...European Equity Research UK – Food & Drugs Retailers Madrid, October 6, 2010 TESCO Better International Should Help Re-rating RECOMMENDATION UPGRADED TO BUY FROM HOLD TARGET PRICE RAISED TO GBP490 FROM GBP450 BUY CURRENT PRICE: GBP430 TARGET PRICE: GBP490 Jaime Vázquez (+34) 91 289 5436 javazquez@gruposantander.com Borja Olcese (34) 91 289 1853 fdolcese@gruposantander.com We upgrade Tesco from Hold to Buy and raise our Dec-11 TP from GBp450 to GBp490. The two key highlights from the 1H11 results are the better than expected international LFLs in 2Q and the increased confidence in the US. Management provided more detail than usual at the presentation, which we believe denotes confidence. International LFL: 4.1% in 2Q after 0% in 1Q. We believe LFL is the key driver of CROI and not scale via openings. With better LFLs, the ‘maturing effect’ looks more credible to us. In the four most mature countries, the CROI of the mature assets (>4 years) is 220bp higher than the CROI of all assets. US to break even in 2012E/13E: the improvement in LFLs and other underlying metrics show that the key components of a profitable model are coming together. The worsening of overall losses in 1H from US$132mn to US$143mn is explained by the adverse leverage from new space and the acquisition of two supplier factories (US$10-15mn loss). This is a highly operationally geared business and improving LFLs is therefore key. UK: we agree with management that LFLs (Tesco’s and the industry’s)...
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.....................................................6 External factors affecting the organization...................................................................5 Macro-environmental level: Pestle analysis is applied ...............................................12 Major Changes taking place in the external environment.................................... 12 1.3.2. Industry Level: Porter five forces.........................................................................................13 2. Review of Tesco Existing Plans ................................................................................. 16 2.1. Tools to analyze the effect of current business plan............................................... 16 2.2. Position of Tesco in its current market ....................................................................... 17 2.3. Competitive Strengths and weaknesses of current business strategy ............. 19 3. Consideration of Strategic Options.......................................................................... 20 3.1.1. 3.1. Market Penetration ....................................................................................................................21 Modeling tools to develop strategic options for Tesco .......................................... 20 3.1.2. 3.1.3. 3.1.4....
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...Executive summary This report provides an analysis and evaluation of the profitability and liquidity of Ahold and Tesco. Methods of analysis include using Porter’s five forces to identify economic characteristics of retail industry, identifying strategies of two companies, assessing the quality of the balance sheets and income statements and analyzing profitability and risk ratios. Results of data analyzed show that the ROA, ROCE, asset turnover, current ratio, liabilities to shareholder’s equity ratio and inventory turnover of Ahold performed better than those of Tesco during 2009 to 2011. The report finds that compared to Tesco, Ahold has a better ability to earn profits and a lower probability to face risk with a stronger solvency both in short term and long term. So Ahold would have a better condition in future to attract investors. Some of the limitations include: when comparing the performance of the two companies, further reasons why Ahold was performing better and details about the variation trend were not discussed as not enough information was provided. Financial Statement Analysis--Ahold versus Tesco 1) Identify economic characteristics and competitive dynamics in the industry. Use Porter’s five forces to analyze the retail industry. * Rivalry among existing firms Competition is very high in the grocery retail industry with many competitors like Asda, Sainsbury’s, Morrisons and Waitrose. They compete with one another through price, product and...
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...Introduction The report starts with looking at and exploring what marketing is and how it has evolved. The report is supported with marketing definitions from three different sources and what is meant by a marketing orientation and marketing process. Secondly, an introduction of Tesco the organisation the report will be focusing on throughout the report. Within the report there are some tables and graphs used to support the answers to some of the assessment criteria. The fundamental concepts and principles that underpin the marketing process are discussed and the use of environmental analysis in marketing, while the narrator carries out their own analyses at both macro and micro levels. The report investigates the importance of market segmentation and how this leads to the identification and full specification of target groups. It then considers buyer behaviour and positioning. The main elements of both the original and the extended marketing mix are then looked at. An introduction to the concept of the product life cycle, new product development, pricing strategies, distribution options and the promotion mix have all been discussed. Finally the narrator has developed marketing mixes to meet the needs of different target groups. The report includes the differences when marketing services as opposed to goods and examines marketing to businesses instead of consumers and the development of international markets. The report concludes by summarising the principles of marketing and...
