Impact of e-Commerce on Tesco: Analysis and Strategic Recommendations

This report examines the impact of e-commerce on Tesco, a major UK retailer. It analyzes existing shortcomings, such as delayed responses to economic downturns, pricing issues, competition, and challenges in managing online orders and deliveries. The report then assesses the positive impacts of an enhanced e-commerce system, including improved product presentation, competitive pricing, and targeted marketing. Furthermore, it explores the broader societal effects of e-commerce, including job creation, transparent tax systems, and the potential for digital pollution and health risks. The report concludes with a discussion of financial instability and product quality concerns associated with online retail, offering a comprehensive overview of Tesco's e-commerce landscape and its implications.

LO2: Understand the impact of e-Commerce
Existing shortcomings:
1. When the recession hits the country, the response of Tesco is too late. The company
keeps on selling its products at the old prices at this time too. The consumers start buying
fewer products. The time when the economy is already hit by the recession, this company
creates further problems due to incorrect pricing. The competitors take advantage of the
situation, and they try to exploit the company further.
2. The company has stores in big sizes, and it rents out its parking space to other companies.
This makes the people buy less from stores and more online. Even the very small things
that could be bought from the stores are purchased online, so company faces problem in
managing the bulk of orders and sometimes they have to bear the extra cost of delivery
for delivering small products.
3. It faces bad debts from credit cards and the insurance claims of households. Due to this,
the company sometimes faces the problem of inadequate funds to sponsor its further
operations. It needs a lot of resources in cash to invest in new technologies of The Web
and IT.
4. It lacks experience in few markets that it has entered or plans to enter. The marketing
strategies adopted sometimes fail. It uses adaptation strategy but in some markets,
standardization works. The campaigns of the company are found to be executed badly.
5. The company squeezes suppliers in the fight for becoming the biggest retailer in the
market of UK.
The impact of introducing an enhanced e-Commerce system to the company:
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The enhanced e-commerce system will have more space for the products. It will be able to quote
the prices in a better way based on the prices of other online sellers. There will be no issue of the
parking space as all the customers will buy online. Then the marketing will persuade the
customers to buy online rather than going at the stores. It is easier to analyze the trend of
shopping with customers in the online mode so the company can make the plan of placing their
marketing strategies accordingly.
The positive and negative impact of e-Commerce on society:
The e-commerce company like Tesco provides valuable goods and services to the people. Since
the people have the opportunity to compare products online, the companies have to provide good
products to them if they don’t want to lose their clientele to the competitors. Then it also
provides employment to people with a lot of technical staff is needed to maintain and run the e-
commerce company. The tax payment mechanism becomes transparent as the tax cannot be
hidden in e-commerce companies. Also, the exact amount of tax is paid as per the sales made
which cannot be hidden when it is displayed to all the people. Due to increased sales,
employment, and technology, the national growth is increased. But the traffic of online sites
creates a lot of digital pollution. The important websites take time to get opened. When the offers
are made on online websites, the traffic increases too much. There are health risks for two
reasons. One is that running an online website is purely a sitting job; the employees’ gets
exhausted and long hours of sitting tend to create backache and other problems for them.
Another is that grocery is not a perishable commodity. If the company does not have an adequate
storage facility, then the grocery may affect the health of consumers. Financial instability is also
common in this as a lot of customers pay cash on delivery which is an uncertain thing in terms of
availability of person at the time of delivery, change in the plan to purchase, inadequate cash
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with the customer, etc. Then there are issues on the quality of the product. Sometimes the
customers see some product on the website, and something else is delivered by the company i.e.
the expectations of customers might not be met by the company.
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Tesco Bank Art Competition for Schools 2014. (2014). Fundraising For Schools, 2014(154), 4-
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Higgins, M. & Smith, W. (2002). "Babies Cost Less at Tesco". Journal Of Marketing
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