Digital Business Report: TESCO Digital Business Analysis and Impact

This report provides a comprehensive analysis of TESCO's digital business operations. It begins with an introduction to digital business and defines key terms. The main body of the report delves into a brief description of TESCO's business, its mode of operation, and its target market segment. It then explores the key factors driving the growth of TESCO's digital business, such as secure transactions, increased reliance on electronic devices, consumer relationships, market demand, comprehensive data collection, and innovation. Furthermore, the report examines the impact of external forces, including political and economic factors, on TESCO's business operations. The report concludes with a summary of the findings and includes references to the sources used.

Digital Business

Table of Contents
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................2
Provide a brief description of the business, their mode of operation, the market segment ...2
Provide a detailed explanation of the key factors which may have been responsible for the
growth of your selected digital business................................................................................4
Identify and explain how these external forces may impact on the businesses operation.....5
CONCLUSION ...............................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Digital business is defined as the utilisation of electronic device for communicating the
values as well as promoting the firm's offering by virtual media. This mainly promote the new
and creative ways through which the organisation can able to connect as well as collaborate with
huge number of people into certain time duration. Also, information technology have played key
role in identifying the business operation and infrastructure with the help of internet for carrying
out regular regime efficaciously (Bharadwaj and et. al., 2013). This business transformation have
overcome the distance barriers as well as accelerated their development through leveraging the
market opportunity and explore business enhancement in effective manner. Mainly, the new
business creates the best possible benefits of digital media as they obtains online space because
of which this become comparatively simple for them for communicating with consumers as well
as promoting its websites by several platform such as SEO or social media. For this report the
chosen company is TESCO, which is one of the leading retailer having strong channel of
distribution. The organisation accomplish the requirements of consumers by retail outlets and
digital platform as well. There are several kinds of business which has various purposes but the
mode for dealing with consumers are traditional and digital platform. Similarly, E-commerce
model that is a part of digital business the register the domain name as well as formulate the
hosting account for inviting the consumer. On another side traditional business involves bricks as
well as mortal model that is physical outlets which recruit employees who can direct the clients
as well as direct consumers and assists them to obtain expected products. Therefore the
difference among traditional and digital business are discussed:
Traditional business includes face to face deals in which organisation sell their tangible
assets which consumers can touch, try, experienced and many others during shopping. In this
business can provide products or services to those customers who are into proximity as it can
able to reached at outlets as well as obtain the required products (Chaffey, Hemphill and
Edmundson-Bird, 2015). Moreover, this is essential for traditional media to know about the
dynamics but here the enterprises know about the modifying pattern after longer duration. On the
other hand, digital business is considered as the online medium which aids customers to obtain
products through utilising e- devices such as mobile, laptop and others. Also, the firms such as
TESCO falls under the digital business category that have boarder reach as it can formulate
online catalogue for displaying its offerings that can further availed through large consumers
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during irrespective of its geographic places. As an outcomes, with the assistance of this the
companies such as google etc. can able to obtain outcomes at real time. Mainly, it is helpful for
understanding the response of consumers as well as the modifying trends.
Factors which provide digital business in recent times
There are various factors that facilitates digital business in recent times. Some of them
are discussed below:
 Secure transaction: Earlier individuals generally prefer cash transaction so they more
comfortable to visit the physical stores. But with the enhancement in awareness as well as
introduction of secure platform that drive consumers to utilise credit or debit cards for
cashless transaction (Korpela, Hallikas and Dahlberg, 2017). In this, TESCO which is
operating internationally provides several payment options to clients like using payment
card or cash on delivery. Moreover, with this representatives of organisation stay
connected with consumers by helpline number which aids firm to retain customers trusts.
 Enhance dependence upon electronic devices: Currently, most of the customers expand
the devices such as laptop, tablets and many others. So, the huge business such as
TESCO identify this as an opportunity for targeting the marketplace as well as reaching
the prospectus through sending them personalised message via email platform or text
message. It have further aids the consumers and firm in managing E-CRM. Thus, the
adaptation of mobile phones have leads the digital business to perforate into mass market
area suitably.
MAIN BODY
Provide a brief description of the business, their mode of operation, the market segment
TESCO was established in year 1919 through Jack Cohen when he initiated to sell
groceries from small East End London stall. In year 1924, the brand TESCO was appeared
firstly. The name TESCO was developed when Jack Cohen bought a tea batch from T.E. Stock
well. Its first store was opened in 1929 and bought few more stores. Till 1950s they have more
than 800 stores. In 1997 they explored their business into Ireland. Within year 1995, respective
organisation initiated its internet shopping services that is still active as well as remain effective
for them. From 2001, they have spread their firm across Britain as well as mainly buying out
small organisation which they feel valuable. Currently, they offer insurance, house and cars,
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which have their own mobile phone network and have six different kinds of stores such as Tesco
metro, express, superstores and others. This sales around 40,000 products and operates with three
own label products like value normal and finest. Several stores has gas stations which are
becoming the Britain largest sovereign petrol retailers, Tesco financial services and Tesco.com.
