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The impact of technology on the operations of TESCO

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Contents
Introduction: ................................................................................................................................................. 3
Business Model: ............................................................................................................................................ 3
Business Plan: ................................................................................................................................................ 5
Evaluation: .................................................................................................................................................... 9
Strengths ................................................................................................................................................... 9
Weaknesses ............................................................................................................................................. 10
Conclusion: .................................................................................................................................................. 11



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Introduction:
21
st
century is the century of speed and modern technology. Living standard of modern people
greatly affected to a new direction by steady changes with tremendous growth and rapid
development. The reasons behind highly technology enabled lifestyle are advancement of
communication technology and rapid growth of internet technology for last decade. This makes
customer informative and aware of the sellers and there offerings and make them always hungry
for better upgraded and hi-tech products and services. Online retailing started in middle and late
of 1990s. From the start of this its created the rivalry between off line and on line selling. This
rivalry is getting fierce every day. Only shopping malls are viewing huge rate of shoppers in
these days but still internet is dominating it. It is now a nightmare for traditional stores that e-
marketing one day will take their entire market share. But some experts saying that footfall in
shopping centres are increasing with the same pace like internet shopping so why not e-shopping
and traditional shopping cannot stay together? The experiences online buyer having when they
buy products from online sellers from their well programmed and hi-tech websites are
extraordinary. Customers really enjoy the shopping with transparent discounts and product
details. Online shopping saved the customers from fraud practices and unfair prices of various
traditional shopping centres. In retailer website total product description along with
specifications are available. Not only one product but several competitors product with the
benefit of price and quality comparison page is available. (TESCO PLC Case Study, 2011)
Business Model:
Here we are discussing about TESCOs customer relationship management. Internet is a great
factor to change TESCOs business model. It will be easy to find out the advantages and
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disadvantages of using technology in business. We can easily suggest some business plan for
TESCO. Last conclusion we can discuss about the product. (McCabe, 2013)
TESCO is one of the retail market leader in United Kingdom. Currently 5, 30,000 employee
working in TESCOs different outlets. It is really a challenge for companies like TESCO to
accustom themselves with the change in society and its people. Demand is also shifting from
quantity to quality. Proper planning and management decision send TESCO towards its goal.
TESCOs employees, customers are its top priorities. Presence of TESCO in several locations of
this world with high value assets can be seen and it has a bright future with tremendous growth
opportunity. Chairperson of TESCO believes in diversity in workforce which gives us the reason
behind TESCOs equal number of male and female employee ratio. The Chairman once said that,
In the last four years (since 2007), the number of female directors at Tesco has increased by 42,
an increase of nearly 70%, and we are working hard to help women succeed in senior roles more
generally throughout the company. There are currently three women on our PLC Board (19%)
and women in senior management positions account for 29% across the Group as a whole
(Tesco PLC, 2013). TESCO adopted modern technologies to compete in this competitive market.
In future as uses of internet increasing TESCO is using this technology to give its customer the
outmost comfort and reliability. This study will find out the impact of technology in business
development of TESCO. Information Technology and several communication technology helps
TECO to gain advantageous over its rivals. For customer TESCO started its online portal. By
this study it will be clear that for business development statistics is important or not? (Suddath,
2013)
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Business Plan:
Several Modern day technology TESCO is using. Three major functions of using information
technology and communication technology are followings.
Because of online technology TESCO got a new market. Information and communication
technology is the key features for TESCOs success in recent market. TESCO customers can
easily buy products from its online portal. It helps customer to spend their free time in other
things. As TESCO is a big brand normally too many customers visit it every day so it is always
over crowded.
Second most important features is introduction of PDA. This service is helpful for the outlet
customer of TESCO. PDA service helps the customer to locate exact product location. By typing
the name of a product employees can easily find out its location. To get a position in the
competitive retail market of United Kingdom a proper customer service department required.
PDA service helps to locate exact location of shelf as per row and column basis. Comfortable
find out of the product is the priority of the customer.
To boost logistics and supply chain TESCO brought a new system called navigation system.
This is the third important features of TESCO in technological development. For high value
consumer durable goods truck driver can use navigation system to locate the address. It is a
reliable service.
TESCOs website is the favourite one for customers. Information and communication
Technology is a boost for TESCOs future sale. Online customers of TESCO are getting
benefitted out of it. It not only bring a wide range of choices but also it saves some amount of
valuable time of the customers to go to the shop, find the product, compare the specification of
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the product with its rivals, pay for it after standing in line in front of the counter for several
minutes, then coming back from the store. This can takes minimum of thirty to forty five minutes
if customer is really quick one and its a holiday otherwise in busy hours it can take an hour
maybe. Online shopping is the one and only way to tackle his situation in a strategic way. For an
outlet like TESCO which is overcrowded most of the time, buying from these outlets are really a
headache for consumers. So bringing online services TESCO can not only give its customer a
relief but also it can bring customers who cannot buy from TESCO because of their insufficient
time of shopping.
