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Tesco.com - IT and online strategy and business model
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INTRODUCTION
Tesco:A Major Retail Grocery selling store
Setup by Jack Cohen First to Introduce Self-
Service mode Growth by Acquisitions Introduced Trading
Stamps Businesses include
financial services, online grocery retailing ,Petrol filling Stations
TESCO.COM-A RARE PROFITABLE.COM
1996: Decided to tap the Internet for Business.
Accepted phone, fax, and Internet orders.
First retailing company that was an Internet Service Provider.
Proved Online Grocery selling as a viable Business.
REASONS FOR PROFIT GENERATION
Online customers tended to order costly Merchandise in large quantities
Opportunities for cross selling (Pop-up windows)
Customers ordered in bulk to justify delivery charges of $ 5
A UNIQUE BUSINESS MODEL
“The Pick-In-The-Stores System”
Rejected warehousing Model : As demand was low and it was a huge investment.
Opted for Positioning Information System in Existing Stores.
Used Shopping cart equipped with Online Displays.
Divided Outlets into six Major zones – Bakery, Groceries, Frozen Foods, Chilled-Foods, Liquor, Produce.
Electronic Scanning of Ordered Items
Suggested Substitute Products for Out of Stock Items.
Continued…
FLOWCHART
THE INGREDIENTS OF SUCCESS
Delivering Excellence: Problem: Complex
Delivery Procedure
What Tesco.com did? Optimal use of Time
and Resources Predetermined route
maps for Delivery Generated $27 million
through delivery Fees
INVENTORY MANAGEMENT
Inventory monitoring and replenishment
How these conditions were fulfilled?
Used a wheel with light of various colors
Customer profile Database generated through loyalty card scheme
CUSTOMER SERVICE
Differential pricingVariety of merchandise
availability on Tesco.com
Text to speech conversion technique was introduced for Blind people
Timeliness of deliveries and accuracy with orders served
WEBSITE MAINTENANCE
Tie up with knowledge management consultants - Intervowen
Website updated on regular basis
CD version of website for dial up mode customers
System checks were carried out
MyWeb Software adopted
Low fixed cost but high variable cost
Intensifying competition
Increasing Internet Traffic
Entry in U.S. Market
REASONS TO WORRY
Presented By:
AshimaPragyandipta PatnaikMayur KansalNeetika PanwarMegha Yadav
Queries???
Sales increased from $19.2Million to $264 million
Online venture sustained due toSmart-small business
The Safeway alliance-The biggest testimony
UNIQUE BUSINESS MODEL-THE OUTCOME