What are the key elements to Tesco’s success in the competitive retailing industry?
Tesco is the largest supermarket company in the UK and one of the four largest global retailers. In my opinion, the Tesco Club Card is major contribution to the success of business. Tesco was capturing valuable information with every swipe of its Club Card and building a powerful database of customers, which it gained through card membership information. The card provided Tesco with vital customer information such as what products they were and was not buying, where they were spending their time in the store, and where they were not. The Club Card has helped Tesco’s marketing by allowing these tailored marketing campaigns to individual consumers and target groups. It has also helped to build loyalty with is a points system where you get 1 point for every dollar spent and these points can be exchanged for vouchers that can be spent in store.
The 2nd key element to Tesco’s success is the company is able to adapt its distribution channels to meet local market needs and the requirements of the business environment in which it operates. The trend of the UK people has been changed to one stop shopping and they want to get everything at one place. In order to make a solid position in the UK market, Tesco has been spending a huge amount of money on the development of existing infrastructure, from large 7,500-square-foot Tesco Extra hypermarket formats with a full range of food and nonfood products, down to small 1,600-square-foot One Stop convenience stores. Tesco is also opening a range of nonfood stores branded Tesco Homeplus when it faces difficulties to receive planning permission for expanding its large food stores. This expansion allows Tesco to grow its nonfood division to the extent that its nonfood revenue is now total 23% of total group earnings. Tesco’s international business segment is also growing steadily. The company has expanded into Eastern Europe, emerging markets such...