The second most important technological development for TESCO is use of PDA (Personal
Digital Assistant). This was mainly brought for the use of employees of TESCO. PDA (Personal
Digital Assistant) is also known as Palmtop. It also helps customer to locate a product when they
cannot able to find it. If outlet helpers can just type the name of the product on PDA (Personal
Digital Assistant) screen and it will show the product location to them at the same time. This
Increases the customer satisfaction in great extent and help TESCO to maintain its leading
position in United Kingdoms competitive market with maximum number of customer retention.
PDA (Personal Digital Assistant) also making TESCOs brand image as the most customer
friendly shop and that bringing new customers as well. PDA service helps the customer to find
the exact row and column of where the product is. That is very comfortable and time savings for
the customers.
For better logistics services and supply chain management TESCO has a world class navigation
system. It is the third most factors in development of technology in TESCO. While on delivering
the valuable consumer durables products if truck driver cannot locate the address of the customer
then this navigation system can help him to find the address. This service is quite handful and
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TESCO is really depending on it for future development. (TESCO Mobile Reaches 200,000
Customers,2013)
ICT technology greatly impacted TESCOs business. To efficiently work in the competitive
market these technologies are necessary. To make the life of employees easier this PDA
technology is very much effective. Services like PDA and other automation services helps
TESCO to get large amount of customers. TESCO had to train its employees if they did not take
other specialists organizations help to implement information and communication technology.
Though Information and communication Technology is an expensive one but it can save a lot
amount of money for in long run.
By implementing digital video and CCTV camera TESCO put extra security in there system.
This can be more advanced by information and communication technology. To be competitive in
global market low price and high quality is very important and that can be achieved by this ICT
improvement.
Information and communication technology also brought special services like self-check out
facility for the customer. By this technology every customer can scan there bill and product by
themselves. For E-marketing facilities TESCO made there website. Customers can buy product
by online. TESCO then launched a deep assortment and wide range of product for there
customer. Creativity in website made attract more and more customer. Because customer also
understood that online purchasing not only saving their time but also saving their travelling cost;
Information and communication Technology helps TESCO to segment its customer in various
formats.
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Logistics and supply chain management were improved by implementing navigation systems.
PDA services given customer several online facilities and navigation system helped TESCO to
build a core competence within it.
TESCOs business performance is greatly affecting by technological development. To sustain in
this competitive market, adoption of those technologies and providing extra services is
necessary. Technology not only helping the customers to locate the product but also it makes the
employees life a bit easier. Including automation services like PDA (Personal Digital Assistant)
in various sectors of the business helping TESCO by attracting more and more customers. If
TESCO did not adopt the ICT (INFORMATION AND COMMUNICATION TECHNOLOGY)
then they had to train their own employees by themselves for order taking and providing
respective services. These technologies do not come easy or for low price. TESCO paid a lot for
these technologies to the technology provider because they understood that establishment cost is
nothing in front of the huge capital it will save with the help of that technology. Tesco also
implemented its technology for outlet securities like digital video and CCTV camera installation.
Electronic advancements not only increasing its brand value but also reducing its cost of
manufacturing and for that reason TESCO is offering their product to the customers with lesser
price than that of other competitors. And that gives TESCO a competitive advantage over other
rivals in global market.
Other advancement in technology field is self service checkout facility. By that facility customer
can scan the product they bought and scan the bill of the product by themselves. Very advance
technology is used to design the TESCO website for e-marketing purpose. From that website
customers can easily buy their needed product. TESCO already launched wide variety and deep
assortment of product by their website. Attractiveness of the website brings more and more
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customer to TESCO. TESCO targeted their market according to the customer demand like for
fast moving consumers who have lesser time in hand and spent less time for shopping online
retailing is the best place for them.
Navigation systems made a revolution in logistics and supply chain management for TESCO. So
in a summary online retailing gives TESCOs customer a relief and navigation system gives a
relief to the supply chain management and logistics service agent. TESCO officials said that they
are launching new digital music and book services in United Kingdom not only that TESCO
expanding their food shopping into Bangkok and Shanghai and also initiated club card in digital
format in China. (Tesco PLC, 2013)
Evaluation:
In order to evaluate the performance and contribution of TECHNOLOGY in Tesco, firstly
several advantages and disadvantages need to be found out.
Strengths
The customers of Tesco can by the products through the company website.
TECHNOLOGY has created the website for Tesco for the purpose of providing online
shopping facilities to its customers. This facility actually has brought the customers close
1to the brand. People can get benefited by online shopping as they do not have to do
physical shopping in huge crowd. Just a click on the items can bring them to the
customers.
