Terry Leahy - Europe's Most Admired Leader

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Case Details:

Case Code : LDEN036
Case Length : 20 Pages
Period : 1995-2005
Pub Date : 2005
Teaching Note :Not Available
Organization : Tesco
Retail ing
Countries : UK

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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About Leahy

Leahy was born on February 28, 1956, in Liverpool. He studied in St. Edwards College at Liverpool and earned a management science degree at the University of Manchester's Institute of Science and Technology. During his school holidays, Leahy worked with Tesco, stacking shelves. He joined Tesco as a marketing executive in 1979. During that time, MacLaurin wanted Tesco to overtake Sainsbury's as Britain's biggest supermarket chain. MacLaurin identified Leahy as one of the prospective candidates, who could help him realize his dream. Leahy was promoted as marketing manager in 1981 and from 1984 to 1986 he held the position of marketing director for Tesco Stores Limited and was appointed commercial director of fresh foods in 1986... 

Leadership and Entrepreneurship Case Studies | Case Study in Management, Operations, Strategies, Leadership and Entrepreneurship, Case Studies

Tesco under Leahy's Leadership

Leahy attributed Tesco's success under his leadership to four principles. These, principles according to him, were, "We have been clear about what we wanted to achieve, we have listened to what our customers have told us, we have given responsibility to our managers and staff, we have kept things simple..."11

Terry Leahy - The Leader

From the very beginning of his career in Tesco, Leahy was rated very high by his bosses. The description given by his colleagues for him, however varied...

The Criticism

In April 2005, Tesco announced revenues of over 37 billion and a net profit of 1.37 billion for the fiscal 2004-05. Though Tesco's financial performance under Leahy had been outstanding, he was criticized on several counts, especially for the company's HR policies. The average wages paid by Tesco were among the lowest in the retailing industry in the UK. The salaries were paid on an hourly basis and the time taken off for tea breaks was not considered while calculating the total working hours. Tesco's staff were not given any sick pay for the first three days they were off...


Exhibit I: Market Share of Leading Players in the UK's Grocery Market
Exhibit II: Largest Retailing Companies in the World
Exhibit III: Tesco - Key Financial Statistics (2001-05)
Exhibit IV: Tesco's Share Price Chart (January 1995 - June 2005)
Exhibit V: Tesco - Competitors Profile
Exhibit VI: Tesco Values
Exhibit VII: Format of Tesco Stores in the UK 

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11]  "Terry Leahy Speech to the Institute of Directors," www.bemrosebooth.com.


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