Posted: March 18th, 2023
Tesco PLC: Success and Future
Products and Services Offered
Tesco’s Future (Porter’s Competitive Model)
Suppliers’ Bargaining power
Buyers’ Bargaining Power
Possible Entry of Competitors
Extent of Rivalry
Tesco PLC is a UK-headquartered general merchandise store, with outlets in eleven other countries. Tesco is the largest of its kind in the United Kingdom, and only second to Wal-Mart, in the world. It began as a small group of stalls in 1919. The name ‘Tesco’ was, however, only adopted later in 1924; and the first store opened in Middlesex five years later. By mid-1990s, the company had hit the 500 mark in terms of operational stores. This number almost tripled in the following decade, and the chain currently consists 2,500+ branches, spread across twelve countries. Besides being an FTSE 100 component, the company is listed on the LSE, and controls a significant share of the United Kingdom grocery market.
This text explores the operational activities of Tesco. It describes the company’s product range and the forms of expansion it has undergone over the years. Additionally, it examines the possible role of cultural policies and location factors in the company’s success, and analyses its prospective future growth.
2.1 The Products and Services Offered
Food and groceries are the core retail items in Tesco stores (Yusuf, 2011). However, the company also deals in electronics, game items such as DVDs, toys, and clothing. Tesco electronic products operate under the common brand name technika. These range from the company’s own computers, television sets, DVD players, etc. (Tesco, 2013). As a matter of fact, Tesco, in September this year, launched its very own Hudl tablet computer (Cellan-Jones, 2013). The company also stocks exclusive brands of clothing such as F+F, stone bay, etc. (Tesco, 2013). In addition to the range of products available in the Tesco stores, the company deals in additional out-of-store products such as pharmaceutical products, pastries from the Tesco pharmacy and bakery brand images, respectively.
Moreover, Tesco offers a range of services including restaurant, phone shop, and optician services (Google Finance, 2013). Tesco also provides insurance and banking services through the newly-established Tesco Bank (Tesco, 2013).
2.2 Business Expansion
Product differentiation (variation) and acquisitions / mergers are the two major ways through which business expansion is realized (Dlabay & Burrow, 2007). Tesco’s expansion can be attributed to both factors. Acquisitions have played a major role in Tesco’s expansion, especially within the UK. Product differentiation, on the other hand, causes expansion by inflating the range of products offered. It involves bringing in a variety of new brands, flavors, packaging, etc. (Dlabay & Burrow, 2007). Tesco has witnessed massive growth, which has seen the development of branches scattered in Asia, Europe and America. This international expansion translates to a larger market, and, consequently, to more variations in tastes and preferences. Products need to be varied and new designs brought in, to take care of the increasing variations in tastes and preferences.
Tesco’s international expansion takes the circular form of business expansion. First, the expansion is accompanied by a change in the output pattern (product variation), and secondly, because the expansion has resulted in the production of products that are unrelated and totally different (Osborn, 1967). Tesco’s expansion has benefited its customers, who now have a wider variety to choose from, and lead to the creation of more opportunities for employment.
2.3 Cultural Dimensions
Culture has to do with the attitudes, values and beliefs shared by a certain group. Culture is, to a large extent, linked to communication. Communication is likely to be easier when people share a common culture. Culture influences business environment in the same way. Businesses can, therefore, only succeed in international markets if they understand, and respond to the variations in culture. Tesco has managed to thrive in international settings, mainly because of its ability to respond to the values and traditions in different nations. This it does, through effective management of organizational culture. Tesco’s core aim, for instance, goes beyond just profits (Tesco, 2013). It encompasses the aspect of ‘being the best’, in order to maintain customer and employee loyalty (Tesco, 2013).
Tesco, therefore, works by understanding the need of a particular community, and then tailoring its activities to respond to that particular need. This recognizes, and appreciates the fact that the needs of one community differ from those of another. This appreciation for cultural diversity explains why Tesco puts more emphasis on green policy in the UK, and in poverty alleviation in China. Tesco’s zero-carbon green business strategy in the UK is evidence of this (EMCC, 2013).
2.4 Location Factors
Location plays a significant role in the choice of business location. Factors such as availability of raw materials and proximity to other businesses have to be considered. It has, however, been speculated that an area’s demographic profile is the most prominent factor in Tesco’s store-location choices (Joseph, 2010). A significant number of Tesco stores in the U.S. are located across Las Vegas, San Diego and Phoenix (Joseph, 2010). These neighborhoods may not be the most affluent, but they have almost similar demographic features (Joseph, 2010);
i) High household and population density.
ii) Large extents of cultural diversity; a relatively large non-white population.
iii) A bulk of the population is aged between 15 and 25.
