...SWOT, PESTEL, Porter's Five Forces and Value Chain Analysis of Tesco Introduction This report is aimed at critically analyzing the macro, meso and micro business environment of Tesco, one of the largest food and grocery retailers in the world, operating around 4,331 stores. Strategic evaluation tools such as PESTEL, Porter’s Five Forces, SWOT and Value Chain analysis have been used by researchers in order to achieve this aim. Tesco – Company Overview Tesco is among the largest food retailers in the world with revenue in excess of £54 billion in 2009 and employing over 470,000 people. They operate approximately 4,331 stores in 14 countries around the world. The company operates primarily in the USA, Europe and Asia and their Head Office is based in Hertfordshire, UK. According to Datamonitor (2010), the commercial network portfolio of Tesco comprises : over 960 Express stores which sell approximately 7,000 products including fresh foods at suitable localities ; 170 Metro stores which sell a variety of food products in town and city centres; and 450 superstores which sell both food and non-food items including books and DVDs. Tesco also provides online retailing services through their website tesco.com and Tesco Direct . In addition, they provide broadband I nternet connections and financial services through Tesco Personal Finance (TPF). Tesco was founded in 1919 and launched its first store in Edgware, London, UK in 1929 (Tesco, 2010); however, over the decades it has evolved...
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...Final Assignment Case Study Aldi store originated in 1913 and is one of Germany’s leading store chains. It was created by the Albriet brothers. Aldi stores corporation has various names such as Aldi, Hofer, and Combi. There are approximately 5400 stores worldwide. The Aldi stores are located in the following countries, Germany, Netherlands, Belgium, Denmark, Austria, France, United States, and the United Kingdom. Currently there are 20,000 Aldi employees worldwide. In 1993 the sales for the Aldi Group was 21 billion dollars. Aldi has been known as one of the top competitors in the global retail markets. Product and branding strategies Approximately 90% of Aldi’s products are under their own brand, which means that the can and dry goods are produced by local manufacturers and then re-labeled under a generic name. Aldi takes pride in only supplying 500 – 1000 items at any given time in their store. They take pride in keeping the stores lean and bare minimum selling primarily frozen foods, fresh vegetables and canned goods. Pricing strategies Pricing is very important to Aldi stores, they utilize the Market Penetration Pricing strategy which means that they set the price of a product or service as low as possible to facilitate rapid sales of the goods and services. Market Penetration Pricing strategy is used primarily with new product introductions. Aldi takes pride in having their products 30% cheaper than their competitors. Lean Production Aldi takes pride...
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...Strategic Analysis of ALDI Table of Contents 1. Introduction 2 2. Brief Background on Aldi 3 3. Market Identification of Aldi 4 4. Environmental Analysis 5 4.1 PESTEL Analysis 6 4.1.1 Political factors 6 4.1.2 Economical factors 6 4.1.3 Social and cultural factors 7 4.1.4 Technology factors 8 4.1.5 Environmental Factors 8 4.1.6 Legal factors 9 4.2 Key Trends affecting the industry 9 5. SWOT Analysis 10 5.1 Strengths 10 5.2 Weaknesses 11 5.2 SWOT Table 12 6. Identification and evaluation of the Strategies pursued by Aldi 13 6.1 Strategies implemented by ALDI 13 6.2 Critical Evaluation of the Strategies 14 7. Conclusion 16 8. References 16 1. Introduction Albrecht Discount Inc., globally known as Aldi, is a German based family owned global discount chain of supermarkets. Aldi constitutes of two independent groups, that are Aldi Nord (North) and Aldi Sud (South) legally and economically independent but family related (Aldi Sud Business, 2013). It is the market leader in the industry of international grocery retailing and owns and operates chain of discount grocery stores in Europe, Australia and United States. It’s stores retail and supply general merchandise and food including meat products, fresh meat, frozen and refrigerated foods, sweets and snacks, dairy and bakery products, beverages and pantry items in addition to home care and personal care products (Report Linker, 2013). In the present Aldi Inc.’s strategic...
