E-Commerce

1. E-Commerce 2011
Contents
Chapter-1................................................................................................................................................................................. 3
Business 2 Business Model ................................................................................................................................................. 3
Business 2 Consumers Model ............................................................................................................................................. 4
Chapter-2................................................................................................................................................................................. 5
Company background ......................................................................................................................................................... 5
Company Values ................................................................................................................................................................. 5
Company Objectives ........................................................................................................................................................... 6
Treat people as they like to be treat ................................................................................................................................ 6
Chapter-3................................................................................................................................................................................. 7
The business models used by the company ............................................................................................................................ 7
Current market .................................................................................................................................................................... 7
Chapter-4................................................................................................................................................................................. 9
Tesco.com transaction types ................................................................................................................................................... 9
Currently IT position........................................................................................................................................................... 9
Data Management ................................................................................................................................................. 11
A database administrator ....................................................................................................................................... 11
Application Security ............................................................................................................................................. 12
Administrative Systems ........................................................................................................................................ 12
Security Office ...................................................................................................................................................... 12
Information Services ............................................................................................................................................. 12
IT Solution ........................................................................................................................................................................ 13
Chapter-5............................................................................................................................................................................... 14
Tesco.com’s competitive advantages over its competitors ................................................................................................... 14
Consumer is benefiting (HOW?) ...................................................................................................................................... 15
How do customers choose were they do shopping ........................................................................................................... 16
Competitive Advantage..................................................................................................................................................... 16
Differentiation ............................................................................................................................................................... 16
Cost Leadership............................................................................................................................................................. 17
Cost Focus ..................................................................................................................................................................... 17
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2. E-Commerce 2011
Chapter-6............................................................................................................................................................................... 18
Chain management improvements .................................................................................................................................... 18
Structuring a Supply Chain Improvement Program ...................................................................................................... 19
Conclusion ............................................................................................................................................................................ 21
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3. E-Commerce 2011
Chapter-1
Business 2 Business Model
Is Refers to the full range of e-commerce that can occur between two organizations. Among other
activities B2B e-commerce including purchasing and procurement, supplier management, inventory
management, channel management, sales activities, payment management, and supports. Tesco is a pioneer in
Grocery Shopping & Delivery Service commerce. Now Tesco extends this functionality all the way to
organization's Enterprises Resource Planning system for true B2B commerce.
Figure 1.0
Business 2 Business Model
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Business 2 Consumers Model
When conducting business over the Internet, there are several different transactions or business models
that exist within the world of E-Business. One of the most common models in E-Commerce is the Business-ToConsumer (B2C) model. In B2C transactions, online transactions are made between businesses and individual
consumers. Businesses sell products and services through electronic channels directly to the consumer.
B2C E-Commerce involves what is known as electronic retailing or e-tailing. E-tailing involves online
retail sales. E-tailing makes it easier for a manufacturer to sell directly to a customer, cutting out the need for an
intermediary. With B2C transactions there is no need for retailers and therefore, no need for a physical store
from which to distribute products.
Figure 1.1
Business to Consumer model
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5. E-Commerce 2011
Chapter-2
Company background
Tesco is an UK international grocery and general merchandise retail chain. It is the largest British
retailer by global sales and domestic market share, with profits more than 3 billion. Currently it’s the third
largest global retailer based on revenue. Jack Cohen found Tesco in 1919 when he began to sell surplus
groceries from a stall in the East End of London.
Figure 2.1
Tesco Logo / commercial
The Tesco brand first appeared in 1924. The name came about after Jack Cohen bought a shipment of
tea from. He made new labels using the first three letters of the supplier’s name (TES), and the first two letters
of his surname (CO), forming the word TESCO. The first Tesco store was opened in 1929 in burnt oak,
Edgware in South East London, Tesco originally specializing in food and drink, it has various areas such as
clothing, consumer electronics, telecoms, health.
Company Values
To maximise sales.
To grow and maintain the number one retail company.
Tesco wants to outshine their competitors and remain the market leader.
The main aim of Tesco is to maximise profit.
To provide goods/services that is cheap and affordable to consumers or the public.
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The company main purpose is to create a value for customers to earn their lifetime loyalty. And the
company success depends on people, the people who shop from TESCO and the people who work with
TESCO. If our customers like what the company offer or provide, they are more likely to come back and shop
again it’s a matter of persuasion. If the Tesco team find what company do rewarding, they are more likely to go
that extra mile to help the customers.
Company Objectives
Appreciate customer.
Eminent their needs.
Take care about the notice.
Treat people as they like to be treat
Work as a team.
Trust and respect each other.
Listen support and say thank you.
Share knowledge.
