Tesco:

Use of IT and information systems Introduction to MIS

Case problem:
How can technology (IT) as a part of the broader information system be used to help organizations?

Tesco
Founded in 1919 in London, Tesco plc is a Britishbased international grocery and general
merchandising retail chain. With revenues of 60 billion (2009), it is the largest British retailer by
both global sales and domestic market share, with profits exceeding 3 billion. With almost 500,000
Employees (2009) and over 4000 stores Tesco is currently the third largest global retailer. Originally
specialising in food and drink, it has diversified into areas such as clothing, consumer electronics,
financial services, telecoms; home, health and car insurance, Internet services, and software.

Tesco's UK stores are divided into six formats, differentiated by size and the range of products sold:
Tesco Extra stores are larger, mainly outoftown hypermarkets that stock nearly all of Tesco's
product ranges; Tesco superstores are standard large supermarkets, stocking groceries and a much
smaller range of nonfood goods than Extra stores; Tesco Metro stores are sized between Tesco
superstores and Tesco Express stores. They are mainly located in city centres and on the high streets
of small towns; Tesco Express stores are neighbourhood convenience shops, stocking mainly food;
One Stop stores are the only category which does not include the word Tesco in its name. These are
the very smallest stores. In addition, Tesco has a banking arm called Tesco Personal Finance;
operates as an ISP, mobile phone, home phone and VoIP businesses; sells petrol and diesel at their
own petrol stations; and offers a loyalty cardscheme to customers. Customers can collect one
Clubcard point for every 1 they spend in a Tesco store, Tesco Petrol or Tesco.com. Tesco has
operated on the internet since 1994 and was the first retailer in the world to offer a robust home
shopping service in 1996. Tesco.com was formally launched in 2000.

In common with most other large retailers, Tesco draws goods from suppliers into regional
distribution centres, for preparation and onward delivery to stores. Tesco is extending this logistic
practice to cover collection from suppliers (factory gate pricing) and the input to suppliers, in a drive
to reduce costs and improve reliability. Radiofrequency identification (RFID) technology is taking an
increasing role in the distribution process. Tesco's international expansion strategy has responded to
the need to be sensitive to local expectations in other countries by entering into joint ventures with
local partners. Tesco operates in the following markets: China, Czech Republic, Hungary, India,
Japan, Malaysia, Poland, Republic of Ireland, Slovakia, South Korea, Thailand, Turkey, UK, and USA.

The business is dependent on efficient Information Technology (IT) systems. Any significant failure in
the IT processes of their retail operations (e.g. barcode scanning or supply chain logistics) impacts
ability to trade. Tesco recognise the essential role that IT plays across the Group in allowing efficient
trade and achievement of commercial advantage through implementing IT innovations which
improve the shopping trip for customers and make life easier for employees. The company has
extensive controls in place to maintain the integrity and efficiency of IT infrastructure and share
worldclass systems across International operations to ensure consistency of delivery.






Questions


1 TESCO - WHAT KIND OF BUSINESS IS IT AND WHY IS IT PERFORMING SO WELL?


2 TESCO: USE OF IT AND INFORMATION SYSTEMS


3 CHALLENGES - Discuss the challenges faced by the CIO - which are the most important and why?


4 SYSTEM USERS
Identify the users of TESCO IS and IT - prepare a table with the first column showing the technology
or system used and then create a column for each stakeholder and indicate whether a stakeholder
uses a particular system/ technology by placing a tick in the relevant part of the table


5 MIS
What is an MIS? You should define MIS and discuss the component parts.


6 IS/ MIS PURPOSE
Summarise the main purposes of information systems in organizations


7 EVALUATE TESCO'S' SYSTEMS
Which of Tesco's systems are most likely to confer a competitive advantage for the company?