The Role of Information Technology in TESCO PLC's Business Development

This report provides a comprehensive analysis of TESCO PLC's information technology (IT) strategy and its impact on the company's business development and competitive advantages. The report begins with an introduction to IT management and its significance in the modern business landscape, followed by background information on TESCO PLC, including its founding and evolution. It then examines the company's products and services, along with an assessment of its competitive environment, utilizing Porter's Five Forces model to analyze the bargaining power of buyers and suppliers, the threat of new entrants and substitute products, and competitive rivalry. The report further delves into the analysis of TESCO PLC's inbound, operations, and outbound logistics, highlighting key activities within Porter's value chain, including human resource management and technology development. Finally, it explores how TESCO PLC could deploy IT to enhance its operations and gain a competitive edge, concluding with a summary of the key findings and recommendations. The report provides a valuable insight into the strategic use of IT within the retail industry, particularly focusing on TESCO PLC's approach to maintaining and improving its market position.

Managing Information and
Technology
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Table of Contents
INTRODUCTION...........................................................................................................................3
BACKGROUND INFORMATION............................................................................................3
PRODUCTS AND SERVICES..................................................................................................3
COMPETITIVE ENVIRONMENT.................................................................................................4
PORTER’S 5 FORCE ANALYSIS............................................................................................4
ANALYSIS OF INBOUND LOGISTICS, OPERATIONS AND OUTBOUND LOGISTICS.....6
Inbound Logistics:.......................................................................................................................6
Operations...................................................................................................................................6
Outbound Logistics.....................................................................................................................7
TWO SUPPORT ACTIVITIES IN PORTER'S VALUE CHAIN..................................................7
KEY VALUE ADDING ACTIVITIES WITH JUSTIFICATION.................................................8
BUSINESS COULD DEPLOY INFORMATION TECHNOLOGY (IT) .....................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
In modern times, Information Technology management refers to all the disciplinary
activities done by organisations considering IT resources in order to meet all the requirements
based on different priorities (Cartwright and Cooper, 2012). In today's trendy world, it has
become vital for companies to manage their IT systems so that they could gain both competitive
advancements and also reach to the desired position. Under this report, company that has been
taken into consideration is TESCO Plc, which was found by Jack Cohen in 1919. Presently, it's
headquarter is at Hertfordshire, England, UK. Including this, role will show the information
technology that has helped TESCO PLC in gaining competitive advantages. Analysis of the
competitive environment, analysis of inbound logistics, operations and outbound logistics. It will
also put light on Porter's Value Chain of TESCO PLC and lastly, report will also consider deploy
information technology (IT).
BACKGROUND INFORMATION
Jack Cohen was the founder of TESCO PLC in 1919, if it is talked about company's
initial age, then TESCO name previously showed up in 1924, just when Jack (Founder of Tesco)
purchased shipment of tea from T. E. Stockwell and joined those initials with the initial two
letters of his surname, and the first Tesco shop opened in 1931 in Burnt Oak, Barnet. His
business extended quickly, and by 1939 he had more than 100 TESCO shops the nation over
(Cresswell, Bates and Sheikh, 2013). Along with this, it has been found that various countries of
both Europe and Asia served by TESCO stores. At first a UK nourishment shipper, TESCO has
expanded extensively since the mid 1990s, with performing number of operations among 11
nations across the world. Away with this, it is also said that TESCO has gone through association
where it was pulled out of the US in 2013, yet beginning at 2018 continues watching
improvement elsewhere. Since the 1960s, TESCO has improved into different regions through
dealing within a particular industry and i.e. retailing, where it has offered customers with ample
number of products through both offline and online systems.
PRODUCTS AND SERVICES
TESCO Plc at the moment is dealing in a number of sectors like clothing, grocery, club
card, finance, mobile industry, delivery savings and in some of other industries (Desouza and
Hensgen, 2015). At the moment within retail industry, Tesco Plc is holding 23% of the market
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share within United Kingdom. On the other hand, grocery sector has led TESCO Plc to grow
subsequently among different regions of both the continents (Europe and Asia). Away with this,
Tesco Plc is also dealing among different sub sections of retail industry like, company is retailing
attire, books, furniture, gadgets, petroleum, toys, monetary administrations, programming,
internet providers and telecoms as well.