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Chapter-3
The business models used by the company
Current market
Tesco is the world leading retailer in United Kingdom and now is currently expanding outside Europe,
and it’s one of the multinational successes Retailer Company Currently. Tesco provides different products with
high quality such as household items and clothing designed to appeal to more sophisticated tastes for the
consumer. All this features can be made by over than 250,000 Tesco workforce do have in United Kingdom.
There are approximately 2,209 Tesco Stores in the United Kingdom. This includes every type of store:
Tesco (175+)
Tesco Extra (424+)
Tesco Metro (160+)
Tesco Express (827+)
One Stop (513+)
Tesco Home plus (10+)
There are currently 1,826 additional stores worldwide. The countries they are located in and their amount are
below:
People's Republic of China (56)
Czech Republic (108)
France (1)
Hungary (125)
Republic of Ireland (104)
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Japan (144)
Malaysia (26)
Poland (334)
Slovakia (65)
South Korea (142)
Thailand (532)
Turkey (79)
United States (110)
Moreover the company began stocking electronic products, toys, sports tools, cookware, and home
furnishings in its stores and with guarantee lowest prices comparing with the other competitors, beside that
Tesco offers special service for the customer to make sure customer satisfaction like (providing free and large
parking, clean and friendly sales environment, free service delivery, handicap facilities, and financial services).
Tesco is not limited to these things, also they are reliable and respect their customers as well as meet their
needs. Beside that Tesco obtain reputation among its customers in the world as well as Tesco in Malaysia.
Tesco also simplified and computerized its distribution system, opening its own centralized warehouses for
storing inventory which could then be supplied to its stores as needed, instead of having to rely on
manufacturers' delivery schedules. Least but isn’t the last Tesco contributing to improve countries social and
economic by invest in different countries.
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9. E-Commerce 2011
Chapter-4
Tesco.com transaction types
Currently IT position
Information technology is used for storing, protecting, processing, securing, transmitting, receiving and
retrieving information. In business establishments, information technology is used for solving mathematical and
logical problems. Information technology helps in project management system. Initially, planning is done, then
the data is collected, sorted and processed and finally, results are generated. It helps managers and workers to
find out about a particular problem, visualize its complicacy and generate new products and services, thereby
improving their productivity and output. Tesco is one of the companies that been using IT which to improved
the company daily business process.
The System combination as one of IT services offered by Tesco covers a complex of activities which
enable the customer to obtain the most sufficiently way of using information sources, linking them to work
actions, developing, and implementing software applications as well as to secure failure operation of IT base,
data backup, recovery & protection against mishandling or spoil. As an primary part, system integration
activities involve design of the entire software solution, suggestions regarding the potential of further system
development, operation support and IS/IT maintenance and upgrades.( www.buzzle.com)
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Figure 2.2
IT locality
As you can see in this figure above the scheme of Tesco organization, take control by the Headquarters
giving up through Finance, Strategy, Public Relations, Marketing, Research, Sales, IT, Administration, Legal,
Personal, Production, Logistics Departments. Ending with the most important department which is security
department. All these departments can provide and offer well treat and success within the organization of Tesco.
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Figure 2.3
Organization chart
Data Management
Is the development and execution of architectures, policies, practices and procedures in order to manage
the information lifecycle needs of Tesco in an effective manner.
(Ashvinder Rana, Data Migration Lead, Utopia)
A database administrator
A database administrator (DBA): performs all activities related to maintaining a successful database
environment. Responsibilities include designing, implementing, and maintaining the database system
establishing policies and procedures pertaining to the management, security, maintenance, and use of the
database management system and training employees in database management and use.
(http://dba.fyicenter.com)
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Application Security
Secures Tesco’s databases from internal and external threats while also ensuring that Tesco meet or
exceed regulatory compliance and audit requirements.
Administrative Systems
Provides implementation and maintenance support for strategic administrative applications at Tesco.
The core systems include Financials, HR, Payroll, Registries, and Data Warehousing/Reporting.
(www.stanford.edu)
Security Office
Responsible for the Tesco's entire security position, both physical and digital.
Information Services
Performs traffics the information flow and exchange of data throughout Tesco. This infrastructure
comprises mainframe computers, databases, and also responsible for various day to day operations such as
managing the Tesco’s database, providing technology training.
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13. E-Commerce 2011
IT Solution
“As we can realize that the climate and the weather in United Kingdom is worst most of the time during
the life there. With that problem the sales can be reduce to minimum level, so that people can’t move and get to
Tesco in save trip. In this condition here is the IT solution comes with great opportunity to keep the sales going
even if the weather or the climate is not that good, moreover it saves time for the consumer during his daily life,
so that anyone can order through the internet and the product will be send till his door step.
