Essay about Analysis of Tesco 2

3205 Words May 15th, 2008 13 Pages
Task A- Market (s) Environmental Analysis
Tesco PLC is a major food retailer that operates primarily in the United Kingdom. The company operates 2,291 supermarkets, superstores and convenience stores in the United Kingdom, the rest of Europe and Asia. The company also offers financial products, such as insurance and banking services, as well as electrical appliances and telecommunication products. For the year 2007 to date, Tesco PLC achieved revenues that totaled £ 46,611 million, an increase of 10.9% against the previous year revenues that were £42,016 million. Tesco is one of the largest food retailers in the world, operating around 2,318 stores and employing over 326,000 people.
It also provides online services through
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Porter in 1979. It uses concepts developed in Industrial Organization economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Porter referred to these forces as the microenvironment, to contrast it with the more general term macro-environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally requires a company to make a re-assessment.

A graphical representation of Porters Five

Competitive Rivalry within an Industry: Tesco being a diverse company, operating in over 10 countries worldwide, and having a wide range of products is seen as an organisation with an intense level of competition. “Whilst Tesco remains dominant there are signs that it is experiencing increased competition," said Edward Garner, a TNS spokesman. With Tesco securing almost double the amount of sales of its highest competitor Asda. Tesco’s product diversity contributes to gaining a competitive advantage over its rivals.
Threat of New Entrants: There is high entry costs and limited capacity of the Tesco markets, therefore limiting the threat of

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