Can Porters Value Chain Help Us Identify the Source(s) if Tesco's Competitive Advantage - Essay Example

With more than 240,000 employees, Tesco operates 164 and 2715 in USA and UK respectively (Annual Report, 2011). Tesco is widely known, as it always thrives to constantly communicate its brand message to potential customers, as a company that ‘creates value for customers to earn their lifetime loyalty’. Tesco’s Value Chain Analysis The primary aim of Value Chain analysis is to find sources of a company’s competitive advantages. In order to do this, company can be divided in to several activities so that the strategically relevant activities become evident (Bischoff, 2011, p. 3). More specifically, value is an extremely important concept to strategic management and marketing as well.

Porter’s Value Chain proposes an organizational system composed of systematic transformation process with inputs and outputs to a distinct stage. Customers perceive and measure value in consideration of money they are willing to pay. If the marketer can make a difference between the total cost and the value which in turn equal to that of product’s price, he can generate profit. . The support activities include administrative infrastructure management, HRM, IT, procurement etc. When it comes to the Value Chain Analysis of Tesco, it can be observed that the company has taken measures to ensure delivering of maximum values to its customers.

As depicted below, Tesco’s seven strategies explained in its Annual Report, 2011 exhibit its focus on consumer choice. It is giving greater emphasis on green-retailing. As a global business, it is trying to make a difference in how effectively it can tackle the climate change issues (Annual Report, 2011, p. 15). Both these and its online home delivery system, which was reckoned as highly successful (Child, 2002, p. 135) are major inbound logistics that contribute to its values offers to the customers and profits it proposes to generate as well.

In both its home and foreign markets, Tesco operates through a replenishment systems and distribute its goods in its own brands. Moreover, the company thrives on innovation. As far as outbound logistics are concerned, the company is highly successful in going global. As Child (2002, p. 135) noted, Tesco is very successful in delivering fastest organic growth of any retailer in the world. Its non-food business has grown by 18 % in 2000. Tesco was not simply globalizing its business, but rather, it thought of a strategy ‘Think Global, Act Local’ by which it positively approached to understanding of responsiveness of cultural vagaries as well as attitudes of foreign customers (Griffith, p. 4). Tesco in UK has emerged as part of routine, and therefore, it not just seized opportunities but rather it became part of a country where it launched its store and people too became part of it.

This has eventually contributed greater to