COMPETITIVE ENVIRONMENT
British Multinational retailer named as Tesco, which is dealing in general merchandising
industry in all over the world, where company faced high competition from different competition
from various famous retailers like Morrisons, LIDL, ALDI and so on (Drucker, 2012). In order
to examine the competitive environment, Porter's Five Forces Model has been performed
underneath:
PORTER’S 5 FORCE ANALYSIS
Basically, this model was found by Michael E. Porter, which consists of five forces that
may impact upon company's performance level and may affect existing competitive advantages.
Since, TESCO Plc is dealing within retailing industry, therefore company deals with high
competitiveness from different competitors (Drucker, 2012). This model is holding different
forces and these are: bargaining power of buyers, bargaining power of suppliers, threat of new
entrants, threat of substitute products and competitive rivalry where all of these are described
underneath:
Bargaining power of buyers: At present, it can be said that within retail industry,
TESCO and other business retailers are facing high bargaining power of buyers, because of
ample number of reasons like change in trends, technological advancements and so on. Slight
change among prices may lead TESCO to face various issues in relation to competition. This can
be justified with a good example of Big 4 Supermarkets of United Kingdom, where these
business firms makes changes in prices considering competitive pricing, here if any offering
done by TESCO plc considering any other pricing strategy like skimming, then shift of
customers towards other products offered by companies can easily be seen (Galliers and Leidner,
2014).
Bargaining power of suppliers: Retail industry of United Kingdom, consists of a various
suppliers but, their negotiation power is low and the reason that came in front is high influence of
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different supermarkets like Morrisons, ASDA, LIDL, TESCO PLC and Sainsbury's as well. On
the other hand, it is also said that suppliers has raised a number of concerns in relation to their
survival within retail industry, because every company like TESCO PLC carrying a short number
of suppliers who works in different regions (mostly wide areas). This raised fear of suppliers that
they might loose commercial contracts with big supermarkets. Hence, this is one of the prime
reason for suppliers that their power of negotiation is quite low. Therefore, it can easily be said
that strong presence of different business organisations within retail industry would help them in
bringing right innovation in correct time considering unique and innovative IT Systems
(Holtshouse, 2013).
Threat of new entrants: Within retail industry threat of entry from new and innovative
competitors is pretty much low, because big four supermarkets like TESCO PLC, Asda,
Sainsbury’s and Morrisons has already grabbed a good position within United Kingdom.
Basically, in order to give competition to these business organisations it will be required by new
entrants to make really very high investments within capital. In this manner, the new
administrators need to create something at an incredibly low cost and/or of high quality based
products to set up within the estimated market of United Kingdom. It is also needed by these new
entries to get approval of the arranging of the government takes an impressive amount of time
and assets to build up new general stores (Major and Savin-Baden, 2012).
Threat of substitute products: This is being considered as another force that has
influenced retail industry of United Kingdom as it contains high threat for different business
firms that are already dealing at higher market of UK. The reason that came in front was many of
the business firms at small level has developed ample number of substitutes to give competition
to Big Four Supermarkets. Some of other non products such as electronics, clothing, furniture
and so on. This could be understood with a good example of various business organisations that
are offering ample number of substitute products like House of Fraser, BHS, Primark,
Debenhams and so on. This is where departmental stores, and non retailers with both scale and
distribution is being done by these firms to compete with Tesco Plc.
Competitive Rivalry: Competitive rivalry within retail industry of United Kingdom has
been high from a really very long time, because of big four supermarkets and other organisations
that are already performing number of operations to gain competitive environment. Basically, the
reason that came in front is high investment done by all the big organisations within IT Sector.
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that are performing business among a lot in advertising and branding of their products. ALDI &
LIDL are the two business organisations, which has given competition to TESCO through calling
this approach as price war, where business firms has given heavy discounts within different
products and services. This has adversely affected the sales of TESCO. Justification that can be
given over here is of big four supermarkets, where company's competitors like market share of
Sainsbury's (15.8%), Morrisons is around 10.14%, Aldi (7%), Asda (15.3%) which declined
TESCO's market share. It will be required by TESCO, to sustain within the market for a longer
period of time, and this could be done through make appropriate decisions right on time
(Marchewka, 2014).
