E-Business Evaluation of Tesco.com

Authors Avatar by raimani37 (student)
University Degree Business and Administrative studies

Table of Contents

Task 1

Management Summary

Tesco currently is the UK’s largest supermarket chain and the market leading food retailer with the purpose to create value for customer and gain their loyalty. Despite being the UK’s largest retailer, it has also been retailing in the global markets and based on revenue, it is the third largest global retailer behind Wal-Mart and Carrefour.

With the focus on customers individually, Tesco provides a highly diversified range of products and services in order to gain customer loyalty keeping the customers in the center of the customer relationship management (CRM) strategy.

Tesco.com considers that the customers are the heart of their business, as the customer needs and services are given the first priority. Their strategies of customer value and delivery services are giving the customers lots of help with shopping works. In order to keep on providing this services and lot more, Tesco have been through lot of strategies and trainings.

With the fact that Tesco has been a central study point of e-business, this report provides an study of Tesco’s e-business. Focusing on how Tesco’s been handling their e-business, the report includes the depth analysis of Tesco’s e-business strategy and working procedure. This report also details the current and future e-business analysis of Tesco recommending the view point of strategies they apply and concludes with a discussion on strategies for addressing a new world e-business strategy.

1        Introduction

TESCO is a UK-based multinational grocery and general merchandise retailer operating 14 markets across Europe, Asia, and North America. It is the UK’s leading food retailer whereas third-largest retailer of the world in terms of revenues (after Wal-Mart and Carrefour) and second largest in terms of profit (after Wal-Mart).

  1. Background and Historical Information

TESCO was established by Jack Cohen in 1919. He begins TESCO selling surplus groceries from a stall in East End of London. At the time, it was not known as TESCO. TESCO was named after their first own brand product Tesco Tea from the initials of TE Stockwell, who was a partner in the firm of tea suppliers, and CO from Jack’s surname. In 1929, Jack Cohen opened the first Tesco store in Burnt Oak, Edgware, North London. Later in 1932, Tesco Stores limited became a private limited company. In 1934, Jack Cohen built a new headquarter and a warehouse, which was the first modern food warehouse in the country and introduced new ideas for central stock control. In 1956, the first tesco self-service supermarket opens in a converted cinema in Maldon. Later on with its continues business success, Tesco took over a chain of 212 stores in 1960 in the North of England and added another 144 stores in 1964 and 1965. It was also been renowned in the Guinness Book of Records as the largest store in Europe. Tesco was starting to be known as superstore when they opened their store in crawley, west Sussex. In 1974, Tesco opened its first petrol station in major sites. With the continuous success of Tesco, its annual sales reached upto 1 billion in 1979. Till 1982 the annual sales of tesco exceeded 2 billion. Later in 1983, Tesco store ltd became Tesco Plc. In 1985, Tesco became the first major retailer to emphasize the nutrition value of its own brand, to customers, through the ‘Healthy Eating’ initiative. In 1987, 500 million program to build another 29 stores. In early 90’s Tesco became the Britain’s biggest independent petrol retailer. In 1992, Tesco launched its organic range. It also provided computers for schools and opened its first Metro store in covent Garden, London. Later on Tesco Value was launched in 1993. In 1994, Tesco opened its first Express and became the first retailer to offer the customers a service commitment at the checkouts through ‘One in Front’. 1n 1995,  an initiative named “Would I Buy It” was launched to ensure that the product are always of high quality for customers. This year, Tesco was renowned as the UK’s market leading food retailer and launched Tesco Clubcard. In 1996, Tesco invested major price for customers launching 24 hour trading and customer assistants in order to make shopping even easier for customers. It also opened Belfast Metro which was the first Tesco store in Northern Ireland. It made their business more globally wider by establishing their stores in Poland, Czech Republic and Solvakia for the first time in those countries. In 1997, Tesco enters the Republic of Ireland. It launched its first Extra store in Pitsea, Essex and Tesco Personal Finance (TPF). In 1998, Tesco enter Taiwan and Thailand launching its Finest range. In 2000, Tesco launched its first ecommerce site Tesco.com. In 2001, Tesco launches ‘Customer Champions’ in many stores and implemented a new labor scheduler to further improve service for customers. Tesco became the leading organic retailer in UK reaching 1 billion price cuts in Total. In 2002, Tesco entered Malaysia. They offered ‘Free-From’ products, designed for customers with special dietary needs. In 2003, Tesco entered Turkey and Japan. In 2004, Tesco entered China and launched their own-brand Fairtrade range and Tesco Broadbrand. Their ecommerce technology became the first major British supermarket to enter music download market. In 2005, Tesco exits the Taiwanese market        in an assets swap deal with Carrefour involving stores and operations in the Czech Republic. It also launched Tesco Homeplus announcing 2 billion of their annual profits. In 2006, Tesco launched Tesco Direct. In 2008, Tesco planned to establish cash and carry business in India. In 2009, Tesco launched  and also re-launched Clubcard in UK investing 150 million offering customers the opportunity to double up their vouchers. In 2010, Tesco opened the world’s first zero-carbon supermarket in Ramsey, Cambridgeshire and its first ‘Lifespace’ mall in Qingdao, China. In 2011, new group CEO Philip Clarke launched updated strategy and vision.