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...ntroduction This report is aimed at critically analysing the macro, meso and micro business environment of Tesco, one of the largest food and grocery retailers in the world, operating around 4,331 stores. Strategic evaluation tools such as PESTEL, Porter’s Five Forces, SWOT and Value Chain analysis have been used by researchers in order to achieve this aim. Tesco – Company Overview Tesco is among the largest food retailers in the world with revenue in excess of £54 billion in 2009 and employing over 470,000 people . They operate approximately 4,331 stores in 14 countries around the world. The company operates primarily in the USA, Europe and Asia and their Head Office is based in Hertfordshire, UK. According to Datamonitor (2010), the commercial network portfolio of Tesco comprises : over 960 Express stores which sell approximately 7,000 products including fresh foods at suitable localities ; 170 Metro stores which sell a variety of food products in town and city centres; and 450 superstores which sell both food and non-food items including books and DVDs. Tesco also provides online retailing services through their website tesco.com and Tesco Direct . In addition, they provide broadband I nternet connections and financial services through Tesco Personal Finance (TPF). Tesco was founded in 1919 and launched its first store in Edgware, London, UK in 1929 (Tesco, 2010); however, over the decades it has evolved to become the market leader within the UK food retail segment (Datamonitor...
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...Business Strategy Module Lecturer Kashif Ali Prepared by M. Sohail Malik Index Introduction ................................................................... 1 Business Environment Analysis ................................. 2 A) Tesco Micro Environment (PESTEL Analysis) ..... 3 B) Tesco Macro Environment (Five forces Analysis) . 6 3. Impact of Globalisation ............................................ 8 A) Opportunities ...................................................... 9 B) Benefits ................................................................ 9 C) Challenges ............................................................. 10 4. Conclusion ................................................................. 11 Introduction: The world has developed ever more intricate, resulting from the greater interdependence among world economies (Thompson, 2002) and the success of organisations is largely determined on how well the organisation adjusts all its tangible and intangible properties to keep itself on track of its surrounding or business environment (Armenakes & Bedeian, 1999). As a market analyst, the organisation undertaken to analyse business environment is Tesco Plc. Tesco Plc is a British global grocery and all-purpose merchandise retailer founded in 1919 by Jack Cohen. It is the 3rd largest retailer in the world and operates in more than 14 countries across Asia, Europe and North...
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...Supermarket Industry Porters 5 Force’s Porter (1980) illustrates in this analytical tool 5 variables that determine the attractiveness of an industry for organisations in terms of profitability in their immediate environment. Using the forces in this model we can analyse how attractive the UK Supermarket industry is to enter, the 5 forces are as follows. The threat of potential new entrants Barriers to entry in the UK supermarket industry relies on the entrants capability of matching capital requirements of existing firms, the UK supermarket industry is dominated by firms known as Tesco, Asda, Sainsbury’s and Morrison’s (Big 4) owing up to 69% of market share in the UK. Looking at the experience curve (1960: Boston Consultancy Group) A new entrant would have to achieve the economies of scale needed to achieve cost parity with the big 4 and compete on cost advantage. In the supermarket industry achieving economies of scale is not on production but other factors such as efficiency, pricing, range of goods and value of products. Tesco for example have very low cost margins in comparison to the scale of their operations and distribution channels but they are able to achieve high sales because the convenience, range of products and different services they offer. Product differentiation is another barrier to entry, a new entrant would need to achieve and individual level of differentiation and attain an identity through promotions and costly advertising, total advertising...
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...P4 - Identify the competitive factors in the retail environment a selected organisation faces In this assignment I will identify what competitive factors and changes Tesco faces in the retail sector and how it might respond to these under the following headings; retail environment using PESTEL, and competitive environment based on overcoming barriers to entry, pricing, new markets and mobile population. In this assignment I will be talking about how Porter’s five forces are being used by Tesco. By using PESTEL we can see the changeable environment in which Tesco functions. PESTEL Political Tesco operates in 14 different countries. Therefore its performance may be influenced by the local legislation and political factors. There are certain rules and regulations which must be followed by Tesco. Employment law is one of the laws which must be adhered to otherwise Tesco may be prosecuted for this. Tesco offer a variety of jobs like high flexible, low paid, highly skilled, high paid and local based jobs. Tesco also offer jobs to students, elderly people, disable people and mixed race people. The reason behind this is so that they follow the employment legislation and don’t break no laws. Tesco has been able to move over into China which has allowed them to break the barrier and move into the world’s most profitable market with over 1.3 billion people according to the Straits Times 2010. Tesco signed a settlement in 2009 which qualified them to set up stores in shopping malls...
