1.0 Introduction
The grocery industry is a huge, fragmented and enormously competitive environment and there are currently several examples of grocery companies that are making effective use of the internet as a link with customers (Delaney-Klinger, 2003). In particular, Tesco currently have internet channels for selling groceries that are profitable (Hall, 2001; Koller, 2001).
During the late 1990’s many new companies were set up to utilise the perceived advantages from using the internet in business, however, with their rapid rise and fall they soon created a phenomenon known as the ‘dot.com’ era (Lovelock, 2001). Questions were then raised about the added value that the internet brought to business and how these technologies could be used competitively. Grocery companies chose to diversify their service by introducing online equivalents of conventional stores. Porter (2001, p.62) criticised numerous pioneers of Internet business for infringement of fundamental strategic principles:
“Gaining competitive advantage does not require a radically new approach to business; it requires building on the proven principles of effective strategy”
The most successful example of an internet business that built its strategy on a previous effective one is Tesco’s online service. However, some companies, such as Webvan fell into the category that Porter (2002) criticises and failed in the online grocery sector.
2.0 Tesco.com
The retail giant, Tesco has cornered 30 percent of the UK grocery market, a figure which is approximately double the collective share of nearest competitors Asda and Sainsbury’s. Overseas sales are growing even faster (Emerald, 2008). Tesco.com views internet ordering of groceries as “an additional sales channel” (Delaney-Klinger, 2003) recognising that this service will never surpass that of grocery store shopping. With this in mind, one of Tesco’s strategies was to market groceries online as a convenience and not as a lower cost option (Delaney-Klinger, 2003). Tesco’s research into the small online grocery markets enabled them to develop an appropriate strategy which allowed the organisation to operate within their means. By providing a ‘Bricks-and-clicks’ hybrid service Tesco’s used existing stores as storage where the online orders would be distributed with respect to consumers location; thus reducing their start up costs.
2.1 Sustainability
The sustainability of Tesco is evident through the way in which they add value by their “plan to target online shoppers via Clubcard, rather than just fishing in the pool of Internet users.” (Humby et al, 2003). Tesco’s Clubcard assists their online strategy as it collects data from each purchase; the data is then altered in store and online to reflect the product range felt important to the customers.
that they will be able to contain more goods and sell more to gain a
Amazon.com operates in the Online Retail Industry. The sector is one of the fastest growing globally and is outperforming the ordinary retail marketplace. It was created after 1995 and it was only the Internet that made it possible for such an industry not only to be established but to become one of the most flourishing sectors in the business environment. What is interesting is that Amazon.com, together with eBay is the pioneer in the field. Both companies were launched in 1995 and are still extremely successful. The creation of e-mail in 1996 had a huge impact on the development of online retail by introducing a fast and easy way to communicate with customers. For this two-year period Internet usage doubled annually, thus, allowing for the expansion of the industry. Google is launched a year later, in 1998, only to become the most used search engine in the world and an essential partner for the online retailers by helping them tailor their websites to customer’s personal preferences and by advertising. After that, more and more people see the opportunity in the growing industry and enter it. By 2001 there are more than 513 million Internet users globally, which calls for action in terms of creating regulations and laws to protect the users and personal property. In 2003, Apple launches iTunes, and provides a platform for low-cost digital downloads. Another major change is the appearance of social media from 2004, which is one of the biggest influencer on the state of the industry. With the launch of iPhone in 2007, this trend strengthens as people get to enjoy the Internet anywhere they want to. From then on, technological advancements have made it extremely easy and fun to shop online, making it ...
In addition to the change in behavior of consumer, many companies or retailers change the sales channel combinations. The greatest impact of the Web-bases electronic revolution has occurred in companies adopting the click-and-mortar approach. Click- and-mortar is one the strategy used by the companies or retailers that they continue to conduct their business in the physical locations and have added the electronic commerce component to their business activities. According to one study, 37% of United States retailers are selling through a combination of the internet, in stores and catalogs. This represents a growing demand for the business-to-customer package delivery service.
In summary, “Internet activities are not most significant in competition, such as informing customers, processing transactions, and procuring inputs”. (Porter, 2001) significant corporate assets--skilled employees, proprietary product, and efficient logistical systems – these factors are the most important to keep competitive advantages. In fact, it is foreseeable that the Internet's evolution will come up in the future involve a shift “in thinking from e-business to business, from e-strategy to strategy”. (Porter, 2001)Only by integrating the Internet into overall strategy will this powerful new technology become an equally powerful force for competitive advantage.
I agree with this statement. When it comes to trying to break into an industry and have a competitive advantage over the rest, the strategy we have to use has to be distinctive. This means we have to come up with a different approach to capture our customers to make them want to use our product rather than product’s from the industry’s leaders. The best competitive position is always to have no competition. To achieve that level, organizations should not be following what the leaders are doing instead they should formulate, implement and deploy a distinctive strategy that changes the rules of the business game in their favor.
