Essay on Digital Strategies and Issues Facing Tesco Inc

Introduction

Tesco is a multinational-operating grocery and general merchandise online platform for customers, especially in the United Kingdom. Jack Cohen founded the company in the year 1919. The company thrives in an online platform that enables them to sell consumer goods conveniently within the United Kingdom. Tesco PLC is one of the largest online retailers in the country, and there is need to examine its digital strategy, unraveling possible issues that the company could be facing regarding e-commerce business (Clarke, Thompson & Birkin, 2015). Furthermore, its e-commerce platform allows customers to view products that they sell and make orders remotely. Tesco has achieved success in the industry by employing critical strategies that have projected higher sales online as compared to their competitors. In terms of revenue, Tesco makes approximately over £57,491 million from online sales indicating that the company is doing well. Tesco applies an interactive model in its entire e-commerce platform. The model is called the Market portal model, which enables integration between suppliers and customers. All stores that belong to Tesco PLC are incorporated in the model to facilitate flawless completion of transactions. The report aims at examining the supply chain that the company applies in business, its strategies and issues that affect Tesco, as an online retailer.

Tesco PLC’s Supply Chain

Proper supply chain management can see a company do well in its e-commerce business. As such, Tesco has a comprehensive supply chain that is interactive of all stakeholders involved in the business. For instance, there is a well-laid procedure on how their products are availed to customers. Many people make orders online, and it is up to the company to ensure that all their clients have been served to satisfaction (Chen & Zheng, 2019). In the past, Tesco relied heavily on direct store delivery, which has since then changed significantly to open up a platform that allows for home delivery. The company aims at serving their clients online, reducing the negative impact that its operations can cause to the environment.

Tesco PLC allows customers access products and make orders online with the help of the internet. Equally, the multinational-operating grocery and merchandise thrive in an interconnected supply chain model that integrates small express supermarkets. In the past, the company enjoyed distribution through direct stores, which seemed inefficient due to increased competition and its inability to serve all customers. As such, the company had to find a modern way that is strategic to their goal in business. Tesco resolved to reduce activity and increase convenience in its operations by introducing an e-commerce platform that has since then yielded a lot. Customers can communicate directly with the customer care service, which links them to the suppliers.

There are over 25 stores that operate under a centralized supply chain model. The supply chain system run by the company covers over 3000 vehicles, indicating how large-scale the company has gone. Operations are controlled and monitored centrally to ensure that transactions and communication are both seamless within the company (Hübner, Kuhn & Wollenburg, 2016). Equally, it is essential to note that the company values efficiency, safety, and accountability, which are vital to maintaining proper customer relations. Tesco thrives in a supply chain that has the potential to improve due to its ability to cover a large pool of customers online. The company has been making developments to its supply chain to the extent of developing a more customer oriented system. Use of the internet is on the rise in the recent past, which has promoted its operations. Additionally, with an increased online business, the company has been able to set up stores that are specified in terms of what the customers require. As such, Tesco’s e-supply chain is integrative and interactive to ensure smooth conduction of business online.

Tesco’s e-commerce Strategy

A company that wants to do better in the e-commerce business has to employ strategic measures in order to market their products and maintain the existing customers. Tesco’s managerial decision and activities significantly affect the operations of the company in one way or the other. Its e-commerce strategy is aimed at providing an enjoyable shopping experience, especially within the UK clients. Tesco’s core values project a non-biased way of operating, which has the interest of the customers at heart (Roberts, & Fiebig, 2018). Additionally, it is on in the best interest of the business to ensure that there is a well-laid objective that drives the organization to deliver first-class services to its clients. The company’s mission statement states that they make what matters better together. This means that Tesco values unity when working together in a bid to achieve convenience and sustainability in their business model. The mission statement, along with its vision aims at obtaining the best results. A company with a mission statement that lacks focus is likely to fail in the market. This explains why Tesco monitors its success in a bid to ensure that the impact is reached in the market.

Tesco PLC has laid strategies that they apply in e-commerce in a bid to ensure that their mission and vision statement are in line with its operations. Digital marketing helps drive traffic online, which has promoted its activities. The first strategy that the company employs is the use of the market portal model. The model is interactive and ensures that customers are served within then shortest time possible (Paris, Bahari & Iahad, 2018). Equally, the e-commerce platform developed by the company enables many to select products that they require at their convenience. Proper customer management and application of a centralized information storage system has proved critical in the expansion of the business. The company can be able to control their operations centrally, a move that has promoted accountability and improved services to clients. The market portal model has enabled them to carry out activities efficiently as it enhances the relationship among all stakeholders.

There is a need always to track the success of a company with a view of establishing its legibility in business. As such, Tesco assesses its e-commerce strategy in a bid to check whether the operations are in line with the vision and mission statement. The success of a company can be measured by applying different approaches. For instance, an organization can opt to gauge its performance in the market by looking at their financial reports. Tesco has been doing relatively well in the last few years in the business world, indicating how efficient their strategy works (Chaffey, Hemphill & Edmundson-Bird, 2015). Additionally, an increase in traffic on their e-commerce website is indicative of the success that the company is enjoying. A high number of customers and revenue made from the sale of products online helps a company gauge their performance. As such, Tesco can track their success by the number of customers gained and the total sales that they make within a specified period.

Issues Facing Tesco PLC in developing an e-commerce Strategy

Tesco has faced challenges in its bid to implement its e-commerce strategy. First, increased competition from the established companies is a challenge to its expansion objectives. Examples of companies providing similar services include Sainsbury’s, Asda, Morrison’s, Aldi, and the cooperative, among others. Competitors offer an alternative and cheaper platform for many to purchase products. As such, the competition has denied Tesco clients who could otherwise be theirs if it were a monopoly. Stiff competition in the sector has also seen the company improve on its service to ensure efficiency and convenience. Poor quality services on their e-commerce platform can prove unhealthy for business. This means that the company should do what it takes to improve their performance by enhancing efficiency and convenience on its platform.

Second, technological failure affects Tesco’s ability to implement its strategy online. Digital marketing and management of various systems require the application of advanced technology. For instance, cloud-based customer management responsibility programs employ the use of technology to ensure that information is stored securely in a central place. Poor technological infrastructure online can lead to big-time failure of any business that relies on technology. For instance, Tesco has failed to make deliveries for their customers a couple of times due to technological failure. Such circumstances work in favor of its competitors who at that time might be having a stable platform. Delays in deliveries make many not to trust a platform, which consequentially leads to loss of clients. As such, poor technological infrastructure hinders the implementation of an e-commerce strategy.

Low payments to suppliers have been a matter of debate for decades now. Tesco enjoys vast profits by paying suppliers lowly and maximizing their profits, many have complained, and some suppliers are avoiding supplying their products for fear of exploitation by the company. This is becoming a challenge to the company’s operations as they rely on suppliers to make sales online. Suppliers should be well paid to avoid any possible misunderstanding in regards to supplies.

Conclusion

To sum it up, Tesco is a multinational company with the ability to do better if all operations are correctly handled. It has a well-established e-commerce platform that conveniently and efficiently serves the market. Equally, its supply chain is interactive and involves both small stores and express supermarkets. Its mission is geared towards ensuring improved service to all its clients across the United Kingdom and other parts. The company has faced challenges in implementing its strategy, including competition, technological failure, and low payments to suppliers, which threatens supplies to clients. Furthermore, the company can expand its online operations to other areas given its strong financial base.

References

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