Information Systems and Strategic Advantage at Tesco: A Report

This report provides a comprehensive analysis of Tesco's IT systems and their impact on the company's strategic and overall performance. It examines Tesco's current competitive position in the market, highlighting its market share and competitive advantages derived from cost leadership and diversified products. The report delves into the various information systems used at different organizational levels, including EDI, decision support systems, and executive information systems. It also explores the application of the value chain model to identify opportunities for IT implementation and value creation. The impact of IT on Tesco's operations, customer service, and competitive advantages is discussed, with specific examples such as replenishment systems, telecommunication services, and the club card program. Furthermore, the report identifies potential areas for creating competitive advantages and offers recommendations for future strategies, including the 'Tesco in a box' initiative. The analysis covers inbound and outbound logistics, marketing and sales activities to showcase how Tesco has effectively integrated IT solutions to enhance its business processes and gain a leading edge in the market.

INFORMATION SYSTEM

Table of Contents
Introduction......................................................................................................................................3
Current competitive position of Tesco............................................................................................3
Various system used in Tesco at each level.....................................................................................3
Use of value chain model to identify opportunities.........................................................................4
Impact of IT on the company and confers competitive advantage..................................................5
Potential areas to create competitive industry and recommendations.............................................7
Conclusion.......................................................................................................................................7
Reference list...................................................................................................................................8

Introduction
The assignment focuses on analysing the impact of IT system on the strategic and overall
performance of a company. The organization that has been selected for the assignment is Tesco.
For the analysis, the assignment will evaluate the areas of competitive position as well as market
position of the company. It will also focus on understanding the system used in Tesco in various
levels. The use of the value chain of the company and its extension will also be highlighted.
Impact of It system on the company and the competitive advantages it offers will also be
discussed in order to understand the impact on overall industry. Potential areas that help in
creating competitive advantages and its distinct characteristics will also be focused.
Current competitive position of Tesco
Tesco is a multinational supermarket and grocery retail. The company is considered to hold
around 35% of the market share in the United Kingdom. The customer services and effective
strategy has helped the company to make competitive advantages. The comparative positioning
of the organization's market share is beneficial. Competitive advantage is considered as the key
attributes of the organization that supports in increasing the overall efficiency, performance and
capabilities of the company (Monitor, 2016). Tesco current competitive position helps to get
competitive advantage that is derived through the cost leadership and diversified superior
products. It is evaluated that the higher competitive position of Tesco helps the company to get
most of the market share. The competitive positioning of the company is determined to be
dependent on its brand name that has been evolving. It has been able to get the right message
and products at the right place and time. The priority of the company is to make sure that their
CRS was to focus on their stakeholders

Various system used in Tesco at each level
Tesco employs different types of information system because of different interests and level in
the organization. These systems can differentiate or categorised on the basis of functions, process
perspectives and hierarchical aspects. The three levels are operational level, management level
and executive level. It is evaluated that at the operational level Tesco uses the EDI Electronic
Data interchange system. This is used to manage the daily cash tills, sales, stock control as well
as reorder stock from suppliers. The system helps the level to perform the daily activities and
transaction in the effective way. The information system that supports Tesco’s organizational
level is the transaction processing systems (Fredendall and Hill, 2016). These are used to
automate recurring activities as well as ensure that they are performing in the accurate and
speedy way. The radio frequency identification technology supports this level to keep the proper
count of the quantities as well stocks of the products. At the managerial level it is analysed that
decision support system is utilised. This system helps the functional manager in the activities like
controlling, managing, decision-making and administrative factors (Chowdhury, 2016).
Information system at the executive level of Tesco referred to as Executive information system.
This helps this level in the decision making process with long-term strategic decisions.
Use of value chain model to identify opportunities
In order to have a better understanding in which the firm gains competitive advantage as well as
creates shareholder value, it is essential to separate the system of the business. In this context it
helps to understand the value generating activities that is known as the value chain. By analyzing
the activities, it helps to identify the weaker areas that are affecting the growth of the company. It
los helps in regards of enhancing the development with the implementation of the proper and

appropriate information system or technologies (Schniederjans et al. 2015). The implementation
of the information system will help in creating added value for the company in the long term. It
is evaluated that Tesco has made valuable utilization the value chain analysis to implement the
IT or IS in their process of business transformation. In order to understand the various factors
associated with the activities of value chain and the information system are required to be
evaluated. In this regards the primary activities of Tesco are discussed with its association of the
technology and system. This will help to understand the factors that have helped the company to
create added value. Following are the activities of the Tesco’s value chain-
Inbound logistics - this involves the relationship s with the suppliers of the company. This is
associated with the activities that require receiving, store as well as disseminating inputs. In this
area Tesco has made proper use of information system in order to create added value for the
company. The company has used the innovative supply chain management that helps them to
link up with their suppliers in the effective way (Chen and Zheng, 2019). This system is also
referred as continuous replenishment application. It is used to manage and monitor the in house
inventory in an efficient manner. This system helps Tesco to reduce wattage, save coast and
provide best customer service to its consumers.
Outbound logistics - this activity involves getting the finished product to the customers. Tesco
tried various ways to do this activity. However, it was evaluated that the cost involved with is
high as the distribution system was complex. In that context, Tesco updated the transport
management software to a system that was more efficient (Pang et al. 2015). The new updated
system was the Isocracy software. This helped them to make the distribution system more
efficient and effective. This also helped to add extra value to the firm and the reduce cost
associated with the activity.

