For example, the Tesco stores in Thailand have competition against 108 Shop and 7-eleven to name a few. Asda and 10 million to each Aldi and Morrisons. Furthermore, Tesco has the power to force suppliers to give them discounts but Also, to increase demand by lowering prices etc. undercut Tesco. In 1994, Tesco acquired both Global TH and WM Low and Co. In total there will be 58 stores that will stop baking and 201 that will only bake those products which are in demand. Under reasonably general conditions, a reduction of the number of players will result in an increase in market prices all else equal. The organisational culture is a set of certain assumptions, values, and norms being shared by the members within an organisation. It does not store any personal data. Environmental -Due to the current and previous worrying increase in global emissions and the sharp increase in global warming, Tesco has had to make serious changes to how they run to avoid being bashed in the press and going against the law. the increase of contactless payment methods. is not much demand for freshly made bread anymore in the market that they operate in. Customers can collect two club card points for every 1 they spend in a Tesco store or on Tesco.com. But now its competitors are providing the substitute products of Tesco in the market. The definition of monopolistic competition is a market structure in which there are many firms selling differentiated products and few barriers to entry. 1509 Words7 Pages. These cookies track visitors across websites and collect information to provide customized ads. Research from www.yourmoney.com has found that one of the UKs biggest and most popular cities, Sheffield, has 54% of people who are inclined to spend their money now. From my research on former or current Tesco employees reviews on a job website I can see that the staff of Tesco are for the most part happy with the work they are doing. This was because supermarkets like Aldi and Lidl were the most cost-efficient option rather than Tesco, Sainsburys, ASDA, Morrisons, and more. A A highly competitive market is one in which an extensive amount of producers rival each other to fulfil the wants and needs of the members of the general public. Market structures influence how businesses set prices based on the type of structure in operation. The competitors also keep an eye on the price levels of a company. Furthermore, another advantage of oligopoly is that It takes a Pearson (KY) e-book. The definition of monopolistic competition is a market structure in which there are many firms selling differentiated products and few barriers to entry. In legislation, the government's monopoly regulation and buyer power reduction policies will restrict entry into this sector with such restrictions as licence requirements and access quotas for raw materials. Britain's. Tesco says that they care about their staff immensely. The last marketing strategy will know that it is Tescos. The type of structure will influence a company's behaviour and the level of profits it can generate. their shops. BREXIT is put simply, the withdrawal of the UK from the European Union. are more willing to spend their money right now rather than save it for later. According to a statistics in 2016, companys annual wage bill accounts to GBP 4.5 billion. This applies to Tesco as this will affect many decisions they make. Clubcard points, customer service, cafes, car parks, etc are all reasons people may decide to shop at Tesco regardless of price. basic selection. dominates an industry. packaging. For this section of the assignment, I will be using Tesco Extra in my These cookies help provide information on metrics the number of visitors, bounce rate, traffic source, etc. Another law that will influence Tescos activities is the National Minimum Wage Act 1998. I believe that they will have to re-negotiate their contracts with foreign suppliers as there will be increased tariffs and nd restrictions. Product Strategy Target market The primary target market of family interconnecting room in Scenic Hotel is international family tourists. It has been among the most popular supermarket in Ireland. support society. So it launched 2 of its own sub-brands - Tesco finest for the affluent customers and Tesco Everyday Value for the rest of the crowd. they use a large number of vehicles to transport their goods and services around the globe. Tesco is worried about economic conditions, and they are expected to affect production, costs, sales and earnings. possibly sued. need to spend any more money on PPE for their employees. Tesco provide endless good deal placing in core good around non-foods to undercut levels of competition which actually Tesco marketing with good deal. Due to the current economic conditions imposed by COVID-19, Tesco may suffer from a sustainable technology fund for this purpose. These cookies will be stored in your browser only with your consent. Furthermore, there will be no need for the red and green lights before you enter Tesco as it will go back to the old rules. may stop shopping at Tesco. PESTLE is the framework to analyze key factors influencing the organization from the Such things get copied quite quickly such as a nectar card with Sainsburys, which was only There is different market structures such as Perfect Competition, Monopoly and Oligopoly and are discussed below: A place where different sellers of the same product then the firm's price purpose and the output decision depends upon the demand for their products. Tesco is already set the prices according to the income of the demographic area of the store. To encourage saving, the government has introduced cash ISAs and premium However, this can be detrimental to economic growth. Throughout the years societys attitudes to saving have changed dramatically. Customers may go somewhere else where the products are sold that they wish for at a cheaper price so they may stop shopping at Tesco. Type of pricing strategy Tesco using now is cost-based pricing .Cost-based pricing affected the prices based on the costs for producing, distributing .Cost-based pricing only suite for Tesco own label products instead of national brand product .This is because Tesco set its own brand products price based on its production cost. Competitive advantage refers to factors that allow a company to produce goods or services better or more cheaply than it rivals. This will cause Tescos whole pricing structure to change. become illegal to sell. As a result, Tesco has to negotiate now fair prices which other companies could not able to match. As different market structures result in different sets of choices facing a firm's decision makers, an understanding of market structure is a powerful tool in analyzing issues such as a firm's pricing of its products and, more broadly, its potential to increase profitability. Perfect competition is theoretically the opposite of a monopolistic market. drinks such as Coca-Cola. Factors that affect competitive advantage include: Differentiation - This affects Tesco because it can set them apart from competitors In 2018 the UK minimum wage increased by 4.4% for 25 years old and onward. opening a new no-frills discount brand, Jacks. The impact of a change in demand and supply to Tesco can be negative or positive to them. they also have cheaper value items such as Tescos basics. They also encourage their customers to make low carbon choices. Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. better or more cheaply than it rivals. I believe Tesco should start taking Structures are classified in term of the presence or absence of competition. An oligopoly is a market lots of things that will be returned if not sold eg flowers, newspapers, the customer returned This cookie is set by GDPR Cookie Consent plugin. What are the physical state of oxygen at room temperature? Their profits exceeded 3 billion in 2009 and employ around 440,000 employees. How does market structure affect pricing? Another example of PESTLE Tesco's Marketing Strategy Tesco's marketing strategy accurately targets its ideal consumers with the help of its well-positioned brand image. Another example of PESTLE analysis for Tesco is the advancements of Technology such as the Clubcard. negative as the higher-income households may think Tesco is a cheap brand because of the You will need to look at the environment in which TESCO operates and gather information to enable you to consider the following points: Explain how the following contribute towards Tescos competitive advantage: Discuss the following external factors that affect Tesco: Inflation = the rise in the cost of living makes consumers more price-conscious (shop around), Economic growth is weak = people spend less on luxuries, go to discount stores Taxes = the increase in VAT makes many goods more expensive, (Evaluate the extent to which the business has responded to past changes in the business environment, and suggest how TESCO may react to future changes), Eg: They set prices similar to competitors They use branding and promotions as non-price competition -examples, They make higher profits as all supermarkets charge more than if the competition was perfect, They need to make their products and service different They need to build customer loyalty, They have high overhead costs of their stores so prices need to be high enough to cover this, There are high barriers to entry for competitors so the big 4 supermarkets can make good profits, Pricing: Price promotions, buy one get one free, extra loyalty points, price-matching rivals, everyday low prices, cheaper value items, branded items, finest range Output: Tesco has power over suppliers so it demands lower prices for suppliers output (and what their product should look like (apples without spots, straight cucumbers), Tesco is facing competition from Aldi, Lidl so they have sacked many of their middle managers to cut costs of labour output, Tesco has reduced opening hours on 24-hour stores because there was no demand, Tesco has focused more on non-food (electricals, clothing, etc) as this is more profitable, Tesco has grown its click and collect and online sales and deliveries due to customer demand and new technology. Tesco responds to pricing by multiple different strategies such as its finest range, cheaper It is the third largest global retailer based on revenue and second largest in profit. The High Rate of Unemployment:Tesco is getting affected by the economic factors as those factors affect its profits and product costs. and governments rely on people to save money because it can boost economic growth as them may bring their market share down as they cannot offer a replacement for petrol/diesel One example of Tesco responding to changes in the market is the changes in the company following the threatening growth of Aldi and Lidl. For example, in Thailand, the organization has invested 3.1 million in 49 stores to provide energy savings of 2 million. How radical developments in the consumer market impacted Tesco . Tescos finest range is aimed at the more higher-income customers that have the money to spend on finer items. withdrawal will cause many factors that will affect Tesco to change. Tesco will Economies of Scale. Necessary cookies are absolutely essential for the website to function properly. These are many ways that Tesco has responded to the changes in the market. Tesco stores in Thailand have competition against 108 Shop and 7-eleven to name a few. This has had a significant impact on thousands of businesses Furthermore, if the price of cheese went up then Tesco would have to get more supplied to them to make up for the increase in demand. While Lidls sales increased by 12.8% is below Aldls it is still far above what Tesco achieved. Furthermore, they need to determine if some products may they need to be careful with this because they do not want to drive them out of business. walkers. Performance cookies are used to understand and analyze the key performance indexes of the website which helps in delivering a better user experience for the visitors. This could leave Tesco with a bad reputation as they would just be using the delivery staff and not giving them a secure job that they can keep for a while. survey of 2000 people suggested that the VAT rise could cost each household in the UK This can once again affect the profits of Tesco and its brand image. value items, buy one get one free, and more. doorsteps with the help of easy access to the internet. Because of the decrease in demand for petrol stations Tescos choice to close them may bring their market share down as they cannot offer a replacement for petrol/diesel because people could charge their cars at home for a lot less. responded to it. staff wont need masks and they may even have to reduce the number of delivery staff. prices of the cheese to decrease the demand and make more profit if the demand does not Due to technological improvements over the years, customers buying behaviours are forever changing so Tesco has to keep changing their strategy to keep up with the demand for many things. brung into action because they copied Tescos idea of the Clubcard. This applies to Another big advancement in the way Tesco operates and improves is due to the Clubcard. Free Samples and Examples of Essays, Homeworks and any Papers. decreased due to many different factors such as bad weather then Tesco would have to The company held 30.7% share of the UK grocery retail market in 2010 (Euromonitor, 2010). Market structure refers to the physical characteristics of the market within which firms interact. Tesco has increased their market share through lockdown so perhaps when the pandemic ends it may go back down to where it was before. The market structure of Starbucks is a monopolistic competition. They will have to consider the amount they have to spend on getting existing items they sell onto the shelves in their stores and determine whether it will be worth it because of increased taxes and transportation costs. See also Market Concentration. has shown they are going to do everything to stop that. Tesco has an hierarchical structure. Without knowing the effects of external factors like economic factor, it is difficult for an organization like Tesco to run the business in an efficient manner. Although prices on marketed items are reduced, prices are increased to pay elsewhere in the shop. This is Tescos attempt at taking A credit crunch is caused when banks carelessly lend money out. Tescos basic Due to the current economic conditions imposed by COVID-19, Tesco may suffer from a reduced level of income from a lot of customers. The market structure affects the supply of different commodities in the market. In pure competition, price is set by supply and demand. is caused when banks carelessly lend money out. The supermarket industry in the UK could be described as an oligopoly market because it accords with three key characteristics of an oligopolistic market. interact and handle outside business transactions. 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