Tesco case

Do Tesco enjoy an Information Technology (IT) - generated competitive advantage? Where does it come from?

Tesco is one of the best supermarkets in the world. It goes without saying that this success owes to the success of IT strategy and implementation of Tesco. The fascinating their main IT strategy is 1) thoroughly customer analysis by POS and 2) highly used online-shopping system.

1) thoroughly customer analysis by POS

Tesco focused on customer behavior and need – who bought this goods?, what they bought?, when they bought it?, why they bought it ?, what they need ? , why they complain?, why they felt happy? etc… By developing solid and excellent Database and POS system, they were able to get these much information and analyze customer preference. Thanks to POS, they could reduce operation cost and get much information about customers and then develop marketing strategy. Though many companies use POS, now, but, I think, Tesco was the leading company for introducing this system and utilized well.

Now, new tagging technology – RFID is appearing. RFID can read any information of goods from tag and send this information to company’s Database system and integrate ERP or mission critical system in the company. This technology and integration will pretty contribute to company’s business efficiency. I think this RFID technology will change our purchasing behavior and companies, especially retailer and manufacturing, business model. Since the price of each tag is still high and running cost is high, many companies hesitate to introduce RFID system, though admit this excellence. This new technology is the key factor for companies business success. Tesco may lead in this new technology field as it succeeded in POS system.

2) highly used online-shopping system

At present, online-shopping is natural and there is no brand-new in this business model, but Tesco started this business in 1996, this was the herald in this business among retailers. They designed to allow customers compare Tesco’s price against those of competitors. Also, they received the first RNIB Accessible web site award. From this, we can see how effective and wonderful this business.

From this case, I realized that that making use of IT system properly, company can develop their business infinitively. Tesco has proved that.

Case del Libro

1. What would be your decission? Would you stick to the previously developed UNIX platform, or switch to the new Microsoft one?

I will switch to the new Microsoft one.
Since dot com burst, the company has obliged to reduce cost.
Also, the development of previous platform project did not work well – bad system architecture and operations - in spite of too much investment. If this situation goes on, this project would absolutely go into “Death March”.
Generally, system availability and reliability of UNIX is higher than those of Windows system, but, if it is not well designed or implemented (In this project, NOT!!), it would “sit on a gold mine”.

Considering these situation, the company should change their strategy from high platform to simple one.
At first, the company develops simple platform, and then, if this system is fully utilized and required system expansion, we can expand more.

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To engineer & system administrators, high platform -high speech hardware & software- is really happy, if project worked well. The system reliability, availability, functionality, and performance are higher than new one, so they do not have to devote too much time to performance tuning and system recovery in case it downs.

2. Which are the most relevant criteria for you to make the decision? Just name each criterion, and explain it very briefly.

There are 3 criteria for me to judge IT investment; Quality, Cost, and Functionality.

Quality – to win a customer’s trust, high quality products & services are required. UNIX system reliability is higher than Windows, but, in this case, because of the failure of system design, this edge is lost. Instead, even the cheap & simple platform, if it is well designed, the system quality might be better.

Cost－cost effective estimation is really required in case system development. Even if you use sophisticated system, if it is deficit, it does not make sense. Casa del Libro has to reduce cost as much as possible. The current platform costs a lot and system maintenance also will cost a lot. After careful cost simulation, if Case del Libro cannot receive enough profit, they should change to new platform.

Functionality － Full and easy functionality is attractive. If system does not provide enough function or usability, it is not attractive at all. I think functionality is dependent on application/software, so in this case, it does not matter whether Case del Libro chooses UNIX platform or Windows Platform.

In conclusion, considering above 3 criteria, changing new platform is more attractive and Case del Libro can minimize their business risk.

Should company introduce ERP?

After all, the merit of ERP is low cost & short term development.

Every company wants to avoid futile IT investment and this merit seems to be very attractive!!

All in all, company should introduce ERP?

Every company will become happy by introducing ERP?

In my opinion, ERP does not necessarily make company happy and I do not recommend ERP.

First of all, if you want to introduce ERP, you have to change your business operation according to ERP. ERP provides standardized function and it does not apply to all your business. If you do not want to change your operation and introduce ERP in your business, you have to customize ERP according to your business. In such case, I think, the project of introduction of ERP would be expensive and long term – you cannot be given the benefit of ERP. Furthermore, every time the version up of ERP, you have to customize your system. It costs again and it’s nonsense!!

From my work experience, as an IT engineer and marketer, I have never heard the success story of ERP project in Japan. Most Japanese companies hesitate to change their business to introduce ERP, so they try to introduce ERP by customizing according to their business. Then, quite a few man-hour take and a lot of system bugs are found, which finally leads this project to “death march”. I saw these kinds of failure many times.

