Business Model Analysis and Innovation

This assignment requires a comprehensive analysis of Tesco's business model, considering its evolution and the influence of digital innovation. Students are expected to delve into relevant concepts such as process innovation, subject-oriented business process management, and strategic information management. The analysis should encompass various aspects of Tesco's operations, incorporating insights from the provided bibliography and potentially drawing upon additional research.

Business Information
Systems
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TABLE OF CONTENTS
Introduction .....................................................................................................................................4
TASK 1............................................................................................................................................4
Use of business information system in Tesco..............................................................................4
TASK 2............................................................................................................................................6
Different methods that are used in Tesco for acquiring new business information system. ......6
TASK 3............................................................................................................................................8
Four main areas that could be used for implementing new Business information system. ........8
TASK 4 .........................................................................................................................................11
Benefits that are reaped by Tesco through Customer relationship management.......................11
TASK 5 .........................................................................................................................................12
Potential benefits and challenges for using internet for business. ............................................12
CONCLUSION .............................................................................................................................14
REFERENCES..............................................................................................................................15
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ABSTRACT
Business information system renders quality data and details to management that help in
enabling them for making decisions through which functional activities can be controlled.
Present report has mentioned about benefits that are reaped by Tesco by implementing BIS
system and it will aid in customer retention and customer acquisition. Tesco can use or improve
use of BIS in many areas. Use of BIS could be used for stock inventory management and for
managing online payments. It facilitates for self-checkout counters and improving marketing
campaigns. It also helps in making improvement in top and middle level management decisions
and also, in supporting payroll activities.
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INTRODUCTION
Globalization has opened platform for business organizations for enhancing profitability
and financial revenues that are earned by an organization (Xu and Bu, 2014). Present report is
based on grocery giant Tesco that offers superior quality goods at affordable price to the buyers.
Use of business information system for supporting the activities of the firm has been mentioned.
Along with this various methods that could be used acquiring new business information system
has been mentioned. More over four main areas in which BIS can be implemented has been
identified. In addition to that various benefits that have been taken by Tesco by implementing
Customer relationship management system have been described.
TASK 1
Use of business information system in Tesco
Tesco is a well-known progressive business retailing firm that offers huge success and
growth opportunity for companies. Wide variety of products are offered by it to large number of
consumers and it helps for attracting large number of consumers towards selling the products that
are offered. Advancement in technology has helped for making improvements in practices and
procedures that are being used in organizations for carrying out their operational functions.
Business information system is used in the company so that required practices should be carried
out effectively (Zikmund and Griffin, 2013).
Tesco can make use of BIS for supporting its activities in following areas:-
Supply chain management is active management of supply chain activities so that
consumer values could be maximized and sustainable competitive advantage could be achieved.
Various activities that are covered under supply chain includes development, sourcing,
production, and logistics. Business information system is being used in Tesco for making
improvements in this areas:-
1. Managing online payment for the business.
2. Facilitating self-checkout counters.
3. Improving marketing campaigning activities.
4. Supporting payroll activities.
5. Inventory management and stock control
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Tesco can make use of BIS for properly managing the online payments for the business
and it also helps for facilitating self-checkout counters. Needs and requirement of buyers is
identified and on the basis of that, marketing campaigning activities can be developed and
designed. BIS system aids for supporting payroll activities and through this, inventory
management work of the firm can also be fulfilled.
Technology is used at rapid rate and it is making the organization dynamic and
progressive. Business information system is used as a tool for collecting, processing, storing,
distributing and using the information system in the company. It aids for taking strategic
decisions for business and overall activities of the entity is improved through this. All the three
levels of management makes use of these systems for performing their operating functions. In
accordance with this, it is vital that proper information should be made available with the top
management of the firm so that they could take strategic decisions for the organization. Tesco’s
management has implemented the system so that proper analysis, processing and collection of
data and information should be made and decisions for the company could be taken.
Internal and external is two types of data that is being collected in the firm and all the
required decisions of the company are taken on the basis of this. External data and facts are
collected through survey and questionnaire method (Davenport, 2013). It aids for collecting
necessary data and details from the buyers so that required objectives of the company could be
achieved. Internal data and knowledge is collected from the operational level and line managers
are made accountable for collecting necessary details so that required activities should be
performed successfully.
