Conduct an analysis of the business environment both internal and external where information system operates
In what way does information technology offers solution to the problems that Tesco is facing and also provide the opportunities
How problem solving skills are used in business information and technology environment
You are required to write a report on Tesco by taking into consideration an analysis of the internal and external business environment and also the assessment of the role of information technology.
Background information of Tesco and Do a discussion of the products and services of Tesco (500 words)
Make an analysis of the competitive environment of business with the help of porter five forces and also offer justification of the analysis (1000 words)
Provide any two support activities in Porter value chain and also examine those activities that add value to business (1000 words)
With the purpose of developing “Porter five force analysis” and “Porter Value chain”:
Offer a summary and reflection about the way in which business uses information technology and innovative ideas for enhancing business processes and to improve competitive positioning (500 words)
In modern times, Information Technology management refers to all the disciplinary activities done by organisations considering IT resources in order to meet all the requirements based on different priorities (Cartwright and Cooper, 2012). In today's trendy world, it has become vital for companies to manage their IT systems so that they could gain both competitive advancements and also reach to the desired position. Under this report, company that has been taken into consideration is TESCO Plc, which was found by Jack Cohen in 1919. Presently, it's headquarter is at Hertfordshire, England, UK. Including this, role will show the information technology that has helped TESCO PLC in gaining competitive advantages. Analysis of the competitive environment, analysis of inbound logistics, operations and outbound logistics. It will also put light on Porter's Value Chain of TESCO PLC and lastly, report will also consider deploy information technology (IT).
Jack Cohen was the founder of TESCO PLC in 1919, if it is talked about company's initial age, then TESCO name previously showed up in 1924, just when Jack (Founder of Tesco) purchased shipment of tea from T. E. Stockwell and joined those initials with the initial two letters of his surname, and the first Tesco shop opened in 1931 in Burnt Oak, Barnet. His business extended quickly, and by 1939 he had more than 100 TESCO shops the nation over (Cresswell, Bates and Sheikh, 2013). Along with this, it has been found that various countries of both Europe and Asia served by TESCO stores. At first a UK nourishment shipper, TESCO has expanded extensively since the mid 1990s, with performing number of operations among 11 nations across the world. Away with this, it is also said that TESCO has gone through association where it was pulled out of the US in 2013, yet beginning at 2018 continues watching improvement elsewhere. Since the 1960s, TESCO has improved into different regions through dealing within a particular industry and i.e. retailing, where it has offered customers with ample number of products through both offline and online systems.
PRODUCTS AND SERVICES
TESCO Plc at the moment is dealing in a number of sectors like clothing, grocery, club card, finance, mobile industry, delivery savings and in some of other industries (Desouza and Hensgen, 2015). At the moment within retail industry, Tesco Plc is holding 23% of the market share within United Kingdom. On the other hand, grocery sector has led TESCO Plc to grow subsequently among different regions of both the continents (Europe and Asia). Away with this, Tesco Plc is also dealing among different sub sections of retail industry like, company is retailing attire, books, furniture, gadgets, petroleum, toys, monetary administrations, programming, internet providers and telecoms as well.
British Multinational retailer named as Tesco, which is dealing in general merchandising industry in all over the world, where company faced high competition from different competition from various famous retailers like Morrisons, LIDL, ALDI and so on (Drucker, 2012). In order to examine the competitive environment, Porter's Five Forces Model has been performed underneath:
PORTERâS 5 FORCE ANALYSIS
Basically, this model was found by Michael E. Porter, which consists of five forces that may impact upon company's performance level and may affect existing competitive advantages. Since, TESCO Plc is dealing within retailing industry, therefore company deals with high competitiveness from different competitors (Drucker, 2012). This model is holding different forces and these are: bargaining power of buyers, bargaining power of suppliers, threat of new entrants, threat of substitute products and competitive rivalry where all of these are described underneath:
Bargaining power of buyers: At present, it can be said that within retail industry, TESCO and other business retailers are facing high bargaining power of buyers, because of ample number of reasons like change in trends, technological advancements and so on. Slight change among prices may lead TESCO to face various issues in relation to competition. This can be justified with a good example of Big 4 Supermarkets of United Kingdom, where these business firms makes changes in prices considering competitive pricing, here if any offering done by TESCO plc considering any other pricing strategy like skimming, then shift of customers towards other products offered by companies can easily be seen (Galliers and Leidner, 2014).
Bargaining power of suppliers: Retail industry of United Kingdom, consists of a various suppliers but, their negotiation power is low and the reason that came in front is high influence of different supermarkets like Morrisons, ASDA, LIDL, TESCO PLC and Sainsbury's as well. On the other hand, it is also said that suppliers has raised a number of concerns in relation to their survival within retail industry, because every company like TESCO PLC carrying a short number of suppliers who works in different regions (mostly wide areas). This raised fear of suppliers that they might loose commercial contracts with big supermarkets. Hence, this is one of the prime reason for suppliers that their power of negotiation is quite low. Therefore, it can easily be said that strong presence of different business organisations within retail industry would help them in bringing right innovation in correct time considering unique and innovative IT Systems (Holtshouse, 2013).
