Tesco is a great example of how a company should build itself, renew itself and adapt itself constantly to its customers. One might look at Tesco as the European Wall-Mart, which is not so far from the true. However, I believe, from reading the case, that Tesco huge success was not derived just from copying an exiting idea and implement it in the UK. When Tesco started growing seriously it faced fierce competition from small grocery stores and big ones such as Sainsbury. Yet, by continuously innovative ideas and constant fine-tuning its offers to match with its customers Tesco climbed up and became a leader in retailing.
What did Tesco did Right? What gave them the advantage?
From the start, Tesco's management aimed at massive expansion. Reaching as many customers as possible while offering them cheap and basic products. The phrase "Pile it high, sell it cheap" perhaps describes the business plan best. Indeed, later on `basic products` were only part of Tesco's goods but that it more related to the fantastic job Tesco did in analyzing its customers and finding out what exactly they want. The first move was the "Stamps" which were later replaced by the ClubCard, a tool that enabled Tesco to learn more about their customers' shopping habits. That enormous amount of data enabled Tesco to reduce for example its number of discounted items from 700 to 350. Knowledge is power! Tesco knew it and used the knowledge to identify new trends in the market - what gave Tesco a constant advantage over competitors.
So to sum things up, Tesco's decision to invest in the new platform in the form of ClubCard was a turning point in the company's evolution and all together a great decision.
YV
Saturday, June 19, 2010
Friday, June 18, 2010
Casadellibro.com
1. What would be your decision? Would you stick to the previously developed UNIX platform, or switch to the new Microsoft one? Please feel free to make any rational assumptions you might need in order to reach a decision.
The question whether to stick with the existing platform or to switch to a new one is all but simple. Each option has a main big advantage in addition to a disadvantage. I believe that the decision must arise from a deep analysis of the company's vision for its future. Indeed, staying with the existing platform will assure the company high availability and the power of sustain huge number of transaction. However, maintenance costs will stay very high and at the moment huge number of transactions was not exactly the reasonable estimation. The second option on the other hand seems, as mentioned in the case, intuitively better. Very low maintenance costs and simplicity were two main reasons for that. Yet, one might argue that by switching to a new, less powerful platform might in the future hinder the company's growth due to its limited abilities. Besides the maintenance, the cost of licenses and integration is sunk cost and it would be a shame not to use this. Having said all that, I will conclude by choosing the first option. I believe that the company should stick with the existing platform, at least for another year to see how the market reacts to the latest developments. In case of losses, you can always switch to a new cheaper platform. Changing the platform now and then change it back in case of need is a whole different story and to my opinion, an unnecessary action.
2. Which are the most relevant criteria for you to make the decision? Just name each criterion, and explain it very briefly.
My criteria, which I took under consideration while making my decision were:
Platform's capabilities (in line with future prospects) - a company which sets its goals in expanding and becoming a world leader cannot rely on a relatively weak platform. Online transactions, which suppose to be the company's main source of revenue must always run smoothly, otherwise customers will switch to other competitor.
Costs - The recent developments were not in favor of risky decisions and bold investments. The company must take this under consideration at all time. Loosing a large sum of money at this sensitive point might lead to a bankrupt.
The question whether to stick with the existing platform or to switch to a new one is all but simple. Each option has a main big advantage in addition to a disadvantage. I believe that the decision must arise from a deep analysis of the company's vision for its future. Indeed, staying with the existing platform will assure the company high availability and the power of sustain huge number of transaction. However, maintenance costs will stay very high and at the moment huge number of transactions was not exactly the reasonable estimation. The second option on the other hand seems, as mentioned in the case, intuitively better. Very low maintenance costs and simplicity were two main reasons for that. Yet, one might argue that by switching to a new, less powerful platform might in the future hinder the company's growth due to its limited abilities. Besides the maintenance, the cost of licenses and integration is sunk cost and it would be a shame not to use this. Having said all that, I will conclude by choosing the first option. I believe that the company should stick with the existing platform, at least for another year to see how the market reacts to the latest developments. In case of losses, you can always switch to a new cheaper platform. Changing the platform now and then change it back in case of need is a whole different story and to my opinion, an unnecessary action.
2. Which are the most relevant criteria for you to make the decision? Just name each criterion, and explain it very briefly.
My criteria, which I took under consideration while making my decision were:
Platform's capabilities (in line with future prospects) - a company which sets its goals in expanding and becoming a world leader cannot rely on a relatively weak platform. Online transactions, which suppose to be the company's main source of revenue must always run smoothly, otherwise customers will switch to other competitor.
