Tesco's Innovation Strategy: Future Growth and Capabilities-Part 2

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This report, a continuation of a previous analysis, delves into Tesco's innovation strategies to enhance growth and expansion beyond 2020. It highlights the necessity of innovation for sustaining competitiveness in the retail market. The report identifies key innovations like RFID, connected devices, augmented reality, and cognitive computing, emphasizing the potential of cognitive computing as a unique market offering. It outlines Tesco's roadmap for successfully implementing cognitive computing technology, aiming to provide faster and more efficient customer service. The report also discusses the impact of these innovations on various departments within Tesco, including R&D, marketing, and finance, underscoring the importance of adapting to meet rising customer expectations and maintain a competitive edge.

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Managing innovation in
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Executive Summary
This report is part 2, of which part one has been already presented in which description about
innovation and its importance in order to maintain Tesco's resistivity within a market place was
being discussed. Previous report includes innovation history of the company and its future
capabilities by analysing retail industry. In second part of report, its about role of innovation to
enhance growth and expanding Tesco in a period of some years. It discuss about the requirement
of innovation within an organisation.
This report reveals the innovation that will be brought up by company in retailing
industry. These innovative products will change the industry by 2020 and beyond. It has been
analysed that company should come up with innovations in order to sustain within the
competitive market place. It is also done so that they can remain ahead with their rivals. For
facilitating this Tesco will be coming up with different innovations which are RFID, Connected
device, Augmented reality, Cognitive Computing, etc. Among this they must launch cognitive
computing as this has been not brought up by any organisation in market place till yet. Tesco has
also implemented a road map in order to successfully and effectively launch cognitive computing
technology within a market place.

Table of Contents
Executive Summary......................................................................................................................... 2
INTRODUCTION...........................................................................................................................3
The Future of Industry 2020 and Beyond .................................................................................. 3
Organisation's innovation requirements 2020 and Beyond.........................................................4
Building the future innovation capabilities for the organisation.................................................6
CONCLUSION................................................................................................................................9
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INTRODUCTION
Innovation is a method of converting an idea into products or services which adds a cost
to it for which consumers pay. In order to make a product innovative, it must have creative and
unique concept as well as add an economical cost to the product. According to competitive
environment, it is important for companies to bring innovations in their product or services in
order to sustain in the market place. Moreover with the help of innovation an organisation can
easily integrate in a new market place. In this present report, company taken is Tesco, which is a
retailing industry. It product are supermarket, hyper store, super store and convenience shop. It
has been found in 1919 in London, UK (Akinyoade and Eluwole, 2019).
Main purpose of this report is to examine the possible innovations that may take place in
Tesco by 2020 and beyond. Innovation is being applied in this industry to increase sales and
fulfil the requirements as well as satisfy needs of customers. This includes future of the industry
2020 and beyond, organisation requirement 2020 and beyond. Also this includes, building future
capabilities of innovation and at last a valid conclusion is being given.
The Future of Industry 2020 and Beyond
Retail industry comprises of speciality stores, department stores, supermarkets, discount
stores, mail order business and other non store retailing establishments. Products and services
provided in these stores are important for an individual to fulfil their daily requirements and live
a healthy lifestyle in this modern world. These products and services have a capacity to be
created in various ways, every time through bringing one or more innovative characteristics
within them. This led retailing sector on a high level where it has achieved an important growth
as well as profitability across different countries. It also helps this sector to generate revenue and
productivity (Bei, 2019).
This industry involves various kinds of stores ad markets that are giving competition to
each other on a daily routine in order to move ahead of their rival firms. So, in order to facilitate
this, organisation within this industry are launching new products as well as services within
regular time intervals by coming up with different innovations in current commodities and
products. From past few years, it has been analysed that, important players of retailing sector are
Sainsbury's , ASDA, Morrisons, John Lewis, Aldi, M&S, Amazon etc (Song, Jin and Zhao,
2019). In order to determine the recent trends and requirements of customers within market
place, these firms can conduct research and development activities. With the help of this
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information, company can bring innovation in their products and services or can either add a
cost to their existing commodity.
