Tesco is known as the one of the biggest supermarket chains in the U.K. The company is having the more than 2000 stores in the U.K alone and has about 2500 stores in the whole world. The company was founded by John Cohen in 1919 with the small market stall In London. Now, the company has added over 53000 employees across the world and catering to over tens of millions of customers in a single week. The company is having the operations in 12 countries across the world (Tesco).
Tesco is having the largest market share in comparison with all the other grocery retailers in the same country such as ASDA, Waitrose, Sainsbury’s and Morrisons. The company is having the strong market share of 30.7% against ASDA 17.3%, Sainsbury’s 15/9% and Morrisons 11.7%.
The business of the company is segmented into two parts one is supermarket retail sales stores and the other is Tesco bank. The major portion of the company’s revenue is coming from retail stores spreading across the regions such as U.K, Asia and the Europe (Tesco 2013).
Table of Contents
1. Company Background –Tesco
2. Macro-Economic Situation
2.1 Inflation Rate
2.2 GDP Rate
2.3 Exchange Rates
2.4 Public Spending
3. Porter’s Model of Five Forces Analysis
3.1 Threat of New Entrant
3.2 Bargaining Power of the Suppliers
3.3 Bargaining Power of Buyers
3.4 Intensity of Competitive Rivalry
3.5 Threat of Substitutes Products and Services
4. PESTEL Analysis
5. Suggestions To Manage The Exposure
5.1 Joint Ventures and New Launches
5.2 Product Diversification
5.3 Sticking To It Leadership Model
Objectives and Topics
This report aims to analyze the current business performance and strategic position of Tesco within the competitive global retail landscape. The research focuses on identifying macroeconomic pressures, evaluating competitive forces, and proposing strategic adjustments to maintain market share.
- Company background and performance metrics (2012-2013)
- Macroeconomic environment and its impact on operations
- Application of Porter’s Five Forces to retail competitiveness
- PESTEL analysis of external environmental factors
- Strategic recommendations for future growth and market exposure
Excerpt from the Book
Porter’s Model of Five Forces Analysis
Porter .M. (2008) stated in its book “Competitive Strategy: Techniques for analyzing Industries and Competitors” that an” Unattractive” industry is that in which can have the mishmash of the five forces drives down the overall profitability. This is rated to be the industry to attract “pure competition “in which every industry can be remunerated with average profit. The management guru in marketing has identified five important forces to influence the marketing strategies of any organization. The Porter’s Five Forces Model includes three forces such as the threat of the new entrant or barrier to entry, threat of the substitute’s product and threat of competitive strategy under the “horizontal “competition while others such as the bargaining power of the buyers and the bargaining power of the supplies under the “vertical” competition. Fahey and Naravanan (1986) mentioned that the environmental scanning program should allow the decision makers to know the present and possible changes of the business environment.
In this model, we understand the competiveness of the TESCO in the retail business.
Chapter Summaries
Company Background –Tesco: Provides an overview of Tesco’s history, market share, and operational performance during the 2012-2013 period.
Macro-Economic Situation: Evaluates key economic indicators like inflation, GDP, and public spending that influenced the company's fragile growth environment.
Porter’s Model of Five Forces Analysis: Analyzes the competitive landscape of the retail industry, focusing on barriers to entry and the bargaining power of suppliers and buyers.
PESTEL Analysis: Examines external political, economic, technological, and social factors affecting global retail operations.
Suggestions To Manage The Exposure: Offers strategic recommendations including joint ventures, product diversification, and leadership models to navigate future market challenges.
Keywords
Tesco, Retail Industry, Porter’s Five Forces, PESTEL Analysis, Market Share, Macro-economic, Inflation, GDP, Competitive Rivalry, Strategic Management, Online Retail, Global Operations, Consumer Behavior, Business Strategy, Market Exposure.
Frequently Asked Questions
What is the core focus of this report?
This report provides a comprehensive business analysis of Tesco, evaluating its market position, internal performance, and the external factors impacting its global retail operations.
Which analytical models are applied in this study?
The study utilizes Porter’s Five Forces model to assess competitive dynamics and PESTEL analysis to screen major macro-environmental factors.
What is the primary goal of the research?
The goal is to understand how Tesco can leverage strategic management and operational adjustments to maintain its market share despite economic volatility.
How is the retail industry's attractiveness classified in the report?
Based on Porter’s framework, an "unattractive" industry is characterized by the combined force of the five factors, leading to lower profitability and intense competition.
What does the main body of the document cover?
The main body covers company background, detailed macroeconomic analysis, competitive force assessments, environmental scanning, and strategic recommendations for expansion.
Which keywords best characterize this work?
Key topics include retail market analysis, global strategic management, environmental scanning, and corporate competitive positioning.
How does Tesco's online strategy influence its current position?
Technological factors such as e-marketing and the growth of "Click & Collect" services are essential for adapting to consumer shifts and maintaining competitiveness.
Why are South Korea and China mentioned as significant for Tesco?
The report highlights these regions as areas with specific legislative and regulatory risks, such as trading hour changes and currency regulations, which impact profitability.
- Quote paper
- Kalekye Ndungu (Author), 2011, Analysis of TESCO, Munich, GRIN Verlag, https://www.grin.com/document/267043
