Byte-Sized Business: Propelling Tesco's Retail Evolution with Innovative Software Solutions

Introduction

Programmers Incorporation is a software house that customizes software for various clients across a range of industries. The company is lucrative but requires continuous searching for new clients. To secure the cash flow, the company is focusing on the retail sector for a supermarket in the UK. The company that is being focussed upon is Tesco, which is one of the leading retail sectors in the UK. Tesco, as leading retailers are taking measures to expand its business by implementing the best strategy. Tesco in the UK for the effectiveness in the supermarket is trailing upon new shops and technology for making the groceries shopping easier without visiting the stores. Tesco is focussing on new ideas, creativity, and technological aspects to ensure better breakthrough services. The retail industry for a supermarket in the UK, like Tesco, has the potential market for software. It has a potential market for software because it is trying to make products easily available and accessible to end-users (Guardian News & Media Limited, 2020). Innovation is effective with the use of software as it helps to maintain the economic costs by satisfying the changing needs of customers. Tesco is the leading grocers and have more than 43% of online grocery sales. Tesco is moving from Bricks to mortars to bricks to clicks. The software for Tesco are based upon sensors and geolocation for digitalisation. The market for software is huge because Teasco is trying to reach people and deliver products on the same day. The credit to cash software is being recommended for Tesco to ensure improvement in the business.

It is an underdeveloped market for software because the retail industry for supermarket Tesco has not been able to meet the online expectations of customers. The supermarket fails to meet the power grid capacity during the peak season, thus having the potential. This market is underdeveloped as it is based upon several factors, such as climate change and other innovative approaches (Forbes, 2016). It is an underdeveloped market as it is one of the largest food retailers but is unable to track customer activity through the loyalty cards system, thus requires better software such as credit to cash for successfully managing the business and transition. The objective of the study is to help the software company to identify the industry having the opportunity for the software like Tesco in the UK.

The business model most suited to exploit Retail industry for Supermarket Tesco

The UK supermarket is dominated by Tesco and other competitors like Sainsbury, ASDA, and many more. The supermarket has a strong economic presence in the UK market, and the high-end supermarket is, therefore, reflecting shifts in the share of the market. For the effectiveness and to ensure better software such as credit to cash, Tesco needs to seek a new business model to support the dot.com business. The business model of Tesco is primarily nothing better than next day delivery services. The main intention of Tesco is to improve the online delivery and to ensure same day delivery therefore the many to many business models is effective. It is good to improve the coordination between customers’ and business using the technological platforms. This model is effective in creating relationship to create value by increasing the efficiency. This business model is trending and is allowing customers to meet their needs through the help of the software to ensure opt out ant time of the day. The network of the business model is more like

This business model is effective and the software as a service ensures sustainability for better revenue creation. However, Tesco is trying to change its mode of business by offering the services and delivery on the same day in the future. Tesco's business model focuses on customers, products, and channels. The business model is simple, where the priority is the customer. The business model is to serve shoppers better every day effectively. To exploit the industry, the business model needs to improve the activities for customers. The commitment needs to be effective and efficient so that the reinvesting can be done for improving shopping and delivery regularly (Tesco PLC, 2016). The business model by Peter Drucker states about the theory of business. The theory states that the business declines and fails owing to the assumptions made while making fundamental decisions. The business model is useful to make strategic decisions through strategic thinking. To exploit the industry, the company Tesco is trying to listen to customers by trying to deliver the best on the same day with better prices and services. To bring the products and fulfil the demand of customers, channels, and software are to be used so that the business can grow online. The business model idea is to improve offers and services most conveniently to customers. Furthermore, to exploit the market, the business model is focusing on the shop and go application software. The software companies can exploit the retail industry as the main aim is to serve the customer better by improving the power grid capacity during the peak seasons. The software company can develop tools so that automated control can be attained to improve the storage and services daily through the use of scan pay go and credit and cash software.