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...Porter’s Five Forces Analyses Threat of New Entrants - Low According to Porter (1985), potential competitors in any market are faced with challenges that new entrants often have including sales channels, costs of conversion and funding needs. (Dr. Antony Michail, 2011) Throughout the recession Tesco has continued to invest into expanding the company and developing efficiencies, making it as competitive as ever to defend against the threat of new entrants (Datamonitor, 2010).The threat of a new competitor entering this sector is relatively low, due to the huge capital investment required to be competitive and establish a brand identity that stands out. Tesco and other large supermarket are able to purchase large volumes of goods in lower price. In contrast, smaller new entry companies are more likely to buy smaller volumes at higher prices. New firms also have to be aware that Tesco already have loyalty customers. All of which helps to protect them from the threat of new competitors. Therefore, the successful entry of new threats is minimal. Threat of New Substitutes products or services - High According to Porter (1985), the threat of substitute products and services offered by an organization depends on propensity of the buyer to substitute, switching cost that the buyer will incur, perceived product or service differentiation level, the number of substitute products or services in the market ease of substitution and quality depreciation among other factors. (Dr. Antony...
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...general environment in which they operate, and the competitive environment. Marketing is a coordinated process, which makes the best use of available resources to present a product proposition to a target market in order to attain objectives, and then evaluating how successfully this has been done. According to Malcolm McDonald, it is the management process, which identifies, anticipates and supplies customer requirements. According to Quinn (1980) ‘Strategy is the pattern or plan that integrates an organization’s major goals, policies and action (s)...into a cohesive whole’ The business model used to assess the marketing strategies and …is Tesco, Which is one of the largest `retailers in the world. Strategic evaluation tools such as PESTEL, Porter’s Five Forces, and SWOT and value chain analysis have been used by researchers to achieve this aim. Company overview Tesco is among the largest food retailers in the world with revenue in excess of £54 billion in 2009 and employing over 530,000 people. They operate approximately 6,784 stores in 12 countries around the world. The company operates primarily in the USA, Europe and Asia and their Head Office is based in Hertfordshire, UK. According to Data monitor (2012), the commercial network portfolio of Tesco comprises: over 1,547 Express stores which sell approximately 7,000 products including fresh foods at suitable localities; 192 Metro stores which sell a variety of food products in town and city centres; and 481 superstores...
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...retailers can avoid the stagnation threatened by saturation. Aldi Aldi started in 1946, when the Albrecht brothers took over their mother’s grocery store in Germany. According to (Ruddick, 2014) from the small provincial store, they built one of Germany’s biggest retailers, which is renowned for its low prices. Aldi arrived in the UK in 1990 and has opened over 500 stores and has over 9000 stores in 18 countries. Aldi’s product range specialises in their own brand, which are cheaper than well-known brand labels. This is because they can control their prices at its distribution level. Aldi does not only stock food products, they also stock items such as; underwear, toiletries and fishing equipment. Comparing Aldi to the four major supermarket chain retailers there is a stark difference to how they function to how Aldi functions. (Keynote, 2007) Illuminates that Aldi stocks around one thousand product lines whereas the major chain retailers stock over three hundred thousand product lines. This is beneficial to the less price sensitive consumer as there is more choice however, this also means products are more expensive....
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...intensified compensation in the supermarket industry. In practice, the effective of a right strategy depends on the ability to outperform the business or gain a competitive advantage. This can only be achieved by having a proper mechanism to monitor, evaluate and control the strategies that have been selected. The globalized forces and marketing stimulus, customer’ behavior is now shaped towards having a planned weekly or monthly shopping from supermarket. This would be real opportunity for supermarket lie STO supermarket which provides more than one stop shopping for customers to save their valuable time spent on shopping from different supermarkets or corner shops. The political instability in male emphasizes more on saving their items. However, STO super mart practicing the concept of customer’s orientation in every service customer. As both macro and micro environment is very dynamic, the strategies need to be continuously revised based on it in ordered to succeed. Some of the strategies such as introduction of price checker and self-checkout system need to monitored and controlled well when compared to other strategies II. About STO Super Market People’s Choice Supermart was established in July 1991, with the intention of providing an inexpensive mode of shopping by introducing the concept of Supermarket for the first time in the Maldives. Supermart is located at the ground floor of STO trade Centre. Supermart is the largest supermarket in the Maldives and holds a variety...