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...Topic | Information required | Sources of information | Use of information in Coursework | Date for completing research | Completed/ Review | Choice of BusinessLocation | Address/postcode of local business and at least two different countries where the business trade internationally | Got to the shop am check online for annual report and the website. | Why I chose this business | 2/10/13 | | Choice of BusinessSize | • Sales revenue over 3 latest years • Profit figures over latest 3 years • Cash flows • Capital invested • Production output • Number of employees – current will do • Number of outlets or locations – see National vs international • Value of the business (market capitalisation) • Market share | on the annual report and websites | Choice of buss contrast size | 2/10/13 | | Choice of BusinessOwnership | Type of ownership of each businessIf Sole trader or partnership – owners’ namesIf private limited, name ending with LTD & PLC if public limited – get current number of shareholders | Go to the shop for the local business and for the international I would check the annual report | | 2/10/13 | | Choice of BusinessNature | | Go to the local shop and ask them and for the international business I would go online | Why I chose this business | 2/10/13 | | Purpose & Activities | Goods & or services traded | Go to the local shop and I would ask them what activities they do and what is the purpose and for the international business i would...
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...oVeRVieW tesco around the world Creating value for customers across all our businesses UK Revenue* £40,766m Number of stores Us Revenue* 2,715 Employees £495m Number of stores 293,676 Selling space (sq ft, % of Group) 164 Employees 4,134 Selling space (sq ft, % of Group) 36.7m sq ft 35.4% 1.7m sq ft 1.6% tesco Bank Revenue* £919m Employee figures represent the average number of employees during the year ± 230 employees across asia and Europe work in locations other than those listed Employees * Revenues are sales excluding vaT and exclude the impact of iFRiC 13 (customer loyalty schemes) † Revenue for Europe includes France; revenue for asia includes india 1,274 GDP growth: Economist intelligence unit europe Revenue*† Revenue* (£m) Stores GDP growth Employees (% real change pa) £9,192m Number of stores 1,082 Employees± Republic of ireland Poland Hungary Czech Republic slovakia turkey 2,332 2,156 1,649 1,355 996 700 130 371 205 158 97 121 13,344 24,932 21,157 12,812 9,105 8,038 -0.8 3.8 1.2 2.3 4.0 8.1 89,559 Selling space (sq ft, % of Group) 30.2m sq ft 29.2% asia Revenue*† £10,278m Number of stores 1,419 Employees± india in india, we have an exclusive franchise agreement with Trent, the retail arm of the Tata Group. we are supporting the development of their Star Bazaar format. 104,071 Selling space (sq ft, % of Group) 35.0m sq ft 33.8% Revenue*...
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...ALDI IN AUSTRALIA: WHAT WILL BE THE IMPACT? May 2000 Aldi in Australia Aldi will become a small but significant player in the Australian market OVERVIEW I. Aldi is the world’s lowest cost grocery retailer II. The United Kingdom provides an excellent model for the development of Aldi in Australia III. The arrival of Aldi in Australia will have a focused impact, felt mostly on key line pricing and by Franklins Aldi 2 Aldi in Australia I. Aldi is the world’s lowest cost grocery retailer – Ia. Aldi acts as a category killer in core grocery lines – Ib. Aldi has a low-cost logistics and operational system that works on a 12% gross margin – Ic. Privately owned Aldi has a long investment horizon and plenty of patient capital – Id. There are few threats to Aldi or the limited assortment store. Aldi is immune to competition, even from WalMart Aldi 3 Aldi in Australia Ia. Aldi acts as a category killer in core grocery lines – Aldi is a limited assortment discount grocery store, a format characterized by a high turnover on a narrow range of grocery items in a small space – The main appeal of limited assortment stores is low prices – Packaged grocery accounts for almost 50% of a German Aldi store’s turnover and 50% of an American store’s SKU mix – In Germany, over 70% of German households shop at Aldi, mostly for basic staples Aldi 4 Aldi in Australia Aldi is a limited assortment discount grocery store… TYPES OF DISCOUNT...
