How Technology Has Extended Tesco's Value Chain

How technology has extended Tesco’s Value Chain

Intro

The idea of the value chain was thought up of first by Michael Porter. The idea behind it is having a value chain in a business if for it to create a sustainable competitive advantage in the market it operates in. All businesses entail different activities that join it together to create the values chain. The Value chain of any organisation will always start with the production of raw materials and ends with the finished product in the customers possession. The principal of the value chain framework is to maximise value while decreasing cost.

Two parts are ultimately linked in the value chain analysis. First part of the value chain connects the value of the businesses activities with its functional parts. The contribution of both parts to the total added value of the business is assessed. To run a value chain analysis, the businesses activities are split into primary and supporting activities. Primary activities are linked to production, where on the other hand supporting activities like hrm establish the essential foundation for effectiveness and efficiency of the firm.

View from supplier

Tesco's development of the there value chain through the adaption of readily available technology, has resulted in great success, effectiveness and efficiency. From a suppliers (upstream) stand point, Tesco’s inbound logistics has evolved to the use of EdI’s and barcoding. An EDI (electronic data interchange) contains business data which generally represents price, quality, dates etc. By involving this technology in Tesco’s inbound logistics, there suppliers can efficiently know what product, how many and where they need to be dispatched to, in real time ‘Tesco believe that an open an...

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...as for the company to be transparent and consistent about its motives and values. "If you do that they will stay with you for a lifetime, and that's where you get your return on investment,"

Conclusion

References

WeSupply. (2013). Tesco EDI Initiative. Available: http://www.wesupply.com/tesco-edi-initiative/. Last accessed 31 March 2014.

Jon Sinigaglia. (2007). EDI (Electronic Data Interchange). Available: http://searchdatacenter.techtarget.com/definition/EDI. Last accessed 27 March 2014.

Anthony Reuben. (2012). Tesco new-look stores to appeal to gadget enthusiasts. Available: http://www.bbc.com/news/business-19810924. Last accessed 27 March 2014.

Ian Grant. (2011). Tesco uses customer data to stride ahead of competition. Available: http://www.computerweekly.com/news/1280095684/Tesco-uses-customer-data-to-stride-ahead-of-competition. Last accessed 27 March 2014.