I know many foreign companies could have made success in introducing ERP, but most Japanese are delicate and cling to their own way. The business operation in Japanese company is distinctive style and it is hard to standardize.

In this environment, the introduction of standardized software package – ERP is difficult.

Basically, when company wants to introduce new IT system, they should do so by developing system from scratch; analyze business process, system requirement, design business process & IT architecture, implement software by programming and system test, and introduce system. During this process, if there are any points where ERP or other software package can be utilize with no customization, then, company should introduce them. But, it would be better not to introduce them across the board.

DELL HELL

In 2005, a blog titled “dell hell” made a major impact to DELL.
Actually, in those days, I tried to buy new DELL PC, but, because of this word – “dell hell”, I gave up buying DELL’s, instead, I bought Sony PC -VAIO.
What dell should have done to deal with this problem or this kind of power blogs?

If I had been the CEO of dell, I would have carried out through 1) customer service and 2) marketing activity from customer’s claim

1) customer service

Swift and through customer follow up are basics of business. No matter how wonderful service/products we provide, without taking care to customers or following up them, those companies cannot survive. Also, no matter how excellent business plan/strategy we make, if it ignore customer, it does not make good business sense. In any business, we should carry out hands-on approach ( = watch & understand customer ), instead of desk theory.
Conversely, if we can deal with customer claims well and carry on through customer follow, we can get high customer satisfaction and regular customer. I was drilled this notion by my boss and keenly felt the importance of customer follow from my experience.
My company, Ricoh – OA Equipment Company, highly focused on customer satisfaction. Actually, the products of Ricoh, such as copiers and printers, are not so sophisticated, comparing to CANON or XEROX copiers, but, thanks to Ricoh’s customer oriented strategy, Ricoh competes well with them.

2) marketing activity from customer’s claim

Japan is thoroughly focuses on service country and if there are any problems on service/products, no matter how tiny ones, customers claim to them. I think, thanks to this high service/product quality and business creation from customer’s claim, Japan accomplished high economic growth. A good example is Panasonic. Konosuke Matsushita, the founder of Panasonic, I respect him as the best entrepreneur, extremely focused on customer needs and when there were any claims from customer, he thanked for them and promptly reflected these claims and requests to their products. Then, Panasonic was able to get high customer satisfaction and expand their business globally. As we can see from this case, managing customer requests/claims leads to big business success. I believe that customer oriented company is the best strategic company.
In the first place, customer does not claim to the company in which they are not interested, which indicates that customers hope to improve its products/service.
In that way, the claim from the blog of Jeff Jarvis is good business chance and if I had been the CEO of dell, I would have reflected his advice to future business in DELL.

Owing to the development of blog, we are very lucky because we can get customer’s real request or claims efficiently. We should get well along with power blogs. They give us good business hints & chances and are treasury business.

facebook facebook!!!!

1 year ago, I registered my private information and began to use facebook. Before using facebook, I used mixi – Japanese most popular SNS. My first impression toward facebook was really nice, especially developing human network. I was able to develop network with IE student before coming to Madrid. Since then, I stopped using mixi and started using facebook. Facebook is really nice tool to develop human network and communicate with friends but I think there are several issues/problems. I would like to discuss about it.

First of all, as it pointed out often, to use facebook, users have to open their private information. This becomes the bottleneck for users. In the first place, facebook is developed based on the concept that users utilize this site by their own name and share information with their friends under realistic human relationships reliance. Using real name on web site may sometimes cause privacy abuse. The service concept turns out badly. Actually, some of my friends, especially female friends, hesitate to use facebook because they have to open their real name. If this issue is solved, facebook can get more users who are afraid of privacy intrusion.

Second, the function of facebook is really rich but I think because of too many functions the performance (speed) is bad. Sometimes it freezes on my computer. Instead, twitter is so simple and if you want to send message to your friends, twitter is better. Like mobile phone, facebook has many functions which are not used so often. Too many functions causes low performance, which are not practical. To prevent this problem, I think it would be better for users to choose and customize functions what they really need.

Anyway, although there are some issues on facebook, it is sophisticated communication tool. Regardless of location, we can connect with friends. I hope this service more prevail in Japan. Since current Japanese young people are internal focus and they only interact with Japanese friends, they do not have many chances to interact with foreigners. Now, Japanese economy and market has already saturated and Japan has struggling with depression. To activate Japanese economy, business globalization is necessary and young Japanese should interact with foreigners and cultivate global mind set. In the old days, to interact with forefingers, we had to study abroad or live in foreign countries by paying much money. By using facebook, we can do that for free at any moment!! Facebook may become the savior for Japanese globalization.

Google's current 3 issues

In my opinion, Google’s current 3 issues are “Enterprise service”, “business in China”, and “management”. I would like to describe these 3 issues in detail.

