This report explores how companies manage their information systems and deploy IT systems for better productivity. It includes a case study of Tesco, analyzing the competitive environment, inbound and outbound logistics, and operations.
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Managing Information and Technology
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Table of Contents INTRODUCTION...........................................................................................................................3 Introduction and background of Tesco...................................................................................3 Analyse the competitive environment of your chosen business by applying porter’s 5 force analysis and justify your analysis...........................................................................................4 Analysis of inbound logistics, outbound logistics and operations.........................................6 Analysis of activities on Porters' value chain.........................................................................7 Identification of key activities adding value..........................................................................8 The way Tesco can deploy information system in business for better productivity..............9 CONCLUSION..............................................................................................................................10 REFERNCES.................................................................................................................................11
INTRODUCTION Today, one of the most important function of any company is to manage its information system, because introducing technology in business not only provides benefits but also hampers operations(Varelas and Georgopoulos, 2017). By managing IT system, it will prove beneficial for firms to gain high competitive advantages. In this regard, present report is going to evaluate how a company manages information system, by considering a case of Tesco. It is one of the largest retailer firm of UK that operates its business in a number of countries. Therefore, making investigation of this company will help in identifying a number of concepts regarding with usage of IT system for improving productivity of business. For this purpose, analysis is one to evaluate competitiveenvironmentofchosencompany,includinginboundandoutboundlogistics. Through this analysis, how Tesco can deploy IT system is also highlighted. Introduction and background of Tesco Tesco is one of the British based retailer firm, which has established its business in 1919, from then to current period, it has still holding the best position in retail industry. Currently, it is on 3rdlargest position in the world in terms of revenue, whereby from retail business, now it has entered into other sectors also(Thomas-Francois,von Massow and Joppe,2017). It includes banking, fuel, club cards, telecom and more. By offering the best quality of products, today,
Tesco has opened more than 2,482 stores in UK and near about 2,329 across territorial boundaries. For managing its large business, this firm has implemented MIS system that helps in achievement of grand success as well. Through this system, it has address all its major activities that are identifying customer needs and preferences, intensity of competitive environment, current changes in trends and so forth, with storing and managing entire information. To retain customers at its stores, Tesco offers a wide range of groceries, clothing, club cards, finance, delivery savings and more. Among these commodities, grocery sector has aid this company to frequently grow its business, in emerging and developing markets at global level. With high customer satisfaction, this retailer currently holds near about 23% of market share in UK region(Lloyd,2017). Furthermore, as Tesco is also considering as service based industry, which provides services to people through online process also. For operating and managing business, this firm mainly follow the hierarchical organisational structure, that aid in managing lower departments by upper ones. Under this process, store and area managers come under top level management who oversee working operations of crew members and shift managers, includingstaffmembers.Tohandlealltheseoperationsofdifferent-differentlocations, Management Information System helps Tesco in driving its business sufficiently. Analyse the competitive environment of your chosen business by applying porter’s 5 force analysis and justify your analysis Competitiveanalysisreferstoapracticesofanalysingaboutvariouscompetitive organisation by evaluating their strategies and products. It is favourable to examine the ways through which competitors can be hamper the profitability and goodwill of company(Lloyd, 2017). However, competitive analysis can be carry out with the help of using Porter's five force model in context of Tesco. This model was primarily discovered by Michael Porter in order to analyse competitive of a business organisation in market. It is helpful to make appropriate strategies for gaining competitive advantage among different competitive firms. Bargaining power of Buyers –This can be defined as power of consumers to switch with another brand to fulfil the same needs and wants. It has been analysed that Tesco has ahigh bargaining power because there is an availability of other supermarkets for similar products in market. However, the customers have a high bargaining power due to having various choices of brands in market for selected single product to fulfil specific needs. In context of Tesco, there are various competitive organisations such as ASDA, Aldi, Sainsburry etc. which are accountable
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for offering similar goods & services at relevant costs. In addition to this, customers have limited budget but they demand new features and easily get switch to other brand fort better services due to which bargaining power of consumers become high for given company. Basically, existence of several competitors in market is responsible for making switching price low which enhance customer power to select among variety of products in same range of price(Senft, Gallegos and Davis, 2016). It is observed that people desires high quality of products affiliated with low prices and they have a behaviour of opting to purchase goods from discounting stores such as Aldi and Lidl which is liable for reducing market share of Tesco. Moreover, the given organisation has slashed in prices in regards to around 2000 vegetables and fruits for promoting healthy eating as well as enhancing respective sales. Bargaining power of suppliers –The suppliers plays an important role in terms of