We were given a new case to analyze: yes, it is the Tesco Case!
As many of you may know, Tesco is an english "super" super market where nowadays you can buy from milk to movies, not to mention the opportunity to get a loan when you consider how to pay all the stuff your wife just bought! (Carrefour, I am waiting for your offer!).
The brief assignment required by our professor consists of defining what we think of the competitive IT advantage generated by Tesco.
From what I read, I think Tesco has based its IT-generated competitive advantage by being the first one to take advantage of the possibilities that technology creates for the business. The company has been highly innovative since the beginning of its story and took the right direction by acquiring advances in technology to increase its knowledge of customers habits and preferences. Investments in technology and, from there, marketing were hugh but they clearly payed off.
However, Tesco not only focused its efforts on strengthening its supermarkets sales through the famous Club Card but also clearly diversify its business to different services such as finance, insurance, traveling, and mobile phones! Tesco provides a large array of online uses for customers apart from shopping online such as trading shares, compare its prices with those of competitors, and more...and everything is easy to find in its website.
Another issue Tesco took advantage of was its location. Tesco has mainly focused its commercial activities in the UK, though in the middle 90s it started to expand internationally (mainly to Eastern Europe countries and Asia). That concentration allowed it to focus its efforts on increasing market share in the UK market. Tesco was able to use technology to research its market and customer successfully. And the customers help: it would be very different to get all the customer information and online interaction with them in a different market, one less used to deal with through the internet. In addition, the responsible use of data by Tesco allowed the company to continue innovating and get acceptance of new online "products" by its clients.
Sunday, January 25, 2009
Thursday, January 22, 2009
The Upcoming "Free-economics" Era
After my unsuccessful prediction regarding whether Meneame.net is a profitable business (answer: it is not), our Information System professor asked us to write about an article written by Chris Anderson. The article and references about the author are here.
In very basic terms, the article reflects the power of internet and how it is changing the way different industries are starting to communicate with customers. The term "free" reflects the tendency that many internet companies are following: give free things to people and earn very good money.
The best example of the "free" era is this. To provide you with just some figures: Google revenues were up 20.92 billion US dollars and the company value as of January 22, 2009 is 80.92 billion US dollars. Now, how much do you pay to use Google? I am sure you will say nothing (0); otherwise someone is stealing from you and it is not Google (and not me either).
Who is paying Google then? Following what the article says, there are three parties interacting: customers like you and me that go around different websites, the medium (Google) and, finally, advertisers. The first two agents participate in a free market whereas advertisers pay the bill. Something similar to what occurs in the media industry where you pay nothing to listen to the radio or watch TV (till cable providers show up) but advertisers do.
According to Andersen, what is going on in this internet era is what economists call "cross-subsidies": you give away something for free knowing that you will get something in return...for a profit, of course. The best example, also cited in the article, is Gillette: they almost give razors for free knowing that you will later need to pay for blades and shaving cream.
Andersen claims that the Friedman proposition of "there is no such thing as a free lunch" is vanishing. Andersen, we have to talk...do not discredit such an economist in front of other economist (with lower knowdledge though). There is always someone who have to pay the bill and, at the end, it is either advertisers or customers who pay it.
In very basic terms, the article reflects the power of internet and how it is changing the way different industries are starting to communicate with customers. The term "free" reflects the tendency that many internet companies are following: give free things to people and earn very good money.
The best example of the "free" era is this. To provide you with just some figures: Google revenues were up 20.92 billion US dollars and the company value as of January 22, 2009 is 80.92 billion US dollars. Now, how much do you pay to use Google? I am sure you will say nothing (0); otherwise someone is stealing from you and it is not Google (and not me either).
Who is paying Google then? Following what the article says, there are three parties interacting: customers like you and me that go around different websites, the medium (Google) and, finally, advertisers. The first two agents participate in a free market whereas advertisers pay the bill. Something similar to what occurs in the media industry where you pay nothing to listen to the radio or watch TV (till cable providers show up) but advertisers do.
According to Andersen, what is going on in this internet era is what economists call "cross-subsidies": you give away something for free knowing that you will get something in return...for a profit, of course. The best example, also cited in the article, is Gillette: they almost give razors for free knowing that you will later need to pay for blades and shaving cream.
Andersen claims that the Friedman proposition of "there is no such thing as a free lunch" is vanishing. Andersen, we have to talk...do not discredit such an economist in front of other economist (with lower knowdledge though). There is always someone who have to pay the bill and, at the end, it is either advertisers or customers who pay it.
