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Technology in this Era has taken the worldwide business by a storm. This can be proved by the fact that the use of automated systems is much more popular now and have taken over a lot of tasks and processes which were initially accomplished manually. This Transformation has caught the attention of competitors, as they are now aware of how a proper information system can help them to gain competitive advantage.
"An information system established with the goal of creating competitive advantage and improving the competitive position of an organization. A strategic information system supports and shapes the corporate strategy of an organization, often leading to innovation in the way the organization conducts its business, the creation of new business opportunities, or the development of products and services based on information technology"
The competition is fierce and the introduction of new technology and systems changes the public attitudes and hence helps an organization to be ahead in the game.
USE OF INTERNET
The increasing use of World Wide Web or the internet has played an important role in the globalization. The whole world is now a market and trade across the borders has become more reliable and easy. More people get involved in e-shopping because of its flexibility and ease. They can access internet from anywhere at any time, place and order and receive the goods and services without spending much time. The organizations have analyzed the demand, efforts are being made to improve in the sector. The companies which have well developed information systems managed to come up strong in this field which gave them competitive advantage.
ORGANIZAION CHOSEN: TESCO PLC
Tesco was founded by Jack Cohen in 1919, in East end of London where he sold groceries from a stall, such was the start of this enormous organization which is now so sturdy that it is difficult to quiver it. In 1929 Cohen managed to open his first store in Burnt Oak, North London. In 1932 Tesco became a private limited company (www.tescoplc.com)
Tesco climbed the ladder of success very quickly and started to gain customer loyalty, the consistent strategy of growth helped Tesco overtake Sainsbury's as the UK's largest super market. The UK grocery retail market's 15.6% share was in Tesco's hand which made it a market leader by 6%. (www.corporatewatch.org.uk)
Today Tesco is UK's largest and world's third largest grocery retailer, with it's operations reaching 14 countries world wide. It has a group sales of 59.4 billion, amongst which are the UK sales of 41.58 billion. Tesco has over 470,000 employees worldwide. In a period of economic turndown Tesco has managed to increase its sales by 13.5 % (on a 52 month comparable basis). (www.tescoplc.com,www.investis.com)
GOALS AND OBJECTIVES
The goals and objectives of the strategy of Tesco plc are
To be a successful international retailer
To grow the core UK business
To be as strong in non-food as in food.
To develop retailing services - such as Tesco Personal Finance, Telecoms and Tesco.com
To put community at the heart of what we do
IT STRATEGIES TO ACHIEVE ITS GOALS
Tesco plans to centralise IT applications across its stores worldwide, after signing a £100m network and voice contract to support its overseas expansion programme.
Tesco's global standardisation strategy has been made possible by the use of Information technology , it has enabled the organisation to cut costs and centralize its procedures.
Tesco has always been one step ahead in the race to gain competitive advantage, it has managed to develop a strong Information system. The use of IT system can increase the organization sales by the use of internet. As online shopping is very popular improving and spending capital in this area could be very help full
The improvement in the supply chain system can improve the stock control and product availability which would in turn increase the sales
The check out system can be made more advanced acquiring more customers.
The self-scan check out system is gaining popularity and investing in this would be beneficial for the company.
"Our aim is to have a common technology platform in tandem with common business processes so that we remain competitive as a group as we continue our expansion abroad. By deploying centralised purchasing systems and processes into a country, for example, you immediately make that country more productive"(Tesco IT Chief Nick Folkes)
Increasing market share: Tesco plc has the highest market share of 30.6% and it is still increasing ,It has used the IT system considerably in achieving that.
Tesco club card is a very strong marketing tool employed successfully by Tesco. It is now being introduced internationally to enhance customer loyalty. Club card 2 has been a great success adding to the success
Since Tesco has such a huge network and such massive operations all over the world it enjoys large economies of scale which make it possible for Tesco to lower their prices for their customers without affecting its own profit margins. This provides Tesco with a huge competitive advantage against its customers and also acts as a barrier to entry for new entrants to the market.
Dot com business gaining strength. Tesco online business is increasing with every passing year, contributing its fare share in the growth
Use of good quality self-checkouts
The use of centralized information system to centralize wide spread geographical operations
Innovative technology to electronically check in products
Upgraded supply chain management system
Availability of huge investments for the IT sector
In an organization as huge as Tesco plc it is difficult to maintain high level of Information Technology system throughout the organization because of its size.
