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Tesco – Leading UK Supermarket. Custom Tesco – Leading UK Supermarket Essay Writing Service || Tesco – Leading UK Supermarket Essay samples, help
Situational analysis of performing markets relative to specific industrial settings is a common strategy used to analyze the recurring elements in the market. The United Kingdom Market presents a relatively different market in terms of the variables that are affecting the performance of different players in the supermarket industry. Tesco supermarket is one such player in the industry affected by the relative market forces both from an internal and external perspective. In order to establish these facts, the report aims at presenting a situational analysis of Tesco supermarket using SWOT analysis, PESTLE analysis, and Porters five forces analysis.Situation Analysis of Tesco Supermarket i. Political AnalysisThe legal framework of the United Kingdom gives Tesco a relatively easier platform of operation given its size (Lambert & Francis, 2008). These factors are also largely supported by fewer instances of intellectual property and rights invasion resulting from competitors in the vast market. In addition the UK trade regulations and subsequent tariffs imposed on the retail market businesses are relatively low, which significantly spurs the growth of Tesco (Lambert & Francis, 2008). This factor also includes aspects of pricing regulations and subsequent taxation levels for the retail markets in which there are different taxation rates and incentives given depending on the global currency performance of the sterling pound. ii. Economic AnalysisThe arrangement of the economic system in the UK gives provision for a free market and the same is seen for other countries in which Tesco operates especially in the Asian markets like Japan (Lambert & Francis, 2008). These features offer a comparative advantage for Tesco to spur its growth based on the financial markets efficiency. In addition, the quality of infrastructure enables transportation, supply and consumer access to goods. This has a great impact on the workforce skills levels and relatively low costs of labor. The manageable interests rates of UK banks enables Tesco to access loan packages to stimulate further expansion in offshore markets which require a significant amount of lobbying. Despite the recession, in early 2008 Tesco was still able to stay afloat many challenges and protect its market share (Lambert & Francis, 2008). iii. Social AnalysisThe social factors in the markets in which Tesco operates gives Tesco significant advantages to expand its trade activities. The management at Tesco has formulated mechanisms aimed at exploiting the occurring demographics of the UK population, the education levels of the citizens, the existence of different class levels of citizens, the accommodative and liberal culture of the citizens which impacts positively on their attitudes towards Tesco. According to Humby et al (2007), "Nobody at Tesco would claim that Clubcard was the exclusive reason for Tesco's success. Almost simultaneously with the introduction of the Clubcard loyalty programme, Tesco beat competition from other supermarket chains...transforming into a truly national retailer" (p.68). Furthermore Humby et al (2007) state that "in the 18 months that followed the launch the card changed and developed the way Tesco rewarded customers...this resulted in knowledge" (p.68)
iv. Technological AnalysisTechnology advancement, impact of product, impact of cost structure, impact of value chain structure, rate of technological diffusionTesco has enhanced its technology through diversifying its market strategies ever since its inception. This has consequently led to its grabbing of a huge chunk of its market share due to e-Retailing. It is reported that Tesco's competitors, Safeway supermarkets (www.safeway.co.uk) and J. Sainsbury (www.jsainsbury.com) supermarkets respectively made an attempt of implementing this system in the UK, but still they were unable to gain popularity similar to the market leader, Tesco (Harris and Dennis, 2002). This could be attributed to the impact of Technology on product cost structures with regard to the rate of technological diffusion. v. Legal AnalysisIn a move to exploit a weak regulation system in Thailand, the management at Tesco targeted to implement its expansion strategy. As Vorley et al (2007) reports, "As a result Tesco, Casino and Carrefour rushed into all areas of Thailand, especially the north, in order to secure sites before the draft regulations became effective. These regulations also stimulated the diversification into convenience store formats such as Tesco Express" (p.54) vi. Environment AnalysisThe culture seen at Tesco's management has greatly enhanced its operations since there is significant integration between staff and the management, a factor that further impacts positively on its customers. In addition, Tesco has embraced a community perspective and included these into their operations. In addition, Tesco embraces positive environmental attributes through the use of environmentally degradable packaging material (Lambert & Francis, 2008). i. Strengths
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