Methods of operating in the retail food sector are always changing. This is especially true in the supermarket space. Today's informed consumers are increasingly demanding quality, fresh, and innovative foods. Additionally, these consumers also demand convenience be served along with these first-rate products. More grocery products are being purchased at non-traditional food retailers.
The Tesco app along with the Tesco e-commerce site is a ‘modern’, quick and easy way that customers can access what they want and when they want to. On top of this, it allows access for people who can’t always reach the main store physically due to disability or ill health. If Tesco appear to be a fitting and thoughtful service that takes notice of people’s needs and situations, their public image will be seen as a considerate and attentive one. Customers are more likely to be drawn to this service if they are shown care. Furthermore, the creation of small side stores such as Tesco express and Tesco Metro has made shopping more convenient for customers who live in local neighbourhoods.
During the last decade, we’ve been to the top of the world—during the dot-com boom of the late 1990s—and back down again, when it all fell apart a few years later. But with the bad came the good: The Web forever changed the business world. The following small-business owners are shining examples of how Web-based technologies can be a businessperson’s best friend.
In the last category, Tesco’s goals are to make major improvements of its stores in the UK by 2017 and to open 450 convenience stores annually (B...
As a leader of online shopping within the retail outlet industry, Tesco Malaysia is light-years ahead of its competition and it is no surprise that it has more than half of the ecommerce grocery market in Malaysia and is doing so well in the online shopping channel as its search positions dominate the sector. It is hard to pick any flaws with its ecommerce practices, but of course, there is always room for improvement. The following are some of the suggestions that could be tweaked to generate even more of the green stuff for the retailer.
Since its launch in the mid '90s, Dell's e-commerce business has been a poster child for the benefits of online sales, says Aberdeen Group analyst Kent Allen. The company's strategy of selling over the Internet -- with no retail outlets and no middleman -- has been as discussed, admired and imitated as any e-commerce model. Dell's online sales channel has proven so successful, says Allen that the computer industry must ask: "Does the consumer need to go to the store to buy a PC anymore?"
Amazon saw a big opportunity in online grocery sales business after noticing that several larger big-box retailers have not acted upon swiftly for seizing this opportunity. Amazon is planning on building local fresh foods and grocery stores; customers can make online purchases and opt for either a home delivery or a curb-side pick-up of their purchased groceries in an Amazon store parking lot. As a result of Amazon’s introduction into the grocery sales business, Walmart and Kroger immediately took note of this imminent move from Amazon and have come up with their own versions named “click and collect” online grocery shopping services where customers can make grocery purchases online and pick them up at a store parking
For organisations to be truly marketed-orientated they must exceed the value offered by their competitors; and at the same time, the overall goals of the organisation must be achieved. Additionally, for marketing to be carried out effectively and efficiently throughout the organisation, then it must involve analysing, planning, implementation, and control (Kottler and Armstrong, 2012). According to Kottler and Armstrong (2012, p. 5), the modern marketing concept can be expressed as “the process by which companies create value for customers and build strong customer relationships in order to capture value from customers in return”. Tesco’s, it appears, may have managed to successfully achieve this.
He believes that leaders and managers should be flexible with their strategies (McKeown, 2012). The author states that it is not always the best option to copy the competitor and his strategy. What is good for one business might not always be good for the other even if they are producing identical products. Lastly, the strategies can be changed. If a business person believes that a strategy constructed ten years ago is not conducive anymore then, it can be altered or completely changed according to where the business stands in the present.
In October 2000, after only 10 months of operation, Priceline’s affiliate Priceline Webhouse Club, unable to raise additional financing, shut down its business, after running through $363 million. The financial climate at the time, with its renewed emphasis on profitability, made it impossible for Jay Walker, Priceline’s founder, to raise the additional hundreds of millions that would be required before Webhouse might become profitable. Walker did not see the closure as a failure of the Priceline business model, however. Instead, he characterized it as the result of the “fickle sentiments” of investors. Many analysts did not accept Walker’s characterization. Instead, they pointed to other factors. First, many of the major manufacturers of food and dried goods chose not to participate in Priceline Webhouse. So, to generate consumer interest, Priceline Webhouse subsidized discounts on most products itself. Although some major manufacturers, such as Kellogg’s and Hershey’s, did eventually sign up, many, such as Kraft, Procter & Gamble, and Lever Brothers, did not. The second miscalculation was that bidding on groceries and gasoline did not exactly provide a “hassle-free” way to shop. Customers were required to bid on and pay for groceries online, then use a special identification card to pick them up at a participating supermarket. If the particular items purchased were not available at the store, the customer would