Therefore, it can easily be said that, TESCO Plc only got affected by bargaining power of
buyers along with the competitive rivalry. This is where, it is required by TESCO Plc to keep on
making right choices in specified time frame. On the other hand, it is also said that other forces
like bargaining power of suppliers and threat of new entrants is really low in nature for the
business company. Away with this, it is also said that in order to reduce the bargaining power of
buyers and competitive rivalry, then it will be required by TESCO to bring ample number of
modifications within operation process, so that right and unique product can be developed and
delivered to correct customers. This would directly lead TESCO PLC to enhance their
competitive advantages as well (Margetts, 2012).
ANALYSIS OF INBOUND LOGISTICS, OPERATIONS AND OUTBOUND
LOGISTICS
Inbound Logistics:
Inbound logistics is the primary function of value chain which involves receipt of
products from the supplier at the storage warehouse. Internal handling and dispersion to the
warehouse store and finally placing the products on display at the table. Quality control is the
key factor that TESCO need to keep in mind while delivering goods and services to its customer.
This approach provides the opportunity that helps the customer to acquire true value of money
and removal of additional cost charged to its customer (Mondo and Musungwini, 2019).
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Operations
Operations plays a very crucial role for effective and smooth functioning of TESCO. It
includes stock management and display of product in an effectual manner in order to achieve
competitive advantage at the workplace. This is the second level of value chain within the
business organisation. In assistance of this, the supervisor of TESCO focuses on continuously
performing the tasks that helps in disposal of stock within a given time period in order to
achieve competitive advantage. TESCO emphasised on adopting a new and innovative approach
to increase their own performance level (Hall, Site 1001 Inc, 2016).
Outbound Logistics
Outbound logistics helps in delivering high quality goods to its customer that helps in
increasing motivation level of employees. In context of TESCO, the manager focuses on offering
products to its customer conveniently by providing them home delivery. It offers various benefits
to its customer such as good packaging, product deliver on time, lack of disruption and other
facilities that is according to the need and preferences of customer. It is the place where final
products is delivered to its customer in order to satisfy them.
TWO SUPPORT ACTIVITIES IN PORTER'S VALUE CHAIN
TESCO can adopt the Porter's Value Chain method in order to alter or modify the
existing goods and services for providing true value to its customer. This method has been
founded in 1985 by Michael Porter, which involves nine leading steps that helps in changing the
activities of business. Value chain method involves various type of activities such as maintaining
infrastructure of firm and technology for increasing the performance of business organisation
(Tesco Value Chain Analysis, 2019). At present, the management team of TESCO emphasised on
achieving a competitive advantage over its rival firms such as Morrisons, Aldi, Sainsbury's and
many more, therefore, its management team can execute the concept of Porter value chain which
is mentioned below:
Two secondary activities of TESCO:
Human resource management: The human resource management provides support to
TESCO in offering best services to its customer. The management of TESCO emphasised on
recruiting individual from different cultures that helps in satisfying the need and preferences of
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customer. Due to hiring of individual from different background will bring unique ideas as well
as talent in the workplace. This will help in satisfying need and preferences of customer in order
to retain them (Hall, Site 1001 Inc, 2019).
Technology development: It is essential for the company to implement advanced
technology in order to improve the quality of product and services. In context of TESCO, the
management team emphasised on providing latest technology that helps in increasing shopping
experience of its customer. In addition to this, the supervisor of TESCO emphasised on
introducing new distribution channel such as selling through intermediates to reach fresh
customers and increase its profitability ratio.
These activities helped TESCO in retaining within the marketplace for a longer time
period. Apart from this, the organisation focuses on suitable alteration within different sectors in
order to enhance productivity and profitability in an effective manner (Rizzo and et. al., 2016).