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...Keeping things simple Annual report and financial statements 2010 Contents and introduction ConTenTs The DIreCTors’ reporT AnD busIness reVIeW 1 Highlights 2 Chairman’s statement 4 Strategic review 4 Business review 5 Market overview 6 Our strategy 8 Key Performance Indicators 10 Our business model 12 Risks and uncertainties 14 CSR/Today 16 Our people – Values in action 18 Performance review 18 Operating review 23 Financial review 26 Governance 26 Board of Directors 28 Corporate governance report 32 Directors’ remuneration report 41 General information FInAnCIAL sTATemenTs 43 Group financial statements 43 Directors’ statements of responsibilities 44 Independent auditors’ report 45 Consolidated financial statements 45 Group accounting policies 50 Consolidated statement of comprehensive income 51 Consolidated balance sheet 52 Consolidated cash flow statement 53 Consolidated statement of changes in equity 54 Notes to the Group financial statements 75 Company financial statements 75 Company accounting policies 77 Company balance sheet 78 Notes to the Company financial statements InVesTor InFormATIon 86 Five year summary of results 87 Supplementary information 88 Investor relations and financial calendar Our business We are the UK’s fourth largest food retailer by sales with an annual turnover in excess of £15bn. We have 425 stores across Britain, ranging in size from 10,000 to 40,000 square feet. Over 10m customers visit our stores each week served by over 134,000 employees...
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...Annual Report and Annual Report and Financial Statements Financial Statements 2015 2015 “ think the store is I genuinely trying to improve performance and there is evidence of progress.” Ipswich “ hen I shop in Tesco W now there is an overall better feel.” “ lease keep the P prices low, the shelves well stocked and the tills manned with enough staff.” “ ontinue to work on customer C service – it makes a big difference.” Newton Abbot Aylesbury “ he store is of vital importance T to the local community, long may it continue to be so.” Maldon London In this report: Strategic report Chairman’s statement CEO introduction Three priorities Our business model Key performance indicators Financial review Environmental and social review Principal risks and uncertainties Corporate governance Financial statements Other information Page 2 3 5 8 10 12 18 22 26 72 146 FINANCIAL HEADLINES £69.7bn £1.4bn £961m £(6.4)bn 9.42p £(8.5)bn Group sales Group trading profit Underlying profit before tax Statutory profit/(loss) before tax Underlying diluted earnings per share Net debt (13/14: £70.9bn) (13/14: £3.3bn) (13/14: £3.1bn) (13/14: £2.3bn) (13/14: 32.05p) (13/14: £(6.6)bn) The champion for customers Our business was built with a simple mission: to be the champion for customers – to help everyone who shops with us enjoy a better quality of life...
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...INTERNET VS STORE-BASED SHOPPING: THE GLOBAL MOVE TOWARDS OMNICHANNEL RETAILING Euromonitor International August 2014 INTERNET VS STORE -BASED SHOPPING: THE GLOBAL MOVE TOW ARDS OMNICHANNEL RETAILING Passport I LIST OF CONTENTS AND TABLES Executive Summary ..................................................................................................................... 1 Growth Drivers .......................................................................................................................... 1 Internet Retailing Trends .......................................................................................................... 2 Chart 1 Global Internet Sales by Category 2013....................................................... 2 Behaviour and Characteristics of Online Shoppers .................................................................. 3 Retailer Strategies .................................................................................................................... 4 Outlook ..................................................................................................................................... 6 Summary 1 Opportunities and Threats to Retailers ......................................................... 6 Introduction................................................................................................................................... 7 A New Way of Shopping ...................................................
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...INTERNET VS STORE-BASED SHOPPING: THE GLOBAL MOVE TOWARDS OMNICHANNEL RETAILING Euromonitor International August 2014 INTERNET VS STORE -BASED SHOPPING: THE GLOBAL MOVE TOW ARDS OMNICHANNEL RETAILING Passport I LIST OF CONTENTS AND TABLES Executive Summary ..................................................................................................................... 1 Growth Drivers .......................................................................................................................... 1 Internet Retailing Trends .......................................................................................................... 2 Chart 1 Global Internet Sales by Category 2013....................................................... 2 Behaviour and Characteristics of Online Shoppers .................................................................. 3 Retailer Strategies .................................................................................................................... 4 Outlook ..................................................................................................................................... 6 Summary 1 Opportunities and Threats to Retailers ......................................................... 6 Introduction................................................................................................................................... 7 A New Way of Shopping ...................................................
