Importance Of Core Competence In Tesco

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Register to read the introduction… Benchmarking may help in understanding performance standards and what constitutes good or bad performance. However, it will be crucial for Tesco to look at the generic level. Core competences may be embedded deep in Tesco at an operational level in the work routines. The framework developed by Prahalad and Hamel in the 1990s suggests that over time companies may develop key areas of expertise which are distinctive to that company and critical to the company’s long term growth (Drejer, 2000; De Toni, and Tonchia, 2003). In the case of Tesco the areas of expertise are most likely to develop in the critical, central areas of the organisation where the most value is added to its service and its delivery. For example, trust in the Tesco brand lies at the heart of these services and in 2003 the number of retail service accounts rose by 36%. Some 50,000 new service accounts per week are being opened and Tesco sees these areas as long term businesses with the potential to build real scale. Financial services have also been launched internationally in for example Hungary and Korea (Datamonitor Report, 2003; MarketWatch, …show more content…
In order to identify core competences in a particular market, the question of – why is the customer willing to pay more or less for one product or service than another- needs to be addressed. For example, Tesco have been very successful in capturing the leadership of the retailing market. This shows that Tesco designs and implements effective supply systems and deliver an efficient “customer interface”. Tesco was the first UK grocer to launch a loyalty card and has been the most effective. Palmer (2004) claims that until recently, it was the only grocer to use the information to mail customers every …show more content…
In case of Tesco it is not appropriate, as they do have a clear business strategy with a clearly defined market segment.
Strategy frameworks and structuring tools are key to assessing the business situation. Risk and value trade-offs are made explicit, leading to concrete proposals to add value and reduce risk. Explicit plans for action, including effective planning need to be developed by Tesco as the strategic alternative.
From the generic strategies discussed above, Tesco is likely to employ two strategic options that are also likely to be primary market objectives of focus on market development though partnerships and diversification through new product development.
Market Development Strategy: Joint Developments and Strategic

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