Threat of new entrants: Within retail industry threat of entry from new and innovative competitors is pretty much low, because big four supermarkets like TESCO PLC, Asda, Sainsburyâs and Morrisons has already grabbed a good position within United Kingdom. Basically, in order to give competition to these business organisations it will be required by new entrants to make really very high investments within capital. In this manner, the new administrators need to create something at an incredibly low cost and/or of high quality based products to set up within the estimated market of United Kingdom. It is also needed by these new entries to get approval of the arranging of the government takes an impressive amount of time and assets to build up new general stores (Major and Savin-Baden, 2012).
Threat of substitute products: This is being considered as another force that has influenced retail industry of United Kingdom as it contains high threat for different business firms that are already dealing at higher market of UK. The reason that came in front was many of the business firms at small level has developed ample number of substitutes to give competition to Big Four Supermarkets. Some of other non products such as electronics, clothing, furniture and so on. This could be understood with a good example of various business organisations that are offering ample number of substitute products like House of Fraser, BHS, Primark, Debenhams and so on. This is where departmental stores, and non retailers with both scale and distribution is being done by these firms to compete with Tesco Plc.
Competitive Rivalry: Competitive rivalry within retail industry of United Kingdom has been high from a really very long time, because of big four supermarkets and other organisations that are already performing number of operations to gain competitive environment. Basically, the reason that came in front is high investment done by all the big organisations within IT Sector. that are performing business among a lot in advertising and branding of their products. ALDI & LIDL are the two business organisations, which has given competition to TESCO through calling this approach as price war, where business firms has given heavy discounts within different products and services. This has adversely affected the sales of TESCO. Justification that can be given over here is of big four supermarkets, where company's competitors like market share of Sainsbury's (15.8%), Morrisons is around 10.14%, Aldi (7%), Asda (15.3%) which declined TESCO's market share. It will be required by TESCO, to sustain within the market for a longer period of time, and this could be done through make appropriate decisions right on time (Marchewka, 2014).
Therefore, it can easily be said that, TESCO Plc only got affected by bargaining power of buyers along with the competitive rivalry. This is where, it is required by TESCO Plc to keep on making right choices in specified time frame. On the other hand, it is also said that other forces like bargaining power of suppliers and threat of new entrants is really low in nature for the business company. Away with this, it is also said that in order to reduce the bargaining power of buyers and competitive rivalry, then it will be required by TESCO to bring ample number of modifications within operation process, so that right and unique product can be developed and delivered to correct customers. This would directly lead TESCO PLC to enhance their competitive advantages as well (Margetts, 2012).
ANALYSIS OF INBOUND LOGISTICS, OPERATIONS AND OUTBOUND LOGISTICS
Inbound logistics is the primary function of value chain which involves receipt of products from the free sample supplier at the storage warehouse. Internal handling and dispersion to the warehouse store and finally placing the products on display at the table. Quality control is the key factor that TESCO need to keep in mind while delivering goods and services to its customer. This approach provides the opportunity that helps the customer to acquire true value of money and removal of additional cost charged to its customer (Mondo and Musungwini, 2019).
Operations plays a very crucial role for effective and smooth functioning of TESCO. It includes stock management and display of product in an effectual manner in order to achieve competitive advantage at the workplace. This is the second level of value chain within the business organisation. In assistance of this, the supervisor of TESCO focuses on continuously performing the tasks that helps in disposal of stock within a given time period in order to achieve competitive advantage. TESCO emphasised on adopting a new and innovative approach to increase their own performance level (Hall, Site 1001 Inc, 2016).
Outbound logistics helps in delivering high quality goods to its customer that helps in increasing motivation level of employees. In context of TESCO, the manager focuses on offering products to its customer conveniently by providing them home delivery. It offers various benefits to its customer such as good packaging, product deliver on time, lack of disruption and other facilities that is according to the need and preferences of customer. It is the place where final products is delivered to its customer in order to satisfy them.
TWO SUPPORT ACTIVITIES IN PORTER'S VALUE CHAIN
TESCO can adopt the Porter's Value Chain method in order to alter or modify the existing goods and services for providing true value to its customer. This method has been founded in 1985 by Michael Porter, which involves nine leading steps that helps in changing the activities of business. Value chain method involves various type of activities such as maintaining infrastructure of firm and technology for increasing the performance of business organisation (Tesco Value Chain Analysis, 2019). At present, the management team of TESCO emphasised on achieving a competitive advantage over its rival firms such as Morrisons, Aldi, Sainsbury's and many more, therefore, its management team can execute the concept of Porter value chain which is mentioned below:
Two secondary activities of TESCO:
Human resource management: The human resource management provides support to TESCO in offering best services to its customer. The management of TESCO emphasised on recruiting individual from different cultures that helps in satisfying the need and preferences of customer. Due to hiring of individual from different background will bring unique ideas as well as talent in the workplace. This will help in satisfying need and preferences of customer in order to retain them (Hall, Site 1001 Inc, 2019).