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...Globalization in NZ: Laws, local markets, farmers, what we need to consider to enter, what we need to appeal to the NZ population, what I expect them to do, PESTEL analysis, Auckland (how many people live there, find an article on health in NZ) marketing the product Whole Foods has a strong reputation of being one of the top premium organic grocery stores here in the United States, but their business could grow to other countries, such as New Zealand. New Zealand has a population of over 4 million people who are very culturally health conscious. There is a very good market for Whole Foods to come into New Zealand and become a successful chain of stores around the two islands. For Whole Foods to successfully come into this country they would have to look at the laws, environment, socio-economics, marketing and technology. Whole Foods has to implement a strategic plan before they even enter the country. Auckland, the capital of New Zealand, is an excellent place to open up a Whole Foods. “Many New Zealanders engage in some form of Self Care: sustaining a physically active and health conscious regime to maintain or restore good health.” (1) Auckland has a population of 1,300,000 residents which is roughly 31 percent of the country's population. This gives a good and diverse target marget for Whole Foods to enter into. Whole Foods would first have to register with New Zealand’s government before they were to start implementing their plan.” If you form a company, various formal...
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...Strategic Analysis Kroger Executive Summary This strategic analysis of The Kroger Company will take a look at the changing trends of grocery retailers, profitability and strategic position. Included is a PESTEL analysis and Porter’s Five Forces model for a closer look at Kroger and the industry. Competition is a big threat and since Rodney McMullen became CEO of The Kroger Company in January 2014 the company has rapidly gained market share and is currently second only to Wal-Mart (United States Department of Agriculture, 2014). With recent strategic acquisitions Kroger is better positioned to sustain their level of growth. There are several problem areas that Kroger will need to stay on top of and plan for how to combat those areas. We will provide a couple recommendations on the strategic direction that will most benefit and sustain competitive advantage for The Kroger Company. Introduction The Kroger Company was established in 1883 by a man named Barney Kroger who opened the first store in Cincinnati, Ohio. Since the opening of that store, Kroger has been an innovative leader in the grocery industry. With annual sales exceeding $108 billion it is one of the world’s largest retailers. Kroger can boast the following firsts: ● 1st to establish bakeries ● 1st to sell meat and groceries under one roof ● 1st grocery chain to routinely monitor product quality and scientifically test foods ● 1st to test an electronic scanner ● 1st grocer to formalize consumer research Kroger...
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...Infrastructure 14 Conclusion 14 Bibliography 16 Appendix A 18 Appendix B 19 Appendix C 20 Appendix D 21 Appendix E 22 Introduction As a continuation of the analysis provided in Coursework 1 on the Stamford Waitrose Branch and the Waitrose Company, using PEST(EL) analysis, on the external influences that affect its business. The analysis in this paper focuses on how the branch and Waitrose as company employs Supply Chain Management, Porter’s Value Chain and Porter’s Five Forces business process models to contribute to their position within the highly competitive UK grocery business. To distinguish itself from other leading supermarkets Waitrose employ a differentiation strategy; by targeting a cliental that prefer quality products over price, providing a wide variety of fresh items and by using ‘Own brand’ labelled...
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...Andrew Wash GBA 490-321 Written Case 1 February 12, 2014 Table of Contents Issue #1 ……………………………………………………………………………… 2 Issue #2 ……………………………………………………………………………… 3 Issue #3 ……………………………………………………………………………… 4 Recommendation ……………………………………………………………………. 5 Dominant Economic Characteristics ………………………………………………... 7 PESTEL Analysis …………………………………………………………………… 8 Five Forces Analysis ……………………………………………………………….. 10 Drivers of Change in the Industry …………………………………………………... 12 Current Strategy …………………………………………………………………….. 13 Competitor Analysis ………………………………………………………………... 15 SWOT Analysis …………………………………………………………………….. 17 Financial Analysis ………………………………………………………………….. 19 Issue #1 Trader Joe’s first problem is that information is occasionally leaked regarding the identity of their private label suppliers. Trader Joe’s thrives off keeping the identity of their suppliers a secret to all consumers and media in order to maintain the integrity of their products. Since 80 percent of the products sold at Trader Joe’s are private label, the identity of the supplier is not known because the product is sold under the Trader Joe’s brand name. Information leaks regarding Trader Joe’s suppliers could damage their brand image because it could cause Trader Joe’s to lose its charm to consumers and because it could make other companies wary of supplying their goods. First, information leaks could cause Trader Joe’s to lose its charm in the eyes of the consumer. There were news reports spread within...
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