SWOT ANALYSIS

STRENGTH: Tesco has become the largest brick and mortar grocery chain in the U.K.
Tesco had grown from stride to stride to become the largest brick and mortar grocery chain in the U.K. In 1995 it overtook the venerable Sainsbury’s, an entrenched leader in the market since the late 1800s. Since then, there had been no looking back for Tesco. For the fiscal year 2000, Tesco reported sales of £18.7 billion and net income of £1 billion, an increase of 11%. Much of this meteoric growth resulted from a combination of astute real estate planning, excellent location strategy, creative execution of multiple format stores and above all its ability to keep pace with prevailing customer trends. To become a market leader a company has to obtain a proper planning. Location is a very important factor in the success of an organization. It is very important to choose it wisely. If a company has multiple stores its customer accessibility will be increased. It will be very easy for customers to go to the stores if there are many outlets. The level of customer satisfaction will also be increased. Tesco serves its customers with cheap price and best quality.. “Pile it high and sell it cheap” was the slogan that launched Tesco and the company was leaving no stone unturned to offer its customers the best value for their money Tesco introduced a variety of innovative practices that have increased efficiency and reduced operating cost over the years. In January 2000, A.C. Nielsen, a market research company, rated Tesco as the lowest-cost supermarket for food in all of Europe.

It is very important fro a company to deliver good quality product to its customers. If products are good, the probability of the success will be increased. It will also increase the reputation of the company. Tesco never compromise with the product quality. It also serves its customers with cheap price.

Tesco has a strategic e-venture plan which reduces the stress of shopping.
The e-venture was a carefully planned strategic move for Tesco. It originated in September 1996 when a conventional telesales mail order service was launched. This was followed by a shop-at-home alternative that was built on a CD-ROM-based catalog that consumers could use to generate a shopping list before uploading it to Tesco’s servers. This procedure made the shopping experience easier. Now the customer can easily generate a shopping list before uploading it to Tesco’s servers. It reduces the stress of shopping and made the household shopping interesting and trouble-free. By this process the level of customer satisfaction has increased a lot. It helped to increase the profitability of the company. Tesco is the first in the U.K. to set up a transactional Web site.
Tesco was the first in the U.K. to set up a transactional Web site where customers could log in to a central system to purchase groceries online. Since then, it had moved into other non-food lines and added a considerably wider delivery region. In many ways, Tesco was a company that was waiting for the Internet to evolve into the digital marketplace that it later became.

As Tesco is the first organization which introduced a transactional website, obviously it will enjoy first mover advantages. Customers will be very pleased to have this site where they can easily do their shopping without any complexity..

Information Week ranked Tesco as the best among British supermarkets in terms of its IT operations and third among all of European supermarket chains.

It spent between £130 million and £150 million every year to stay abreast with advances in IT. It operated a tri-level architecture anchored by mainframes and assisted by middle system servers and PC client front-ends. Its private digital network connected all its stores in real time. The company had integrated its IT skills into multiple areas spanning both front office operations as well as the backroom operations. At the customer end, the company’s IT infrastructure provided the backbone for customer service and support operations. It was used to administer a remarkably successful loyalty card scheme.

Company has build such IT structure to help the customers and increase the customer satisfaction level. Tesco wants to give superior services to its customers and enhance the efficiency of its operations. This type of technology will increase the chances of success of the organization. WEAKNESS
Some customers began to complaining about the inordinate delays in accessing Web pages at certain times of the day.

Although Tesco had shown tremendous technological savvy in launching its Web site on a shoestring budget with a group of Dell servers and standard, off-the-shelf software packages, it might soon be time for a reality check when scalability of its systems comes in question. Just as soon as the site went online, some customers began complaining about the inordinate delays in accessing Web pages at certain times of the day. If that perception stuck, it could adversely affect the company.