As currently they have about 6000 stores with the intent to serve the people of world such as
Thailand, Poland, China and many others. For retaining the interest of potential consumers as
well as attract them, respective organisation have utilised the loyalty card as well as facilitates
heavy discounts to clients that develops their products more cheaper in context of pricing in
comparison to another rivals. This strategy perform in favour of firm. Moreover, the team stay
open to know about the dynamic atmosphere such as because of increased globalisation the
opportunity for both male and female. For instance, the organisation constantly practised for
engaging the clients by websites through providing them appropriate arena to expand. For
promoting this practices TESCO provides the home delivery facility as well as utilised social
media to motivate the responses as well as produce the traffic sources for firm (Tesco PLC -
Company Profile, Information, Business Description, History, Background Information on Tesco
PLC).
The primary objective of TESCO to be market leader in context of selling quality
products to huge number of consumers. For instance, firms have extended their mode of
operations from physical stores to online platform. Into physical outlet employees of
organisation managers the inventory in such a manner the clients can easily approachable to
shelves (Matt Hess and Benlian, 2015). Moreover, this is utilised RFID technology which
automatically send the notification to suppliers for refilling the firm's inventory. It have
promoted the balance growth among various stakeholders of organisation. In addition to this, the
website of TESCO was introduced in year 2000 and become the larger dealer in terms of home
shopping services. This assisted the firm to browse the website as well as expand the catalogue
for buying non perishable products like electronics, furniture and others. Also, the organisation
continuously performed on its technology for the external and internal stakeholder convenience.
Because of which respective company accomplished the remarkable development of 70% as well
as became the largest retailer firm within United Kingdom.
TESCO have performed the market segmentation as per the basis of various categories
like demographic and geographical. In geographic, the TESCO targets the United Kingdom that
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is their home country and another thirteen countries like China and Europe. Moreover, within
demographic category, they target men and women both of several age group. As the prices are
affordable so both low as well as middle income group individuals which involve staff as well as
professional avail organisation offerings.
Provide a detailed explanation of the key factors which may have been responsible for the
growth of your selected digital business
The business makes effort for reinventing themselves in order to obtain the potential
platform in which they can effective explore its operations (Mithas, Tafti and Mitchell, 2013).
Shifting from traditional to digital mode is their huge transformation which have been
experienced through several firm such as TESCO. Few key factors which have leads respective
organisation to utilise digital media are discussed below:
 Consumer relationship: Within physical store, this is not feasible for sales
representatives to provide desired amount of time for resolving all consumer queries.
Moreover, the respective organisation websites includes the contact detail and area in
which consumer can post its valuable feedbacks or reviews. These information aids them
to adapt the vital or expected changes. Likewise, the client support can assists in reducing
the possibilities of dissonance through effectively resolving the queries of all person into
firm. Thus, this process required relevant amount of attention to clients queries.
 Market Demand: With advance usages of internet the dependencies upon electronic
media get enhanced. Now a days, most of the individuals experiences busy life because
of which they opt shopping through being at its won areas (Morabito, 2014)(. The
TESCO' s manager was visionary because of which in year 2000, they invested into
online platform as well as regularly tried to pitched the clients. Thereafter, this gains
large consumer response which was even develop respective organisation productivity
and profitability. Thus, there are broad option for organisation because of which they can
able to formulate the innovative marketing campaign for accomplishing the potential
market needs.
 Comprehensive data collection: It is also considered as the main reason for TESCO to
select the online platform as this aids their business to accumulate information of several
consumers as well as present the organisational growth. Likewise, with the usages of
digital business they come to get knowledge that either this provides appropriate revenue
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to firm or not. Therefore, massive amount of clients responses aids digital business to
maximise their strategies as well as spread brand awareness.
 Innovation: As usages of innovation as well as advance technology always aids firm to
develop potential reputation (Oestreicher-Singer and Zalmanson, 2013). So as a quick
mover TESCO explicitly utilised the digital platform for boosting its business as well as
provides immense consumer demand efficaciously. Moreover, as various consumer
prefer content from several medium so they utilised the video, image and text for
appealing the customer interests. Also, the firm rather than storing information manually
utilised the centralised system of data base which record whole essential information
about consumers. Therefore, as per the repeat purchases, the firm target audience and
develop longer relation with the potential customers.
Identify and explain how these external forces may impact on the businesses operation
External factors as also defined as the macro factors which directly impact the business
operations. These factors hamper the business operations, profit and productivity level. So, this is
vital for performing effective analysis through identification of that factors to operate their
activities and operations (Pagani, 2013). Therefore, the description of that factors which can
impact the TESCO business operation are discussed below:
 Political factors: This presents the regulation, tax rate, political parties which influence
the Tesco digital business performance. As local authorities of several region take this as
an opportunity of inviting international retailers as they aids in enhancing job
opportunities for local people. It is an opportunity which positively influence the
respective organisation performance. On the another hand, as they have extended their
business into an emerging economy, this is an effective investment for future but the
policies are quite unpredictable because of political stability.