There is two type of information system that is being used in the firm and it comprise of
general vs. specialized information system. Tools which are used includes database management
system (DBMS) and electronic spreadsheet. Both the tools are used for systematically carrying
out the analysis and processing of data and information. On the other hand there are some
specific techniques that are being used for carrying out the special processes in the firm and it
includes Enterprise resource planning (ERP) and it is an information system that is being used
for integrating external and internal information that is being used in the firm.
One more system that is being used in the firm is Geographic information system in
which management and analysis of all the types of details and information is performed. One
more system that is being used in the firm is expert system that is being used by management for
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resolving the issues that is being faced. Critical and complex issues that are being faced in the
company are resolved and effective strategies are formed for performing the necessary activities
of the enterprise (Galliers and Leidner, 2014). Expert system is one of the most effective system
that is being used in the company and it aids for resolving the issues that is being faced in the
company. Large amount of data and information is collected in the firm and necessary and
effective decisions are taken by analysing the data and information that is being collected in the
company.
TASK 2
Different methods that are used in Tesco for acquiring new business information system.
Business information system of Tesco has been designed for appropriately analysing the
information that is being collected in the firm. Along with this, there are different types of tools
and techniques that management of company is using for carrying out their practices and
procedures. In the same way, typical components of information system includes hardware and
software and in hardware tools that are being used comprise processors, keyboards, printers and
monitors (Österle, 2013).
Bespoke development - One major method that is been used in Tesco for acquiring
software system is through bespoke development. This system is a unique system that has been
designed for meeting the specific requirement of consumers. This type of bespoke development
can be done by making software within the company itself or it can be outsources to outside the
company.
Major advantage of Bespoke development are as described:-
 Tesco will get the exact software/ systems that are required in company.
 Attributes and features that will be needed for specific business needs will be added in
the system.
Disadvantages of this approaches are:-
 It requires a long time for developing such a system and it cost the company for
designing such a system.
 It is required that experts should be hired such as business analyst, testers and
programmers.
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 There are possibilities for bugs and faults in the software which are required to be fixed
and it will take additional cost and time of the firm for implementing such system.
 It is required that funding should be there so that system could be developed in an
appropriate manner. It takes extra cost for company and due to the same, profitability and
financial revenues earned by the entity reduces.
Off-the-shelf - Second method that could be used in the company is off-the-self. It is the
software that is easily available in market and it is ready made. An example of such systems
include Microsoft office. There are off the self BIS that can be customized to some extent.
Example of such system includes Microsoft office. Off the shelf software system has more
functionality as developers make efforts for meeting the requirements as soon as possible.
Community support is also available for software that are popular and there may be books,
articles, forums and online communities which offer support and advice to learn or resolve any
issue.
Some of the benefits of this system are: Cheaper: - Development cost for this system is lower and this cost is spread among large
number of users due to which it is cheaper. Reduces training cost: - It is a commonly used system and so it is not required for hiring
specialist and experts. If it is a commonly used package then users such as staff members
and other stakeholders must be already familiar with the same as it saves learning time
and training cost for implementing such system. Organisation can purchase pre-existing
training material and courses that may be leverage by the firm. Available immediately: - The development work has already been done and due to that it
is only required that software should be implemented and used immediately.
 Upgrades: - Up gradation of this software is available at free or at a reduced cost.
Disadvantages of this system are:- Compromise: - It may be required that compromise should be done on the requirement of
software.
 Over complication: - software might contain some functions that are not needed and due
to that functionality of the software gets affected.
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TASK 3
Four main areas that could be used for implementing new Business information system.
There are various areas in which management of the company has implemented the new
information system and it has helped for performing the required activities of the business
successfully. All the three level of management in the firm makes use of these systems and it
helps for performing the required activities of the business successfully. Top management people
makes use of these opportunity so that effective strategies and decisions should be taken for the
company. It is vital that all the necessary functions of the business should be performed
effectively (Bryman and Bell, 2015). More than that, office automation has been done and all the
processes. There are four main areas where Tesco can implement the business information
system in four distinct areas and it comprise of taking tactical level decisions in which managers
are provided with the stock cards and they are provided with the sales figures and that could be
used by them in taking decision for the organization.