The business model that will be best suited for exploiting the industry is based upon the aspect of software applications such as the Scan pay Go. The best-suited business model would be through the use of software and online applications to help customer service better. To get the advantage of the retail industry, the software companies need to implement better applications so that the shopping is hassle-free, and the capacity of the supermarket in the UK for Tesco is improved to serve the customer with effectiveness and efficiency. Business is taking online measures to ensure a better market in the immediate environment for sustainability. The model ensure value proposition, revenue model and value chain to meet the client requirement on require basis based upon this software business model. The revenue stream using the business model for Tesco might be effective to improve business and software integration as below:

Potential pitfalls and hurdles in this industry

The retail industry acts as an important contributor to the growth of the economy. Consumers are the core of the business and are influencing the dynamism that is changing the industry. Several factors are being considered upon, such as brand loyalty, convenience shopping, and technological changes affecting the trends. The retail industry is flourishing, but at the same time, it is facing hurdles that are affecting the future of the business. In the year 2008, the retail industry witnessed a boom, and in the year 2019, it has earned revenue worth US$28 trillion. The retail industry for the supermarket is increasing and is benefiting the relevant market. However, several hurdles are being faced by the retail industry due to the increasing pressure it faces concerning the consumption pattern and the economic conditions. Tesco is upgrading its legacy software system to ensure better services to customers. ERP is a computer system which is used by Tesco to improve the coordination and resource management for business integrity. The industry is facing challenges that are divided into two sets. One is the globalized market, and the other is the domestic market. The challenges are due to lack of innovation, proper functioning, and lack of software integration (The Financial Times Ltd, 2020). The hurdles and issues are creating an opportunity for software companies like Programmers Inc to build a new strategy. The strategy is to identify the challenges that are being faced by the industry so that the performances can be improved. The challenges include retail branding, performances, and customer centeredness. The fact is that online retailing is gaining importance and the industry for the supermarkets like Tesco lacks software analysis such as Scan go and credit and cash software. The pitfall that is impacting the industry is about the increasing use of the outdated stores that are unable to offer value to customers along with the short-sightedness. The challenges that are being faced in the industry are mainly due to the increasing use of digitalization so that the bridges can be built (Ghrmay, 2017). The Programmer Inc can also implement the niche enterprise software to ensure better customisation that is designed to conform the domain specific business operations and functions.

Contextually, the hurdles or the pitfall that is being faced in the retail industry is also due to the employment of low skilled workers. With the advancement of technology, the issues related to people will be eliminated. The retail industry is changing its business constantly approaches thus creating challenges. The retail hurdles are linked with increasing bankruptcy that affected the growth of the business and its planning process. The industry is failing to keep up with the ever-changing demand and customer expectations. Customer preferences change, and with the seasonal trends, it is noticeable that customer behaviour changes. The hurdle is to meet the changing needs and introduce innovation along with trends to influence the behaviour positively. The next factor is maintaining customer loyalty and creating good experiences. The pitfall is that retailers lack technological innovation and thus are unable to maintain the loyalty of customers. For the sustainability of the business, and to offer personalization experiences to customers, the approach of the industry needs to change. Customer Relationship Management helps to improve business growth and reduce the pitfall to ensure sustainability. The retail industry has a complex operation, and it is difficult to manage internal communication. Inefficient communication affects business and internal communication (Khirbat & et al., 2018). The hurdle is linked with a lack of communication, and therefore, the ERP system acts as a proper solution. The requirement of software in the retail industry is vital so that the industry can centralize its business operations and offer real-time benefits to its customers. The software inc. in this situation can exploit the industry by offering better business operations and ensure proper processing of the business. The lack of software business model was impacting the business but many to many business model is helping to mitigate the issues. The software business model is increasing the coordination and improving the value chain for Tesco.

Several hurdles are being faced by the industry but require proper interferences and business strategy so that the business communication is maintained both internally and externally, reducing the pitfall. It is a fact that the retail industry has the highest employee turnover rates, and it is the toughest challenge in the present day to manage employees. To hurdle is owing to the management of employees and lack of employee engagement within the sector. The supermarket for the retail industry is unable to manage employees and ensure better employee engagements. It is vital that regular training is offered, and the competencies are optimized so that the business can sustain it in the long run. Several hurdles impact the level of competencies and impact the maximisation of profits. Another vital pitfall or hurdle that is being faced by the industry is relating to digital disruption. Consumer behavior is changing, and with the growth of e-commerce, consumers now have choices in the market (Haddock-Millar & Rigby, 2015). To ensure the market share and have a strong market presence, the retail industry needs to influence consumer behaviour positively. E-commerce is not a threat, but it is creating an opportunity for the industry to merge the online along with offline business through digitalization. The retail industry has not yet been part of the online process or e-commerce as it should have been thus facing several pitfalls in the aspect of growth and opportunity. Considering the issues, the hurdle is to identify the best suited technological solution for the retail industry so that the business can meet the changing behavior and offer the best-automated solutions for the business. The wrong selection of software might lead to greater issues; therefore, the software and strategy need to be well implemented. The pitfall is mainly due to a lack of proper technological advancement and proper software. Automation is required so that the industry can meet the existential crisis based upon store size, marketing, and also price. Tesco is one of the largest supermarkets across the world and is leading in the UK (Khirbat & et al., 2018). Tesco faces challenges in terms of software and operational efficiency. Technology and a multichannel mix strategy require the capacity to capitalize so that opportunities are augmented based upon technological innovation. The pitfall can be managed by understanding the needs of customers and enhancing models so that the retail industry can sustain greater effectiveness and efficiency.

