Name: Easvaren Arunasalam Matrix No: 816563 Assignment: Case 12-1 Question: What are the key elements to Tesco’s success in the competitive retailing industry?
Indentify critical success factor that has taken Tesco for victory growth among the competitive retailing industry is to consider their internal operational effectiveness. Tesco explained its growth strategy through “sell for less” model by get cheaper, sell more volume and grow bigger. These factors are essential for retailers who provide a compelling value scheme to the customer and are able to quickly respond to market changes. They realize that being flexible and being able to quickly adapt to changes in the marketplace are key to their survival.
However Tesco’s do have other than above factors to further strengthen their growth position in this highly aggressive retailing industry. Below are the explanations of these key elements.
Branding and Reputation has been strategic advantage for the company where spreading like wildfire by transforming the generic products into the brand-specific, largely through carefully branded packaging and the promotion of an “every penny or cent counts” mindset. The company has a strong brand image and is associated with good quality, trustworthy goods that represent excellent value. The product and service development process of the company have been substantially re-engineered to facilitate better management of product lifecycles and more efficient delivery of wide ranges of products to customers. In addition, Tesco’s is also very successful in terms of customer loyalty due to its loyalty cards system and its general approach to customizing services to the needs of every customer.
Information Technology (IT) Integration into Tesco’s growth strategy has created an opportunity for them to lively compete in an increasingly dynamic and complex environment. Tesco use IT system to connect business partners online in bringing more flexibility, scalability, extensibility and integration across the distribution channels. This has helps to extend the key information on business partners throughout the supply chain and facilitate collaborative relationships with partners. Market exchanges hold the promise of extending Tesco’s reach, delivering buyers to their virtual doorstep from around the world. Other examples of the most efficient technological advances that support daily business operations of Tesco are wireless devices, intelligent scale, electronic shelf labeling, self check-out machine and radio frequency identification (RFID) systems. This technology is an effort to maintain Tesco’s ability to handle an increase in product/service volume while controlling costs that essential to be innovative and market oriented. After considering the fact the nowadays majority of people have less time for shopping, Tesco employed this on-line systems and now became the biggest online supermarket. This is truly evident in terms of tremendous growth of on-line sales where the company has a strong platform to further develop this revenue stream.
Supplier Management has been another key elements for major retailer like Tesco where selling diverse product range, they work with many different suppliers around the world with employees from many different cultures and ethnic groups. Therefore, it is the company policy and company’s main approach to have unique relationships with suppliers. Applying advanced technology in its communications and cooperation with the suppliers, the company aims to control the work of its suppliers and heavily relies on their efficiency. The direct suppliers use a number of sub-contracted suppliers, selected to be best in class in their country. Tesco has established close relationships with the contractors believing that regular and long term orders promote the investment necessary to improve conditions in the...
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