 Economic factors: This involves inflation rate, disposable income and others which fir
finds for leveraging the profitability or growing demand. Although, the digital business of
Tesco is expanding internationally but this produce various traffic from United Kingdom
because of which they have accumulated market share of 30% from their home country.
In respect of inflation rate, when the buying power of consumers reduce TESCO focused
upon advertisement of essential items rather than luxury products for maintaining their
profitability.
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 Social factors: This is considered as the several kinds of trends or choices which changes
the consumers interest such as earlier individuals prefer one stop shopping but currently
its interest have moved towards bulk shopping (Veitandet. al., 2014). For meeting the
consumer demand, the TESCO company manager started considering the suggestion of
its potential clients. Further, in the food range respective organisation have enhanced
their category through adding low fats snacks or several organic items for accomplishing
the requirements of health conscious individuals.
 Technological factors: Adaption of advance technology as well as innovation bring new
opportunities for organisation. The major transformation which TESCO bring into their
operations was through investing within online shopping platform that provides products
delivery upon consumers home. Moreover, the organisation invest into energy projects
which is considered as the sustainable process for attaining the objective through
reducing the carbon emission.
 Environmental factor: TESCO have mostly perform the digital operations through
adapting appropriate methods which protect the external factors interest. For this, they
have abolished the usages of plastic bags as well as stay focused to reduced the
possibilities of wastage. Moreover, the respective organisation have to formulate
effective goals for minimising the carbon footprint of 50% in about 2020 for addressing
the environmental problems.
 Legal factors: Into business, the government policies and legislation plays vital role that
all organisation required to company in smoother manner (Weill and Woerner, 2013).
Although, TESCO have faced the legal charges in context of discrimination on the basis
of gender which hampered their reputation across the world. But currently, they facilitate
al;l regulation such as health and safety, equality and others for the welfare of staff so
that they feel satisfied and operation are performed effectively and efficiently (Pestle
analysis of Tesco, 2018).
CONCLUSION
As per the above report, it has been concluded that digital business plays vital role for
company currently as this assists them in attaining more profitability into market area. It also
leads towards business development as well as growth for getting positive results. There is
difference among the traditional and digital mode of operating business. However, here the
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digital business means that the enterprises operated by online that sell goods and services 24*7
as well as developing awareness and promotion with the help of social media and others.
Moreover, on the another side, traditional business is performed by offline mode as well as
awareness is developed with the assistance of newspapers, print media and many more. The
respective company deals in diversified areas like retailing clothing, furniture, grocery and many
others. So, they have to utilised offline and online both mode for performing the operation and
activities of business at market area. Company have segmented their market as per the
geographic, demographic, behavioural and others for targetting the particular group of
individuals effectively. The several factors that are accountable for digital business growth
involves innovative technology, customers tastes and preferences, simple way of performing
business activities and operation at market area. These factors are so much crucial for enterprise
for conducting its operations and functions appropriately for attainment of profit, success,
sustainability and growth. The macro factors such as political, economic, social, technological,
legal and environmental effects the business operations as through this firm minimises the
carbon foot prints and save renewable energy and many more.
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REFERENCES
Books and Journals
Bharadwaj, A. and et. al., 2013. Digital business strategy: toward a next generation of
insights. MIS quarterly. pp.471-482.
Chaffey, D., Hemphill, T. and Edmundson-Bird, D., 2015. Digital business and e-commerce
management. Pearson UK.
Korpela, K., Hallikas, J. and Dahlberg, T., 2017, January. Digital supply chain transformation
toward blockchain integration. In proceedings of the 50th Hawaii international
conference on system sciences.
Matt, C., Hess, T. and Benlian, A., 2015. Digital transformation strategies. Business &
Information Systems Engineering. 57(5). pp.339-343.
Mithas, S., Tafti, A. and Mitchell, W., 2013. How a firm's competitive environment and digital
strategic posture influence digital business strategy. MIS quarterly. pp.511-536.
Morabito, V., 2014. Trends and challenges in digital business innovation. New York: Springer
International Publishing.
Oestreicher-Singer, G. and Zalmanson, L., 2013. Content or community? A digital business
strategy for content providers in the social age. MIS quarterly. pp.591-616.
Pagani, M., 2013. Digital business strategy and value creation: framing the dynamic cycle of
control points. Mis Quarterly. pp.617-632.
Veit, D. and et. a., 2014. Business models. Business & Information Systems Engineering. 6(1),
pp.45-53.
Weill, P. and Woerner, S. L., 2013. Optimizing your digital business model. MIT Sloan
Management Review. 54(3). p.71.
Online
Tesco PLC - Company Profile, Information, Business Description, History, Background
Information on Tesco PLC. 2019. [Online]. Available
through:<https://www.referenceforbusiness.com/history2/11/Tesco-PLC.html>
Pestle analysis of Tesco. 2018. [Online]. Available
through:<https://businessteacher.org.uk/pestel/tesco.php>
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