Marketing and sales - this is activity is determined to be an essential factor for the company.
This is because Tesco engaged themselves in different kinds of sales and marketing activities. In
this regards the company introduced a club card that provided extra discounts the customers who
possess it. To maintain this marketing activity the company updated the system according to its
requirements.
Impact of IT on the company and confers competitive advantage
It is evident that the business world is changing with the updated and developed technology. It is
also analysed that the changing needs of the customers and market trends also creates a demand
of developing the information system. In order to gain advantage over the competition in the
market the strategic information system helps changing the goals, services, products as well as
environmental relationships in accordance to it. Tesco focuses on using the improved IT system
in their operations and customer areas (Carter et al. 2015). The replenishment system is analysed
it be beneficial for the company in order to gain the competitive advantage in the market. This is
because it helps to monitor the stock levels and carry out the work without any human
interaction. To gain the competitive advantage Tesco have introduced the telecommunication as
well as services related to finance. The improvement in the technology that involves the loyalty
card system also helped Tesco to gain competitive advantage in the market.
It is also evident from the analysis that Tesco have been able to adapt the technological
improvements in an efficient and quick way. It also evaluated that the company has been able to
derive benefits with the implementations of the information technology and information systems.
In that context, the organization is revolutionizing the traditional experience of the customers
with incorporating the activities such as -

POS as well as self-service checkouts - with the use of the electronic data interchange
technology is able to record and replenish the sale levels in the proper way. It is evaluated that it
is effective in managing the requirements of the products in the store. The weld service method
provides various options to the customers in terms of payment. In this context, they can take help
of the staff and they can scan the products themselves and pray for the products. This is also
helpful for the employed as it saves time and they can concentrate in other work of the store.
Website - The official website of Tesco is considered to be a famous online grocery store. The
Tesco’s online drive is another improvement in the system that has helped the company to gain
competitive advantage in the market (Watanabe et al. 2015). The consistent presence of
innovative technology has unique drives has helped the company to increase their market share
in the effective way. The motive is to add new products and services in their online platform to
provide a convenient and easy way of shopping experience to its customers.
Club card of Tesco - it is evident that an information system is a set of factors that includes store,
process, collect as well as distribute information that helps in the aspect of making decision and
control in an organization (Robarts et al. 2015). The Tesco club card is made in accordance to
the defined information system. This involves technology to identify the personal address and
shipping history of the customer in order to provide them with the offers in the proper way. This
has helped to increase the sale of the products and supported to gain competitive advantage
Inventory management - the EDI System is determined to be an important system that controls
stock in accordance to the POS. With the use of the EDS system, shock activities are carried out
in an efficient way. It makes the work less tedious as well as less time consuming for the staff.
This helps to increase the work quality of the employees that helps in providing better customer

services to the consumers (CONTROLLERS, 2016). It is evident that better customer service
supports in gaining competitive advantage in the market.
GPS - this technology helps to provide the order of the customer to their doorstep. It helps in the
context of increasing the customer base that can avail the service of the organization that uses the
satellite navigation technology (Christy et al. 2016). This technology enables the company to
provide convenient shopping experience and increase their market share in a competitive way.
It is abused that Tesco has been successful and positive in adapting to the technological changes
in the competitive business world. The company as whole have worked together to embrace the
change and reap the benefits. This is because the deviation and improvement of the technological
changes has helped the organization to be a market leader in the online as well as offline
mode.
Potential areas to create competitive industry and recommendations
It is evident that an organization utilizes its various resources and technologies to gain the
competitive advantage in the market. It helps to create value creation that translates into value for
the consumers and profit for the company. Strategic information system is used to incur the gain
and competitive advantage. In this context, Tesco has implemented various new technologies and
update the older version in order to increase market share and gain competitive advantage. It
helped the company to make the decision making process better, create efficient communication
tools and search for ideas that will provide more benefit to the company (Bheekharry and Singh,
2019). It is analysed that the Tesco in a box initiative has large potential to gain competitive
advantage for the company. It focuses on integrating all the existing system and application into
a common application that will be incorporated in the supply chain and the store. This system is
considered to be an end to end business process that is determined to be an efficient IT package.

It is recommended that if Tesco were able to implement this system with a strong base, it will
help in gaining competitive advantage. This range is considered to have the potential to provide a
sustainable competitive advantage to the organization.
Conclusion
From the above discussion, it is evaluated that Tesco implement various kinds of It system in
their different level with the prospect of gaining the competitive advantage. It also helps in
evaluating the area that can provide the opportunity to prosper. With the analysis of the food
chain and the symptoms associated with them, plays a role in creating added value. This also
supports in gaining competitive advantage in the market. The overall analysis depict that the
company uses the information systems in the successful and the best possible way.

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