  1. Financial Performance

Over last seven years, Tesco’s financial growth performance has been so strong though the performance was not as strong as expected. Being a nation largest food retailer company, Tesco has also been listed on the London Stock Exchange under the symbol of TSCO.

The figure below shows the Tesco’s annual financial performances which includes 52 weeks/12 months of turnover for both sides of the business as this provides the best comparative.

Fig 1.2: Tesco Annual Financial Performance

As of its 2006 year end Tesco was renowned as the fourth largest retailer in the world behind Wal-Mart, Carrefour and Home Depot. In 2007, Tesco moved ahead of Home Depot following the sale of Home Depot’s professional supply and a decrement in US dollar rate against the British Pound. METRO was just behind Tesco and would have been able to move ahead again if the euro value rate would have be strong against the pound. METRO’s sales include billions of wholesale turnovers whereas the retail turnover is much lesser than Tesco’s.

Despite of economy crisis around in 2010, Tesco made record profits for a British retailer during which it’s underlying pre-tax profits increased by 10.1% to 3.4 billion. Tesco now plans to create 16,000 new jobs among which 9,000 will be in UK.

1.3        Key product and services

Tesco provides varieties of services through online as well as local retail shop. Some of the key products and services that Tesco provides are given below.

  • Tesco Extra – Books, Videos, DVDs to rent, CDs, Gas and Electricity.
  • Tesco Finance – Credit cards, Mortgages, Loans, and Savings.
  • Tesco Groceries – Healthcare, Cooking Ingredients, Fresh Fruit, Garden, Toiletries.
  • Tesco Insurance – Breakdown insurance, Pet insurance, Home insurance, Life insurance, Car insurance.
  • Tesco Telecoms – Dial up internet access, Broadband, Tesco mobile value SIM, Tesco mobile network, Mobile.
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2        Situation Analysis

2.1        Present position analysis

2.1.1        SWOT Analysis

Every business organization has their own some amount of strength, weakness, opportunities and threats. In order to keep the organization run in a specific level, it is necessary to keep tracking their current organization situation (strength, weakness, opportunities and threats) which is provided by SWOT analysis.

In this section of report, a SWOT analysis has been carried out on the E-Business strategy of Tesco.

2.1.1.1        Strength of Tesco E-Business

  • Tesco has globally maintained its strong image in the market of the business especially in UK as its strongest strength of Tesco’s e-business.
    • ...

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E-Business Evaluation of Tesco.com
Document Details
  • Author
    Authors Avatar raimani37
  • Author Type
    Student
  • Word Count
    7735
  • Page Count
    43
  • Level
    University Degree
  • Subject
    Business and Administrative studies
  • Type of work
    Coursework
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