Technology development: It is essential for the company to implement advanced technology in order to improve the quality of product and services. In context of TESCO, the management team emphasised on providing latest technology that helps in increasing shopping experience of its customer. In addition to this, the supervisor of TESCO emphasised on introducing new distribution channel such as selling through intermediates to reach fresh customers and increase its profitability ratio.
These activities helped TESCO in retaining within the marketplace for a longer time period. Apart from this, the organisation focuses on suitable alteration within different sectors in order to enhance productivity and profitability in an effective manner (Rizzo and et. al., 2016).
KEY VALUE ADDING ACTIVITIES WITH JUSTIFICATION
Value adding activities plays a very crucial role in every business organisation in order to add values on a particular customer segment, group and so on. The key value added services provided by TESCO to its customer which is mentioned below:
- TESCO has provided high tech-customer service department to their customer in order to maintain trust and loyalty of customer. It will also help the company in building a direct relationship with its customer that increases motivation and satisfaction level of employees.
- TESCO provides personal services to its customer such as give me a call ,if you have face any problem related to products which helps in creating a good brand image and reputation of company in front of customer.
- TESCO offers promotional services such as advertisement, discount, free samples and many more to its customer for increasing the motivational and satisfaction level consumer (Smith and Wong, 2016).
- Herein, the company provides supporting as well as free training services to its customer in order to improves shopping experience of customers.
- Through the implementation and execution of advanced technology adopted by TESCO helps in improving performance level of employees. In addition to this, the manager of TESCO use latest technology for providing new and innovative products to its customer in order to increase the profitability of the business organisation.
- Including this, it is also found that collaboration of TESCO with it's suppliers has also been taken into consideration of value added service, which has helped company is reducing the cost of different products and services offered by them. This is where, TESCO PLC has utilised Lean Thinking approach, that helped company in enhancing the satisfactory level of customers (Pearlson, Saunders and Galletta, 2016).
- The plan, that company has developed as vital most key value added services offered by TESCO to it's customers is a plan named as âOur Little Helps Planâ, which they run on different online platforms, that has helped company in maintaining different range of goals and objectives (Schwalbe, 2015).
Considering the above mentioned value added services, which helped TESCO Plc in maintaining their positive presence among customers. Also, it has helped company in gaining extra attention from customers in all over the world.
BUSINESS COULD DEPLOY INFORMATION TECHNOLOGY (IT)
Deployment of information technology by TESCO would directly lead to become one of the crucial business organisation. Including this, it is said that TESCO Plc has conducted Porter's five forces analysis, which helped company in analysing the attractiveness of industry. This also helped firm in taking a number of decisions in relation to what negatively can go while adopting a whole new IT system for workplace (Valacich and Schneider, 2015). Away with this, it is also said that TESCO Plc performance level will also get improvised in specified time frame. There were some of plus points that came in front of adopting or modifying the Information System then, it would lead TESCO to improvise the profitability and productivity at the same time.
On the other hand, if it is talk about TESCO then it was previously did not kept it's focus on IT Department and in order to fulfil the needs of customers in relation to trends, organisation has made contract with XANSA, in order to reduce the problems that are linked with financial terms of the arrangement were not made open (Feng and et. al., 2016). XANSA will keep on giving an arrangement of administrations through its incorporated conveyance directs in the UK and in India. Administrations will incorporate application the board, programming advancement and program and venture the board for a wide scope of TESCO's IT frameworks covering conveyance, stock recharging, items and valuing through to day by day rack edge marking. XANSA will likewise bolster the United Kingdom and Republic of Ireland finance frameworks just as giving general deals data (White, 2015). Along with this, it is also said that there were a number of cases that came in front, which did not helped company in making appropriate image in front of the customers.
These components may lead TESCO to improvise the performance level through reducing number of negative effects. Away with this, it is also said that it will be required by company to use development so they can overhaul their activities and addition their profitability by satisfying their customers with number of elements that would help organization in fulfilling needs and necessities in a limited frame of time (Fiorini and Masic, 2017).
Above report has clearly summarised the vitality of IT Systems, when it comes to enhance the performance level of the organisation at a time even when if it is filled with uncertainties. On the other hand, it has also been concluded that Porter's Five Forces Model would also enhance or improvise the decision taking process of company. Including this, it is also said that Porterâs Value Chain model basically consists with a number of activities, which would lead a company to bring right modifications within their existing innovative approaches. Away with this, it is also said that finding out the industry attractiveness may help a business firm in bringing right updates within their operations management system.
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