Introduction
The portfolio management function is an indispensable part of the project management process, contributing to the strategic advantage and satisfactory outcomes for organizations. Every organization may perceive portfolio management differently, as it depends on the project’s nature and strategic intent. In this particular study, the weight is on portfolio management and its impact on a strategic advantage and project outcomes. Tesco is one of the pre-eminent retail chains in the United Kingdom, which deals with an immense range of grocery products for customers. The company was founded in 1919. The main products of the corporation are supermarkets, hypermarkets, superstores, and convenience shops. According to 2019 financial reports, the firm’s revenue is £63.911 billion (Sawhney, 2020).
Mission: The mission of the company is “we make what matters better together.” This mission statement depicts the contribution of all key stakeholders to the success of the company.
Vision: The company’s vision is to create value through serving, innovation, and growth around the globe.
Values: Tesco demonstrated some critical values in the competitive market. For instance, it always wants to work hard for customers. Apart from it, it wants to treat people or customers in their way. Also, Tesco believes that a little help can make a difference.
Strategies: The primary policy of Tesco is to create value for stakeholders by implementing innovative customer-focused approaches. It is also correlated with the value for money, customer services, loyalty, and products and services.
Situational Context and Evaluation
· Portfolio Management Introduction
Tesco intends to initiate the new project “Jack’s.” It is a new discount store to help save people’s money and create value. This project’s primary purpose is to streamline its discounted stores to beat its German rivals, such as Aldi and Lidl. Of course, the company is facing several threats due to growing competition in the retail market. Consequently, this project’s planning and execution are mandatory to survive in the long run (Jordan, 2018).
Based on this project, Tesco management perceived portfolio management. For instance, the company’s management believes that portfolio management is a process of prioritization, selection, and control of different programs or initiatives in both internal and external business environments. These programs, projects, or initiatives align with the company’s vision, mission, objectives, values, and strategies. The most important thing is implementing several change initiatives and maintaining the business to get adequate or expected returns. Portfolio management is a selection of multiple financial investments to enable the expected or anticipated return on investment. In the portfolio management process, the company management has to identify strengths, weaknesses, opportunities, and threats related to financial investments and make decisions accordingly. The project’s need is quite visible, as the company wants to beat its rivals by offering discounted products. The project’s size seems reasonable, as the new discount store will be selling almost 2600 products with 1800 brands. Tesco aims to compel its rivals, which as Aldi and Lidl, to review the price and make some price adjustments. It seems the right project at the right time, and active portfolio management strategies or plan snare needed to meet objectives and justify the success (Kock & Gemünden, 2019).
· Managing Project
Apart from the planning of the project portfolio, there is a need to track the management, and it is one of the best ways to manage the whole project until the end. For instance, Tesco operates this particular project by scheduling regular intervals. Reviewing the project progress despite containing some interventions is a good move to keep everything in a loop. Tesco manages Jack’s project through flexibility. For instance, a possible change in the project scope may aloes lead to a change in different project activities. Consequently, due to this flexibility, necessary adjustments can be made. One of the best ways to manage the project and improve its scope is to enhance communication visibility with the team. For instance, collaboration with the project team and all key stakeholders is mandatory for each project activity or task. It is all about maintaining perfect coordination among project members to make the project successful. The best way to manage the project is to identify the problem before it occurs. Prediction or anticipation is critical, and it can make the project less vulnerable. Eventually, there is a need to provide appropriate directions when executing the project. Interacting with the project teams is essential to make sure that the project is running smoothly is crucial. The best way to improve the scope is to keep it flexible, especially when existing in the competitive retail market. Due to the evolution of the competitors’ retail market and actions, some adjustments in the scope can improve it (Ligetvári, 2013).
· Sustainability Criteria
Tesco’s new project is also associated with both social responsibility and sustainability. For instance, a new discount store will help to target people who have a low-income level. The company is running this project to make high quality and needed products available for people with low income, and it justifies social equity. Asther company prioritized, selected, and invested in distributing sources equally in society, there is an ideology behind this project. On the other hand, the impact on environmental sustainability is also in the limelight. The company got the opportunity to place environmentally friendly products in the discounted stores. The most important thing is to drive the retake market’s ecological behavior compared to other rivals, and it seems a significant contribution to environmental sustainability. Relative to economic efficiency, Jack’s project got the capability to allocate resources and enable an incredible distribution equally. New inventory methods and forecasting techniques have been used to eliminate waste and ensure valuable uses. There is a scope for improvement, as new sustainability targets or measures must be aligned to make the whole project sustainable.
Opportunities and Threats
· Likely Successes
The project portfolio management can be successful if significant components, such as selection, resources, and information are managed effectively. In the project portfolio management process, there is a need to identify all organizational capabilities and resources (Rad & Levin, 2006). As specified above, Tesco has an excellent financial condition, and it is a unique opportunity to select this project. Of course, through these discounted stores, this company is better positioned to gain and sustain its competitive advantage in an intense rivalry. It is an excellent opportunity for company management to use its capacity in terms of employees working in different stores regarding resources. The company will be able to shift the burden and make some adjustment to staffing in new discounted stores. It could be an excellent opportunity to save on the cost of recruitment. The information technology infrastructure is always better for the company, enabling improbable communication patterns to make this project successful (Uplandsoftware.com, 2019). The ability to ensure incredible communication is one of the main reasons for selecting this particular project.
