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Tesco Analysis

Tesco Analysis

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Published by gantagiridhar
University of Hull
University of Hull

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Published by: gantagiridhar on May 02, 2011
Copyright:Attribution Non-commercial

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09/30/2013

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Contents:
y
 
Introduction«««««««««««««««««««««««««««««««««««.3
y
 
Industry analysis««««««««««««««««««««««........................3
y
 
PESTEL
framework«««««««««««««««««««««««««««««««.4
y
 
T
esco¶s strategic option«««««««««««««««««««......................7
y
 
C
onclusion«««««««««««««««««««««««««««««««««««..9
y
 
eferences«««««««««««««««««««««««««««««««««««..10
 
 
INTRODU
C
TION
 
In the UK, the food and drink retail sector represents the largest industry which isproviding employment for more than three million people in manufacturing and retailing.According to data monitor (2003) in the year 2003, retail accounted for 9% of grossdomestic product (GD
P
). In recent years, UK supermarket industries have come underincreased scrutiny over their treatment of suppliers and particularly of own-label products.
T
he development of strategic supply network has been an integral part of most supermarketstrategies for the past decade.
T
he report below provides an insight into the
T
esco supermarket company, withemphasis on company¶s analysis of resources, culture, competence and its externalenvironment analysis.As a private sector organisation,
T
esco is one of the largest food retailers in theglobe.
P
resently
T
esco is operating with 2,318 stores in the world and employing over326,000 people and also providing online services through its subsidiary,
T
esco.com. As theUK is the largest market for the
T
esco, where it operates under four banners of 
S
uperstore,
E
xtra,
E
xpress and Metro.
T
he
T
esco sells almost 40,000 products including food, non-foodand clothing and its own label products (nearly 50% of total sales) are at three levels,finest, normal and value(
P
almer, 2004). As well as convenience produce, other retailingservices offered by
T
esco include
T
esco
P
ersonal Finance, gas stations, becoming one of theUK¶s largest independent petrol retailers.
INDUSTRY
A
N
AL
YSIS
:
Impac
t of 
mark
et t
r
ends
etailing involves the commodities sales to the public.
T
he retail industry covers widerange of sectors from general products such as clothing and foods to specialist productssuch as automobile accessories and sports equipment. According to
E
uromonitor
 
International, over the next five years, the move towards greater consolidation will continueto impact the UK retail industry. As
E
uromonitor suggest that future acquisitions andmergers in the UK food retailing are likely to be on a smaller scale. Moreover, it involves thetake-over of convenience retailers by hypermarket chains who are wishing to strengthentheir presence in the UK¶s high streets. As
aphael Moreau a retailing analyst at
E
uromonitor International, says ³Diversifying into convenience stores is on the agenda forthe UK¶s top hypermarket chains because this retail format offers good growth prospects.´ Maintain brand image is the one of the latest market trend in recent years. As
T
esco hasbeen successful because of its powerful brand image and also has a reputation for low price,value and for being customer focused.
T
esco¶s brand associations and equity have helpedthe company to expand into new markets and sectors.
T
he key drivers for
T
esco¶s successare strong public relations, advertising and building profile in catchment areas.
T
he figurebelow shows market share for
T
esco in 2006/07.
S
ource: tesco.comIn addition, aggressive overseas expansion has helped a lot
T
esco to keep profitshigh as the company has expanded business into eastern
E
urope, emerging nations such as
S
outh Korea,
C
hina, and in the U
S
through mid-market supermarkets (known as, ³fresh andeasy´).
T
esco¶s strategy is being close to the customer. With the aid of this strategy
T
escohas successfully developed shopping formats such as metro, express, superstore andconvenience.

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