This is a good advantage for Tesco customers because if Tesco is too crowded online shopping will be
much easier and it will be increase the sales in United Kingdom Tesco online: Tesco.com is the world's biggest
online supermarket and this year the group had sales of over £577 million.
An increase of 29% on last year 2010. Tesco online now operates in over 270 stores around the country
in United Kingdom, covering 96% of the United Kingdom with over a million households nationwide having
used the company's online services.”
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14. E-Commerce 2011
Chapter-5
Tesco.com’s competitive advantages over its competitors
The focus of their business is customers and they work hard to meet customers’ needs and that’s the
only reason Tesco is successful. They understand the merits of competition, and the benefits that bring to the
consumer. From small beginnings, Tesco has grown to be the UK’s most popular supermarket and one of
British business’ great success stories by fulfilling people’s expectations to have safe, nutritious, quality food at
affordable prices. They have maintained their popularity by listening to customers and responding to their
needs.
As a retailer, their stores serve a large number of communities, in which their customers and staff live
and work. So they have always known that they have a wider responsibility in society. With the launch of our
community plan they are doing more than ever to be a good neighbor, be active in communities, seize the
environmental challenges, and behave responsibly, fairly and honestly in all our actions.
In May 2006 the Office of Fair Trading (OFT) referred the supply of groceries by retailers in the UK to
the Competition Commission for investigation.
The focus of the inquiry is to find out whether the market is functioning effectively. Any Competition
Commission Inquiry is required to examine whether there are any features of the market that prevent, restrict or
distort competition. The Competition Commission also has to identify whether any adverse effect on
competition has a detrimental effect on customers in the form of higher prices, lower quality or less choice of
goods or services; or less innovation in relation to such goods or services.
Because they are trying to do the right things for customers, in many ways they share the Competition
Commission’s remit to ensure that the industry functions in a way that is good for consumers. They meet the
opportunity to share their views with the Competition Commission to help them gain a complete understanding
of the marketplace and the perspectives of consumers, suppliers and stakeholders as well, of course, of
supermarkets themselves.
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Consumer is benefiting (HOW?)
Britain is changing: shopping habits change as lives change. As life has become busier and more
complex, and living costs more expensive, Tesco has helped make shopping simpler, more convenient and
affordable. Customers have rewarded them with their loyalty. As customers lives changes so does Tesco and its
competitors, benefiting customers wherever they do shopping. Today's grocery shopper spends less, can get
more of what they want, receives better customer service and has a wider choice than ever before.
Prices are falling: The OFT estimates that grocery prices have fallen by over 7 per cent in real terms
between 2000 and 2005 and falling prices have saved consumers more than £3 billion over the last three
years, overall Tesco prices have fallen by 17% since 2000.
Product quality is increasing: Many innovations in the supply chain have led to more and better
choices of locally-sourced meats and produce, organics, high quality ready-meals, specialist bakery
products, products such as Halal meats and environmentally friendly household products. All these have
been delivered with improved product safety.
Product choice is increasing: The OFT estimates that larger stores have seen 40 percent increase in
product range over the last five years, they have added around 8,000 new product lines in the last year
alone. They have also recently announced that they will invest £2m in supporting locally sourced
products and opening five regional buying offices to help them put more local products on the shelves.
Service levels are high and improving: There are more in-store facilities, longer opening hours, shorter
queues, and better trained staff to increased home delivery.
Supermarkets are doing more to address people’s environmental concerns: with all the major
supermarkets making more commitments to extensive long-term environmental improvement. As well
as their plans to split energy consumption in their stores by 2010 compared with 2000. They are also
spending £100 million developing renewable energy and other green solutions.
These are facts, recognized by the OFT, Verdict, the Institute of Grocery Distribution (IGD), Mintel,
financial analysts and, most importantly by customers themselves – our evidence shows that 85 per cent of
shoppers regard their shopping experience as either excellent or good.
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How do customers choose were they do shopping
Research shows that 94 percent of consumers in Britain have a choice of three or more different
supermarket retailers within a 15 minute drive. In the grocery market consumers can do switch easily between
the stores they use. Each time consumers go shopping they choose where to spend their money. If they choose
to shop in a different store from one month to the next we call this switching. The value of this switching has
nearly doubled since 2002 and in total amounts to more than £10 billion. Consumers have a wide range of
retailers to choose from including Asda, Sainsbury, Morrison, Waitrose, M&S, Somerfield, Aldi, Lidl and
Netto, other smaller supermarkets, Costco and Makro, the Co-Ops, Symbol groups, and thousands of
independent retailers.
