Question

The Tesco case was discussed in the Week 2 Interactive Tutorial. Companies like Tesco gather a massive amount of data through different loyalty card programs. Typically, the shoppers fill out an application form in the shop and receive a plastic card and a key fob* in the mail that is scanned before they make a purchase. In this way, the companies gather massive amounts of data about their customers’ millions of purchases each week. From a company perspective, this is the sales data which plays an essential role in the accounting information system. Then, the data analysts of these companies analyse these sales data and turn it into useful information. Required: a) How can this information be used to get a competitive advantage? [3 Marks] b) What else can these companies accomplish from this collected data? [2 Marks] c) What are the risks associated with these types of loyalty cards? [2 Marks] [7 marks. Word limit: Up to 300 words.] (*Key fob is a small electronic device used typically in place of a key, e.g. to unlock a door or to start a vehicle.)

Answer 1

Answer (a):

This information can be utilized in the orderly and unmistakable way to get competitive advantage. Tesco is the grocery and general merchandise retailer and deals information that it has can be broke down to increase a superior comprehension of its customers and their purchasing behaviors and their needs. This will empower Tesco to stock those things and items that customers need and thus it will be in a superior situation to address all issues and necessities of customers. It will likewise assist Tesco with planning and execute its marketing programs and occasions in a superior way, accordingly permitting it to arrive at its objective customers in a more engaged and adjusted way. Utilizing the information Tesco can offer better items, important items and better administrations to customers. This will help in pulling in more customers on a reasonable basis and henceforth will give Tesco a competitive advantage.

Answer (b):

Organizations like Tesco can accomplish a ton of other things by utilizing the gathered information. The business information can be utilized with the end goal of disruption just as advancement. Deals information analysis will educate organizations about the progressions occurring and what should be changed inside the organization so as to remain important. This can empower organizations to enhance and disrupt by recognizing market changes rapidly and afterward embracing to it. Deals information is additionally used to persuade workers. Representatives, especially deals workers, are given a quantifiable measurement on the basis of deals information and henceforth they can work in a more productive way. Purchases made at other stores cannot be tracked and hence there is the risk of one-dimensional analysis of behaviors of customers.

Answer (c):

The premier risk related with these kinds of the faithfulness cards is that of risk of fraud, information theft and extortion. These sort of Companies are needed to have legitimate control frameworks so as to guarantee that information of customers are protected and secure. This, be that as it may, can't be completely ensured and thus is a major risk. Another risk is that an organization won't have the option to follow the general conduct of customers as the faithfulness cards will assist the organization with following a client just for buys made at its store. Buys made at other stores can't be followed and thus there is the risk of one-dimensional analysis of practices of customers.