Implication: Young adults and teenagers are seen to lead an ‘on-the-go’ style of life; and would more often than not prefer ready-made foods (Joseph, 2010). Additionally, this group would make only small purchases of the same, due to their low incomes. However, since this group constitutes a bulk of the population, then these small, yet frequent purchases would translate to relatively higher sales; compared to an area where people make purchases in bulk, to prevent multiple trips to the store. The second argument derives from the idea of cultural diversity. Tesco, being a chain store that operates internationally, would naturally stock, in all its branches, products that are more or less similar. A culturally-diverse population would prevent a situation where some products move too fast, and others stay on the shelves too long.
2.5 Tesco’s Future
The Porter’s competitive model can be used to gauge whether or not, in the near future, Tesco will still be the market leader in the UK.
2.5.1 Suppliers’ Bargaining Power: Suppliers have relatively low bargaining power. The market is not saturated, and large firms, such as Tesco, can easily negotiate, and make choices between suppliers (Yusuf, 2011).
2.5.2 Buyers’ Bargaining Power: The buyers have a high degree of power to bargain and influence prices. They can easily shift from one supermarket to another, especially because information on prices is readily available on online websites (Yusuf, 2011).
2.5.3 Possible Entry of Competitors: Tesco enjoys a significantly large market share, and economies of scale. It has an established position, and reputation, which new firms may find difficult to match. Competition could possibly come from other large firms, but not new entrants (Yusuf, 2011). However, this may not be the situation in countries where Tesco has either just entered the market, or does not have much influence (Yusuf, 2011).
2.5.4 Substitutes’ Threat: This does not pose much threat, since Tesco conveniently offers lower prices than independent and local stores; and can compensate for the same by spreading the loss across the wide product range (Yusuf, 2011).
2.5.5 The Extent of Rivalry: This is significant. Tesco is one of the four large retail stores in the UK. The other three offer massive competition. Tesco, however, still enjoys considerable advantage, especially in terms of space availability (Yusuf, 2011).
Tesco takes advantage of its scale and scope economies to provide high-quality goods at relatively lower prices (Yusuf, 2011). Gauging from the four forces above, it is likely that Tesco will remain market leader for a considerable time into the future. If the current situation is anything to go by, then Tesco will obviously undergo more growth, and spread to more countries worldwide.
Location and cultural considerations have played a massive role in Tesco’s success, growth, and stability. Other businesses need to appreciate diversity, and devise suitable approaches to cultural variations if they are to succeed and, at least, match Tesco’s level of operations.
Cellan-Jones, R. (2013). Tesco Enters the Tablet Fray with Hudl. BBC News Technology. Retrieved from http://www.bbc.co.uk/news/technology-24203271
Dlabay, L.R. & Burrow, J.L. (2007). Business Finance. Mason, OH: Cengage Learning.
EMCC (2013). United Kingdom: Tesco Case Study Report. European Monitoring Centre on Change. Retrieved from http://www.eurofound.europa.eu/emcc/labourmarket/greening/cases/tescouk.htm
Google. (2013). Tesco PLC. Google. Retrieved from http://www.google.co.uk/finance?cid=4116076
Joseph, J. (2010). Retail Case Study: Anatomy of a Tesco Fresh and Easy Neighborhood. MetriScient TM. Retrieved from http://metriscient.com/tesco.htm
Osborn, R.C. (1967). Business Finance: The Management Approach. Avenue South, NY: Meredith Publishing Company.
Tesco PLC. (2013). Core Purpose and Values. Tesco PLC. Retrieved from http://www.tescoplc.com/index.asp?pageid=10
Yusuf, J. (2011). Tesco PLC Company Analysis. Investment Brain. Retrieved from http://www.investmentbrain.co.uk/latest/tescoplctscocompanyanalysis
Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?
Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.
Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.
Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.
While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.
Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.
In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.
Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.
We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!
We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.
Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.
We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.
Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.
There is a very low likelihood that you won’t like the paper.
Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.
We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.
You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.
We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.
You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.
Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.
You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.
The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.
PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!
Place an order in 3 easy steps. Takes less than 5 mins.