Sunday, January 18, 2009
Meneame.net
Our Information System professor has asked us to analyze the case of meneame.net; this website, according to the info given by our professor, is a social network where users send different kind of news that they consider interesting. Those news are voted by other users and news that get more votes are posted in the front page.
If you check the site you are able to see how news show up and then the comments and votes. The website seems to be very famous in Spain and, since its launch in December 2005, the number of monthly visitors has follow an increasing trend with more than 20 millions visits in June.
Our professor has asked us to think whether meneame.net could turn out to be an economically sounding project. I strongly think that with number of visits per month mentioned, the site should be a profitable business. Imagine you want to promote your business in internet, what kind of site would you look for to post your ad? Obviously, the one with the most visits as possible.
Hence, with the power of Google sense, meneame.net has to be a profitable. The main issue for executives from the company is to define what kind of ads they allow since they get paid every time an ad is "click". As a consequence, they have to determine what type of people gets into the site, for how long, from where, what ages. The larger the data they come up with, the better to sharpen the target market for ads in the website.
It is possible to research news by topic, to check out users and comments as a great quantity of statistics; however, I think that the website could have more order and become more use-friendly. The website is very focused and dynamic and I consider that an advantage; otherwise, people tend to lose attention and may become less interested reducing their visits.
Well, I may post some other thoughts on the issue tomorrow. It is getting late and tomorrow we have classes!! and a loooong day waiting for us...
If you check the site you are able to see how news show up and then the comments and votes. The website seems to be very famous in Spain and, since its launch in December 2005, the number of monthly visitors has follow an increasing trend with more than 20 millions visits in June.
Our professor has asked us to think whether meneame.net could turn out to be an economically sounding project. I strongly think that with number of visits per month mentioned, the site should be a profitable business. Imagine you want to promote your business in internet, what kind of site would you look for to post your ad? Obviously, the one with the most visits as possible.
Hence, with the power of Google sense, meneame.net has to be a profitable. The main issue for executives from the company is to define what kind of ads they allow since they get paid every time an ad is "click". As a consequence, they have to determine what type of people gets into the site, for how long, from where, what ages. The larger the data they come up with, the better to sharpen the target market for ads in the website.
It is possible to research news by topic, to check out users and comments as a great quantity of statistics; however, I think that the website could have more order and become more use-friendly. The website is very focused and dynamic and I consider that an advantage; otherwise, people tend to lose attention and may become less interested reducing their visits.
Well, I may post some other thoughts on the issue tomorrow. It is getting late and tomorrow we have classes!! and a loooong day waiting for us...
Assignments
Yes, I can blame them. I am not posting as usually as I should due to the increase quantity of assignments we have had since the re-starting of classes. This coming week: entrepreneurship presentation (which counts as 10 assignments given the workload!) + organizational behavior final case (50% of the final grade) + possible quizz (I got the gossip, can't reveal the source nor the class). Not to mention the daily readings!
I just hope that in coming weeks I can post something interesting such as the Playboy - Facebook news (did you check it? I mean both Playboy and your Facebook, and, of course, the post).
I just hope that in coming weeks I can post something interesting such as the Playboy - Facebook news (did you check it? I mean both Playboy and your Facebook, and, of course, the post).
Sunday, January 11, 2009
Back!
After some weeks, yes, I am back (for good or for bad, whatever!).
I was absent for more than 10 days because too many things were happening around. First of all, I was on vacation!! Not that classes started just now but there were no classes till January 7 and, in the meantime, my wife left to Argentina (which does not mean she left me - yet), my parents came to visit and I had a quantitative exam that took almost all my energies last week.
I am very happy that my parents are here after more than three months without seeing each other. I am eating so well...and traveling!! yes, we went to Lisbon for three days and this last Saturday we visited Salamanca. I really enjoyed both trips and sharing time with my parents.
I do not think we will keep traveling since I have to much to do in relation to school, to get a summer internship...and to posting, of course!
I apologize for the absence and will try to be much more blog active in the weeks to come!
I was absent for more than 10 days because too many things were happening around. First of all, I was on vacation!! Not that classes started just now but there were no classes till January 7 and, in the meantime, my wife left to Argentina (which does not mean she left me - yet), my parents came to visit and I had a quantitative exam that took almost all my energies last week.
I am very happy that my parents are here after more than three months without seeing each other. I am eating so well...and traveling!! yes, we went to Lisbon for three days and this last Saturday we visited Salamanca. I really enjoyed both trips and sharing time with my parents.
I do not think we will keep traveling since I have to much to do in relation to school, to get a summer internship...and to posting, of course!
I apologize for the absence and will try to be much more blog active in the weeks to come!
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