Tesco and E-Mart used re-engineering strategies in South Korea by leveraging technology and mobile devices. Tesco launched a virtual supermarket in subway stations using QR codes on posters that customers could scan to order groceries for delivery. E-Mart responded by deploying "flying stores" drones around Seoul that promoted their mobile app for online orders. Both companies saw significant increases in online and mobile sales, demonstrating how re-engineering processes through technology can drive innovation in retail.

1. Distinctive Strategic Management (Case Study)
Prepared by : Harwindra Yoga Prasetya (55113310061)

2. What is re-engineering? The differences
of re-engineering and restructuring
The engineering process in
wholesale/retail business
Case study : Tesco Homeplus Virtual
Shop in South Korea

3.  Reengineering is a complete restructuring of business processes to create positive
changes in current performance measurements that are critical to operations
management (Olorunniwo,1998)
 Business process : a collection of value-adding work activities having a preferred order,
an identifiatable beginning, and an end. Inputs and output of a business process are
usually well-defined, and the activitiesare usually performed by cross functional teams.
 Re-engineering, just like restructuring, is a method of revolutionary change and,
therefore, embodies all general features of such radical changes (Dubrovski, 2005)

4. RESTRUCTURING
 Most frequently the process of integrating
connected corporations will only be possible by
using revolutionary methods of change, as which
one can classify restructuring and business
process reengineering.
 This process, representing a transition from the
existing structure to a new one (program-market,
manufacturing, technological, financial,
organization, personnel, ownership, ecological,
developmental) which enables greater
successfulness and efficiency of corporate
operations, is designated as restructuring.
 Restructuring is one of the methods of
revolutionary changes and a way to achieve
renewal of the corporation as a result of strategic
alliances.
RE-ENGINEERING
 Re-engineering, just like restructuring, is a
method of revolutionary change and, therefore,
embodies all general features of such radical
changes.
 Re-engineering brings about ‘a fundamental
rethinking and radical redesign of business
processes to achieve dramatic improvements in
critical, contemporary measures of performance,
such as cost, quality, service, and speed.
 Focus on corporate processes, radical changes,
dramatic improvements and a multidisciplinary
approach.
 Focus on corporate processes which can be
interpreted as a set of connected activities which
engage an input (from suppliers), transform it
and produce an output (for the customer).
Source : Dubrovski, Drago (2005) Restructuring and Business Reengineering in Integrative Processes

5.  The need of more effective and efficient system to achieve the competitive goals
that will demanded in the general and spesific industry environment of the 21st
century.
 Meeting/exceeding rapidly changing customer expectations in the marketplace
successful retailers/wholesalers, by using technology and other strategic tools to
create demanded value for customer, that are :
 Speed of delivery and ordering
 Improved and streamlined customer service
 Reduce cost inventory levels
 The long term idea is to stay relevant, competitive, more profitable and sustain.

6. Case Study :
Tesco-Homeplus
Virtual Shop in
Korea
and
The Counter Move of
E-Mart

7.  People in South Korea work one of the longest hours in
the world, they are very busy.
 For people in South Korea, shopping is not an activity
people would like to utilize their free time in.
 Tesco’s South Korean network of shops, called Home
Plus, have grown to become the country’s second-largest
supermarket after E-Mart since launching in 1999.
 Being number two is never enough for Tesco, they want
to be number 1 in South Korea.
 They came to an answer, expanding their online sales
rather than spending a lot of money opening new
shops.
 The opportunity : South Korea has more than 10 million
smartphone users in a population of less than 50
million, it made sense to look at mobile shopping as
much as websites for desktops.

8.  Homeplus plastered the glass walls of subway stations with
pictures of their products, laid out just as they’d be in a
traditional shop.
 The ‘shelves’ featured QR codes - squares filled with a black
and white pattern, unique to the product in question, they’re a
more versatile successor to the bar code.
 This QR codes are scanned by the traveller’s mobile phone,
building up a shopping basket in the few minutes before the
train arrives.
 If they haven’t got the apps on their mobile phone, they can
just simply download free Homeplus mobile apps through
application store
 Homplus build an e-commerce website and also mobile apps to
complete the brand new shopping experience
 If their train comes before your basket is complete, they can
carry on shopping without the pictures and codes if you wish.
 Tho goods will be delivered timely straight to their houses

10. Youtube Link :
http://www.youtube.com/watch?v=nJ
VoYsBym88

11.  E-Mart is also appear in this new competition in digital channel
 They also build an e-commerce website completed with a mobile apps,
to complete consumers’ shopping experience
 They also try to bring their shop closer, just around their customers
HOW?
 Story : to make people staying far from E-mart, do shopping at E-Mart
 The campaign was executed by using flying truck shaped figures that
were placed around Seoul.
 The flying store had a WiFi installed that allowed users to download
the E-mart smart phone app and make online purchases.
 The flying store proved to be very popular increasing the online sales by
157% and offline sales by 9.5%

13. Youtube Link :
https://www.youtube.com/watch?v=q
HGejSWTmvw

14. Youtube Link :
https://www.youtube.com/watch?v=
Qch3kNUF0fE
Youtube Link :
https://www.youtube.com/watch?v=E
vIJfUySmY0

15.  This steps that firstly taken by Tesco Homplus and E-Mart in Korea is one of re-engineering
form in retail business.
 It simplifies the purchase process, speed up the delivery and ordering, reduce cost
inventory levels, and bring more values to it’s customer
 By utilizing technology and rapidly growing information technology, both South
Korean number 1 and number 2 retailer give retail competition a new meaning.
 Massive users of smartphone in South Korea triggered a new opportunity. Both in
creating and increasing awareness, and also : SALES!
 South Korean nowadays are using their smartphones to shop, to guide them
through supermarket alleys to ease them finding goods they needed, hunt for
discount session by scanning QR codes, etc.
 As mentioned before : re-engineering brought radical changes in retail business
through technology and internet utilization.

16.  tesco virtual supermarket in a subway station : http://www.designboom.com/technology/tesco-virtual-supermarket-
in-a-subway-station/ (Jenni Filippetti, July 6th, 2011)
 Tesco brings the supermarket to time-poor commuters in South Korea :
http://www.wired.co.uk/news/archive/2011-06/30/tesco-home-plus-billboard-store (Olivia Solon, June
30th, 2011)
 The Future Of Retail Is Full Of Challanges As Well As Opportunities :
http://mootee.typepad.com/innovation_playground/2013/03/the-future-of-retail-is-creepy-whether-you-like-
it-or-not.html (Idris Mootee, March 6th, 2013)
 Tesco PLC (Homeplus Korea) website : http://www.tescoplc.com
 E-Mart Flying Store : http://thedigitalpost.blogspot.com/2013/07/e-mart-flying-store.html
 Olorunniwo, Festus; Wood, Donna (1998) Reengineering in the wholesale and retail industries
(Norcross, USA, Institute of Industrial Engineers-Publisher )

17. September 18th, 2014