Four level pyramid level discusses about four main areas that could be implemented
successfully are as described:-
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Four main areas where BIS system could be implemented are as follows:- Transaction processing system: - This is an operational level system which is at bottom
of the pyramid. It is operated by front line staff and shop floor level workers. It provides
important data that is being required for supporting the operations in Tesco. This data is
collected through automated and semi-automated tracking systems through basic
transactions. TPS system is used in Tesco for payroll systems and order processing stock,
stock control systems, systems for payments and funds transfer. All these functions are
performed effectively by making use of TPS in the organization. Management information systems: - Major role of management support system is to
support relatively structured decisions. It is used by inflexible and have vary analytical
capacity. It is used by lower and middle level management and it aids for enhancing
efficiency. Middle level managers makes use of this system for ensuring smooth running
of the organization. MIS is used in Tesco in inventory control and management reporting
system (MRS). Major role played by MIS is for supporting relatively structured decisions
and it is used by lower and middle level managerial level. This technique is used with the
past and present rather than future and it is generally there for increasing efficiency. MIS
system is built on the basis of data provided by TPS. This system provides highly
structured information in the form of reports and it allows managers for evaluating
performance of the organization by comparing current performance of company with the
previous results. Decision support system: - It is a knowledge based system which is used by top level
managers and it is used for analysing structured information system and it allows
managers for projecting the potential impact of their decision on the business. This
system has analytical or modelling capacity and it supports semi structured decisions.
This system is used for analysing existing structured information of the firm and
managers becomes capable for assessing the potential impact of their decision for the
future. This offer access to databases as well as analytical tools and are used to solve the
semi structured problems. DSS manipulates and develops information from MIS and TPS
for generating meaningful information. In Tesco, financial planning system is used.
Major role of DSS is for supporting semi structured decisions and it has analytical and
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modelling capacity. It is used by senior level managers and concerned with predicting the
future. This system facilitates in decision making process of company.
 Executive information system: - This system is used at the senior most management level
and it is concerned with predicting future for the organization. It makes use of external
and internal data sources for supporting unstructured decisions at higher level.
Information in this type of system is structured and it is taken from internal and external
sources. These types of systems are designed for operating directly by the executives of
firm and there is no need for intermediaries for making use of such systems. EIS system
organizes and presents data and information from both external and internal sources.
Main role of Executive information system is for predicting the future so that strategic
decisions can be given for the firm. It is highly flexible and it is created for enhancing
effectiveness of the system.
For the company it is required that effective measures should be taken so that sales
performance of the company can be improved. In addition to that business information system
can be implemented for selling the products of the company through online medium. Consumers
can be attracted for selling the products through online mode (Fleischmann, Schmidt and Brger,
2014). This method can also be used for managing the inventory so that all the supply chain
activities can be performed successfully. Delivery and supply of the material can be made
ensured through implementing the system successfully. Company has also taken initiatives for
launching GPS system for drivers and it aids in ensuring that all the required material can be
delivered on due time (Galegher, Kraut and Egido, 2014).
Tesco club card system has also been launched by the company and through this different
components are used for collecting, processing, storing and analysing the data and information
that is being used by the company. Through Tesco club-cards information and details are
collected about consumers and it aids for making effective strategies that could be used by the
companies for carrying out the systems and procedures effectively.
Different types of information such as address, name, personal details, information about
sales can be collected and on the basis of that strategies can be formed for performing the
business functions effectively (Wirtz, Pistoia and Göttel, 2016). By making use of club card
system loyalty of consumers can also be gained by making use of this approach. Three major
criteria that could be used for evaluating the loyalty of buyers includes frequency and values.