proceeding smooth manufacturing and supplying finished goods in market. It includes that there is alowbargaining power of suppliers associated with Tesco because of existing number of suppliers in the supermarket retail industry. However, it is favourable for given organisation to easily switch to suitable suppliers for purchasing raw material in bulk with reasonable cost that facilitate to boost up respective profit margin. They can buy goods at lowest price in order to enhance profits margin that has led to lose on the side of suppliers. Meanwhile, it has been analysed that every company put efforts to specifically establish strategies for increasing profitability which is automatically happen in case of Tesco due to having low bargaining power of suppliers in market. The given organisation has another benefit then if they feel reduction in quality then they can easily switch to other suppliers for maintaining their quality of product provided to customers. Threat of substitutes –This can be defined as availability of substitutes products and services which is accountable for influencing sales of the organisation. In context of Tesco, the threat of substitutes is observed to bevery highin grocery market among both grocery as well as non grocery items. This situation exists for given company because of potential good substitutes comes from retailers in other markets that is liable for providing both food product as well as drinks directly to consumers along with non-food products including electronics, furniture, clothing etc(Simatupang,Piboonrungroj and Williams,2017). However, it involves for example department stores and non-food retailers with both scale as well as distribution for completing with Tesco. The companies accountable for increasing offer of substitutes product
for enhancing relevant threat in market consist BHS, Primark, House of Fraser, Debenhams etc. Existence of number of substitutes in market can potentially hamper sales as well as customer count of Tesco at marketplace. Threat of new entrants –This includes the threat occurring due to entry new brands in market which can provide similar products to fulfil needs of people. It has been analysed that Tesco haslowthreats of new entrants because of having market share controlled by four major supermarkets and rest of shared between small supermarkets like Aldi, Lidl, Waitrose, Iceland who are putting efforts to gain larger market share. Meanwhile, it is observed that entry of new entrants create problem of reducing customers of brand by distracting the due to which hey switch the brand which may reduce sales of business(Singh,2019). Moreover, new entrant is required to provide much high quality of products at reasonable price to attract customers towards their brand which is difficult for them. Additionally, new firms should provide high quality at cheaper price due to discount offers provided by Aldi & Lidl which develop problem for maintaining profit margin. This situation is responsible for creating difficulty for new enterprise to survive in market among their competitors. Rivalryamongexistingplayers–IncontextofTesco,theyarefacingintense competition in regards to large four supermarkets such as ASDA, Morrisons and Sainsburry which render similar goods including clothing, electronics, food items, extra at relative costs that make cost low for switching the product. Meanwhile, this provide power to buyer that they can easily switch to another brand in industry which are liable to influence sales of the given organisation(Taylor, 2017). Analysis of inbound logistics, outbound logistics and operations Inbound logistics-Inbound logistics are having its focus on overall supply chain of a business by making it more efficient and. It is focussing on transportation of service and goods that is offered by an organisation. It is also helping in saving overall cost of an organisation. This is an activity that is having its focus on how can the overall process of transportation can be mademoreeffectiveandlesstimeconsuming(Lewis,2017).Companiesnowadaysare becoming more focussed on use of synchronized business activities. Inbound logistics is related with how various raw material is obtained by an organisation for the purpose of use into manufacturingprocessandconvertingitintofinalproducts.Forinformationtechnology managers can have a focus on overall pricing issues, large contacts and delivery terms to their
customers. All these are very important issues that have to be focussed by managers in every organisation. In context of Tesco, this company is focussing on management technology system so that they are able to use it for effective use of their resources(Lee and Tang, 2018). Since 1970 this organisation is working towards achievement of their overall objectives.Another aspect is information sharing that is concerns with making process more transparent for keeping material in order. This is tool that is related with management of cost. Operations- Operationsis a process that is related with conversion of raw materials in finished goods. Company is using this process in order to save the time invested and cost associated with it. TESCO is using this process for managing their inventory, displaying of their products and management of stock in order to get a competitive advantage as compared to their competitors. Outbound Logistics-Outbound Logistics is a procedure that is connects with how organisation is storing their products, transporting it and distributing to their customers. The overall process starts with the order placed by customers, packing in warehouses and ends with the product being delivered to their customers. Tesco is offering home delivery facility to their customers to increase convenience to their customers(Hernandez. and Pedersen, 2017). It is also said that company is making efforts for making space for trolley, parking facility, having skilled and competent staff. All these efforts are done in order to supply to their customers increased convenience facility. Analysis of activities on Porters' value chain Porter's value chain- This is avalue chain, that is divided on two parts that is primary activities and secondary activities. Primary h- this includes activities that are related with transportation of finished goods, managing of inventory stocks and warehousing facility. as five main activities as discussed below: Inbound logistics- this includes activities that are related with transportation of finished goods, managing of inventory stocks and warehousing facility. Operations-This function consists of process related to converting raw material in finished goods so that it can be delivered to their customers. Outbound logistics-This is a function that is helping in delivering of products to their customers.
