KNOWLEDGE MANAGEMENT AND

INFORMATION SYSTEM

A CASE STUDY OF TESCO PLC

STUDENT IDENTIFICATION NUMBER:

Knowledge Management
System

Knowledge management can be described as a

system which inculcates both capturing as well as
storing of knowledge outlook along with putting a
value on intellectual property.
As stated by (Beckett, 2000) knowledge
management (KM) consists of the following steps:

Generation of knowledge
Sharing knowledge
Adaptation to knowledge
Application of knowledge
Creation of new knowledge.

KM (CONTD.)

On the organisational front, knowledge management

is very well connected to the notion of intellectual
capital. This intellectual capital consists of Human
Capital, Structural Capital, and Social Capital. Human
capital is expressed by the level of education, skills,
expertise and attitude. Structural capital consists of
brand names, system, and processes and sorts of
management philosophy. Social capital is concerned
with the relationship of the organisation with its
customers, partners, employees and other
stakeholders.

Customer Relationship Management

(CRM) System

Customer relationship management refers to

the way of interaction of a business with its
customers. CRM comprises of acquiring
information about the customers and utilising
that information to meet the demands and
requirements of existing consumers as well as
detecting new ones in order to generate
higher revenues.
Some examples are reporting tools, decision
support, data mining, data warehousing and
sales force automation.

Key elements of CRM

Interaction
management

Relationship
management

Service
quality

Behaviour of
employees

INTERACTION
MANAGEMENT
The activities for interaction should be well organised as well
as customised through the accessible touch points. The
touch points assist in developing customer profiles on the
basis of the data accumulated from previous customer
records. These touch points should be utilised for
distributing various goods and services as well as for
communicating with the consumers. The implementation of
interaction management is done by receiving feedbacks from
customers and increasing the number of interactive sessions
through attractive methods such as the social network.

RELATIONSHIP
DEVELOPMENT

Monitoring of the process of relationship is the most

significant activity in the achievement of relationship
development. It includes the management of complaints
or services.

These processes are composed of activities, schedules,

mechanisms and procedures where the products have
already been delivered to the consumers.

The organisation should set the key indicators of

performance such as customer satisfaction, lifetime value
for customers and rate of retention. A relationship can be
well-developed when the customers are made to believe
that their feedbacks are being taken seriously into
consideration.

SERVICE QUALITY

The quality of service is positively associated with

customer loyalty and in turn, with the profitability of the
organisation.
The following methods might be employed for the
implementation of service quality:
Meeting the expectations of customers by providing a
good level of service along with having a variety of
products in stock.
Good quality of goods should be provided at considerable
prices.
The complaints of the customers should be tactfully
handled.

BEHAVIOUR OF
EMPLOYEES

The relationship between an organisation and its

customers is more likely to be strengthened when an
employee is compliant to the values and behaviour of the
organisation.

If an employee chooses to act his or her own mind, there

might be adverse effects which successively might lead to
the deterioration of the company.
A positive effect can be achieved with instant replies to
the customers along with ensuring that the customer is
treated in a friendly and respectful manner.

LAUNCH OF TESCO CLUBCARD

The inception of the idea was done in 1993. Formerly, Green
Shield Stamps were used as promotional equipment which
provided rewards to customers but did not aid in gaining
any customer information. The change introduced after the
Green Shield Stamps was to develop a magnetic stripe card
which would provide information about customers.
The creative team of Evan Scott made two modifi cations to
the design of the card and re-launched it in 2005 where
every member had a personalised card which could be
scanned rather than swiping at checkouts.
The Clubcard which we know today was re-launched in 2008
with major changes in design along with key fobs. After
Tesco acquired the Power Supermarkets Limited in the
Republic of Ireland, it introduced the Clubcard scheme there
immediately.

PERCEIVED BENEFITS
Customer satisfaction is linked to a loyalty program.
If the loyalty program in practice is eff ective, it can
maintain customer loyalty and it, sequentially, will
increase the business performance of the
organisation.
A loyalty program does not only generate benefi ts for
customers but also for the company
A loyalty program can generate benefi ts to customers
like their convenience and cash saving. Nonetheless,
people will buy more products if they join a loyalty
program.
The information gathered through the Clubcard is
used by Tesco to send vouchers and statements to
the residence of the customers. Through this, Tesco
sends off ers which would appeal the customers in
purchasing them.

IMPACT OF CRM
It not only enhances the services towards customers
but also diminishes complaints, wastages and costs.
It is also eff ective in reducing the tension of the
staff s because CRM aids in reducing attrition with
increased improvement in the products and services.
Moreover, it permits instant research on the market
which helps in the creation of new ways of
communication with customers.
Through a good CRM, the growth of the business is
enhanced, customers stay for a longer period of time;
chances of gaining new customers are increased
along with greater rates of customer satisfaction. The
overall service of the organisation fl ows easily and
the operation is more methodical and everybody
stays happy.

IMPACT OF CRM (CONTD.)

Its major focus is on customer retention and not
acquisition of new ones. It might also lead companies
into treating some customers better than others due
to being more profi table. This is capable of damaging
the fi rms reputation.

Success of Tesco Clubcard

The strategy has been successful since the

moment it had been launched but during the relaunch in mid-2009, it was suggested by several
commentators that it was a defense against the
structural changes in the market and was forced
upon the company.
The loyalty scheme had been heavily successful
and had contributed a lot to the performance of
the organisation; the market started reforming in
significant ways by 2011. The degree of
competition became intense and Tescos share in
the market took a dip.

Emerging trends and

technologies

Enterprise 2.0: This technology empowers the employees

where they can share their views and opinions freely. It uses
social software as potential platforms within companies. It
provides a new method for management of knowledge within a
company. Idea management systems are used by large firms
which are useful in fueling the pipeline of ideas.
Semantic web: It supports in making web accessible data
better compliant to machine processing. It provides a description
of pliable reference mechanisms to contributors and objects of
knowledge; use and creation of knowledge and involving humans
in activities for information and knowledge management
Ubiquitous technologies: This technology accredits timely and
precise automatic capture of actionable logistics data with little
reliance on human intervention

Recommendations
There are some crucial issues that are required to
be looked at by Tesco even if it is doing well in the
market. Although the Clubcard is popular, some
retailers are providing better offers for their loyalty
scheme as compared to Tesco. Through this, more
attention is being paid to them. Therefore, it is
imperative that Tesco takes some significant
initiatives to retain existing customers and acquire
new ones by reaching out to them innovatively. The
trends and technologies mentioned above are
essential in maintaining the top position that Tesco
enjoys in the market.