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Behaviour of shoppers can be measured through this and on the basis of that measures
can be taken for improving the sales performance of the business. Inventory management
activities can also be performed and control of stock can be done through this. Stocks can also be
managed and on the basis of that all the essential supply chain activities can be performed
successfully. GPS tracking system can be used in the company and through this tracking of
orders placed by consumers can be done. Orders can be placed at doorstep by making use of this
approach and on the basis of that better services can be provided to buyers. External
environmental changes that are happening in outside world have given impact on the various
activities that are being performed by the business (Ward, Hancock and Macrae, 2014). With
this, business information system can be used for assessing the requirement and needs of buyers
and on the basis of that actions are taken for making strategies for the organization.
TASK 4
Benefits that are reaped by Tesco through Customer relationship management
Customer relationship management system can be used in company for developing better
and effective client relationship and improving the ability for keeping the buyers highly satisfied.
Tesco is offering diverse range of products to the consumers of business and large number of
people are getting benefited through this. A loyal and satisfied consumer is the biggest asset for
company. There are various benefits that could be reaped by company by making use of this
approach. Some of its benefits are:
Developing better relationship with the consumers: - Better client relationship can be
developed with the buyers as CRM techniques help in allowing tailored marketing techniques so
that Direct mails and E-mails can be sent to the consumers (Whitmore, Agarwal and Da Xu,
2015). Healthy relationships can be developed with the business clients and all products and
services can be designed and developed as per the needs and requirement of them. Buyers can be
informed about the products and services that are offered by firm. It will help in developing new
and effective relations with business clients.
Resolving issues faced by clients: - Issues and problems being faced by clients of
business can be resolved successfully. Client's need and requirements can be identified and on
the basis of that, better products and services can be delivered to them (DaSilva and Trkman,
2014). It can be done with the help of marketing communication techniques that can be used for
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making interaction with the buyers. In addition to this, e-mails and business newsletters are also
sent to the clients so that their reviews and complaints could be identified. CRM system allows
Tesco for sending personalized communication to the buyers and through this, problems faced by
buyers could be identified and resolved.
Customer retention: - CRM system helps in understanding the consumers and data
about consumers can be collected as well. Prediction can be made about types of products that
are required by the consumers. Tesco uses loyalty card system in which points are given to
buyers for repetitive purchase. It aids organization for better understanding the consumers and
client’s expectation can be identified easily. CRM allows for collecting data and information
about the consumers. By making use of loyalty card scheme, analysis of data can be done and
single truth can be created for each relationship that is being accessible from a consistent
interface where people work.
Improving customer service management and customer services: - Organization has
become more capable for rendering better services to the consumers. Team collaboration can be
improved and it supports in reaping better and effective benefits of CRM. CRM software can be
implemented successfully and on the basis of that, measures can be taken for improving the
services that are being used in firm. Better customer relationship can be developed with the
clients of business and through this, efficiency of company can be improved for serving clients
of business (Xu and Bu, 2014).
Enhancing profitability: - Record of customer interaction can be made with the business
clients and it will help in making positive improvements in services and products that are being
provided by company. Better customer satisfaction will help in making the employees satisfied
so that problems faced by clients can be resolved. Existing revenue and profitability of company
can be improved as satisfied consumers are likely to purchase products that are being offered by
the firm (Zikmund and Griffin, 2013).
Cost for implementing CRM system is high and benefits that are being reaped are high.
By implementing the system, overall cost for carrying out the operational processes can be
improved. Retention and attrition rate can be reduced as well as better and effective services can
be delivered to the clients. Communication can be enhanced and smooth flow of data and
information can be ensured through CRM activities that are being performed in company.
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TASK 5
Potential benefits and challenges for using internet for business
Tesco is a leading grocery store of UK that offers quality services to the buyers and
superior quality odds are being offered by the firm. Recently company has launched Online
home delivery business in which consumers are provided with the options for selecting the
products and ordering through website of the company. Online services that are being offered by
the retailing firm aids for attracting large number of buyers for selling the goods and diverse
range of services that are being offered by the company.
Tangible benefits that are being offered by internet to Tesco are as mentioned:
 Sales of products and services in the firm has been increased through new sales lead and
due to that profitability and revenue of the firm has been enhanced. It has supported for
identifying new customers and new markets and existing buyers have been encouraged
for repeat selling and cross- selling.
 Market cost for the firm has been reduced and as customer service time online sales. Cost
of printing and distribution has been reduced and cost for marketing communication also
has been reduced.
