YES Fiona Keenan Launching a new smartphone in a crowded market may seem daunting, but Tesco has form.
NO Loizos Heracleous The consumer electronics market is incredibly challenging, even for the established players. To win, companies need to build a critical mass of users, as well as a way to differentiate the product from the other options on the market, including Apple's brand - an ecosystem of devices, apps and content that the iPhone is a part of. Tesco has the advantage of having an established customer base and brand recognition, even though the brand image and message are more relevant to retailing than consumer electronics. Its plans to offer the phone pre-configured with Tesco services may be an attempt to differentiate the product and avoid commoditisation. But it is getting into a fight with the big boys, and the synergies with its existing core business are not obvious. Diversification tends to be more beneficial if it takes place in related products and services. Tesco has successfully diversified into financial services, but that market is not as fast-moving or cut-throat as smartphones.
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