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...wars Why ch threat eap bananas Policy en farmers’ report future s A Fairtrade Foundation Report February 2014 When I sell a box of bananas it’s a product with quality, with incredible taste, so it should be fair that you pay a fair price for it. Horatio Hernandez Coobafrio Co-operative, Magdalena, Colombia January 2014 contents 1 Introduction 4 2 6 Executive Summary Britain’s Bruising Banana Wars 16 16 20 21 4 The banana value chain 4.1 The UK banana market 4.2 The retail price of bananas in Britain 4.3 UK banana imports 2002 – 2013 4.4 Changes in banana supply chain operations 4.5 The impact of supermarket price wars on producers 4.6 Producer prices vs costs of sustainable production 22 22 23 5 The market environment for bananas 5.1 Evolution of the global banana trade 5.2 Consolidation of retailer power and UK price wars 5.3 The impact of competition law on banana prices 38 6 Fairtrade’s alternative approach 6.1 General background to the Fairtrade system 6.2 Fairtrade bananas – scope and scale 6.3 airtrade: the benefits and F constraints for farmers and workers 2 3 About this report 3.1 Fairtrade’s involvement in bananas 3.2 Research objectives and approach 3.3 Methodological note 7 Achieving a sustainable banana industry 7.1 inclusive market An for smallholders 7.2 Thriving...
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...CUTTING EDGE: OUR WEEKLY ANALYSIS OF MARKETING NEWS 12 March 2014 Welcome to our weekly analysis of the most useful marketing news for CIM, CAM and Sales Leadership Alliance members. Quick links to sections Marketing trends and issues Advertising Consumer perceptions of expense This study examines whether consumers make judgments about brands not just on the basis of what is communicated in advertising but on how the message is communicated. In particular it investigates the effect of perceived advertising expense and effort of the advertiser. An analysis of 4,000 consumers reveals that ads with higher-thanaverage perceived expense and effort have a positive effect on brand attitude, brand interest and word-of-mouth. In contrast ads with lower perceived expense have negative effects. International Journal of Advertising. Vol 33(1) 2014, pp137154 (Modig et al) Digital could make up for loss of print Online publishers and news websites enjoyed advertising growth of 18% last year according to the Association of Online Publishers (AOP) and Deloitte. Their data indicates that digital revenues grew at their fastest rate since 2008; this has been attributed to the rise of mobile, since advertising on smartphones rose by 60% in the last quarter of 2013. Deloitte says it expects publishers to innovate with flexible pricing such as a mixture of paid-for and free ad-funded models. Some publishers are already indicating that digital revenues are making up...
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...Strategic Management Patricia Murtagh The University of Sunderland © 2014 The University of Sunderland First published January 2014, revised February 2014 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without permission of the copyright owner. While every effort has been made to ensure that references to websites are correct at time of going to press, the world wide web is a constantly changing environment and the University of Sunderland cannot accept any responsibility for any changes to addresses. The University of Sunderland acknowledges product, service and company names referred to in this publication, many of which are trade names, service marks, trademarks or registered trademarks. All materials internally quality assessed by the University of Sunderland and reviewed by academics external to the University. Instructional design and publishing project management by Wordhouse Ltd, Reading, UK Copyright © 2014 University of Sunderland ii Contents vi Introduction Unit 1 1 2 5 7 Concepts, models and theories 20 Introduction 2.1 A comparison of concepts, models and theories relating to competitive advantage 2.2 An evaluation of concepts, models and theories relating to strategic choice Case Study: Ciba Vision 2.3 Concepts, models and theories relating to strategic evaluation Case Study: The University of Exeter...
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...gerry JoHnson KeVan sCHoles rICHard WHIttIngton Fundamentals oF strategy ACCESS CODE INSIDE unlock valuable online learning resources Once opened this pack cannot be returned for a refund Welcome to FUNDAMENTALS OF STRATEGY Strategy is a fascinating subject. It’s about the overall direction of all kinds of organisations, from multinationals to entrepreneurial start-ups, from charities to government agencies, and many more. Strategy raises the big questions about these organisations – how they grow, how they innovate and how they change. As a manager of today or of tomorrow, you will be involved in influencing, implementing or communicating these strategies. Our aim in writing Fundamentals of Strategy is to give you a clear understanding of the fundamental issues and techniques of strategy, and to help you get a great final result in your course. Here’s how you might make the most of the text: ● Focus your time and attention on the fundamental areas of strategy in just 10 carefully selected chapters. Read the illustrations and the case examples to clarify your understanding of how the concepts of strategy translate into an easily recognisable, real-world context. Follow up on the recommended readings at the end of each chapter. They’re specially selected as accessible and valuable sources that will enhance your learning and give you an extra edge in your course work. KEY CONCEPT AUDIO SUMMARY ● ● Also, look out for the Key Concepts and Audio Summary icons...
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