This study explored the customer relationship management of Tesco. Tesco is the leading retailer in UK. It manages over a thousand supermarkets, hypermarkets, and convenience stores in the United Kingdom, Ireland, Central Europe and Asia. The study analyzed the customer relationship management, changes in consumer behavior, business environment, and PESTEL, which is very important in strategic and competitive study of an organization, especially in the retail and service industry. Since the retail industry undergoes very diverse change almost everyday, it is just right that Tesco’s strategy on change examined. In analyzing how Tesco is competitive, the study also utilized the SWOT analysis and Porter’s five forces for the industry attractiveness. The study arrived to the conclusion that customer relationship management system help organizations improve the profitability of their interactions with current and potential customers while at the same time making those interactions safer and friendlier through individualization and personalization. The systems goals are to enhance customer service, improve customer satisfaction and ensure customer retention (Tesco, 2010). Tesco still needs the aid of Michael Porter’s five forces, generic studies and cost leadership in order to stay on the top in the retail industry.
This report is aimed at critically analyzing customer relationship management, changes in consumer behaviour, macro, meso, and micro business environment of Tesco, one of the largest food and grocery retailers in the world, operating around 4,331 stores. Customer relationship management system and strategic evaluation tools such as PESTEL, Porter’s Five Forces, SWOT analysis have been used in order to achieve this aim. Tesco- Company Overview.
Tesco is among the largest food retailer in the world with revenue in excess of 54 billion pounds in 2009 and employing over 470,000 people. According to Datamonitor (2010), the commercial network portfolio of Tesco comprises: over 960 Express stores which sell approximately 7,000 products including fresh foods at suitable localities; 170 Metro stores which sell a variety of food products in town and city centres; and 450 superstores which sell both food and non-food items including books and DVDs. Tesco also provides online retailing services trough their website tesco.com and Tesco Direct. In addition, they provide broadband internet connections and financial services through Tesco personal Finance (TPF). The comparative positioning of Tesco’s market share with respect to other leading players in the market has been illustrated as follows (Euromonitor, 2010):
Fig 1: Share of Leading Players in UK Food Retail Market
CUSTOMER RELATIONSHIP MANAGEMENT
Customer Relationship Management (CRM) is a business strategy that is facilitated and enabled by specialized technology. In conjunction with deploying new technology and initiating information engineering and knowledge management, no project of this scope should be launched if its does not address re-engineering processes across the service delivery model and the enablement and optimization of the people and the leadership that oversee it. It is an evolution that is enabled by web-technology that will allow the creation of micro-segments, precision targeting and full view of the customer across all the contact points across an enterprise. One of Tesco’s key weapons in the battle for retail supremacy has been its Clubcard loyalty scheme and the subsequent launch of the Clubcard plus debit card. These have shown Tesco taking a clear initiative and then building rapidly on its advantage (Tesco, 2010). One footnote to this is that loyalty cards should be seen as a longer term marketing tool since they enable retailers to learn more about their customers’ shopping habits and respond accordingly with tailored offers. Tesco’s...
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