PORTERS FIVE FORCES ANALYZE ON TESCO:

Industry Competitors:
The main factors of this force are considered as concentration, fixed or variable costs,
differentiation, capacity, pricing, behavior and market and company growth. In retail
industry Tesco has large number of competitors like Asda, M&S, Morrison’s and many more.
Retail Industry is spread on a large scale in UK. So retail industry has vast arena, so the
competition intensify as the number of rival companies increased. So it’s necessary for
Tesco to concentrate on strategic management in order to win over their competition.

Bargaining Power of Suppliers:

The threat from suppliers is quite low because often supermarkets decide the price they are
going to pay to the suppliers. In the same way Tesco do. If the suppliers refuse to get agree
on the price what Tesco decide then they have nowhere to go. So in a way suppliers of
Tesco are Tesco dependent.

Bargaining Power of Buyers:

Buyer Power controls the market. The power of buyer sometimes forces companies to cut
the prices down. For ex: If Tesco sale something on high price than other supermarkets than
customer will prefer to go to other supermarket rather than do shopping at Tesco. The
power of buyers become high when customers have less number than the sellers. So the
Tesco have to concentrate on the needs and interests of the customers if they want to in
race of top retailers in the retail industry of U.K .

Threats of New Entrants:

All the supermarkets like Tesco, Asda and Sainsbury create a considerable barrier to new
entry. In UK retail industry is mature therefore there is no chance for new entrants. In past it
was easy to take entry when the market was in an introductory stage. But now potential
entrants have to face the barriers imposed on them by the existing companies. So it’s harder
for them to compete with the already existing and established chains.

Threats of Substitutes:
The threat of substitute is acceptable in retail industry because nowadays retail industries or
all supermarkets deal with alike products. So the only option they have to switch the cost of
the product as compare to other supermarket. As a result in all supermarkets like Tesco,
Asda, Sainsbury and Morrison’s have relatively same price. The option of substitute is
beneficial for the buyer because in the race of competition companies have to improve the
quality of the product or cut down the price in both scenario consumers will be in gain. So
Tesco has only option to improve the quality of the product and cut down the price of the
product at the same time.