SWOT Analysis of Tesco’s Multi channel e-business strategy Essay

SWOT Analysis of Tesco’s Multi channel e-business strategy.

Strengths

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Strong brand image as Tesco is considered as one of the largest retailers in the country.
Tesco has been able to form strategic alliances with different stronger firms in order to exploit their core competencies. I.e. it partnered with SITE Intelligence to provide online business intelligence.
More efficient and cost effective supply chain as its I.T. infrastructure is based on more advanced features which allow it to store data in one place for efficient matching and control.

( http://www.ivisgroup.com,2005).
It has one of the largest multi-channel e-businesses in the world offering diversified services such as food & non-food products, Tesco mobiles, Tesco Personal Finance etc.
Weaknesses

Most of the I.T. infrastructure facilities are not directly owned by Tesco.
Its multi-channel e-business transactions however, do not allow to switch to a relatively different channel i.e. online ordering may not allow in-store collection of orders. (Saarien, Tinnild, Tseng, 2005).


Only Clubcard holders are entitled to avail range of facilities through its multi channel e-business platform.
Opportunities

Tesco can apply integrated multi channel e-business strategy rather than focusing on offline and online dominated strategies. This will allow it to support channel switching for its customers.( Lankenau, Klein & Wehmeyer, 2004).
Multiple channel e-business can also provide Tesco an opportunity to sell out into new markets provided it improves upon its supply chain management.
Tesco’s multi-channel e-Businesses are more or less standalone and if they are integrated into platform, they can offer Tesco diversified opportunities to cross sell.
Threats

Current economic and financial conditions can hinder its growth as there has been a marked decrease into consumer spending.
Other competitors such as Sainsbury’s etc can follow the same business model also therefore the competitive advantage may dilute too.
Reliance on third party vendors may create significant reputation risk for it as their failure to perform may result into significant negative publicity for Tesco.

References
1.      Saarinen, Timo, Tinnild, Markku, Tseng, Anne (2005). Managing Business in a Multi-channel World: Success Factors for E-Business. London: Idea Group Inc. 192.

2.      Lankenau. Claas Müller-, Klein. Stefan, Wehmeyer, Kai. (2004). Developing A Framework For Multi Channel Strategies – An Analysis Of Cases From The Grocery Retail Industry. Available: http://ecom.fov.uni-mb.si/proceedings.nsf/0/fbb45414baf2bdafc1256ee00030ea56/$FILE/34Mueller.pdf. Last accessed 9 March 2009.

3.      http://www.ivisgroup.com. (2005). Tesco adopts Sonetto Retail to unlock the value of its Product Information. Available: http://www.ivisgroup.com/ivis/a/71.html. Last accessed 09 March 2009.

 

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