This is the detailed sustainable competitive advantage of Tesco which will discuss the sources which gives edge to Tesco over the competitors.
Tesco is known for a UK retail business that has achieved a bench mark of earning profits through excellent customer service, low cost and high quality products. The competitive advantage makes the product preferable over others by the customers and for Tesco some of them are explained here:
Following are the Tesco sources of competitive Advantage.
Diversification
One of the major competitive advantages of Tesco is its diversification. While started as a food selling brand, the Tesco planned to diversify in their own label which helped them to fulfill more customer needs. Tesco value caters the low income families while the finest range is expensive and meets the needs of high income class. Other ranges include Organic, Kids and Healthy living. The brand is also making its fame in the car insurance, home appliances and kitchen wares.
Distribution System
The supply chain system of Tesco is the most advanced one which helps to deliver the product in a cost and time effective manner to the desired stores. The efficiency of Tesco distribution system is further enhanced by upgrading the in-store processes and the ordering systems. The low cost home delivery system also helps Tesco to maintain the customer choice as a first priority.
Investment in Digital Programs
Tesco has further gained competitive edge in its operations by creating the service oriented products. The availability of product and removal of waste has been ensured by the heavy investment in the third generation ERP solutions. This program has brought a dramatic change in the company’s profitability.
Striking Advertisement
The more striking and easier to recognize, the more it will be remembered by the people. The famous slogan of Tesco “Every Little Helps” is very popular among people and has given the company a competitive edge. Various celebrities are also included in their advertising campaigns for making the brand and products more likable. Customer loyalty has further been extended by offering them the Tesco club cards on shopping of the particular items. The on spot discounts and green living range of products has also attracted many customers from their rivals.
Cost Leadership
Tesco has captured greater market share due to its ability to maintain the price low. The price leadership is quite unbeatable by the other rivals as Walmart and Carrefour.
Well Motivated Staff
The staff at Tesco is always ready to help the customers with their queries while shopping. The 24 hour service is open for the late night travelers unlike many other grocery stores. The employees are considered as an integral part of business and Tesco believes in employee empowerment and workforce development for taking the business to the next level.
International Expansion
In order to ensure long term growth and profitability, Tesco has introduced three principles for expanding the business at international level.
• Suitable Joint ventures and acquisitions
• New geographic locations for growth
• Less competition in new market
In 10 out of 12 countries where Tesco has expanded, it has remained successful and the first one to reach those areas thus achieving a sustainable competitive advantage. Tesco being assumed controversial by many is still visited by the thousands.