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Tesco's Porters Value Chain and 5 Forces

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Lindsay Pereira

on 24 August 2013

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Transcript of Tesco's Porters Value Chain and 5 Forces

Using Tesco as the base we look at
Porter's 5 Forces and the Value Chain in use
Tesco Back Ground
Porter's 5 Force Theory

simple but powerful tool
understand both the strength of your current competitive position
advantage of a situation - Strengths , Weakness or wrong Steps
Tesco's Objective
To Re-position's image
by improving
Outlets, warehousing facilities
stock control and
administration systems
Competitive Rivalry – High
Buyer Power – Medium
Loyalty cards
Supplier Power – Low

Support Tesco's Own Brand
Threat of New Entry – High
Good infrastructure

Loyal Supply Chain

Technology savvy
Threat of Substitution – Medium
One location ALL items and More
Tesco was able achieve Strategic opportunities
1.Competitive advantage – using IS/IT in relation to market forces
2.Strategic collaboration – business alliances based on sharing IS/IT
3.Business diversification – new products / services, channels of delivery using IS/IT
4.Market focus – customer intelligence, customer communication
5. Management improvement – business / management processes, structures
Porter’s Value Chain
A chain of activities that a firm operating in a specific industry performs in order to deliver a valuable product or service for the market.
Porter’s Value Chain from Tesco’s point
Inbound logistics
- Development of EDI and Bar Coding System.
monitor warehouse efficiencies – space and vehicle utilization, delivery times linked to route planning through available syst

Operations - Implementation of IT to help support of procurement, manage customer expectations

Outbound logistics
- EDI has been developed in parallel with composite, multi-temperature food warehouses

new systems have meant lower costs
Marketing and sales
- customer-orientated by business
Building customer loyalty
Tesco has a series of common strategy elements that it adds to each year
Support Activities
(purchasing) – using of a supply chain management System (EDI /EPOS)

Human resource management
– needs people across a wide range of departments,has a structured process for recruitment and selection to attract applicants for both managerial and operational roles.

Technological development – Development of a Supply Chain Management System (EDI /EPOS)

Infrastructure – use of Collaborative Work Systems, Administrative Coordination and Support Systems to provide them the required information in order to take the required decisions more effectively.

Conclusion -

Tesco’s use of the Value Chain in the primary and support activities in the area of business information has been able to give them the required competitive advantage.

“use information technology (IT) for competitive advantage as well as cost savings”

Thank You !!!!


- Having a Support desk to facilitate customer experience and issues.
Full transcript