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Marketing and sales-This is a plan that is connect with formation of strategies for enhancement of promotional activities and achievement of sales target by companies. Service- Thereare many different types of after sales services that have to be provide to customers after delivering of products to the customers(Ge, and Li, 2019). This includes services such as refund, customer maintenance etc. The support services are related with 4 components that are discussed below: Procurement- this function is helping in obtaining of raw materials by organisations. Technologicaldevelopment-Thisistheaspectthatisrelatedwithtechnology advancements taking place in a company. Human resource management-the overall process of hiring of candidates and then retaining them in the organisation is connected with human resource management aspect of value chain. Infrastructure-It is related with structure of company and system. This is also related with various functional department such as marketing, finance, production etc. Support activities used by Tesco- Human resource management,it is the responsibility of human resource department of organisation to hiring and recruit competent employees. HR department has to make various plan that is concern with overall career growth of their employees(Benito, Petersen and Welch, 2019). In Tesco this is a function helping in achievement of low employee turnover as employees are satisfied and not willing to leave the organisation. Technological development- Tesco is a retail store that is using information technology to enable quick sharing of information(Benckendorff, Xiang and Sheldon, 2019). Tesco is trying to maintain all the required data such as inventory details, raw materials that are in transit, delivered products etc. IT helps in reduction of overall cost associated with these maintenance of information. The managers can keep a view on all the activities related to transportation of materials to the company and delivering of products to their final customers. Identification of key activities adding value Key value adding activities- Services:Aster sale service provided by Tesco is helping their customers in building up of goodwill. This service includes repair, exchange, customer services about various attractive
offers and discounts. Company is also hiring polite staff that can help in assisting their regular customers in case they are facing any kind of difficulty(Avgerou,. and Walsham, eds., 2017). This services are mainly related with increasing the level of convenience for their customers. Operations:TESCO is offering variety of stores by keeping a pace with the changing business scenario: Metro-Metro is selling huge variety of products and food brands. This store has a very small section of general items such as cook ware and greeting cards. Express-These stores are smaller in sizes. Major aim is to provide fresh product to their customers. Stores are designed for small shopping visits by their customers(Alcacer, and Delgado, 2016). Extra-This is the largest stores that are offering wide variety of products such as clothing, health services, financial services, clothing facility etc. Superstore- These are the stores that are offering variety of products that are having relation with bakery products. MIT is a technology that is helping Tecso in having required information for the purpose of stock. Time utility is also there because of these value chain activities. Tesco has made efforts toadoptoperationalsystemforthepurposeofkeepingallthedataaccordingtotheir requirement. It is also very helpful in maintaining of proper alignment of services. The way Tesco can deploy information system in business for better productivity Deployment of information technology refers to process enhancing quality of entire information of business which are delivered over technology. In other words, it defines way for creating, capturing, delivering, using and measuring the business data, for earning better result. As TESCO majorly focuses on meeting the customer needs, then instead to concern only on application development, its managers are required to develop better applications for Sales & Marketingfunctions,HR,Operations&Production,Accountingandmore(Varelas,and Georgopoulos, , 2017). Because developing CRM application only, usually limited real strategic value of information and technology department. Along with this, new model which is based on being proactive for user requirements also need to be developed. For this purpose, to deploy IT in business, Tesco needs to implement centralised IT applications like Oracle Financial Software, that helps this firm in reinventing itself and shaping business operations to gain more competitive advancement(Thomas-Francois, von Massow and Joppe, 2017). This software helps in creating
the deposit products as well as gaining flexibility to develop product parameters, so that preferences and desires of customers could be met. It also offers solution for end-to-end processing of life-cycle’s deposit, by driving down cost with assurance of customer delight. Oracle software helps in increasing profitability also with better planning, by identifying opportunities for effective investment. For this process, it aligns day-to-day business decisions with corporate objectives and provide guidance of financial planning, including flexible choice for IT deployment. CONCLUSION It has been summarised from the entire report that implementing and managing IT Systems is the most concerned function of every company. By introducing best technology in business, a firm gets advantage to carry out its major operations and storing entire information regarding with customer data, strategies and tactics used to gain competitive advantage etc. more effectively. It also helps in enhancing performance level of business, with development of each and every application of departments. Along with this, introducing IT systems like Oracle Financing software, provide opportunities to organisations in handling its major operations, such as product development as per changes in customer demand, new trends of marketplace and more. This would help in not only increasing efficiencies of business, but also improve functions for better achievement of corporate goals.
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