TABLE OF CONTENTS

INTRODUCTION.................................................................................... .03 SCOPE OF STUDY..................................................................................03 COMPANY PROFILE............................................................................... 04 INNOVATIONS IN TESCO........................................................................05 THE OTHER SIDE OF INNOVATIONS.......................................................07 CONCLUSIONS.......................................................................................... 09 REFERENCES...........................................................................................10

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INTRODUCTION
Innovation in simple term can be cited as new ideas. It is an ineluctable part of the whole mankind whether it is in business, technology, medicine or science. It helps in the making the life simpler. Innovations are closely followed by creativity. Creativity or creative skills within a person help in the generation of these new innovations. According to Schumpeter(1984), Innovation is the implementation of new factor combinations . It can be a new idea, a method, a new product, technology, etc.. And Robert E. Franken(2007) defined creativity as, the tendency to generate or recognize ideas, alternatives, or possibilities that may be useful in solving problems, communicating with others, and entertaining ourselves and others .

SCOPE OF STUDY
This assignment is about the innovative strategies adopted by a company or organisation to gain a (competitive) advantage over its competitors. And it also answer the question, why do some innovations win where as some do not. This particular report is about the (innovative) techniques adopted by TESCO, (one of the leading super market chains in the world) in its dream to capture the U.S market.

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COMPANY PROFILE
TESCO is a common name for the Europeans. It is one of the leading supermarket chains in the entire U.K. Their product includes all sorts of household/grocery items like frozen foods, bakery items, cosmetics, dairy products, sanitary items, electronic goods etc... It is considered as the worlds 3rd largest retailer business chain; Potter, Mark (2011). It has stores in almost all parts of the world. They have a large chain of super markets, which are mostly known by the following name: 1.)Tesco Extra 2.) Tesco Metro 3.) Tesco Superstores 4.) Tesco Express 5.) One Stop 6.) Tesco Home plus etc.... Apart from these super market chains they have also invested their money in some other business as well which include Banking, Fuel, and Tyres etc... The products of Tesco are priced in such a way that it is suitable to all the poor, the rich. Tesco have also given importance to the quality as well. Quality products in a reasonable and affordable rate is often cited as one of the reasons behind the success of Tesco.

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INNOVATIONS IN TESCO (U.S MARKET)

The U.S market is one the world s largest commercial market especially for commercial goods. Many companies and MNC s and even the Tesco s competitors like Sainsbury s and Marks n Spencer s have tried to capture this market(www.bbc.co.uk). But so far not many foreign companies have achieved this fete. In order to establish its presence strongly in the U.S market Tesco have introduced various innovative strategies. The name of the supermarket chains was , Tesco Fresh & Easy Neighbourhood Markets (Tesco plc press release 9/2/2006,). The idea behind giving such a name was to attract the U.S consumers so that and also to tell them in short that their products are short and the shopping is convenient. They also avoided the traditional methods which every company or firm follows i.e. to get the help and guidance of any local parent companies to know the market it strengths, weakness threats etc... To fulfil this task, which was considered hideous was achieved through a successful and careful planning methodology.

Some of the innovative strategies which were adopted by the Tesco in U.S were the following: 1. On-Line Entry In-order to make its presence felt in the U.S soil, what Tesco did first was to acquire a 35% stake (in e-commerce) into Safeway Inc, one of the leading supermarket chain in the entire United States. Its online store was based on a rising capital model which uses its store and its existing infrastructure to provide help to the internet users or internet customers. Another important reason behind the selection of Safeway was that its website is almost similar to that of Tesco. The Tesco chief, Terry Leahy believed that the combination of Tesco s knowledge in the market n the Safeway Inc was i deal for its stepping into the U.S market. This was then later introduced in Portland and then to San Francisco.

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With the full information from Safeway Inc and the previous experience of Tesco was able to assess many a things about the new markets like its pricing, advertising, tastes, preferences etc.... 2. Digital Marketing One of the important marketing tool Tesco adopted was to spread its brand name, and for that it adopted a digital marketing technique as they were well aware that the United States is a place where marketing through websites and blogs have proved positive results in a firms growth. Tesco U.S have made digital marketing as one of their key roles in the marketing strategy for launching their new products in an area where the company have not stepped its foot before. According to the Tesco source, one other main reason why they relied on digital marketing was of the fact that they knew that they were strangers in this land and hence their traditional strategy i.e. having a direct conversation may not give them prompt results. The firm had created nearly 60 blogs, which explains all about the products, the type of products they have, its quantity, quality and also the store opening times, the environment and structures of the system, its responsiveness to the customers etc...The firm was able to exchange between the themselves and its stakeholders in an easy and much faster manner with the help of digital marketing. The company got positive results of its marketing technique when they saw a number of newspapers and magazine articles citing their blogs in them. And this resulted in the firm trying to contact the people using the blogs and provided response to them and in that way invited them to their nearest stores. Now there is a lot of blogs on Fresh & Easy which is created by other customers or bloggers, which also shows a positive result of their popularity. 3. Self- service Another bold innovation of Tesco was to introduce Self service to its customers. This was considered as a bold move because of the fact that it was a country famous for its customer services. This allowed the customers to scan their products by themselves and know its price and pg. 5