Companies introduce new technologies to gain and retain the customers. If you technology is disturbing your customers it be very devastating for the company. Negative word of mouth is always bad for the company. It ruins the company’s reputation as well as the company’s profitability. The decisions in the technological and fulfillment arenas were not mutually exclusive like they appeared to be.

With an increasing number of online customers, Tesco’s hybrid model could become inefficient. Perhaps the decisions in the technological and fulfillment arenas were not mutually exclusive like they appeared to be. Scalability in each dimension could soon become critical.

As Tesco did not have any exclusive technological background it would be difficult for it sustain in such competitive market. Competitors would easily snatch their customers. It has to improve its technological base as soon as possible to keep their market position.

OPPORTUNITY
Tesco has recently announced that it was seriously evaluating entry into the North American market.

Canada’s Financial Post reported that Mr. Terry Leahy, CEO of Tesco, told analysts that the company “is researching the opportunity to take our model internationally.”10 He believed that Tesco had significant experience advantages including technology that would make it an attractive partner across the Atlantic. It was rumored that the company was also eyeing markets in continental Europe and Asia where it already had a brick and mortar presence

Tesco already has earned a good reputation in the U.K.’s market. It will help the organization a lot to enter and succeed in the North American Market. As it is serving its customers with best quality and cheap price the chances of its success automatically increase.

It is going into partnership with different organization to serve better service to the customers.
It entered into partnerships with companies such as Autonomy to offer customers online assistance with their shopping, with Charcolonline to build a digital mortgage supermarket, and German cataloger Otto Versand to offer baby accessories and home furnishings through Tesco Direct.

Many companies do partnership with other organization to obtain many benefit. In such way both of the companies can enjoy extra facilities. Tesco has entered into partnership with many organizations to offer customers online assistance, to build a digital mortgage supermarket and to offer baby accessories and home furnishings. Threat
Competitors such as Sainsbury’s were building dedicated warehouses and picking centers to streamline their operations.

While Tesco was using its regular stores as the backbone for its online efforts, competitors such as Sainsbury’s were building dedicated warehouses and picking centers to streamline their operations. For them, it was no longer a hybrid bricks-and-clicks offering but a structure that had separate facilities for online operations.

It is the age of competition. A company has to do market survey to know about the upcoming threats from the customers. New competitors can make huge trouble for the existing company. Sainsbury is the major competitor of Tesco. If it could able to modernize its operations, it would create great competition for Tesco. Many consumers of Tesco may shift to that company for better products and services.

E-tailers from the U.S. are making deep incursions in the U.K. market.

As if local competition were not enough, established e-tailers from the U.S. were making deep incursions in the U.K. market. Amazon.com had recently been rated as Britain’s top retail site generating £31.2 million in sales in the first quarter of 2000. Tesco’s presence in non-food areas eventually rising to 45%-50% of all online sales. This meant that it would have to take on Amazon.com in what was widely perceived to be areas of Amazon’s strength.

Tesco is facing huge competition in the local market, now if it has to face more competition from the foreign market then it will face huge problem in keeping their market leadership. Amazon.com is renowned everywhere. It is throwing huge challenger towards Tesco.

Tesco faced a variety of rivals both in its traditional food lines as well as its non-food lines.

Tesco faced a variety of rivals both in its traditional food lines as well as its non-food lines. Competition in the grocery business came from the major chains, namely Sainsbury’s, Asda, a company owned by Wal-Mart, and Safeway. Sainsbury’s was the storied granddaddy among U.K.’s grocery chains, known for its attention to detail and quality of produce. Asda, the Wal-Mart company, had been offering a service it called asda@home for 5,000 lines of products managed from two picking centers in Croydon and Watford

* All of the rivals of Tesco’s are renowned and has much command over the market. So it will be difficult for Tesco to overlook them. The intensity of competition is very high; it has to be very careful. All the steps have to be taken very wisely. a simple mistake can cost them a lot in th What is your monthly What is your monthly salary? * salary?e lung run.

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