...Competitve Analysis for Tesco. Introduction This is a group report for the 221BSS Business Management module. The purpose of this report is to look at an organisation in an industry and complete a stragetic analysis for the chosen organisation. The organisation that we chose was Tesco and we decided to carry out a competitve analysis, recommending a suitable course of action bearing in mind the possible implementation difficulties. Primary Research. There were two parts to the primary research we carried out. We conducted both questionnaires and a focus group. The questionnaires was given out to people at random to find out which supermarkets they visit, why and what would encourage them to start shopping at Tesco. The results came from a variety of people giving an almost equal amount of males and females (see fig.1), although most of the results were from residents in Coventry. As Coventry has two universities a lot of the people who were questioned were people aged 18-30 (see fig.2). The results of the questionnaire showed that the vast majority of people shopped at Tesco and Sainsbury’s (see fig.3). Asda is Tesco’s main competitor and was amongst the supermarkets people least visited despite it being voted the cheapest supermarket for over a decade. This could possibly be because Asda does not satisfy all the main reasons people look for in a supermarket. The results showed the main reason people chose a supermarket was because of its location which may be because...
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...Tesco Company Review Tesco is an international distribution based primarily in the UK, in Ireland and Asia. Its capitalization is 34.84 billion at 11 July 2008 and its turnover is 80 billion Euros in 2008. Tesco is British distribution group and 3rd World Group. Its activity revolves around three areas: distribution in the UK, international distribution and financial services. (Pagano, Margareta, 16 May 1987). The Macro Business Environment of Tesco Group The Macro-Environment consists of factors that may influence an organization externally. This is usually outside of the control of corporations. Examples of factors that may influence a business are changes in interest rates, changes in cultural trends and tastes, more competitors in surrounding areas as well as greater regulations or changes to government laws. (Pagano, Margareta, 16 May 1987). A popular method used to analyze the macro-environment is through a PESTLE analysis which stands for political, environmental, sociological, technological, legal, and ethical issues. Factors That Will Have Significant Impact on Tesco Political Factors The political environment includes all government actions that affect the business in the retail trade. This effect may be through formal legislation, such as the law on the sale of goods, as well as through competition policies and planning systems. For example, the recent developments relating to food safety and sale of genetically modified foods also influence and...
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...Tesco Business Analysis Introduction: Tesco Plc is a British based company, and is the largest food retailer in the UK. It is one of the largest British sellers and holds third rank in retail industry after USA based company Wal-Mart and France based company Carrefour. It sells around 4000 food products (Euromonitor, 2010). Tesco started with the business in grocery retailing, but now it also sell stationary, health and beauty, utensils, clothing, home entertainment, electrical goods, kitchen utensils and seasonal goods like barbeques and garden furniture in the summer. Annual profits of Tesco in year 2005 was announced as £2 billion and in 2006 it announced that it was going to open foreign stores very soon. Tesco operates in 13 countries with 3275 stores of which 2115 operates in UK; its largest geographical market (Euromonitor, 2010). It operates through different store formats which include Extra, Express, metro, hypermarket and superstore. Tesco has its own products ranging from value, normal and finest for different income group of consumers. Tesco was founded by jack Cohen 1919. It gets its name from the combination of the founder of Tesco, Sir Jack Cohen and a partner in a firm of tea suppliers who Cohen worked with, T.E. Stockwell (Marketing (00253650)). One of the biggest investment of Tesco was in the 1980s, when Tesco invested £145m for a superstore development program and invested £500m in building 30 new stores (BSC). The company floated on the stock exchange...
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...EXECUTIVE SUMMARY After years and years of pursuing Sainsbury as the United Kingdom’s largest retailer, Tesco PLC broke through in 1995 and has become not only the largest retailer in the UK, but also the world’s 4th largest retailer, trailing only Wal-Mart, Carrefour and Germany’s Metro AG. Originally, Tesco’s soul focus was the retail grocery market. As of February 2010, the grocery market continues to be Tesco’s largest source of revenue and it has accounted for more than 50% of Tesco’s £ 59.4 billion of sales. Further, Tesco does not limit its operation strictly to the United Kingdom. Currently, Tesco resides in 13 countries worldwide and operates 1,911 stores across Europe and Asia. The company has also expanded in the United States and has plans for an additional 320 stores in 2010 across the world. Australia’s economic and political stability and skilled labour force, provides a welcoming environment for foreign investors. With respect to the retail industry, consumer goods expenditure of 183 billion US $ in 2009 and an expected 212 billion US $ in 2010 presents significant opportunity to foreign retailers. However, risk exists as there is a limited presence of related and supporting industries for non-food products. As well, domestic rivalry remains strong in both grocery and non-food segments. The objective is to implement Tesco’s hypermarket store format in Australia while increasing the company’s global market share. Tesco’s main competitors include domestic retailers...