Better information technology advancements by competitors
Involvement in scandals which can cause negative publicity and hence loose customers
Tesco grocery site not customer friendly
Weakness in non-food
Becoming the most power full online seller.
Innovation in the stores and check out systems
Creating a strong well equipped IT team for each sector of the business
Gaining strength in the non-food
Introduction of latest technology by the competitors
Changes in the legislation
Change of public attitudes
Different demands and attitudes in different countries
Customer Relationship Management (CRM) is an information industry term for methodologies, software, and usually Internet capabilities that help an enterprise manage customer relationships in an organized and efficient manner
In this analysis QCi Customer Management Model will be used to analyze the CRM in the organization.
ANALYSIS AND PLANNING
The first step in developing a customer relationship system is to understand the behaviors, the approach and values of different customers. After gaining a knowledge of the above the customers need to be segmented as this creates much ease in the activity of planning.
Tesco well understands its customers and hence has a strategy for providing them value for their money. Customers want to spend as less as possible and get the best quality products.
Once the first stage has been completed and the identification of the segments has been completed, a proposition needs to be assigned to each of the segments and planning done for the value based offers.
Tesco is a global organization with its business spread in a number of countries. The organization is familiar with the fact that different communities have different requirements, attitudes and concerns, for this reason Tesco plc has tailored the objectives and goals for each country, to provide the people what they actually want.
A tailored Community Plan is developed for each country.
INFORMATION AND TECHNOLOGY:
The base for this model is provided by the Information technology system. It consists of data collection, storage, analysis and usage of the data in a way which is in line with the CRM strategy. Tesco plc has ensured that it is equipped with advanced technology to understand how people and processes work, and the requirements of the customers as well. Tesco PLC is a very big company and the information technology system has enabled it in acquiring and analyzing data required to manage the customers. The information Technology delivers the important information to relevant people at the right time to help in achieving their goals of managing customers.
PEOPLE AND ORGANIZATION: The recruitment, development, training and motivation of the front-line staff are major aspects that the organizations have to cover, in order to provide customers high standard service.
The employee satisfaction is also an area of concern for the companies along with along with the identification of roles and training requirements.
More than 470,000 people now work for Tesco PLC , operating in 14 countries. Tesco has a well developed recruitment system with continuous development. The value they aim to give their customers can be seen by the following statement from the company:
No-one tries harder for customers
â€¢ Understand customers
â€¢ Be first to meet their needs
â€¢ Act responsibly for our communities
We treat people how we like to
â€¢ Work as a team
â€¢ Trust and respect each other
â€¢ Listen, support and say thank you
â€¢ Share knowledge and experience
The organization has ensured high levels of customer satisfaction, as they are aware of the fact that retaining their customers and acquiring new ones is a major tool to win the fierce competition.
When customer contact takes place at various instances, it becomes a very difficult task to manage. In such a situation a precise and well defined system needs to be developed to manage good relationship with the customers.
The organization is familiar with the importance of retaining customers, the introduction of club card was a major step by the company to win the hearts of its customers, and recently the huge profits made by the company in the current year are have been majorly linked to the introduction of club card 2. Tesco have succeeded in creating good customer relations by listening to their customers, acting promptly on their feedbacks and fulfilling their requirements
GIVING CHOICES TO THE CUSTOMERS:
The organization believes in diversification. Tesco gives its customers a wide variety of choices. They provide their customers with proper and authentic information so that it helps them in decision making. The organization has taken a number of initiatives including carbon (GDA) Guideline Daily Amount labeling.
The introduction of Tesco diets, online dieting plans and the provision of healthy eating and weight loss services are some of the areas which Tesco has covered to give value services to their customers.
AREAS FOR IMPROVEMENT
The Organization is already the market leader and has retained customers, whose number keeps on increasing but there is always room for improvement. Improvements can be made in the customer service department by providing the customers much higher level of care. The customer complaint process must be made very effective and immediate action should be taken in resolving the issues.
Latest systems should be adopted for the professional developments of employees to take their service to a next level.
As sometimes Tesco is considered more famous for its low prices, the employees may lack in providing the highest levels of customer service with so many customers pouring in the stores each day. Continuous development and monitoring of the procedures would provide a consistent level of customer service which is not impaired by the high level of customer turnover.
Tesco has always been strong in the food sector, but now they are focusing their energies on the non-food departments as well. The retailing industry is another sector where Tesco needs to increase its share. Gaining strength in these sectors as well would result in covering more customer segments.