The Importance of Information to Organisations in Tesco - Case Study Example

The importance of information to organisations in Tesco 1. Tesco is a Britain based company that is involved in the international merchandizing of grocery and general as a retail chain (Tesco Website). Tesco is a leading English retail chain mapped both by sales that are global and aimed at the local markets. Its profits are estimated to be over 3 billion pounds and is at present, currently the third largest global retailer based on revenue, behind Wal-Mart and France's Carrefour. 2. A strategic decision maybe defines as a choice of a course of action to achieve a desired future state. An example of a strategic decision on the part of Tesco was its decision to provide consumers with discounted rates, in the backdrop of recent recession (Saxton, 2008). The decision was a strategy backed decision given the fact that it would place a a lot more of an insistent focus on pricing as compared to its competitors-Asda and Sainsbury. The decision is also important given the fact that Tesco many believe was losing its sheen and its grip as the market leader in the super market grocery segment to Asda. The decision was strategic given the fact that it focused on the point of an objective and was in essence a manifestation of a move that was aimed at beating competition with respect to a certain objective. An operation decision that Tesco made was its decision to open call a centre in Newcastle (Felsted, 2009). The call centre has been devised, according to a new report so that it could serve Tesco’s home and motor insurance consumers and not the banking customers as it was previously believed. The issue is operational given the fact that it is clearly devised to facilitate a service for the consumer and the smoother operations of the business function. The fact that the region was home to financial services organisations meant a high quality of staff. The place also is well connected with London and Edinburgh providing logistical support and ease in traveling as far as the workers were concerned. A tactical decision is one that has been so as to provide support to a strategic decision. These are more often than not medium level decision. One of the better examples of a tactical decision that Tesco made was the announcement of the announcement of the half-price sale around Christmas, 2008. Tesco said that it launched its Sale at that time because it didn’t want shoppers to be anxious about buying presents and then the following week, seeing those same items discounted. But it was also tactical of course. The Sale went head to head with the start of Woolworths’ closing down Sale. The strategic decision in this context would have been for the choice to project Tesco as a brand that would represent things other than a supermarket for grocery shopping. The tactical decision of announcing the sale therefore is the move that complements the strategic decision. 3. Information on expected yield is essential for making most tactical decisions (Abrecht and Robinson, 1996). There are different kinds of information that is required for taking different decisions. In case of taking a strategic decision, the management and the decision taking authorities would necessarily have to be correctly abreast of the company’s internal situation, infrastructure and work handling capacity, in cases where competing in the market at the higher level is concerned. Beside this, for a company like Tesco, for it to take strategic decisions where it decides on discount, information about the global economy would have played a big part in the decision making process, along with the fact that competitors like Asda and Sainsbury were nipping at its heels and challenging its position as the market leader with a 31 per cent stake in the market share. A PEST analysis would therefore be a necessity before a strategic decision of this magnitude. A report in the Telegraph explained the strategy thus, “Tesco's discount push saw it launch a raft of products with names such as Creamfields cheese, Packers Best tea and Daisy washing up liquid. The goods – which are not branded 'Tesco' but are essentially own-brand products – are priced to be more expensive than Tesco's Value line, far cheaper than its Finest line, but not quite as expensive as third party brands, such as Fairy, Tetley or Cathedral City” (Hall, 2009). Given the backdrop of the global slowdown there was a need for Tesco to attract consumers. The decision therefore could have been taken only in the light of the requirements of the fiscal environment. A tactical decision would in turn need the same information given the fact that it is as most times a mere extension of the strategy choices that a company makes. This however would also then mean that a SWOT analysis would have to be conducted so that the strengths and the weaknesses of any given tactic could be evaluated. A BBC Report for example states clearly that due to lack of expansion opportunities food supermarkets have no options but to diversify. This information would have been the conclusion before the tactical decision to announce Tesco as a full time brand for any given purchase was made. 4. The biggest competitor intelligence information that Tesco would have to be concerned with at present would probably be the fact that Asda is up for sale and that Walmart, the parent company has placed a very conservative price tag on the sale-£6.9bn price tag was calculated on a "historic book value" basis, according to Asda. £6.9bn is just £220m more than Wal-Mart shelled out for Asda ten years ago (MoneyWeek Report, 2009). The fact that Sainsbury the number three company in the market segment is vying for the buyout is another matter of concern as far as Tesco is concerned, given the fact that the two in consortium would be able to pose a major threat as far as the market leader position for Tesco is concerned. The second piece of information that is relevant and perhaps critical is the fact that Sainsbury has been on an expansion track for a while now, with it having added Morrison stores to its bouquet of offering recently. Asda on the other hand has been relatively circumspect as far as expansion plans are concerned. Sainsbury has been working their new strategy along the lines of the findings from their databases that suggest supermarket shoppers tend to buy the same limited range of items, week in, week out. The idea therefore has been to offer the customer something novel and more exciting than the routine mundane ideals of the supermarket and finally, new sources of functional competitive advantage were created and utilized by Sainsbury, achieved by the diversification policies. Food differentiation has been the buzzword that has driven up sales. The idea therefore has been to utilize the merits of the supply chain itself rather than looking outside for the competitive edge. 5. B2B is defined as the undertaking of commercial transactions between two organizations. Normally, this would take place across the internet with one organization acting as the buyer or the consumer while the other is the seller or the supplier. Tesco buys products from its suppliers (Beattie and Yeoman, 2004). Tesco and its suppliers would enter a partnership and if transactions are carried out electronically, across a network, this would be known as business to business e-commerce. The first sign of the vital importance of the B2B system of e-commerce transaction is the fact that the technique allows the supply side or the buying side of the supply chain and its management to be online and therefore completely digitalized. The e-trade system of working is available online on the website, Tesco.com. This has infact often been termed as the envy of the industry. The first attempts to create a link between the suppliers involved with Tesco to its online systems were made through the usage of Electronic Data Interchange (EDI). By 1995 it encompassed 1,300 suppliers - 95% of all those Tesco dealt with (Tesco Case Study, 2002). In 1998 the company decided it needed a more sophisticated service, particularly to view daily sales by group and by item. The arrival of public online B2B exchanges run by third parties has prompted Tesco to link to the Worldwide Retail Exchange (WWRE). It is also keeping an eye on Transora, the giant US retail exchange set up by manufacturers. Worsey says the link to the global WWRE public exchange lets Tesco "get some scale". Other attractions are speed and access to applications that are not available in-house. Through it Tesco can also talk to other retailers and suppliers and share best-practice issues. The best part of the importance that B2B marketing holds for the company is the fact that it does not transform people and that they participants still feel involved and responsible, while giving them the window to decide what works best for their particular business. 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