1) Enterprise service

Google released “Google Apps” – SaaS application- to expand Enterprise application services about 3years ago. Recently, SaaS has gotten a lot of attention as business application and, to acquire high share in this market, Google penetrated in this business. But, Google’s recognition in enterprise market is still weak. When it comes to Google, many people image “search engine”, “gmail”, “youtube”, “google map”, “google earth”…etc… These are consumer oriented services and although these consumer services are well recognized, Enterprise services, like Google Apps, are not recognized well. I worked IT industry as an IT marketer in Japan, and promoted “SaaS” business by collaborating software vendors, like Microsoft, IBM, Google, Fujitsu, Oracle…. From my experience, many clients, though it may apply only in Japanese market, are not still so interested in Google Apps because of high price and low recognition of business application. They prefer other vendor’s services. In consumer market, Google has acquired high recognition and market share, but, in business market, Google is primitive. So, getting high recognition and market share in Enterprise service is Google’s issue.

2) business in China

Google was suffered from cyber attack in China and they contented with Chinese government about this issue. Finally, about 2months ago, Google decided to withdraw its search business in Chinese market. So far, the withdrawal of its services is only search business, but this service is Google’s core business and the withdrawal of huge market – China, which will lead world economy, will be a great impact on Google. To that end, in search business, the monopoly of baidu(“百度”) will more proceed in Chinese market. Personally I wanted Google to compete well with baidu and get top share in Chinese market, so it’s truly regretful. Other than search business, how Google develops its business in China is put on a show.

3) management

I admit Google is excellent company and its technologies/services are really innovative and contributed a lot to change our lives. But, I think, now, it has too many idea/technical oriented services & products, which may lead Google to fall between two stools. Certainly, many ideas/technologies themselves are really important, but, if they are not well managed to customer oriented services, they can’t become products of choice for many consumers and then they can’t sell well. To get high sales performance, stable management – sales strategy, marketing, customer oriented product planning, etc… is really important. For those companies which filled with affluent ideas/technologies, solid management is really required. If these are not well organized, excellent ideas/technologies will end up as mere gratification of the ego.
In that sense, I think Google should more focus on management to exploit their great ideas/technologies.

Future strategy of Microsoft

Recently, the most cutting-edge and popular IT keyword is "SaaS".
Many software/hardware vendors, like IBM, Google, MS, Oracle ...etc, are extremely focusing on this service.
“SaaS” has a tremendous amount of potential.

Software Gulliver - Microsoft is one of them. Microsoft is sifting software business( product out ) to service business.
Now, merely providing software products, this business is pretty obsolete and customers will not pay much money.

Recently, MS released "Azure", Microsoft's SaaS service. This service will become the base of profit of MS.
So far MS provided various software - MS office, SQL Server, Sharepoint, Exchange, .NET, etc...

By releasing these products by way of SaaS, users can use sophisticated MS services without paying expensive license fee and by minimizing system maintenance and deployment cost.
Also, MS can get new customers and provide standerdized services - they can reduce personalized support or customize.

Although many software/hardware vendors are now sifting to SaaS business and creating promising business models, I think MS has huge advantage, because of excellent IT technology, business know-how, brand-image, sales power...

I am really interested in future “SaaS” business and which vendor leads this business.

Four square business model

We learned four square in our information system class. Before the class, I did not know that service, so, after the class, I immediately accessed to the site and used it. I think it was really impressive and fantastic service!! So, from my short experience of four square, I would like to describe about 1) why four square become so popular 2) four square’s business model, from my viewpoint.

1) Why four square become so popular

-Advanced SNS function-

We can communicate with our friends about “what restaurants are best”, “what restaurants are not so good” etc…

We can know someone who often goes to restaurants in which we are interested and make friends with them. We can trace what and where restaurants our friends have been.

-High Game nature-

Every time we go to some restaurants and check in Four square, we can get a variety of titles according to the number of check in. These titles are called “Badge” and the most check in users are given “mayor” title – the best title. Many users are motivated to get high “Badge”.

-High usability-

We can register user and the location of restaurants, and write any comments so easily.

-Providing API -

Since four square provides API, it can cooperate with various application/web services. For example, now, four square can cooperate with twitter and Yelp, so we can read some reviews about shops which are written in Tweet or Yelp around them.

2) four square’s business model

-Advertisement revenue-

Four square can get revenue from local advertisement. For example, some restaurants put up an ad about “Today, we serve drink for free for the first 10 customers”, then, they can get more customers by advertising in four square.

-Providing value-add services by connecting with local restaurants-

Four square and local restaurants connect together and provide value-add services to customers. For example, if customer goes to some restaurants by way of four square, they can get some discount service or some coupon tickets or some special services. If customer gets more value, they are willing to go to some restaurants and restaurants get more profits.

The wonderful MBA Life ( in Madrid ) started yesterday!!

Life in Madrid is really wonderful and comfort!!

I love Madrid!!