Role of Business Intelligence in Achieving Competitive Advantage: A Case Study of Tesco

This report discusses the role of business intelligence in achieving competitive advantage with a case study of Tesco. It analyzes how Tesco can achieve competitive advantage using BI and provides insights into the role BI plays within the organization.

Business Intelligence/Big Data
report

TABLE OF CONTENTS
INTRODUCTION......................................................................................................................3
Role Business intelligence play in Tesco in developing relevant insight..............................3
Analysing how Tesco can achieve competitive advantage using BI.....................................4
CONCLUSION..........................................................................................................................6
REFERENCES...........................................................................................................................7

INTRODUCTION
Business intelligence (BI) basically refers to the usage of the process and the
technical infrastructure which helps in effectively collecting, storing or analysing the data
produced by the business entity. It helps the business in parsing all the data generated and
present it in a easy to digest reports and supports in better analysing and undertaking the
management decisions. This report is based on the organization Tesco which is a British
retail store having it headquarter in UK. This report provides an insight into the role BI plays
within the organization and how it provides useful insight to the stakeholders of the business.
In addition to this, it provides information on how Tesco can achieve competitive advantage
through the usage of BI.
Role Business intelligence play in Tesco in developing relevant insight
BI, is a sort of programming that can saddle the force of information inside an
association. These bits of knowledge can help organizations settle on strategic business
choices that increases the usefulness and productivity, further development of revenue, and
enhance development. With respect to the Tesco, the company in the beginning of 1990s,
came across number of challenges due to its existing business model that it required to find
out a way in order to overcome it (Caseiro and Coelho, 2018). In addition to this, there was
an intense competition in the market at that time with new arrivals in the sector. In 1995,
Tesco introduced Clubcard and most of its competitors also did the same but they used it only
as a means for targeting customers and offering discounts and coupons and they later closed
the scheme a sit was unprofitable. But on the other hand, Tesco identified the value of the
insight it can gain about the customer’s behaviours and now it receives 2/3rd of the data of all
shopping baskets. But the company was finding it difficult to process the flood of data and
therefore, they outsourced the data for analysis purpose to Dunnhumby company in which it
later had majority stake.
At first, Tesco segmented its customers within right set of groups and its upmarket
clients were targeted through product offerings, for example, 'Tesco Finest', the wellbeing
cognizant clients could now purchase 'Tesco Healthy Living' and 'Tesco Value' meant to
allure the value sensitive people the among Tesco's clients. The mailings turned out to be
more intricate. As information from Clubcard endorsers turned out to be more insightful the
minor variations from the standard Clubcard mailing rose from a simple 100 after the fifth
mailing to over 145,000 in 1999. This resulted into helping the company in increasing its
business reach. This has resulted into providing useful insight to et stakeholder of the

organization in respect to undertaking better and more informed decisions. Along with this,
through BI the organization effectively made use of this data and starting trying to convert
the non-buyers (5 ways Tesco uses Big data Analytics. 2021). For example, by finding out
that the recent parents have ended up spending their money somewhere else so it launched a
Baby club which helped it in capturing 24% of the baby market. After looking at the success
of its analytics work within business intelligence, Tesco starting making the application of the
same within the other fields. For example, Tesco optimised its stock keeping system which
helped it in effectively forecasting sales of its products for each store as per the past sales and
the weather data. Along with that, by way of predictive analytics Tesco figured out how to
save 100m pounds in stock that would have in any case expired and along these lines
squandered. In another case Tesco found that its administration of the refrigerator and store
temperatures was problematic and subsequently empowered critical savings in the energy
costs.
Utilizing the insights Tesco has acquired from the effective usage and
implementation of various business intelligence techniques and tools and which has evolved
Tesco from a retailer that idea it knew what the clients needed into one that really did know
and could screen the preferences as they changed over the long term. Tesco figured out how
to separate its clients into sections it saw better and subsequently focus on its business
endeavours as needs be. Therefore, in this way, Tesco made use of BI which resulted into
effectively managing its bulk of data and processing it such a way which helped in generating
useful reports which helps in providing meaningful outcomes to the stakeholders of the
company.
Analysing how Tesco can achieve competitive advantage using BI
In order to grow and survive in the market, it is essential for the business
organization effectively analyse the competition in the market find out the opportunities and
the ways in which it can overcome the challenges posed by the competition. With reference
to the theory of competitive advantage, which suggests that everyone will be in the better
position if the decisions are being undertaken based upon the competitive advantage at
different levels. It is nothing more than asking for the optimal usage of the resources along
with that globalization of manufacturing and services across the world (Theory of
Competitive Advantage. 2020). The theory depends on a basic assumption that satisfactory
business openings are accessible to the individuals who are drawing in themselves to use
upper hand of others to the extent that they can advance their own latent capacity – for
example, move up the value chain in case they are constrained so far because of capacity