Current major players and consider potential competitors

Tesco is one of the major grocery firms in the UK with several competitors. The major competitor of Tesco in the retail sector Supermarket in the UK is ASDA, Sainsbury’s and Morrison’s. Tesco, along with its competitors are mainly stated as Big Four, but Waitrose is also gaining market along with Aldi and LIdl as strong competitors in the UK grocery market (Investopedia, 2020). The competitors of Tesco are many because several convenience stores are also gaining popularity, impacting the market of Tesco. The market share of Tesco is more as compared to its competitors, and it is one of the largest retailers across the world. The rivals in the market are growing, and therefore, Tesco might be at the risk of losing its market leadership. In this context, it is vital to state that self-service marketing changed the way of shopping for the people of Britain (Guardian News & Media Limited, 2020). Therefore, with the changing business model and software implementation, the potential of the business and shopping experiences are changing. The competitors of Tesco are many, and the profitability of the supermarket grocery is being affected. With increasing mergers and the grocery stores in the UK, the business and the market share of Tesco is aging affected. The market share of Tesco and its competitors is demonstrated through the help of the graph below for the years 2015 to the tear 2020. The graph is depicted below:

From the help of the graph, it is determined that the market share of grocery in the UK changes with time. Tesco, along with Sainsbury’s, had one of the largest shares in the market for a long period, and it is about 43.1 % in January for the year 2020. This is due to increasing innovation in the services that are being offered by Tesco and its online services that positively influenced people. However, ASDA in the year 2019 surpassed Sainsbury’s and owned the second position after Tesco. The competitors are constantly taking measures to increase their market share and become the leader. It is important to note in this aspect that before discounters gained popularity in the UK market, the market was dominated by the big four supermarkets.

However, with the growing uncertainty and inflation, consumers were shifting their preferences from Tesco to others, such as Aldi and LidI. With the increase in the price wars in the grocery market, it is vital to note that Tesco took measures to improve its market share by reducing its prices and, at the same time offer valued services to be better than the competitors (Statista, 2020). The share of the market was changing with the increase in the competitor’s value in the market. With the increase in price wars and by reducing the prices of the products, the volatility in the market increased, thus impacting the retail sector supermarket and giving rise to the Co-Operatives like Aldi to have a strong market presence in the UK. With the increasing competition and the competitor's position in the market, Tesco can retain a strong market position, thus influencing the business (Guardian News & Media Limited, 2020). The current major players, as per the projection from the graph, are the LidI along with Waitrose.

Recent changes that might make it the right time to sell software

For the business to be effective and to gain importance in the market, Tesco needs to make a few changes so that it can retain its strong position and gain better market value. The industry shifts from the big four to other such as Aldi and LidI are increasing problems for the company. It is therefore important that the software company Programmer Inc sell its products so that the ease of shopping is offered to customers. The changes that are being noted is that the market is witnessing negative changes impacting the position of the business. As of April 2020, the market cap for Tesco is £22858.02m reflecting the changes in the market (BBC, 2020). As per the reports and information, it is noted that the UK retail market is witnessing a seismic change, which is reflected as a generation shift in the way the retailers tend to operate. The change is in the purchasing style along with the consumer's demographic along with lifestyle, thus impacting the position of Tesco and other retailers. The diversification and lack of proper services are impacting the business of UK grocery sectors. The grocery retail market of the UK is witnessing the fundamental changes, which are that the influencers are trying to impact the UK grocery sectors based upon a few factors. The factors are the rise of the discounters, shifting consumer shopping habits, technology, consolidation & diversification, and also BREXIT.

