based on the rate of purchase in each store, offloading excess
stock to locations it will be quickly purchased (Porter, 2001; Hanson & Birkinshaw, 2007).
Regarding Ten Tops’ supporting activities, operations have heavily invested into its
infrastructure surrounding the procurement and delivery of various goods to its physical
stores. This investment into establishing effective and flexible contracts and acquisitions of
various goods has allowed Ten tops to differentiate themselves with their limited offer “top
picks”, with an existing infrastructure to support one-off purchases within their contracts with
distributors. This allows for a steady inflow of customers, while providing the necessary
funds for operations to continue purchasing goods and expand in the future (Porter, 2001).
However, the technology integration within Ten Tops is negligible, with no methods for
customers to purchase goods and services digitally, as well as a simplistic and old-fashioned
website and Facebook page. This heavily limits the potential expansion and future of the
business operations, with consumers only interacting with the business if they know of the
business if they have personally interacted with it, or from word of mouth (Hill & Hill, 2017;
Hanson & Birkinshaw, 2007).

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Potential recommendations for Ten Tops’ operations management

Analysing potential improvements is crucial to operations management, as it allows for the

continual development and evolution of the business, fixing weakened areas of the business,
while building upon its strengths and unique features (Hill & Hill, 2017).

One of the main weaknesses that needs to be capitalised on by Ten Tops is its lack of an e-
commerce store and methods of at-home purchase by consumers. While this would require a
heavier investment into the acquisition and delivery of products by the business, having a
centralised website would allow potential customers from across Australia to purchase goods
from the business (Williams et al., 2020). This would provide Ten Tops with a wider reach
and customer base, additional funds for operations to use to expand the business, while
allowing for excess goods within stores to be utilised by the business, (Kumar, 2006;
Thompson et al., 2010). The use of an online purchasing platform would also provide
operations with various forms of information that can inform decisions for operations,
including popular products that may require increased stock for the business’s in-person
stores, as well as potential areas of expansion for physical storefronts to be established, while
catching up to competitors such as (Hill & Hill, 2017; Meredith & Shafer, 2012).

Another recommendation for Ten Tops is to include heavily popular “Top Picks” from its
temporary stock into its permanent roster of goods, allowing consumers to reliably purchase
highly desirable products from its stores. This would allow operations to capitalise on high-
performance goods, utilising their increased sales to bring consumers into the business at a
consistent rate, increasing sales of both the high-performance goods, as well as other products
in the business, including other “Top Picks” (Fitzsimmons, 2020). From these increased
sales, Ten Tops can analyse high-performing products and cater future products and Top
Picks towards common demographics that purchase the high-performing products (Kumar,
2006). The continual purchasing of high-demand top picks into the businesses’ regular sales
also allowing for continual contracts to be developed with the relevant distributors, with a
steady inflow of funds to be utilised by operations for future expansion, while decreasing the
stress on the business to manage deliveries to in-person stores (Williams et al., 2020; Porter,
2001).

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References
Ten Tops. (2021a). About Ten Tops. https://tentops.com.au/about-ten-tops/

Ten Tops. (2021b). Top Picks. https://tentops.com.au/top-picks/

Thompson, A. A., Strickland, A. J., & Gamble, J. E. (2010). Crafting and executing strategy
text and readings. McGraw-Hill Irwin.

Jacobs (2017). Operations supply chain management. McGraw-Hill Education.

Hill, A., & Hill, T. (2017). Essential Operations Management (2nd ed.). Red Globe Press.

Porter, M. E. (2001). The value chain and competitive advantage. Understanding business
processes, 2, 50-66.

Meredith, J. and Shafer, S. (2012) Operations Management for MBAs: 5e. New York: John
Wiley & Sons.

Kumar, N. (2006) ‘Strategies to fight low-cost rivals’. Harvard Business Review, 84(12), pp.
104–112

Fitzsimmons, J.A. and Fitzsimmons, M.J. (2000) Service Management: Operations, Strategy
and Information Technology. New York: McGraw-Hill.

Hansen, M.T. and Birkinshaw, J. (2007) ‘The innovation value chain’

Williams, C., McWilliams, A., Lawrence, R., Whaeduzzaman, W. (2020). MGMT (4th ed.).
South Melbourne: Cengage Learning .