· Challenges
On the other hand, increasing threats of substitutes becomes a big challenge. Many retailers are already selling discounted products to customers. Ultimately, it puts question marks on the project portfolio, as the company may face substantial loss due to the lack of available substitutes. In the project portfolio management, the company can face several business uncertainties. For instance, in the current situation, such as coronavirus pandemic, selecting and prioritizing the project can be risky due to declining sales. These challenges or risks can be overcome by shaping effective risk management strategies. These strategies are to be included in the portfolio management plan. Assessing risks or threats in terms of impact likelihood and possible solution is the best way to get things in the favor (Carneiro & Martens, 2012).
Development of the Plan
· Critical Elements of a Plan
There are some critical elements of the plan, which can be incorporated to make the project portfolio successful. For instance, these key elements are periodic measurement, risk assessment, resource availability and allocation, strategy alignment, and balancing. In the first element weak phase, the project management will be better positioned to determine the cost scope, schedule, and resource. In the second phase, which is risk identification. The company can identify risk and conduct both qualitative and quantitative assessments. Apart from it, risk response planning and risk monitoring and control are critical components of this element. In the third phase, the company will determine resources and allocate them based on the capacity. It can also help to determine the size of the project. Strategy alignment is crucial, as the management has to align activities with the project and business strategy. Finally, purpose, opportunities, and benefits must be determined. The impact on strategic goals will be positive, as all considerations from periodic measurement to balancing can be aligned with the company’s primary goals and objectives (Rajegopal, McGuin, & Waller, 2007).
· Project Portfolio Management Model
Modern portfolio theory is suggested for this organization. According to this model, each asset’s ratio must be selected and combined in the portfolio, as it can facilitate getting adequate returns. Due to fluctuation in the competitive retail market process, the ratio for each asset can be changed. Tesco’s Jack’s project is to be triggered by asset ratio and combination, as the management has to anticipate the required assets to make the discounted stores successful. Tesco management must define portfolio managers’ role to identify and carefully choose assets to ensure maximum and related returns (Managementstudyguide.com, 2018).
· Implementing the Project Portfolio
Implementing the project portfolio is linked with some essential steps. For instance, management has to set the strategy antidetective support first. After it, the company management has to developer build implementation teams, as change agents must run this new project. Collecting the project data and evaluating the progress is the right approach to keep it smooth. In the next step, the company has to develop a portfolio and test and refine it accordingly. Learning and adopting are final steps in the execution plan, as it sets the foundation to make some changes (Windsor, 2019).
Tools and Techniques
There are different tools for managing project management portfolios. These tools or techniques are Monday.com, Celosias, Wrike, Perforce, and Workfront. Tesco needs a tool or technique which can offer tons of customization in one solution. Celoxis is a unique solution for the company, which can assist in meeting all project portfolio needs. For instance, by using this tool, the company can identify the project request to boost the business value. In this new particular portfolio process, the Tescoteam will determine problems and fix them accordingly visually. The best thing that this tool can offer to the company is the effective allocation of human capital (Bayney & Chakravarti, 2012). Based on the company’s capacity, the management can optimally allocate resources according to skills, experiences, and availability. Another outcome of this technique or tool is that it can provide automated cost and revenue estimation. File sharing, customized client portal, and managing change requests are always some differentiated benefits of Celoxis. Comparatively, Monday.com and other tools are focused on centralization and efficiency. It is a cheap, realistic, differentiated, and customized tool to make the whole project portfolio management successful. Tesco should choose this tool because it can meet the portfolio needs and requirements (Aston, 2020).
Conclusion
It is to presume that Tesco’s new project needed a comprehensive portfolio management planning to make it successful. The portfolio management planning mutes be flexible to make some adjustments due to the retail market’s evolution in the United Kingdom. In this thorough analysis of project portfolio management, the emphasis was on Tesco’s new project and extensive planning. The plan contains multiple components, which have been embellished along with some key insights. Finally, several tools have been explained along with a short comparison, as the company selected a particular technique or tool to manage the project portfolio effectively.
References
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Bayney, D. R., & Chakravarti, R. (2012). Enterprise Project Portfolio Management: Building Competencies for R&D and IT Investment Success. J. Ross Publishing.
Carneiro, K. D., & Martens, C. D. (2012). Analysis Of Project Portfolio Management Maturity: The Case of a Small Financial Institution. Revista de Gestão e Projetos, 3(1), 252.
Jordan, D. (2018, September 19). Tesco’s new discount chain Jack’s takes on Aldi and Lidl. Retrieved from https://www.bbc.com/news/business-45572731
Kock, A., & Gemünden, H. G. (2019). Project Lineage Management and Project Portfolio Success. Project Management Journal, 50(5), 587-601.
Ligetvári, É. (2013). Project Portfolio Management: A Pilot Survey on the Importance of ‘Project Building Stones’ of Corporate Life. Theory, Methodology, Practice, 9(1), 57-62.
Managementstudyguide.com. (2018, March 1). Portfolio Management Models. Retrieved from https://www.managementstudyguide.com/portfolio-management-models.htm
Rad, P. F., & Levin, G. (2006). Project Portfolio Management Tools and Techniques. www.iil.com/publishing.
Rajegopal, S., McGuin, P., & Waller, J. (2007). Project Portfolio Management: Leading the Corporate Vision. Project Portfolio Management.
Sawhney, K. (2020, June 19). CBI Warns That Social Distancing Will Make Recovery Slow for the Retail Sector. Retrieved from https://kalkinemedia.com/uk/news/cbi-warns-that-social-distancing-will-make-recovery-slow-for-the-retail-sector
Uplandsoftware.com. (2019, january 1). 3 Key Components of Successful Project Portfolio Management. Retrieved from https://uplandsoftware.com/
Windsor, G. (2019, October 7). 9 Steps for Implementing Successful Project Portfolio Management. Retrieved from https://www.brightwork.com/blog/9-steps-implementing-successful-project-portfolio-management