 Supply chain cost for the firm has been reduced from reduced level of inventory and
increasing competition from suppliers. Short cycle time for ordering also has reduced the
cost for the supply chain activities.
Intangible benefits:
 Online sales have helped for making improvements in corporate image of the company
and enhanced the brand image of the firm. It has helped the firm for developing their
products faster and effectively and it also enables for taking faster response for market
needs. Online grocery shopping services that are being offered by the firm are one of the
most effective initiative and platform that has been launched by the firm. Wide variety of
goods such as Home-ware, electrical, clothing, Groceries and Clubcards are offered
through the online platform. There are many customers of the entity have difficulty in
accessing to the physical stores and online retailing services that are offered by the firm
supports for selling goods to a larger consumer case. Using internet for business has
various added advantage and it has helped for improving the various processes that are
being used in the firm.
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 Digital technology provides an effective medium for selling the goods to consumers that
are located in far geographical areas. With regard to this use of internet helps for making
the communication process faster and flow of data and information can be made more
smooth and effective. Team collaboration can be made more effective as the data and
information that are provided to buyers are made faster and through this all the practices
and procedures can be made better (Davenport, 2013).
 Internet is also being used for taking reviews and responses from buyers about the
services that are being given to them. On the basis of that weak performances of the
retailing firm can be identified and measures can be taken for making positive and
effective improvements can be made in them (Shapiro and Varian, 2013). Internet can
also be used for resolving the problems and issues that are being faced by clients of
business. People who have difficulty in accessing the goods and services through
physical stores gets better advantage for ordering through online delivery sites and
purchasing of products can be done through this. Large consumer base can be sold goods
that are delivered by the firm and by this profitability and financial revenues of the
company can be enhanced.
 Use of internet also aids for making consumers aware about diverse range of goods and
discounted schemes that are being offered by the firm. E-mails and business letters can be
sent to the consumers and they are made aware about the various products and discounted
schemes on them. It aids for selling large amount of commodities and through this
financial revenues and profitability earned by the company can be enhanced. Time
required for carrying out the operational process can be reduced and by making use of
internet all the departmental processes can be made digitized (Galliers and Leidner,
2014). Internet can be used for taking orders from the buyers and through this home
delivery of goods can be done. Tracking of orders and delivery of services can be done at
a faster rate and clients can be delivered better values for the money invested by them.
Challenges faced for using internet are:-
1- Security and protection issue: - Various security and privacy issues are faced while making
use of internet. Fraudulent use of credit cards and computer virus and spam is one most security
issue. Phishing is also one major security issue that is being faced by the company in which E-
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mail messages look like they have come from an official source but links from the message goes
to a fake website.
2- Training cost :- It is required that staff members should be trained for effectively making use
of internet and for this proper training needs to be provided to them. Staff member’s needs to be
trained on new business information system and business processes that needs to be changed.
3- Complex maintenance - For selling goods through online mode it is required that information
system needs to be working for 24*7. Maintaining the system is complex and challenging task
and due to that time and cost of the Tesco also gets consumed.
4- Staff resistance – Staff members also creates challenges for implementing the internet system.
It is critical that positive involvement of staff members should be there so that all the process
should be completed successfully.
CONCLUSION
Summing up the present report it can be concluded that business information system can
be used in an enterprise for carrying out the analysis of data and information in successful
manner. This technique can be used for collecting, processing, distributing and analysing the data
and information. Better and effective decisions can be taken and on the basis of that strategies
can be formed. DBMS is an effective tool can be used for managing the data and information in
the firm. Processing the data becomes easier and top management, middle management and
lower level management can take strategic decisions for the enterprise. Business activities can be
supported and all the necessary functional activities can be performed in planned and systematic
way. There are various areas in which this system can be implemented and inventory
management is one such area. Stocks and inventory can be managed in better way and supply
chain activities can be performed successfully. There are various advantages that could be reaped
by making use of internet in the firm.
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REFERENCES
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Online
Tesco. 2017. [Online]. Available through: <https://www.tesco.com/direct/>. [Accessed on 22th
May 2017].
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