Value Chain of Tesco

Technology development is a downstream activity and is the ability to provide new innovative product that anticipate customer needs. It is very important to the company in order to reduce cost. By using technology, customers can shop every time they want. They also use the internet and online Tesco system to buy goods and products without go directly to the supermarket. However, installation and capital investment is a long term process with a huge needed of capital.

Tesco also builds up a strong strategy, which also support for value chain and successfully in managing its business by using the balance scorecard-steering wheel. It is main tool for business in term of ensuring that Tesco will reach the gold and meet the demand of its strategy. There are five segments of steering wheel, includes operations, employee performance, finance, customer and community.

Inbound logistics is the first step in Tesco’s value chain, which involves relationship with suppliers and includes some major aspects such as material handling, disseminate inputs and inventory and transportation. They are followed step by step, begin with the corporate with suppliers, then storage of goods, delivery of products to retailers and placing them on the inventory and shelves. Moreover, Tesco tries to increase consumer choices in store by choosing healthy goods in term of non-genetically modified products. Tesco also implement a down price of meat, vegetable, and drink because they can easily find any suppliers, who offer the price they want. By 2010, the company is on top of market position and economies of scope as they gain bargaining powers to achieve low costs from its suppliers. One of the specific example is that Tesco provides an opportunity to reduce costs, therefore price of products will be the lowest as possible when delivered to customers. As a results, it brings success and positive effect to Tesco’s inbound logistics.