Tesco's Competitive Advantage

Tesco, one of the worlds largest retailers with 1878 stores worldwide, achieved market dominance through a series of technological and business differentiators.The Tesco competitive advantage lies in one simple truth....innovation through technology. In a nutshell, the company has a long tradition of installing the latest procurement practices, investing in better ways to retain customer loyalty (via the club card program) and investing in one of the world's leading online retail stores via the 60M (GBP) http://www.tesco.com/. These differentitiating factors have helped to ensure Tesco's market dominance in the UK supermarket and grocery space. Today's blog entry will analyze each of these competitive advantages and look at ways that they have used them to combat and compete with other supermarket chains both in the United Kingdom and beyond.

WEB PRESENCE

The Tesco web presence is among the most profitible in the world, generating over 360 (GBP) on the 60M invested in it. Tesco.com is used to buy a variety of goods that move well beyond grocery items. One can now use Tesco.com to purchase electronics and home goods in addition to traditional perishable products such as groceries.

BI - Business Intelligence & Loyalty
The Tesco club card program is among the most well regarded loyalty programs in the world. The program is essentially designed to analyze consumer buying behaviour and then offer custom deals that meet the specific unique needs of the consumer. The program works as follows:

1. Customer signs up for program in order to recieve discounts on goods
   
2. Consumer buying behaviour is analyzed using sophisticated business inteligence software
   
3. An email or letter is sent to the consumer containing discounts on the goods that consumer typically buy and SUGGESTIONS on other products the BI system believes you will like given your buying habits as compared to other like buyers in the market.

This kind of sophisticated system adds RELEVENCY and VALUE to the consumer loyalty program. These factors are key for low margin businesses that require innovative ways to retain customers and keep them shopping at Tesco as opposed to other competitors.