Tesco

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