Strategic management Tesco

2017 WordsApr 5, 20149 Pages
Strategic Management Research Essay - Tesco The report below provides an insight into the supermarket company Tesco, with emphasis on the company’s internal analysis of resources, competence and competitive advantage, whilst also considering its external environment. Tesco are the chosen company for this report as they are the market leader within the supermarket industry, Tesco controls over 30 percent of the UK grocery market, a figure which is almost double the combined share of nearest rivals Asda and Sainsbury’s. This provides the report with an excellent basis for analysis of competitive advantage. The statistical evidence for the company’s performance over the last five years can be seen in the table and graphs, within in the…show more content…
In particular, Miller (1992) questions the notion of being "caught in the middle". One of the primary activities of the value chain model and one of Tesco’s core competencies is marketing and sales. Evidence of this is through Tesco’s use of information technology as a key resource, with over 40 million customer’s worldwide using loyalty card’s such as ‘Clubcard’ (TescoPlc, 2013). Research by Clemons and Row (1991) suggests that although it is unlikely that any single investment in information technology will lead to competitive advantage, what does make a difference is the competency to innovate with IT over a period of time. This shows how Tesco’s innovation of the ‘Clubcard’ has enabled them to differentiate from their competitors, as they have shown the notion of innovation that is not easily replicated. Specifically, Tesco’ use of information technology has lead to a competitive advantage as it is used to leverage differences in strategic resources. Evidence of this is supported by Rowley (2005), who describes how Tesco’s ability to understand their customers effectively, as a source of both differentiation and cost advantages, provides them with a competitive advantage. Rowley states that unlike other companies, Tesco uses data about its customers to provide services for them. This innovative capability allows making correct decisions about which products to supply and the best way to introduce this
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