How does Tesco maintain its lead in the online grocery market Assignment

How does Tesco maintain its lead in the online grocery market - Assignment Example Against this background, this essay seeks to critically evaluate the measures implemented by Tesco in order to maintain its lead in the online grocery market. The paper starts by outlining the historical background of the supermarket chain; this is followed by a detailed analysis of how it harnesses the use of the internet in its operations. Background information about Tesco According to Datamonitor (2004), Tesco PLC is the largest food retailer in the UK and it operates around 2,318 stores worldwide where 1,878 stores are located in the UK. The supermarket chain also operates stores in the rest of Europe and Asia and it is headquartered in Hertfordshire, the UK. The company is comprised of 367,000 employees worldwide (250,000 of them in the UK), sales of more than ?37billion and it has an estimated 30 % of the market share in the grocery industry in the UK. However, Paton (2005) suggests that Tesco now ranges far beyond food, given that it now offers services which include â€Å"b anking, flower delivery, online diets, legal advice, DVD rental and telecoms.† Tesco prides itself in training and retaining talented workers despite criticisms by other sectors of the society. Technological factors Technological development in ICT has immensely contributed to the positive growth of the organisation, especially through the use of the internet. For instance, online shopping has significantly improved the operations of the organisation given that the bulk of its customers can conduct their business in the comfort of their homes. The supermarket chain has fully harnessed the use of the internet in its online grocery market. The supermarket chain is comprised of Tesco.com, a wholly-owned subsidiary offering a complete online service, including tescodirect.com and tesco.net (Datamonitor, 2004). The company is also in a better position to maintain its lead in the online grocery market because it offers a range of online financial services. According to information o btained from (http://www.essaycoursework.com/modelanswer/business/help/pestle/tescos.php, ND), Tesco.com is regarded as the world’s biggest online supermarket and it is believed that it generates sales worth over ?577 million every year. There are different factors that contribute to the success of Tesco’s online business. Specially designed website Through the use of a specially designed website, Tesco is able to appeal to the interests of many customers as possible regardless of their geographical location. It acts as a global store whereby people from all corners of the world can make purchases online which is a great advantage for the organisation. The other reason for its success in online business is that its website has a catalogue of every product offered, which makes it relatively easier for the customers to do online shopping in the comfort of their homes without any hassle. The website is user friendly given that it is easier to navigate in search of differe nt products. Research has shown that there are more than one million households that use the company’s online services across the whole world and this is seen as a competitive advantage to the company since it is better positioned to receive more revenue from its operations (Datamonitor,