The grocery market has undergone many changes in recent years, including the rapid growth of
discounters such as Aldi and Lidl, and the introduction of M&S Simply Food outlets. Incorporation and new
entry of Tesco, Sainsbury and Musgraves into the convenience market also demonstrates the activity and
competitive contention in the UK grocery retailing market.
Competitive Advantage
Differentiation
This strategy involves selecting one or more criteria used by buyers in a market and then positioning the
business uniquely to meet those criteria. This strategy is usually associated with charging a premium price for
the product - often to reflect the higher production costs and extra value-added features provided for the
consumer. Differentiation is about charging a premium price that more than covers the additional production
costs, and about giving customers clear reasons to prefer the product over other, less differentiated products.
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Cost Leadership
With this strategy, the objective is to become the lowest cost producer in the industry. Many, perhaps all
market segments in the industry are supplied with the emphasis placed minimizing cost. If the achieved selling
price can at least equal, or near the average for the market, then the lowest-cost producer will "in theory" enjoy
the best profits. This strategy is usually associated with large-scale businesses offering "standard" products with
relatively little differentiation that are perfectly acceptable to the majority of customers. Occasionally, a lowcost leader will also discount its product to maximize sales, particularly if it has a significant cost advantage
over the competition and, in doing so, it can further increase its market share.
Cost Focus
Here a business seeks a lower-cost advantage in just one or a small number of market segments. The
product will be basic perhaps a similar product to the higher priced and featured market leader, but acceptable
to sufficient consumers. Such products are often called "me-tools".
Figure 5.1
Competitive Advantage
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18. E-Commerce 2011
Chapter-6
Chain management improvements
In many cases, the only option is to look beyond the production process to the broader supply chain.
Many leading edge companies have extended their management of physical logistics to address the entire
supply chain process, from supplier to buyer, in order to shorten product life cycles, increase competition, and
meet the redouble expectations of customers. There are clear opportunities for making supply chains more cost
effective, more transparent and more responsive to improve customer service.
Four areas are the key to effective supply chain improvement: process, measurement, information management
and technology. Best practice in these areas includes:

Integrating internal functional processes and systems across the enterprise. This includes the physical
supply chain execution and management processes:
Customer service management
Demand management
Materials and Production planning
Logistics and inventory management
Order Fulfillment
Sourcing and Procurement
Supplier management
Product development and commercialization (marketing).

Collaborating with suppliers and customers, involves sharing information and integrating intercompany
processes to improve resource utilisation and to enhance end-consumer satisfaction across the supply chain as a
whole

Automating management and execution processes, such as order tracking, online purchasing and
materials and production planning. This allows cost, time and waste to be taken out of the supply chain.
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Supply Chain Performance Scorecard
Performance Attribute
Definition
SCOR LEVEL
Supply Chain Delivery
Correct product, place, time,
Delivery Performance to Request.
Reliability.
quantity, condition to correct
Delivery Performance to Commit.
customer.
Responsiveness
Velocity at which supply chain
Order Fulfillment Lead Time.
provides products to customers.
Flexibility
Agility of supply chain to respond
Upside Production flexibility.
to changes in market, maintain
competitive advantage.
Cost
Costs associated with operating
Total SCM Costs as % revenue.
supply chain.
Effectiveness in managing assets to
Cash to Cash Cycle Time.
satisfy demand. Includes fixed and
Assets
Net Asset Turns.
Working capital.
Structuring a Supply Chain Improvement Program
Our recommended approach comprises four phases followed by ongoing management and optimization. This
approach is designed to de-risk investments and priorities the development focus to maximize returns.
Phase 1 Improvement Assessment and Analysis
• Define opportunities based on operations strategy and performance shortfalls.
• Define targets, quantify benefit and priorities.
Phase 2 Analyze supply chain and processes.
• Modeling the current supply chain flows.
• Measuring service and financial performance.
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Phase 3 Design Improvement Solutions
• Run simulations on model supply chain.
• Generate ideas through improvement teams.
• Align supply chain, process and information.
• Define process change and technology deployment.
Phase 4 Detailed Planning and Implementation
• Develop detailed designs and plans.
• Define business case.
• Manage change.
Figure 6.1
Supply Chain Improvement Program
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Conclusion
Over all, with these expectation of Tesco procedures through Marketing, IT, Management, services, and
competitors, Tesco been one of the great shopping center in UK through the technology, mind, enhanced of
thinking that could lead to successful work within impeccable method this can be Gooood. Through our daily
life human race been trying to do the best of shopping, Tesco did what consumers need, more over no one can
predict the future but while enhanced the critical thinking human can raise with the best of mind, to serve the
community, society with demand products.
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