Presentation YouTube Link

 
https://youtu.be/9AIHLDxtzpc

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Presentation on Porter’s 5
forces of TESCO
Presenters 
• Asif Arifin Ayon (30055301)
• Md Rakibuzzaman Rakib (30051418)
• Usama Ahmad Butt (30054418)
• Hassan Raza (30054057)
• AKM Raian Huq (30050044)
• Grace Tolulope Okelola (30047899) 2
Agenda
1. Introduction
2. Competitive Rivalry 
3. Bargaining Power of Customers
4. Bargaining Power of Suppliers 
5. Threat of Substitutes 
6. Threats of New Entrants 
7. Conclusion 
8. Reference
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 Introduction

A British public limited company, Tesco Plc operates

supermarkets, hypermarkets, and superstores in the United Kingdom
and several European countries, as well as in the United States. When it
comes to retail, the company was founded and is based in
Hertfordshire, England, United Kingdom, in 1919. Almost 423,000
individuals were employed by the company as of 2019, generating an
impressive 64.760 billion pounds in revenue (Tesco, 2020). In all,
the corporation has about 7000 locations worldwide. Assessing
Porter's five forces from the perspective of the global retail industry
would be a practical approach of maintaining adequate strategies
to better understand the situation of the organisation. 
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 Competitive Rivalry 

Demand and availability for basic commodities are increasing, making

the retail industry more competitive. Many organisations and firms have
taken the market to provide a wide variety of options for customers.
This has resulted in fierce competition among established players. Asda,
Morrisons, Aldi, and The Cooperative are the group's primary
competitors. As of December 2020, Tesco is expected to have a 27
percent share of the grocery market. The rest of the pack has a market
share of 15.7, 14.1, 10.3, 7.7, and 6.3 percent, respectively (Statista,
2021). With the presence of such big names in the industry, the business
environment becomes more competitive. 
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 Bargaining Power of Customers

Customers have a lot of power in the retail industry since there are so
many vendors to choose from; they can purchase from anybody they
like. A significant degree of buyer power may be achieved since the
product selection and prices at these supermarkets and stores are almost
identical. Because of internet channels, customers are more informed
about product price and special offers, which affects their purchase
habits. Additionally, customers aren't restricted to doing business with a
single retailer, and moving between them is cheap and easy, further
increasing their bargaining power (Stan, 2015). As a consequence, retail
consumers now have greater influence. 
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 Bargaining Power of Suppliers 

The negotiating power of the industry's suppliers is considered low

to moderate because of the large number of suppliers, most of whom
have just a little impact on businesses. Major retail companies are less
affected by the actions of individual suppliers. A large number of service
providers also compete for limited store space. Suppliers' ability to have
a significant effect on the performance of the business is being
weakened due to the expansion of the company's supply capacity
(Wang, Tang, and Zhao, 2018). Thus, the negotiation power of suppliers
in the retail sector is kept low to moderate. 

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 Threat of Substitutes 

When it comes to retail, the risk of alternatives is low since merchants

are seen as essential partners in the food supply chain. Alternatives to
retail store goods are easily accessible. Due to the limited number of
substitutes for Super chain-branded products, customers find it difficult
to migrate away from them. Option costs may exceed the low-cost
goods and services offered by the shop. Technology has changed the
way individuals do business and increase awareness, but it cannot be
regarded a substitute to retailing (Pantano et al, 2017). As a
consequence, the retail industry faces little threat from substitutes. 

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 Threat of New Entrants

Emerging store enterprises may easily join the market, even in

the presence of retail giants, which raises the danger of competition in
the retail industry. There are several reasons why small enterprises may
enter the market, such as their proximity to the customer,
their specialisation, and so on. Retail items may be put up in a small or
medium size to fulfil the demands of new entrants, so cash is not a
barrier. Despite the fact that the need for physical space might be a
deterrent for fledgling businesses (Sadun, 2015), The retail sector
encourages healthy rivalry among enterprises because of its nature. As a
consequence, there is a strong likelihood of a newcomer.
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 Conclusion

Tesco retains the grocery retail industry's market leader. Cost leadership and
distinctiveness have helped the corporation retain its position. Comparatively,
the firm has created a lot of value. IT and a simplified supply chain have
helped the firm succeed. Greener Living affects clients' brand views. 

Despite Tesco's advantage, competitor sectors are rising fast, boosting rivalry.

The corporation should lower pricing while retaining quality moving ahead.
Instead of buying from providers, the corporation may consider starting a
farm. This will minimise purchase expenses, allowing for reduced selling
prices and still-profitable sales. 
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 References
1. Tesco, 2020. Annual Report. (online) www.tescoplc.com. Available at: 
https://www.tescoplc.com/media/755761/tes006_ar2020_web_updated_200505.pdf.
2. Statista, 2021. Great Britain: Grocery market share 2017-2021 | Statista. (online) Statista. Available at: 
https://www.statista.com/statistics/280208/grocery-market-share-in-the-united-kingdom-uk/.
3. Pantano, E., Priporas, C.V., Sorace, S. and Iazzolino, G., 2017. Does innovation orientation lead to
retail industry growth? Empirical evidence from the patent analysis. Journal of Retailing and Consumer
Services, 34, pp.88-94.
4. Sadun, R., 2015. Does planning regulation protect independent retailers?. Review of Economics
and Statistics, 97(5), pp.983-1001.
5. Stan, V., 2015. Antecedents of customer loyalty in the retailing sector: the impact of switching costs.
Journal of Applied Business Research (JABR), 31(2), pp.371-382.
6. Wang, Y., Tang, W., and Zhao, R., 2018. Information sharing and information concealment in the
presence of a dominant retailer. Computers & Industrial Engineering, 121, pp.36-50.

