Competitive strength of Tesco

Tesco enjoy an IT generated the competitive advantage? & Where does it come from?

Tesco has been implementing information technologies in many fields such as royalty program and online market etc. Among these implementations, royalty program is the wisest. Tesco started to use clubcard not only in order to increase their revenue but also as a marking tool almost 30 years ago. This marketing strategy, which gets customer information without requesting customer's additional efforts and uses this information to make target marketing, is nowadays very popular. In this point, TESCO HAS ENJOYED AN IT GENERATED THE COMPETITIVE ADVANTAGE. 30 years ago, they can just use their club card as a tool to increase the sale. However, they made database with information from customers and used theses database to create different marketing strategy depending on customer segmentation. At that time, TESCO ONLY IMPLEMENTED THAT KIND OF STRATEGY. They might definiely enjoyed the competitive advantage as a pioneer.

What shoud Casadellibro choose?

Developing UNIX platform or Buying Microsoft server?

In order to choose one, I have to consider both technology and business. Of course, my purpose is to choose the best technology which can tackle the current business challenge.

At first, let's compare two server systems, UNIX and Microsoft server(NT). What are the strengths and weaknesses?

Next, what is the current business situation? They are experiending two kinds of difficulties. One is the internal problem that they found severe errors in developing UNIX platform. The other is the external problem that the macro business environment suddenly turned into recession.

Third, what is the original purpose of the new system? That is to automatically operate casadellibro.com which has huge database.

In these circumstance, what should I choose? Right now, I will change our system to Microsoft NT and simultaneousely start to develop LINUX server, which is free and open source software. In order to reduce the cost in economic crisis, I believe Microsoft NT could be the best choice. However, cosidering the expansion of customer, we need much more capable and secure server system. LINUX could be a solution which increases the capacity and security as well as reduce the cost.

My criteria in that choice

(1) Cost

(2) Potential capability

(3) Ability to customize

(4) Security

Is ERP a solution for all fuctions and sectors?

Definition
Enterprise Resouce Planning (ERP) is an integrated computer-based system used to manage internal and external resources including tangible assets, financial resources, materials, and human resources. It is a software architecture whose purpose is to facilitate the flow of information between all business fuctions inside the boundaries of the organization and manage the connections to outside stakeholders*

Is ERP beneficial to all companies?
Korea's companies have been falling in love with ERP system. The size of company doesn't matter. Big companies already went to the stable stage in using ERP system. Middle or even small size companies are trying to implement this system. Many ERP experts are saying all companies should be orchestra. I read a post about ERP written by a executive director of KT, which is the No.1 telecommunication company in Korea. He explained strengths and weakness of BIG ORCHESTRA and SMALL JAZZ BAND in order to empersize what he wants to say. His point is exactly same as mine.

Our point is that COMPANIES SHOULD DECIDE WHETHER THEY IMPLEMENT ERP SYSTEM OR WHICH THEY CHOOSE AFTER KNOWING WHO THEY ARE. Companies should move forward consolidating respective strengths. Big orchestra plays efficiently and effectively by conductor's guide. This point is similar to efficiency of companies with ERP. Jazz band can play no matter wherever they are and individuals in the band can play with freedom. This character is like of companies which don't use ERP. If efficiency is a main factor for a company to success, that company should implement ERP system. Otherwise, If a company is too small or creativity is a main factor, should that company also be operated by ERP? I strongly believe they have to know theirself before buy ERP system with huge money instead of following the trend.

And... aren't ERP companies able to develop A SMART ERP, which has both strengths of BIG ORCHESTRA and SMALL JAZZ BAND?


* http://en.wikipedia.org/wiki/Enterprise_resource_planning

Have we experienced this difficulty?

Today is August 17, 2005.

This morning, Michael who is our dell's vice president and my old friend came to my office with bad news. As soon as coming to my office, he reached my computer without any words. He made me show a public letter posted in some blog. Recipient of that letter was me. A writer of the letter is Jeff Jarvis, who is active journalist and blogger. When I recognized who is the writer before reading the letter, I thought this letter could be a powerful ally or adverse depending on the content. I know the power of word of mouths. This is why I had these too different possibilities.

Unlike my hope that this letter came from our enthusiast fan, Jeff noticed he threw our computer, complaining our product and service. As well, he gave me some advises to overcome this terrible situation. I was shocked. I even didn't know where we are before reading this letter. Our vision is to make all people who want to have a computer available to have a high-quality computer with less money. I have thougth we've been achieving our vision. But in reality, we are moving away from our vision.

Right now, I realized where we are. So, now is the time to find solutions to problems. I don't have any time to be just sad and angry. I have to change the situation as soon as possible because I know very well the power of word of mouses.

I have to tackle two problems.

The first thing is why we experience this terrible sistuation and why our customers are leaving our company? It is about our product quality. I think if our product satisfies our customers, complaints about after-service would not happen. I've always believed that investment in after-service is dead money which is not necessary if the product is perfect. So, I don't want to spend huge moeny on improving our customer service. Instead, I will improve the quality of our computer. And I will make a new effective and efficient procedure for customer service.

The second problem is We have customers who have complaints in the terminal stage. Even though the number of this letter's followers is too small compared to our customers, I should've known, in the web, there are our customers unsatisfied with our product and service. These people could be huge adversary to our company as they're using one of the most powerful tools to make and to transfer information, blog. We sell computers which is an essential tool for accessing the internet. So, our customers could reach to adverse complanints someday. I have to do something in order to stop spreading these complaints. What should I do? I have two options. To contact Jeff and to persuade him to stop his post. Or to acknowledage our faults in public and to try to fix those. Both options have risk and benefit. The first one could prevent adverse customers from increasing in short-term. However, I'll choose the other. Although we can experience more difficulties through this choice, I believe this choice can raise the speed to improve our product.

I make a decision where I should go. Now is a time to consider how I can go there.