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Question 1: EMA (Introduction: Innovation definition (Why Tesco's…
Question 1: EMA
Introduction: Innovation definition
Why Tesco's place high importance on 'INNOVATION'
Stay ahead of their competition
The Macro-environment (Fiona Harris p18-19)
The competition:
• under price pressure from discounters like Aldi and Lidl
• under pressure from new online rivals, such as Amazon
Morrisons selling some of their products through amazon prime
Potential of Amazon merging with Morrisons
Sainsburys merging with Argos
Meet customer needs as External markets change (P14-15 block 1)
Micro environment (Fiona Harris p18-19) - ;
Customers - Consumer markets (p19, fiona harris)
Tesco's market
With customers having multiple options to spend their money, Tesco's must innovate to attract their attention to spend their money through innovation.
Example innovations; Unforgettable bag, find a way to reduce plastic from their suppliers.
'The micro environment focuses on the groups of stakeholders and audiences in an organisations immediate environment that affects its activities and success'
Concept: Marketing segmentation - psychographic variables
Lifestyle
'live a waste free life'
Reduce carbon footprint
Motivation
Defra's seven population segments : Waste watchers
Recover from their pre-tax loss of £6.4 billion
How are they are recovering?
Placing 4000 more 'here to help' staff in stores
Adding the 'human' factor you don't get in Aldi and Lidl.
Shows Tesco's are focusing on customers
Concept
Competitive advantage: Differentiation; superior customer service (Fiona Harris p24).
Helped drive sales up for Tesco's
To improve operations strategy to meet market demands
model: Strategic reconciliation
Tesco's dot.com business
Had to be changed as their online store's offered 30,000 products, whereas their stores only stored 20,000
Depots were introduced with robots and their own delivery vans to increase efficiency and automation
End result: same-day delivery
Therefore, Tesco's place high importance on innovation because to improve operations strategy to meet market demands, they need to innovate
However
2 more items...
Shows that Marketing and Operation functions integrate to facilitate innovation
Why?
1 more item...
Information-based integration & Formalisation-based integration
Where Tesco's innovate
In response to Malaysia’s drive to cut plastic waste Tesco has launched the 'unforgettable bag', a shopping bag with a barcode. This is an initiative to shift away from single-use-plastic-bags and reduce waste. This gives customers discounts on their shopping every time they reuse the bag
Promotes people to reuse their bag
Meeting the needs of the public who care for the environment
Creates shared value
Makes social and economical gain
Concepts and theories to use from Block 1