Costs - The recent developments were not in favor of risky decisions and bold investments. The company must take this under consideration at all time. Loosing a large sum of money at this sensitive point might lead to a bankrupt.
Monday, June 14, 2010
ERP
In today's business environment, which is super competitive, firms feel the need to have new business goals in order to fulfill their inner visions. One of the most important things, in order to achieve those objectives is the support of the IT.
Enterprise Resource Planning (ERP) software was created to offer an integrated IT solution. A software like that should help in creating a compatibility between the task itself and the technological systems in the firm.
Today, we can find ERP in many companies as a major investment but many times, managers are not provided with good guidance and not taking full advantage of the ERP potential.
The question whether companies should adapt to ERP or vice versa is not so easy and depends allot on the company itself. Personally I believe it should be integrated into the company rather than being adapted. ERP by nature should serve the company's needs and therefore should be used by it, even and perhaps because it brings change to the company.
That was rather vague opinion of me, after all, today was the first time I heard about this term...hopefully that after tomorrow's session I will be a bit smarter.
Yours
YV
Enterprise Resource Planning (ERP) software was created to offer an integrated IT solution. A software like that should help in creating a compatibility between the task itself and the technological systems in the firm.
Today, we can find ERP in many companies as a major investment but many times, managers are not provided with good guidance and not taking full advantage of the ERP potential.
The question whether companies should adapt to ERP or vice versa is not so easy and depends allot on the company itself. Personally I believe it should be integrated into the company rather than being adapted. ERP by nature should serve the company's needs and therefore should be used by it, even and perhaps because it brings change to the company.
That was rather vague opinion of me, after all, today was the first time I heard about this term...hopefully that after tomorrow's session I will be a bit smarter.
Yours
YV
Sunday, June 13, 2010
The Hell with Dell
The summer of 2005 was especially hot. Jeff Jarvis just got back his computer (for the fifth time) from Dell's lab. He was hoping that perhaps this time it will work, but life with Dell, as Jeff probably knew by then, are full with disappointments. For Jeff, that was the straw that broke the camel's back. He posted a blog stating that Dell’s machine is a "lemon", and that was the opening shot for a long and dirty quarrel between him and Dell.
Numbers tell that after a while, Jeff's blog and especially the term "Dell Hell" contributed massively to the company's loss of popularity and a negative public opinion regarding the firm and its products. Dell understood in the painful way that Jeff is not the kind of dude you wanna mess with.
So how should Dell have dealt with the situation? They had two options, either to attack back or to try and eliminate the problem as soon as possible in a peaceful and submissive way. Well, Dell went with the former way and the sad results were not late to arrive. Now I am not saying that Dell should have gone with the later option without thinking twice. The decision with which way to go must derived after checking the facts and see who is right. In this case, the outcome was in favor of Mr. Jarvis. Unfortunately, for Dell the result was different and so was the action plan.
Jeff Jarvis had all the rights in the world to be very upset with Dell and even though some might claim he was a bit too rough with them, I would say that he did what every frustrated consumer dreams of doing whenever he feel he got screwed, several times. Jeff just did it.
I don't know if Jeff's case was one of a kind, actually I'm pretty sure there were other Jeffs with the same problem but less resources and personal motive to do what he did, Dell didn't take that under consideration and thought that he is just like all the rest and must not be paid attention to. How could they know? I guess they couldn't, at the beginning. However, when Jeff started writing about his experiences, Dell had to see the first red-light turning on. Dell should have invite Jeff to their offices and try to consolidate him in whichever way they can and even to go way and beyond to make him love the company. Why? simply because Jeff is not and ordinary customer, for dell he should have become a tool, an advertisement tool. The same bad publicity and exposure Dell had, resulting Jeff's blog could have in its favor...
By buttering Jeff up a bit, and even sucking up to him, Dell could have won a great ally, instead, they won themselves a bitter, angry nemesis who is not only willing to do anything but also holds the weak position of the poor little customer against the big bad firm.
Saying that, I must add that not every company should take actions like Jeff's as a serious bomb threat, even if the complainer has a blog! I am just saying that a company must address issues like that and treat customers with respects. They might be wrong, they might be right - that should be the base for their course of action! If the company is right and the complaint is baseless I am sure they will not have problems proving it, but if the company is wrong, what tells them that its not Jarvis, try to strike again...
