Strategic Management of Tesco Essay examples

1774 Words Sep 21st, 2010 8 Pages
1.0 Introduction
The food and drink retail sector represents the largest industry in the UK. In recent years UK supermarkets have come under increased scrutiny over their treatment of suppliers, customers and their competitive position in the market. The report below provides an insight into the supermarket company, Tesco, with emphasis on its external environment analysis and company's analysis of resources, competence and culture.

Tesco is one of the largest food retailers in the world, operating around 2,318 stores and employing over 326,000 people. It provides online services through its subsidiary, Tesco.com. The UK is the company's largest market, where it operates under four banners of Extra, Superstore, Metro and Express. Many
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Tesco had become a stable, competitive player in the U.K. supermarket business. But in order to grow internationally the company needed to frame its growth strategy.

3.0. Role of Technology

According to Porter, The structural attractiveness of a company is determined by the five forces of competition: the intensity of rivalry among the competitors, the barriers to entry for new competitors, the threat of substitution of products/services, the bargaining power of suppliers and the bargaining power of buyers. The Internet has a significant influence in determining the profitability of a company by influencing these five forces of competition.
The Internet dampens the bargaining power of channels by providing companies with new and direct avenues to customers. It also boosts the industry’s efficiency by expanding the overall size of the market. However, it also increases the bargaining power of buyers with easy access to information about products and suppliers and reduces the switching costs for them. The internet mitigates the need for an established sales force or existing channels reducing the barrier to entry and it intensifies competition by expanding market geographically.

Today companies act in an increasingly dynamic and complex environment, giving more difficulties making forecasts and adapting themselves to the continuous changes. In order to be able to compete in this kind of world, it is necessary to innovate at an

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