TESCO Case Solution & Answer

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TESCO Case Solution

The introduction of the internet to the community and the emergence of e-commerce in the business society have changed and influenced the ways of doing business globally. This has redefined the value chain and operations of the organizations all over the world, and it is critical to the management of Tesco to adapt to the change and to remain relevant in the other product markets excluding the food and beverage segment.

Â Bargaining power of buyers:

The bargaining power of buyers is relatively high in the industry as there are several other chains and retail outlets that are operating in the markets where the business operates. The present market share of the organization is roughly above 10% in the home country, and this ultimately reflects the significant presence of others in the industry.

The presence of others in the industry indicates that the customer is not dependent upon the products and services of the organization and therefore, the organization, in order to be successful, will have to adopt itself as per the trends and liking’s of the customers. For the interests of the business, the management of the company will have to value the customers regarding their aspirations and needs.

Bargaining power of suppliers:

Tesco operates on a global scale having a presence in some of the major markets all over the world along with a positive brand image and reputation among the customers and population centers where the business exists and this is a critical plus point for the organization. The suppliers of the company have no other choice but to agree and submit as per the aspirations and policies of the organizations due to their less influence over the company.

There are numerous other alternatives for the retail chains to acquire products from the markets as there is a significant proportion of suppliers in the market who are eager to sell their products to the company on their terms and conditions.

Competitive rivalry:

The competitive rivalry in the industry is quite high as there are several other competitors and rivals of the organization that are competing for the business in the markets all over the world. The major competitor of the organization in the global market presently is the U.S. based retail chain Walmart. The management of the organization is very critical of the threat that Walmart poses to the interests of the business due to the size of its share and ability to influence the economies in the markets where it operates.

The launching of Tesco Direct will also bring in some other multi-national giants to compete with the organization in the online retail sector of the home appliances and other merchandise. Some of these online competitors are eBay, Amazon, and Alibaba, etc.

Value chain of the company:

The value chain of the organization has also evolved as per the changing industry dynamics and environment. The development of the technology has also been a significant contribution to the increased efficiency and effectiveness of the operations of the company.

The value chain of the organization consists of more than 700 hundred retail stores and outlets that are segregated upon their reputation as superstores, metro, express, one-stop, home plus and Tesco extra. Apart from this, the management of the company also has roughly 1800 delivery vans and a valuable human resource for more than 450,000 employees.

The company initially started to pursue orders, and home delivery of the food and beverages products through on call orders from the customers and the systems were mostly manual……………..

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