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EMA - Q1 - Block 1 Why does Tesco place high importance on innovation?…
EMA - Q1 - Block 1 Why does Tesco place high importance on innovation?
How do the business functions integrate to facilitate innovation?
Information-based
Internal emails
Financial: delaying supplier payments
Preserve sales margins
"Absolute focus on operating margin"
Damaged supplier relationships
Online shopping
Placing order
Checking stock levels
Picking
Order fulfilment
Delivery logistics
Dark store strategy
Scalable
Inexpensive
Labour intensive
Inefficient
Customer complaints
Alternatives
Conflict
Reduction in conventional sales
New business model
dark stores = remote regions
dedicated dot-com - urban
Dedicated depots = optimised layout
Speed up order fulfilment
Robot - load delivery vans
Automate delivery schedule - optimum efficiency
Same day delivery
Own van fleet & drivers
82% improvement in labour productivity
4Fs plan
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Fewer miles: distribution network
Fuel economy: eco-driving
Fuller trucks: Logistics planning
Fuller cages: warehouse workers' performance/planning
INNOVATION
Re-positioning in 1990s
From low-cost
Now appeals across many social groups
Product diversification
Telecoms
Internet services
Online shopping
Home delivery service
Financial services
End 24-hour shopping at 76 stores
Growth of online shopping
Refocus on price cuts
Sales improvement
Price cuts
Reduced margins?
More staff in stores
New Technology
Clubcard
Information of customer buying habits
Failed to keep pace with amazon
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Globalisation
New product launches
Glocalised
Joint ventures
"unforgettable bag"
Malaysia
Cut plastic waste
Recyclable plastic
Barcode
Customer discounts
Dot.com
New business model
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New products
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Waste NOT
Cut waste levels
30% recycled bottle
CSR
"helping the planet"
Smaller sized wine bottles
#
Portion & waste control
Health focus
Corporate Social Responsibility
Reduction in carbon foot print
4Fs plan
Growth
3rd largest retailer in world (profits)
Under price pressure from discounters: Aldi & Lidl
Under pressure from online rivals ie, Amazon
Decline in market share
2015: worst results in its history
Change in shopping habits
Cold-pressed fruit juices
Waste NOT
Surplus fruit & veg
Reduction of food waste
Corporate Social Responsibility
Rise of discounters
New way of working
"reorganising, refocusing & retraining"
Pressures
Rising costs
Falling consumer spending
Spread of discounters
Amazon
Retail disruptor
Acquisitions
Booker
Challenge Amazon
Control of supply chain
Speed up customer direct delivery
Competitive advantage
Dot.com
Same-day delivery
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Asda/Sainsbury: next day
Operations
Employee involvement