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SWOT Analysis of TESCO
Presenters
• Asif Arifin Ayon (30055301)
• Md Rakibuzzaman Rakib (30051418)
• Usama Ahmad Butt (30054418)
• Hassan Raza (30054057)
• AKM Raian Huq (30050044)
• Grace Tolulope Okelola (30047899) 13
Agenda​

1. Introduction 
2. Strengths  
3. Weaknesses  
4. Opportunities  
5. Threats 
6. Conclusion 

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 Introduction

Jack Cohen established Tesco in 1919 as a collection of market booths in the

United Kingdom. Tesco had phenomenal expansion and, in just a few short
years, surpassed its competitors to become not only the biggest retailer in the
United Kingdom but also the world's second-largest. Dave Lewis is currently
serving as CEO of Tesco PLC. 
Tesco processes 66 customers per second, has around 80 million weekly
shopping visits, and generates approximately 141,000 pounds in sales every
minute.
Tesco, the most popular and biggest grocery chain in the United Kingdom, has
had a remarkable amount of success ever since it first opened its doors.
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 Strengths

• Tesco is Britain's largest supermarket. It's the most profitable UK supermarket

chain. Tesco anticipates £ 57.8 billion in revenues for 2021. 
• Tesco has the largest market share of the four major supermarkets, 27.9%. Irish
supermarket. 
• Tesco has 4673 stores in 14 countries. It's also active in Europe, North America,
and Asia. 
• Tesco has 4673 food stores worldwide, up from 3,751 in 2008. The company's
revenue is rising as its retail network grows. 
• Tesco has designed many retail formats to expand. Tesco offers Homeplus,
Metro, Extra, Express, One Stop, and Superstores. 
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 Weaknesses

• Tesco left the U.S. and Japan in 2012 owing to failures. Due to poor exports,
the firm closed outlets in Japan after nine years and the US after five. 
• In 2017, Tesco was punished for deceptive accounting and profit deception.
• Operating profit declined 21.3% (£1.7 billion) in fiscal year 2021, prompting
the share price to drop. Its stock fell 8% in Q1 2022.
• Tesco was fined £7.5 million for selling expired goods in three locations
between 2015 and 2017 (pizza, flavoured milk, soup, etc.). This corporation
admitted risking customer safety.
• While Tesco is the UK's pricing leader, its low-cost approach may reduce
profit margins.
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 Opportunities 

• Tesco established Jacks, a discount store with rising sales. It may expand as Aldi
and Lidl's low-cost rival. 
• Tesco will do well if it forms strategic alliances with other brands. Tesco will be
better able to service current and future customers.
• Tesco may form joint ventures in underperforming areas. Local enterprises might
boost performance by offering market knowledge.
• Tesco has stores in many emerging countries, but it should expand to South Korea,
Turkey, and Indonesia.
• Recent incidents have shown the perils of touching public coins and cash.
Customers prefer credit cards versus cash. More cashless Tesco outlets are coming. 
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 Threats 

• Tesco's 2017 Christmas commercial sparked social media outrage. People

boycotted Tesco for allegedly disrespecting Christian beliefs.
• Tesco was accused of deceiving consumers with bogus farm brand names and
marketing under "Woodside Farms." It was sued over the problem in 2017.
• With Britain out of the EU, trade negotiations and cost issues threaten Tesco.
• Supermarket competition Tesco's market position may be endangered by
WalMart (with ASDA takeover), Carrefour, and Aldi.
• Government laws, legal and tax issues, financial constraints, and economic
upheavals might harm Tesco outlets in important locations.

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 Conclusion

There is a huge possibility for Tesco in the supermarket business. Tesco's income may be increased and
its competitors successfully competed with by making strategic choices and employing effective
marketing strategies. Tesco, here are a few ideas:
• Develop a footprint in Asian and African nations by investigating new markets
• Respond as quickly as possible to the thorny problems that have erupted in the situation.
• Before entering a new market, do significant market research and market analysis.
• Increase consumer satisfaction through improving the company's e-commerce sites and online operations.
• Incorporate consumer input into new advertising and marketing strategies. Public condemnation might be
avoided if it is used correctly
• To resolve legal and financial concerns such excessive bills, tax payments and credit card obligations.
• Gain an advantage over the competition by increasing marketing and advertising activities.
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 References

• Wood, Z. (2020, February 14). Available at: Tesco stopped rivals from opening nearby stores, watchdog finds.
The Guardian
• Davey, J. (2020, February 25). Available at: Tesco completes China’s exit with a $357 million stake sale.
Reuters
• Lee, L. (2020, May 16). Available at: British grocer Tesco’s slavery review reports abuse in Malaysia. Reuters
• Jahshan, E. (2020, May 31). Available at: Tesco faces shareholder revolt over CEO’s bonus hike. Retail Gazette
• Davey, J. (2020, February 25). Available at: Britain’s Tesco tests a cashless store in London. Reuters
• Vizard, S. (2020, March 5). Available at: Tesco becomes the first supermarket to directly price match with Aldi.
Marketing Week
• Davey, J. (2020, April 8). Available at: 
Tesco defends dividend payout as warns coronavirus costs could top $1 billion. Reuters
• Wilson, B. (2020, March 8). Available at: Tesco limits sales of essential items. BBC News

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