Retailing sector is bringing out new products and services continuously. Recently this
industry have come up with with rise of the bots, resurgence in customer service, spending IT
budgets more wisely, increasing adoption of mobile and its payment technology, bricks and
mortar to become fashionable again, etc. (Innovation in the retail industry in 2018, 2016). This
industry will bring more innovation in next few years will be Artificial Intelligence and machine
learning technologies, revolutionary employees scheduling solutions, mobile workforce
management applications and many more. Along with this they will come with different kinds of
innovation which can be divided into categories such as In store enhancement for, In store
enhancement for retailer, payments, mobile and e-commerce, virtual/ augemented reality,
personalisation and many more. With the help of such innovations organisations can have a
competitive advantage with other competitors to bring better technology or product. This would
change the rank or position of retailing industry in next 1-2 years. These kinds of products helps
in giving customer satisfaction and grabbing a higher market share within a market place.
Thus, it can be observed that this sector has a great future since companies operating in
this industry are coming with innovations in order to satisfy customers completely. One of the
effective way to fulfil customer requirements is being analysed by such business organisation.
Through this method a company can grab a high rank within market place and also earn profits.
Innovation has helped in this sector to sustain in market place and garb a higher market share.
By using tool of customer satisfaction an organisation can increase its sales as well as
productivity (.Subramanian and et. al., 2019).
Organisation's innovation requirements 2020 and Beyond
Tesco is one of the repudiated and well known companies since it bring innovations in
their products and services which is being positively accepted by its customers. As this
organisation is coming up with rapid innovations in their commodities, customer expectation
from it are rising and henceforth, it is required to come up with more innovations in future period
also. Besides this, another reason to come up with innovations for this firm is higher demands
from customer and to sustain in competitive market place. Therefore, Tesco is coming up with
many innovations in 2020 and beyond, that are being mentioned below.
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 RFID: Company has come up with many innovations that has created expectations in
customers. To meet this expectation, Tesco is coming with an innovation which is RFID,
that is going to be brought in 2020. With the help of it, stores tags all its range of
products, observing technology as a medium of automating administrative tasks. This
will allow company to be customer focused. It would be helpful for customers as their
demands could be analysed by this and would be quickly reacted (Retail Trends That
Will Transform the Industry, 2019).
 Connected device: Tesco is planning to lunched a channel on digital platform which is
IFTTT. It refers to service that will help customers in connecting with their favourite
application. Full form of IFTTT is If This Then Than. It would be helpful for customer as
they will be able to automate their shopping. In this if in case cost of the product changes
or decreases to certain amount, than it would be added to their online shopping basket.
This will also promote online shopping and explore capacity within customers to set up
automated E-commerce. This will increase the sales and profits of the company.
Moreover, this will also encourage their rivals to bring innovations in their brand to
sustain in competitive market.
 Augmented reality: This innovation would be brought up by Tesco in 2020, for
marketing their product in market. Through this customer will be able to view 3D models
of their products in their convenient places. They can also save their preferences for
future purpose. Through customers will feel engaged towards the products and services
of Tesco's brand and they will purchase more products. This will lead to increase in sales
and productivity ODF the company. Augmented reality will develop a platform for their
rivals and they will also be influenced for brining innovation in their products and
services (Essential Retail, 2019.).
 Cognitive Computing: With rapid advancement in technology, there is an urge of
reducing efforts of human and make machines do the work. For facilitating this, Tesco is
coming with cognitive computing technology in 2020 so that it can give faster and quick
services to customers. They are launching robots to give products and services within
their stores. This would be helpful to consumers who have pressing needs. It would help
in increasing sales and productivity of the stores. Moreover, it will reduce the efforts of
human employees within the stores. Cognitive computing will give a new platform to the
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industry to encourage their competitors to bring innovations and will also bring progress
in retailing sector.

Illustration 1: Retail Trends That Will Transform the Industry
(Source : Retail Trends That Will Transform the Industry, 2019)
Building the future innovation capabilities for the organisation
Innovation is an important factor which is used by companies who do operations at a
large scale in order grab the attention of customers towards the new products and services which
has been launched. It helps in analysing the specific and unique characteristics of products and
services which differentiate it from other products. It is a suitable method which is used by
organisation to attract customers and maintain their brand loyalty with the company for a longer
span of time.
