The E-business activities of Tesco Management Research Paper

SWOT ANALYSIS FOR TESCO’S E-COMMERCE BUSINESS
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Table of Contents TOC \o "1-3" \h \z \u SWOT Analysis of Tesco’s E-commerce Business PAGEREF _Toc46156930 \h 3Strengths PAGEREF _Toc46156931 \h 3Expansion into Mobile App and Online Stores PAGEREF _Toc46156932 \h 3Sales Growth through Digital Channel PAGEREF _Toc46156933 \h 4First-rate Customer Service PAGEREF _Toc46156934 \h 4Product Diversification PAGEREF _Toc46156935 \h 5Modified Logistics PAGEREF _Toc46156936 \h 5Customer Loyalty PAGEREF _Toc46156937 \h 5Effective Risk Management Framework PAGEREF _Toc46156938 \h 6Weaknesses PAGEREF _Toc46156939 \h 7Ineffective in Managing Operation Cost PAGEREF _Toc46156940 \h 7Declining Brand Reputation PAGEREF _Toc46156941 \h 7Data Privacy and Security Concerns PAGEREF _Toc46156942 \h 7Threats PAGEREF _Toc46156943 \h 7Change in Customer Values PAGEREF _Toc46156944 \h 8Risks Associated with Tesco Bank PAGEREF _Toc46156945 \h 8COVID-19 PAGEREF _Toc46156946 \h 8High Rivalry PAGEREF _Toc46156947 \h 8Change in Regulations and Politics PAGEREF _Toc46156948 \h 9Technological Disruption PAGEREF _Toc46156949 \h 9Opportunities PAGEREF _Toc46156950 \h 9Growing Sales in Covid-19 PAGEREF _Toc46156951 \h 9Technological Adaptations for Future Growth PAGEREF _Toc46156952 \h 10New Store Openings Growth PAGEREF _Toc46156953 \h 10Sustainable Development with E-commerce PAGEREF _Toc46156954 \h 11Reference List PAGEREF _Toc46156955 \h 12
“SWOT Analysis for Tesco’s E-commerce Business”
SWOT Analysis of Tesco’s E-commerce Business
Understanding Tesco assists magnificently about the shifts in the retail sector. Therefore, understanding the influence of online retailing on Tesco is vital to recommend the substantial strategies for enhancing the brand position in the global retail industry along with fierce rivals. Singh and Hong (2017) highlighted that the organisation aims to propagate online for achieving a competitive advantage globally. Consequently, the research investigates the SWOT of Tesco’s online business in the UK to explore future growth opportunities in the market. SWOT analysis is the strategic framework that investigates the external threats and opportunities and internal strengths and weaknesses to grow forward (Gürel and Tat 2017). Henceforth, the respective framework is worthy in creating a strong influence on business growth. The SWOT analysis of Tesco’s e-commerce business is discussed below.
Strengths
By overviewing the success factors of Tesco, the retailer expanded to 3,961 stores in the UK, which further exceeds in number after 2012. Thus, Tesco created a strong brand reputation in the marketplace and ranked among the top three global retailers. Tesco gained success with its electronic service in Europe (Statista 2019). Corresponding, the e-commerce strengthens the business model of Tesco to stabilise its position in the international market.
Expansion into Mobile App and Online Stores
After the success in the UK, Tesco production and innovative team launches the mobile application to connect with mass customers and offers an online solution to in Britain, including Prague, Poland, Slovakia and others. Moreover, Tesco plans to launch the mobile-application in China, Turkey, the United States, India and other countries for expanding its market share worldwide.
Sales Growth through Digital Channel
Tesco performed exceptionally with its digital tools and enhanced its sales by 5.1% in 2018. The sales growth largely depends on the growing orders of average basket size and numbers of orders with an online chain. Along with, high-quality delivery creates a better relationship with customers as many consumers gave positive feedback regarding the improvement in quality and service of Tesco. As per Wunsch (2019), Tesco escalated the business profitability with 300 pounds and reached to 1.54 billion in 2019 with its innovative systems.
Figure 1: Tesco’s Profitable growth from 2015 to 2019 (Wunsch 2019)
First-rate Customer Service
Tesco’s success largely depends on its customer service because the business model is the customer-oriented and online expansion presented extra value to customers that offer customisation, accommodations and high access to products. As per ContactPiggeon (2020), e-commerce setup in Tesco assists the marketers to collect the feedbacks from customers and evaluate the demands of consumers for delivering them similar products or service to maintain strong sustainability in the retail sector. Additionally, the user-generated websites portal and intuitive layout help customers to reach out the desired products immediately.
Product Diversification
The product diversification is the competitive advantage of Tesco, but with an e-commerce website, the company enhance consumer’s convenience with Tesco bank, credit card payments, and online information for every product they desire (ContactPiggeon 2020). Thus, it encourages customers to explore more products on the list.
Modified Logistics
The supply chain strategy and logistics are at its best in Tesco and augment the value of Tesco with high effectiveness and efficiency. On the other side, implementing innovations in the supply chain system boost time-efficiency, limit costs, improve long-term retention; attract digital customers, stock shelves rapidly with updated automated monitoring and offer exceptional quality to the end-consumers (Tescoplc 2020). This advancement supports firm to attain a competitive advantage in the online retail industry.
Customer Loyalty
As per Tescoplc (2020), Tesco founded in 1919 and with creative marketing tactics, Tesco attained success with mass-market sales, self-service approach and low-cost purchase. Moreover, Clubcard in the UK’s grocery chain add value in the business by extending its reach, and then the launch of online grocery store supports the firm in generating the revenue of £1.3 billion by 2018. Tesco works more responsively with the launch of an e-commerce site, and the traditional club cards offer more value to the customers with 10% discounts on their preferred brands. With this approach, Tesco magnificently retains customers and make them loyal consumers.
Effective Risk Management Framework
Tesco magnificently deals with the emerging risks to manage the performance in the future and grow in the global marketplace without hindrances. The following figure highlights the framework. According to Tescoplc (2020), the primary concerns of the risk management framework are to be competitive, focused and responsible for creating high value for stakeholders. This model further assists management to invest capital appropriately in digital projects and allocate resources meaningfully to boost business reach and expand its market. With risk management models, Tesco remarkably manages the evolving trends in online retailing, meet consumer demands, maintain sustainability and minimise the operation cost.
Figure 2: Risk Management Framework (Tescoplc 2020)
Weaknesses
With the changing environment of the retail sector, Tesco failed in various operations and managing the cost of the business, that affects its reputation in the global market. As per Ramadan, Farah and Daouk (2019), Tesco has fierce competition ...