KEY VALUE ADDING ACTIVITIES WITH JUSTIFICATION
Value adding activities plays a very crucial role in every business organisation in order to
add values on a particular customer segment, group and so on. The key value added services
provided by TESCO to its customer which is mentioned below:
 TESCO has provided high tech-customer service department to their customer in order to
maintain trust and loyalty of customer. It will also help the company in building a direct
relationship with its customer that increases motivation and satisfaction level of
employees.
 TESCO provides personal services to its customer such as give me a call ,if you have
face any problem related to products which helps in creating a good brand image and
reputation of company in front of customer.
 TESCO offers promotional services such as advertisement, discount, free samples and
many more to its customer for increasing the motivational and satisfaction level
consumer (Smith and Wong, 2016).
 Herein, the company provides supporting as well as free training services to its customer
in order to improves shopping experience of customers.
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 Through the implementation and execution of advanced technology adopted by TESCO
helps in improving performance level of employees. In addition to this, the manager of
TESCO use latest technology for providing new and innovative products to its customer
in order to increase the profitability of the business organisation.
 Including this, it is also found that collaboration of TESCO with it's suppliers has also
been taken into consideration of value added service, which has helped company is
reducing the cost of different products and services offered by them. This is where,
TESCO PLC has utilised Lean Thinking approach, that helped company in enhancing the
satisfactory level of customers (Pearlson, Saunders and Galletta, 2016).
 The plan, that company has developed as vital most key value added services offered by
TESCO to it's customers is a plan named as “Our Little Helps Plan”, which they run on
different online platforms, that has helped company in maintaining different range of
goals and objectives (Schwalbe, 2015).
Considering the above mentioned value added services, which helped TESCO Plc in
maintaining their positive presence among customers. Also, it has helped company in gaining
extra attention from customers in all over the world.
BUSINESS COULD DEPLOY INFORMATION TECHNOLOGY (IT)
Deployment of information technology by TESCO would directly lead to become one of
the crucial business organisation. Including this, it is said that TESCO Plc has conducted Porter's
five forces analysis, which helped company in analysing the attractiveness of industry. This also
helped firm in taking a number of decisions in relation to what negatively can go while adopting
a whole new IT system for workplace (Valacich and Schneider, 2015). Away with this, it is also
said that TESCO Plc performance level will also get improvised in specified time frame. There
were some of plus points that came in front of adopting or modifying the Information System
then, it would lead TESCO to improvise the profitability and productivity at the same time.
On the other hand, if it is talk about TESCO then it was previously did not kept it's focus
on IT Department and in order to fulfil the needs of customers in relation to trends, organisation
has made contract with XANSA, in order to reduce the problems that are linked with financial
terms of the arrangement were not made open (Feng and et. al., 2016). XANSA will keep on
giving an arrangement of administrations through its incorporated conveyance directs in the UK
and in India. Administrations will incorporate application the board, programming advancement
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and program and venture the board for a wide scope of TESCO's IT frameworks covering
conveyance, stock recharging, items and valuing through to day by day rack edge marking.
XANSA will likewise bolster the United Kingdom and Republic of Ireland finance frameworks
just as giving general deals data (White, 2015). Along with this, it is also said that there were a
number of cases that came in front, which did not helped company in making appropriate image
in front of the customers.
These components may lead TESCO to improvise the performance level through
reducing number of negative effects. Away with this, it is also said that it will be required by
company to use development so they can overhaul their activities and addition their profitability
by satisfying their customers with number of elements that would help organization in fulfilling
needs and necessities in a limited frame of time (Fiorini and Masic, 2017).
CONCLUSION
Above report has clearly summarised the vitality of IT Systems, when it comes to
enhance the performance level of the organisation at a time even when if it is filled with
uncertainties. On the other hand, it has also been concluded that Porter's Five Forces Model
would also enhance or improvise the decision taking process of company. Including this, it is
also said that Porter’s Value Chain model basically consists with a number of activities, which
would lead a company to bring right modifications within their existing innovative approaches.
Away with this, it is also said that finding out the industry attractiveness may help a business
firm in bringing right updates within their operations management system.
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Online
Tesco Value Chain Analysis. 2019. [Online]. Available through: <https://research-
methodology.net/tesco-value-chain-analysis/>.
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