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.