Tesco

Case study - Tesco Name: Li Wai Ching (s2859153)

Product diversification

Tesco is an online grocer which having 12,000 products online. The company not only tried to sell the tangible products, but also the intangible products such as e-diet and music download service. Therefore, it leads Tesco having 3000,000 order each week. In order to achieve the synergy effect, the company tried to acquire e-Diet Company and advertised it via a plenty of mail. On the other hand, it also tried to involve in mobile service which called Tesco Mobile and partnership with O2. In 2004, Tesco got a big successful in digital music download which gained 10% market share in 6 month. The product ranges of Tesco had already beyond the general terms of grocer. The development of intangible services online lead their customers to change their buying behavior which customers can download music or renting a film when choosing a can of soup in once at Tesco.com. However, the product diversification can attract more customers shopping online in order to increase the sales revenue and create the competitive advantage.

Establishing the effective IT system

Tesco used the Retalix POS system which can run on various platforms to achieve their long-term innovation and growth objectives. The system can be quickly and easily to across the language and currency restrictions in worldwide in order to minimize the conversion costs. Retalix system provides the self-checkout lanes for the customers with other additional services, such as: lottery reward, electronic gift cards, insurance, and personal financial services. As a leading innovator, Tesco is not immersed in the past, but the future to get the maximum benefit from the effective IT system. The system allows employees to spend more time on customers’ service and make the inventory management more streamlined. Therefore, it is not only helping to decrease the operating costs, but also increase the satisfaction of the...