The change is positive as it is influencing people to have a better understanding of the products along with services. The shopping habits of consumers are changing, and the UK shop is not as it was earlier (Tesco Plc., 2018). The consumption habits are changing, and people enjoy ease during shopping, such as payment-related and services. Earlier consumers were spending about 2 hours shopping in the supermarket for the food, but with the increase in online shopping, people are not spending shopping in the superstores (Retail Think Tank, 2016). Brand loyalty is another key factor that was changing and impacting the mind of people to buy food and vegetables. The challenge that is being faced by the grocery sector is from the online sectors like Amazon prime and other non-food sectors. However, experimental shopping is being strategically used, but it is unable to combat the rise in online shopping. It is determined that the grocery supermarket needs to offer immersive experiences to consumers so that people tend to spend time in the stores. Therefore, the software company can implement the software such as credit and cash along with scan go pay so that the shopping experiences in the physical stores are not boring but entertaining. Tesco is taking measures and is trying to offer frictionless shopping and same-day delivery so that the market and hidden competition can be managed. The software company can offer services and solutions in terms of offering solution focussed offerings so that the lifestyle is impacted and the eat style services are well managed for consumers (IG, 2019).

Furthermore, the recent changes are also based upon the use of technology so that the offerings of customers can be met with convenience, ease of use, and experience. The shift and the change in the use of technology in the grocery retail market might influence the supermarkets to ensure better shopping experiences for the young generations. Tesco is taking measures to undergo the changes and ensure its market position by testing smartphones scan /pay so that the shopping is smooth and acts as a game-changer. The change that is giving a chance to the Programmer Inc is also related to consolidation and diversification that is taking place in the market. Grocers are trying to consolidate with the help of mergers and acquisitions such as Tesco/Booker and Co-Op/Nis and many more (Kantar, 2019). This might take place due to the increase in the competition; therefore, the software implementation might help Tesco to increase its position and satisfy customers for better growth and sustainability. The changes in the market are becoming more technological; therefore, the emergence of software at this time might help Tesco to meet the situation and have a strong market position. Diversification in the business is more of the defensive approach that is impacting the business and consumers (Retail Think Tank, 2016). Therefore, the changes and the shift to technologies might be the right time for Programmer Inc to sell the software in this sector so that the needs of consumers are filled, and the level of satisfaction is ensured.

Regulatory or ethical issues

Several ethical issues are being faced by the retail sector supermarket in the UK. The software company will deal with the supermarket and grocery market in the UK and therefore face several regulations that might impact its functioning. The ethical issues that are being faced in the retail industry are many such as product misrepresentation and many more. Therefore, the industry has strict regulations and ethics that are to be followed by the others operating with the retail sector. The first factor is with the working conditions and business practices issues (Harvard Business Publishing, 2020). The work environment and the business operational factors impacting performances and targets are also based upon regulatory so that the quality is assured. The ethical dilemma is faced by the big companies to draw the bridge and establish concrete practices so that the business creates value which requires predictive policing. The regulatory policy is about encouraging and supporting ethical practices and behaviours for the business approach to be effective. The code and business practices of the sector are to be followed to avoid misconceptions and malpractices. It is vital to note that the Management Information System of Tesco and other retailers require proper regulations and ethical understanding so that the collaborative vision is determined to meet the changing issues (Hodges, 2018). The organizational policies are to be determined by the software companies and be ethical in the approach so that the business is fair. To serve shoppers, better regular, regulations are to be followed, and corporate governance is vital so that the software improves the ethicality of the business and helps to sustain in a strong market position.

Conclusion

The retail sector of the grocery supermarket in the UK faces several competitions from its competitors. The change in the market is due to the changing pattern of shopping, and consumers' tendency to purchase online. The grocery market lacks better facilities in terms of better software and analysis to augment profitability. Programmer Inc, in this case, can improve client services through its software and enhance business practices. The best strategy, as noted it to improve the business model of the company and try to ensure that the products purchased are delivered within the same day. The software is to be implemented to grow the business practices by maintaining the regulatory so that consumers are benefitted the most, and the potentiality is augmented. The change in the business model is one of the best strategies so that the grocery market can satisfy the changing consumer lifestyle and demographics.

References

Ghrmay, T.M., 2017. Tesco: Losing Ground in the UK Case Analysis. European Journal of Business and Management, Vol. 9, No. 34, pp. 1-9.

Haddock-Millar, J. & Rigby, C., 2015. Business Strategy And The Environment: Tesco Plc’s Declining Financial Performance And Underlying Issues. Review of Business & Finance Studies, Vol. 6, No. 3, pp. 91-103.

Khirbat, S. & et. al., 2018. Analysis Of Trends, Challenges And Best Practices In Contemporary Retailing:A Case Of TESCO Group. International Journal of Business and Management Invention, Vol. 7, Iss. 12, pp. 9-14.