People can use credit cards for shopping. The online payment facility that has been
provided by TECHNOLOGY in Tesco has benefited the customers. Therefore, people do
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not need to carry money for the purpose of shopping. Only the swapping of credit cards
or the online payment facility can complete the purchase process of consumers.
Implementation of navigation system in logistic and supply chain management is the key
feature of TECHNOLOGY. By the service Tesco has made their supply chain quite
efficient.
Implementation of PDA service and location label of products has increased the core
competency of Tesco. The service is beneficial because it helps the customers to find a
product from a row and shelf instantly. Customers have to face limited trouble in order to
find a product by the PDA service.
The online shelf spaces are cheap and plentiful so, the niche markets can also be catered
by the online shops. For example, it is possible for an online store like Tesco to sell the
intercom systems like wireless intercoms, video intercoms, and wireless infant
monitoring systems which cant be possible for a mortar and brick retail store. (Foster,
2012)
Weaknesses
As there are several advantages of using TECHNOLOGY, on the other side Tesco might
have several disadvantages too. If any problem occurs in the system or main hub and the
company cannot run the process immediately; Tesco may have to face huge loss in
business for that particular day. Moreover, it can create a negative brand image in
customers mind.
Another disadvantage may occur due to technical problem. If the website gets crashed
due to hardware problems in systems, people will not able to purchase products.
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Moreover, the most critical factor will be taken place if online payment gets hampered.
Therefore, it is quite risky to maintain the process.
Last but not the least, using TECHNOLOGY in Tesco is very expensive. It increases the
operational cost of Tesco. It is evidenced that, in order to use the services of
TECHNOLOGY; Tesco pays almost 3,000,000 Euros every year. (TESCO PLC, 2013)
Retailers are investing $750million for technological advancement and that is three times more
than what retailers were invested in 2010. (Ruddick, 2013)
Conclusion:
Implementation of ICT may create several technological problems in business practices of
Tesco. In order to avoid the technological problem in server or in the systems Tesco needs to
monitor the following aspects.
Now-a-days Tesco is totally dependent on ICT. Therefore, ICT team needs to establish the
communication system with the help of data processing. As Tesco pays a huge amount, it is the
duty of ICT to take care all these things. The effective data processing will reduce the chance of
system and website crash. (Jackson, 2013)
Moreover, Tesco needs to keep a good backup system in computers. The data processing system
is effective but not safe enough. In a critical system crash the storage data may be lost.
Therefore, Tesco always needs to keep multi-redundant backup files and the files should be
copied.
Tesco need to employ password protected server and data protected protocols in order to protect
the data from the terminals. Moreover, in order to stop online hacking off the security password
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of Clients debit and credit cards; Tesco needs to secure the socket locker of the website. The
enhanced and specialized security and robustness will easily stop online hacking.
Retail scenario has been changed very speedily and in future it will be a breakthrough for them
who have a better technology. TESCO is applying technology in three key sectors like stores, on
PCs and increasing TESCOs presence in mobile and tablets via several apps. Customers are
getting familiar with the technologies and they do not bother about channelling or anything
regarding supply chain. Customers now a day does not worry about vendors they only care about
good products at great price and easily available at their door step. Customers in these days order
from their laptop and pay by the QR code from their mobile and collect the product next day
from one of the hundred stores of TESCO in United Kingdom. Because of technology customers
now can see what the ingredients of a product are and how to use those ingredients in what ratios
to finally make those products. (McNamara, n.d.) Technological advancement in various fields
gives advantageous like:
Productive gains: Productivity gain saves both money and time for TESCO. Self check out
facility is a masterstroke for that.
Cost reduction and increased profitability: If operating cost, production cost and distribution cost
decreases then automatically increase the productivity.
Efficiency: When all other factors are running so well then technology will increase the
productivity and efficiency of the organisation in a great extent.
Improvement management information: It will bring speed in TESCOs system. And make all
the data accessible at any point of time.
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Improved Customer: One store keeper is handling all the billing is too much time consuming. So
it is better that customer can scan the bar code and make their own bill.
Managing risk: TESCO needs to ensure that what data customer is sharing with them is
completely safe and secure. (Woods, 2007)
Cybercrime: This is the most growing crime of this era. Here unauthorized persons can enter into
TESCOs database and steal valuable inside information.
Preventive Technologies: Technology like close circuit television camera and other burglary
alarm must need to implement in and outside of TESCO stores to prevent criminal activities.
Disaster Recovery: If any natural calamities like flood, fire and cyclone happen then it can
destroy all the data in the computer of TESCO stores. So TESCO should come up with an idea
like backup drive or backup computer where they can store huge amount of daily data.
(Datamonitor: Tesco PLC, 2011)

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