Tesco is a retailing industry which is being recognised for its fast and effective
innovations towards its products and services within the market place. This is beneficial for
organisation to come up with innovative and creative products that will fulfil as well as meet
requirements of customers. An effective method of doing this is by bringing up an innovative
product or service within the market place. In order to ensure the sustainability of it, Tesco is
focusing on building the future innovation capabilities for the organisation in order to give
satisfaction to its consumers and also to achieve advantage in the competitive market place. This
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can be done with the assist of a road map that gives a structural guidance to utilise the innovation
which is being needed in Tesco. Through the help of road map organisation can create potential
which will be helpful for them so that they can become a leader within an organisation. In
context to Tesco industry, road map is being implemented to carry forward the introduction of a
particular and innovative product. This has been described below (Bettencourt, 2019).
Recommendation and reason: After determining requirements and wants of the
consumers related to products and services of Tesco, it has been observed that cognitive
computing is the most quick easiest as well as feasible innovation that can be launched by the
company within the market place. Among all the innovation mentioned above, this innovation is
being chosen because it has not being brought up by any company until now.
Impact of change: In order to launch Cognitive computing technology, it is essential for
Tesco company, to do few necessary changes in their existing method so that they can create an
efficient result. This change will not only impact a particular function within a workplace but
will have impact on all the functions which are there in Tesco company. These functions are
human and resource department, marketing department, finance department , research and
development department, accounting department and many more other functions.
 Research and Development: Department of research and development in a workplace
plays an important role while bringing a new product or service at a market place. Here,
in regard to innovation of cognitive computing technology, Tesco is required to develop a
group of people within research and development department. These people will work in
an effective and enthusiastic way for creating cognitive computing technology. This
group must include people who have expertise skills and knowledge that is being needed
to implement cognitive computing technology within stores so that it can be effective.
Department can take some classes or tutorials in order to collect information related to
different computer skills and technical knowledge which will assist in implementing a
cognitive computing technology. This would result in successful launching of this
technology and also provide complete satisfaction to the customers.
 Necessary resources:Tesco must analyse the resources that are being required in order to
implement cognitive computing technology. They can also find out different substitutes
or options that are being available for for innovation which has been selected. Road map
includes information as well as details that would be beneficial in determining resources
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that is required by a company so that they can wider and make strong their concept of
innovation. Furthermore, it is been observed that in order to implement effective
cognitive computing technology, Tesco requires, technical employees, machines,
equipments and many other resources that will aid in successful launching of the
technology at a market place.
 Needed Technical skills: With context to Tesco innovation of cognitive computing
technology, company is needed for technical employees who have knowledge and skills
related to programming languages as well as computers. This would be helpful in
developing robots that will make help in reducing efforts of human employees and also
give faster as well as quick services to customers within the stores. Besides this training
and development may also be provided to the present workforce which can be related to
artificial intelligence in order to achieve maximum opportunities within particular time
period.
 Legal aspect: It is important for Tesco company to acknowledge different legal aspects
so that they can launch cognitive computing technology at a market place. It is must for
company to balance product design, rights of intellectual property should be assured and
also various kinds of legal aspects must be remain in perception of customers. This would
be helpful in maintaining their product important for a future and longer run. Intellectual
property rights related to all the standards which are being given by government are
managed and assured by Tesco company. This is done in order to protect their product as
well as services and itself so that they do not face any type of conflicts that might have an
negative affect on its image brand in future run (Sousa and Rocha, 2019).
 Cost of change: Under this stage, organisation focuses on the required changes in current
methods and technologies to launch an effective and significant product or service within
the market place. The structure of cost which is linked with usage of innovation of Tesco
company, in context to cognitive computing technology is being mentioned below.
Tesco has to incurred a lot of money to practicably come with creative technology
through the medium of cognitive computing technology within the market. As per the above
mentioned table, cost structure of this technology innovation, it has been determined that Tesco
company needs to spend $40000 on Research and development of the technology. Moreover, it
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has also been analysed that organisation will incurred $21000 on doing marketing of the
technology and $207000 on acquisition of resources which are being required. Apart from this
Tesco company has spend a cost of $14000 on advertising about the new technology, which is
cognitive computing technology. Moreover, along with this $22000 would be incurred by
organisation for recruiting as well as selecting workforce which are skilled and competent in
order to create a new technology.
Feasibility: According to the determination of affect of changes, that has been implemented on
Cognitive computing technology, which will have on organisation, it is important to check new
technology's feasibility before it has been brought up up at a market place. Feasibility basically
focuses on the evaluation of success plan in order to successfully and effectively execute
cognitive computing technology. It is important that the enterprise acknowledges that whether
process of implementation of a plan requires any changes for a successful launch of the new
technology. It has been analysed that although the organisation is already having the needed
machinery and software in order to create a new product, still it is required to garb few new tools
and technology in order to develop cognitive computing technology within the stores
(Nishimura, 2019).