rather than ability. Additionally, it accepts that assets will move to where they track down
their best business openings regardless of socio-cultural contrasts.
Business Intelligence can result into driving the organization's important decision
making. Despite the fact that numerous associations understand the worth of educated
decision making and significant insights and knowledge associated with it, but a large
number of them balk away from implementing an analytics application at their work
environment. Business Intelligence (BI), when lined up with the organization's targets and
procedure, can possibly acquire extensive advantages such as getting an insight about the
customer’s mindset and preferences, new market openings, and information driven thinking.
Aside from these, be that as it may, business insight can likewise be a source of
feasible upper hand for an association. Business entities like Tesco enjoys the competitive
upper hand over its rivals when it has a few attributes that permit it to perform better
compared to its rivals. BI has supported Tesco in undertaking competitive advantage in the
form of identifying the potential patterns, trends, consumer mind sets, their changing tastes
and preferences etc. BI provided Tesco with the real time information as there is practically
no postponement between the hour of assortment of information and the hour of spread of
information as data (The Role of Business Intelligence: What it Is and Why it Matters. 2020).
The business intelligence professionals have the real-time availability of the data which is
readily available. This implies that as opposed to depending on old information to design,
they can utilize the most recent numbers, along these lines being more precise in their
expectations and figures. Another point is democratization of data, in which employees in an
association need data to be fruitful at their particular employment. Without BI apparatuses,
they are subject to a couple of number crunchers to measure, sort out, and structure the
information. Notwithstanding, in the event that they utilize BI instruments, they need simply
stress over the presentation and understanding of information as the numerous crunching is
finished by the application.
Business Intelligence have been very useful for the company in order to take the
advantage of competitiveness in the market. Tesco as in the example of its Clubcard scheme
which it introduced helped it in gathering bulk of data about its customer base which resulted
into assisting it in accumulating the lot of useful insights into the performance and the
functioning of the operations. The company changes its product categories and added new
product lines which helped it in reaching the huge market share through the way of increase
in the customer base (Gauzelin and Bentz, 2017). This has also helped in enhancing the brand
image of the company as well. Along with this, the company effectively get to know the

changing consumption pattern of its customers based upon which it changed its strategic
decision-making process. In addition to this, with the implementation of predictive analytics,
it resulted into supporting the organization in effectively analysing the stock management,
forecasting of sales, budgeting expenditure in a more effective way. Also, it assisted in
identifying the areas in which the company is incurring unnecessary expenditure and which is
adding no value to the business. This has turned out be very useful for formation, growth and
development of the Tesco (Ahmad and et.al., 2020). BI has assisted the organization in
effectively making use of this data which has helped in saving huge amount of wastage of
inventory and the cost associated with it through the way of optimising the inventory
management system along with cost management system. This has helped in taking
advantage of the changing consumer pattern and coming up with the innovative plan which
helped in keeping up with the changing needs of the people and taking first mover advantage
against its rivals or the competitors. BI has played an important role in growth and
development of Tesco through the only way of making use of large amount of data and
converting it into a useful information which assisted in attaining greater and useful desire of
the business.
CONCLUSION
It can be summarized from the above that, Business Intelligence is having a he role
in the growth of any business organization irrespective of the industry in which it is operating
into. BI has supported Tesco in respect to developing useful insight to the stakeholders of the
business which was very well analyzed through the way of example provided pertaining to it.
It has helped the management of Tesco in regard to undertaking the right business related
decision through the way of effectively identifying the areas where the business is not
performing well and is also incurring unnecessary expenditure which is not even adding any
value to the business or the profits. This resulted into enhancing the financial situation of the
company which helped it with the availability of the required funds. In addition to this,
through BI insights, it supported in taking competitive advantage against its rivals and helped
in attaining better market positive and acquire greater market share.

REFERENCES
Books and Journals
Ahmad, S., and et.al., 2020. Towards sustainable textile and apparel industry: Exploring the
role of business intelligence systems in the era of industry 4.0. Sustainability. 12(7).
p.2632.
Caseiro, N. and Coelho, A., 2018. Business intelligence and competitiveness: the mediating
role of entrepreneurial orientation. Competitiveness Review: An International
Business Journal.
Gauzelin, S. and Bentz, H., 2017. An examination of the impact of business intelligence
systems on organizational decision making and performance: The case of
France. Journal of Intelligence Studies in Business. 7(2).
Online
5 ways Tesco uses Big data Analytics. 2021. [Online]. Available Through:<
https://www.analyticssteps.com/blogs/5-ways-tesco-uses-big-data-analytics>.
The Role of Business Intelligence: What it Is and Why it Matters. 2020. [Online]. Available
Through:< https://chartio.com/learn/business-intelligence/business-intelligence-
guide/>.
Theory of Competitive Advantage. 2020. [Online]. Available
Through:<https://isg-one.com/articles/theory-of-competitive-advantage>.