Think about it!
YV
Numbers tell that after a while, Jeff's blog and especially the term "Dell Hell" contributed massively to the company's loss of popularity and a negative public opinion regarding the firm and its products. Dell understood in the painful way that Jeff is not the kind of dude you wanna mess with.
So how should Dell have dealt with the situation? They had two options, either to attack back or to try and eliminate the problem as soon as possible in a peaceful and submissive way. Well, Dell went with the former way and the sad results were not late to arrive. Now I am not saying that Dell should have gone with the later option without thinking twice. The decision with which way to go must derived after checking the facts and see who is right. In this case, the outcome was in favor of Mr. Jarvis. Unfortunately, for Dell the result was different and so was the action plan.
Jeff Jarvis had all the rights in the world to be very upset with Dell and even though some might claim he was a bit too rough with them, I would say that he did what every frustrated consumer dreams of doing whenever he feel he got screwed, several times. Jeff just did it.
I don't know if Jeff's case was one of a kind, actually I'm pretty sure there were other Jeffs with the same problem but less resources and personal motive to do what he did, Dell didn't take that under consideration and thought that he is just like all the rest and must not be paid attention to. How could they know? I guess they couldn't, at the beginning. However, when Jeff started writing about his experiences, Dell had to see the first red-light turning on. Dell should have invite Jeff to their offices and try to consolidate him in whichever way they can and even to go way and beyond to make him love the company. Why? simply because Jeff is not and ordinary customer, for dell he should have become a tool, an advertisement tool. The same bad publicity and exposure Dell had, resulting Jeff's blog could have in its favor...
By buttering Jeff up a bit, and even sucking up to him, Dell could have won a great ally, instead, they won themselves a bitter, angry nemesis who is not only willing to do anything but also holds the weak position of the poor little customer against the big bad firm.
Saying that, I must add that not every company should take actions like Jeff's as a serious bomb threat, even if the complainer has a blog! I am just saying that a company must address issues like that and treat customers with respects. They might be wrong, they might be right - that should be the base for their course of action! If the company is right and the complaint is baseless I am sure they will not have problems proving it, but if the company is wrong, what tells them that its not Jarvis, try to strike again...
Think about it!
YV
Monday, June 7, 2010
Dear loyal fans,
Today, I will write my second chapter about Facebook. Assuming all of you have read the first part and already familiar with my attitude towards Facebook, I will try to concentrate on the future of Facebook - two years from now. I will start by advising you not to see my in-depth analysis and forecast as a sort of recommendation for you to invest or not in Facebook. But if you will, and you will gain some profit- dont forget about me...
We live in a different world. Such in which privacy is a synonym to "he is probably try to hide something". Do not get me wrong, this major change in our society's conception is one that is warmly embraced here. Facebook knows it, Facebook uses it. People will continue to look at Facebook as their window to society and use it more and more as a main platform to socialize and basically "present" themselves to the world.
I also believe that Facebook will join one of the main internet players such as Yahoo/Google in order to gain more power and spread to a new area. Today Facebook holds an incredible amount of personal information of its 4 billion users - these data is extremely valuable and will be used, to my opinion, in more fields such as personalized advertisement.
I do hope that this process will be as slow as possible. I am a Facebook user but not because I find it so amazing, but because the society I live in does; and if I wanna stay connected to it I should do some adjustments.
All the best
YV
Today, I will write my second chapter about Facebook. Assuming all of you have read the first part and already familiar with my attitude towards Facebook, I will try to concentrate on the future of Facebook - two years from now. I will start by advising you not to see my in-depth analysis and forecast as a sort of recommendation for you to invest or not in Facebook. But if you will, and you will gain some profit- dont forget about me...
We live in a different world. Such in which privacy is a synonym to "he is probably try to hide something". Do not get me wrong, this major change in our society's conception is one that is warmly embraced here. Facebook knows it, Facebook uses it. People will continue to look at Facebook as their window to society and use it more and more as a main platform to socialize and basically "present" themselves to the world.
I also believe that Facebook will join one of the main internet players such as Yahoo/Google in order to gain more power and spread to a new area. Today Facebook holds an incredible amount of personal information of its 4 billion users - these data is extremely valuable and will be used, to my opinion, in more fields such as personalized advertisement.
I do hope that this process will be as slow as possible. I am a Facebook user but not because I find it so amazing, but because the society I live in does; and if I wanna stay connected to it I should do some adjustments.
All the best
YV
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