Approval process: Under this stage executives of an organisation is required to take
approval from higher level mangers or board of directors in a meeting. This approval will be
related to launch of fresh as well as innovative product or services. In context to this, Tesco
company must come up with some required changes in the current system in to create a
Cognitive computing technology. Therefore, these changes can be made only with the approval
of higher level managers of Tesco. This is needed to be done in order to make them aware about
the plan which is needed to be implemented for launching a new product among customers.
Apply the changes: This is considered to be an important step in road map for launching
the innovative product with the market place. In this, changes are being executed within Tesco,
so that they can effectively launch Cognitive computing technology. In this innovation the
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resources which can be required are software , personnel, technology from different sources so
that product can be developed successfully. For facilitating this, Tesco will conduct traning and
development classes and engineers so that they can make a capable cognitive computing
technology. These classes will help technical staff members to acquire skills related to
implementation of high-end technology.
Reviewing the impact of changes: It is a last stage that mainly focuses on a successful
completion of a plan. This is in regards to the future uncertainties to a limit according to which
Cognitive computing will be effective within a market place. Prototype model is being used to
do a test in this step. It is being carried out before launching a new product at a market in order to
check its feasibility based on its profitability and acceptability in market.
CONCLUSION
From the above mentioned report, it can be concluded that innovation is an essential
method to sustain in a competitive market place. It is treated as a tool for taking advantage over
competitors and grabbing opportunity in order to increase the present share of market. It bridges
the gap between customers as well as an organisation and also enhances loyalty towards brand.
Moreover, along with this it has also being determined that retailing is a broad industry. This
sector needs to launch some innovative products so as to increase productivity and profits of the
firm. It also help them in maintaining resistivity within a market place for a longer duration. By
coming up with unique innovations in their products as well as services within a regular pace of
time, an organisation tries to achieve acceptance from people based on the quality ratio. It will
result in creating number of opportunities for the sector in future period.
Furthermore, it has been analysed that retailing industry has a wider scope of launching
new technologies based on the requirements of demand of existing market place. Some effective
that will be launched by this sector can be RFID, Connected device, Augmented reality,
Cognitive Computing, etc. These innovations can be brought according to the demands of
customers. Apart from this, it has been analysed that organisations implements road map, so that
they can use any change and also come up with innovation within a market place. This process
includes a set of stages that are used in launching an innovation.
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REFERENCES
Books and Journals
Akinyoade, A. J. and Eluwole, O. T., 2019. The Internet of Things: Definition, Tactile-Oriented
Vision, Challenges and Future Research Directions. In Third International Congress on
Information and Communication Technology (pp. 639-653). Springer, Singapore.
Bei, X., 2019. Trademarks, specialized complementary assets, and the external sourcing of
innovation. Research Policy.
Song, B., Jin, P. and Zhao, L., 2019. Incentive Mechanism of R&D Firms’ Collaborative
Innovation Based on Organisational Ambidexterity. Discrete Dynamics in Nature and
Society, 2019.
Subramanian, N. and et. al., 2019. Out-in, in-out buyer quality innovation pathways for new
product outcome: empirical evidence from the Chinese consumer goods
industry. International Journal of Production Economics. 207. pp.183-194.
Bettencourt, L. A., 2019. Service Innovation—A Jobs-to-Be-Done Guide. In Marketing
Wisdom (pp. 157-171). Springer, Singapore.
Sousa, M. J. and Rocha, Á., 2019. Skills for disruptive digital business. Journal of Business
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Nishimura, A., 2019. Profit Opportunity, Strategic Innovation, and Management Accounting.
In Management, Uncertainty, and Accounting (pp. 97-127). Palgrave Macmillan,
Singapore.
Online
Innovation in the retail industry in 2018. 2016. [Online]. Available through:
<https://www.centurylink.co.uk/blog/five-innovative-things-retail-industry-2018>.
Essential Retail. 2019. [Online]. Available through:
<https://www.essentialretail.com/analysis/five-ways-tesco>.
5 Retail Trends That Will Transform the Industry in 2019. 2019. [Online]. Available through:
<https://blog.hubspot.com/marketing/retail-trends>.
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