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...Task 1 Tesco is a well-known retail supermarket in the UK as well as almost in the world as it has become the third largest retailer in the world. It has stores 12 countries across Europe, Asia, and North America. Retailing is really a competitive industry as the competitors are in all over the world, such as ASDA, ICELAND, Sainsbury’s, Waitrose, German Aldi, US Warmart, and many other local retailers. The success is the effective leadership and management. Tesco’s leaders have always set high satndards and clear goals, never setting anything less than the best (The times 100). As a global company, Tesco always looks at and respects the strengths from other competitors and tries to learn and bring them on board as quick as they can to become they own strengths. Tesco has employed both the differentiation strategy and the low price strategy in the past. According to Poter (2008), cost leadership means having the lowest cost per unit among its rivals in the highly competitive industries, which in the case, returns will be low but nonetheless higher than others. The differentiation strategy is to be outstanding in this industry with a number of dimensions that are broadly valued by customers, employees. Tesco sells a no frills commodity and it is way above a standard business in this industry. In turn, it keeps customers satisfied with their shopping experience and loyal. Loyalty is what benefit do you create for somebody and in return for the benefit hey will repay you...
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...The evaluation of financial statements of organisations is critically important for the assessment of the entire performance of the firm and finally evaluation of better investment decisions. There are different financial tools that are accessible for establishing relevant analysis of the financial statements of organisations (Fernie & Ebooks Corporation, 2005: 9). One of the financial tools that are widely used in evaluating the financial statement is ratio analysis, which not only assists in the evaluation of the company’s performance but also gives room for effective comparison of the performance of one firm to that another (Baker, 2011:1). In this report, the main goal is to make comparison of two UK based firms; Tesco and J Sainsbury Supermarkets through the determination of ratio analysis for both of these firms over a time period of three years. Overview of Tesco Tesco is among the top food retailers in Ireland and United Kingdom with about 2715 retail stores located countrywide. Tesco was found by Jack Cohen in the year 1919 and its headquarters are located in East London. The management of the company has shifted forward by two major individuals inclusive of Sir Terry Leahy as the CEO and David Reid as the Chairman (Yahoo Finance, 2013:1). The company has a definitive product range such as Groceries, financial services, telecoms and consumer goods. The total revenue of the firm by March 2013 was about £ 43.6 billion with operating income of about £ 2.272 billion...
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...TESCO PLC is a British multinational grocery and general merchandise retailer. It is a third largest retailer in the world. It has stores in 12 countries across Asia and Europe and is the grocery market leader in the UK, Ireland, Hungary, Malaysia, and Thailand. Mission Tesco’s business was built with a simple mission – to be the champion for customers, helping them to enjoy a better quality of life and an easier way of living. This hasn’t changed. Customers want great products at great value which they can buy easily and it’s Tesco job to deliver this in the right way for them. That’s why we’ve chosen ‘Serving Britain’s shoppers a little better every day’ as the new core purpose. As a business, serving customers is at the heart of everything we do – from colleagues in its stores to those of its in supporting roles. In the UK, Tesco serve some 66 shoppers every second, so it’s Tesco goal to ensure every one of those customers experiences just a little better service on each visit. PESTLE Using PESTLE analysis to analyse to business environment of Tesco. Political Many governments encourage retailers to create more career opportunities for the domestic population. So Tesco plays its role in providing employment opportunities, it also increases the demand for its products and diversifies its workforce. Economic Tesco is concerning any changing in policies, such as taxation. Although Tesco is growing internationally, it is still concern the UK market where it has...
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...Tesco is known to many US investors. In this analysis I will attempt to outline the key dynamics of this company and demonstrate why I consider it to be an excellent investment at the current market price. Readers should be aware that I have been a shareholder in Tesco PLC since 2006. In addition, since this analysis has been written for the Gurufocus value ideas competition there may be some unconscious element of positive bias, even though I have attempted to be objective. Therefore I would strongly advise investors to do their own further research before investing in this company. Tesco is listed on the London Stock Exchange, stock code TSCO, and is also available on the US market as an ADR, stock code TSCDY. At the time of writing this article the share price in London was 395 pence and $19.59 for the ADR in the US. The Business Tesco PLC is the largest retailer in the UK and its core business is large format stores for food and other convenience items. In addition the company offers telecoms services such as mobile and broadband to UK customers as well as financial services including household and car insurance, personal loans and credit cards. In 2009/2010 the company achieved 31% of total sales in international markets. The market cap is 31.7 billion pounds (US$51.83 billion) and Tesco is now the world's third largest retailer behind Wal-Mart (first) and Carrefour of France. In the UK it has been reported that one out of every eight pounds spent in retail stores...
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...many essential data could be hidden and may not be able be presented in financial statements. As a result, by applying this method it can analyse strategic planning of Tesco from previous years. Porter (1985) said that business activities could be divided into two main parts，supportive activities and primary activities. The former includes firm infrastructure, human resource management, technology development and procurement. The later includes inbound logistics, operations, marketing, sales and service. Primary activities: Operation: The operation within Tesco before 8 April 2013 was in fact only had one way that products sent to local stores and customers buy it in store, however after that day, Tesco has launched its online grocery shopping service for all customers in Bangkok (Tesco2013). “With our wide product range and great service proposition we are confident that Tesco Lotus online shopping will receive an overwhelming response from customers”, said Tesco Lotus CEO John Christie. By increasing another shopping approach, increase the supply to meet demand; what's more, Tesco can achieve economic-scale in the future, which can lower the costs. Keeping the price unchanged, lower costs can get higher profit margin, which is a competitive advantage. In order to obtain more future competitive advantage, Tesco has an attempt to grow by exploring outside Britain. For...