other details. And if they need any further assistance they can contact the staffs. In short it was a combination of self service and c ustomer service. 4. Kitchen within a store This was started by Tesco in U.S only. This included a kitchen within the store and the staffs present their made samples of food which they allows to be tasted by the customers. After they had tasted the food they can select the one they had liked. 5. Convenient locations This is one of the primary marketing techniques of every organisation. But what Tesco did was that they made their stores small compared to their competitors. And made sure that the locations of these stores are convenient for all. The designs of these shops were based on that of Tesco Express (a super market chain of Tesco). 6. Customer data The Tesco in U.K is famous for its customer data collection through Club Cards a loyalty card given to customers through which they can store information about the particular products they are purchasing, their tastes, preferences etc... But in U.S Tesco is relying on its customer research for gathering the customer data.

THE OTHER SIDE OF INNOVATIONS

Though innovations help in improving the overall performance of a company, it also has success and failures. There are many innovations which fail, and which creates a loss as well as various other problems for the company or organisations. The reason behind the failures of innovations can be many and some of the main reasons are as follows:

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(http://collectiveadvantage.com/5-reasons-innovation-fails)

1.) FearEvery innovation in an organisation involves a work or an activity which will be different from the one which they may be following earlier. Sometimes the existing way of doing things or the existing technology may be producing good results and hence they are afraid of implanting anything new into it. 2.) Personal PrejudicesThe personal prejudices of a particular leader or a group also often results in the failures of an innovation. As that particular person or group may not recognise the importance or need of that innovation. And sometimes they may implement an innovation which may not be suitable for that particular organisation.

3.) Inability to take riskSome firms or organisations may not have the ability to take risk, they want to perform the same way as they had done before. They do not want to make any changes in the organisations. And this mentality result as a barricade to implement new innovations and hence results in its failure. 4.) Lack of innovationsMost of the organisations especially the big firms who are doing fairly well fail to see the need of implementing any new innovations as they are already secured.

Some of the examples of innovations that failed are as follows: (webecoist.com) pg. 7

1. Asus laptop- This laptop had all things of an ordinary laptop expect its panel which was made of a bamboo. The customers failed to consider this as a satisfying step for a greener environment. 2. Magnetic trains- These trains were supposed to be much faster than the conventional trains. These trains do not use wheels and tracks but powerful magnets. But in reality its highest speed achieved was jus t 3miles more than the ordinary trains. 3. Mini- This car was considered as a trend setter for the industry as its creator thought that with its invention the era of small cars are goin ro rise but it proved to be wrong. (www.telegraph.co.uk)

CONCLUSIONS:
Every company have to adopt some new ideas or innovations in order to sustain in its field of competition. And its mandatory to do so from the point of business firms as the environment in which they are existing is undergoing a rapid change. From this report we can get a brief idea regarding some of the innovations adopted by Tesco in its attempt to capture the United States market. And we can see that many of these are entirely different from the one s they were following earlier, but still the firm has managed to capture some share in the market. So we can come to the conclusions that innovations have to be a part of every firm or organisation. But it also tells about certain factors in innovations which if not taken into consideration will do a negative effect to that organisation and hence it can revoke a firm s life.

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REFERENCES

 Human Motivation,2007 3rd ed., by Robert E. Franken page 396  Potter, Mark 2011 http://www.reuters.com/article/2011/02/17/tescoigd-idUSLDE71F1LR20110217.

 Schumpeter 1984 Innovation Strategy and Firm Perfomance: An

Empirical Study of Publicly Listed Firms, Nanja Strecker p 13.

 http://collectiveadvantage.com/5-reasons-innovation-fails  http://www.managing-innovation.com/case_studies/Tesco.pdf  http://news.bbc.co.uk/1/hi/business/7079339.stm  http://www.telegraph.co.uk/technology/4985234/Top-10-innovationsthat-should-have-changed-the-world-but-didnt-manage-it.html

 http://webecoist.com/2008/10/20/failed-green-technologies-designsand-innovations/

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