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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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...http://123articlesworld.blogspot.co.uk/2012/04/pestle-analysis-of-tesco.html Friday, 13 April 2012 PESTLE analysis of Tesco Political factors - Now Tesco is operating business in 14 courtiers all over the world, so its performance may be influenced by the local legislative and political conditions. Employment laws specified by local government must be followed in order to avoid legal hurdles. Most of the governments encourage the organizations to provide employment for local candidates so that local people can be benefited more. All kinds of jobs like low-paid, highly flexible, more skilled, highly-paid and local based jobs are available in stores like Tesco. Tesco employed different categories of people like students, elderly workers and disabled people for low labor rates. Tesco followed the employment legislation and other laws properly in every country where it has stores. Economical Factors - Demand for a product in market, price of the product and profits of an organization depends on the economic factors like interest, inflation rates and local unemployment levels. Organizations cannot have control on these economic factors, but it can show adverse effect on organization performance. Tesco is still completely depending on UK market even though it has stores in different countries, which mean if UK market collapsed or affected by any economic factors, Tesco will be in greater amount of risks. Social Factors- Demographic changes and change in customer behaviors...
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...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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...A PESTLE Analysis for Tesco A PESTLE analysis for Tesco must consider all the important external factors impacting on the company. These factors may have political, economic, sociological, technological, legal or environmental dimensions. The political analysis must include the impact of local and national government, and the international situation. The Economic analysis needs to investigate the influences of the stock market and tax increases, amongst many other monetary matters. Sociological factors are difficult to determine, as they are part of our background culture. This is part of the reason why using systematic analysis techniques is important. Technological factors are usually easier to spot, because new technologies involve change, and change is always noticed. For instance, online shopping has had a major impact on Tesco's recent success. The change created by technological advances often lead to legal problems, which is why legal analysis is always an important part of a PESTLE analysis. Tesco's operations obviously have a significant environmental impact, from fossil fuel use to packaging issues. Reducing the demand on the planet is a challenge for any big company. A PESTLE Analysis for Tesco must look at all the six factors we have mentioned. Here they are again, with some more examples: • political: an increase in unemployment due to a downward turn in the world economy. • economic: impact on sales of the credit crunch. • sociological: an increase in...
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...strengths and weaknesses of the organisation. In this paper two techniques that are often used for environmental scanning are applied on Tesco PLC. These techniques consist of the PESTEL analysis and the SWOT analysis. Environmental Scanning in the Strategic Planning Process Hunger and Wheelen (2002) divide the strategic planning process into four key stages, which comprise the following: scanning of the external and internal environment, development of strategies, implementation of strategies, and evaluation of actual results in line to the strategic targets set. The scanning of the external and internal environment is important in order to identify key factors that help in the development of sound strategies (Hunger and Wheelen, 2002, p. 12). For example, an examination of the business environment can help in the identification of opportunities and threats that affect the organisation. PESTEL Analysis Political The UK government has recently adopted a tax measure that affected Tesco. In 2011 the UK government increased the VAT rate from 17.5% to 20% with the aim to increase government revenue by £13 billion per year (BBC, 2011, n. p.). Crossley et al. (2009, p. 3) contend that an increase in the VAT rate leads to lower customer spending. Therefore, an increase in the VAT rate negatively affected the sales revenue generated by Tesco. Sales revenue is the key source of income of the organisation and thus it holds a substantial effect on profits (Atrill, 2009, p. 33). ...
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...Before performing a specific SWOT analysis it is often useful to perform a SCAN (strategic creative analysis), or similar objective setting analysis. Objectives vary between companies. For instance, many companies would want to increase market share. But Tesco is under investigation by the monopolies commission, therefore they might be better concentrating on objectives like "increase sales revenue". The following discussion provides a general overview of the strengths, weaknesses, opportunities and threats surrounding Tesco. Use it as a basis for conducting your own, specific, SWOT analysis of Tesco (or similar companies.) It is a teaching resource for students or managers that can be used to provide inspiration for any specific SWOT analysis. Threats to Tesco First, let's take the T in SWOT and look at possible threats to Tesco. Examples of possible financial threats are fluctuations in the stock market and tax increases. Remember, if the objectives of Tesco are not threatened by these factors then they are not threats. But, as most companies would be worried about a tax increase, a general, continuing objective might be to decrease the tax burden. Other objectives may take precedence, and make the tax threat insignificant (for a period). The biggest, most obvious, threat is: * Online and offline innovation by other supermarkets aimed directly at taking customers from Tesco. Examples of specific threats that might affect Tesco in the future, are shown in the...
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