(A) Identify and analyse Tesco’s current business strategy Tesco is one of the largest retailers in the world by revenues ($94,185 BILLION), just after Wal-Mart and Carrefour. Their goals are to improve value (Shareholder) and loyalty (Clubcard) for their customers. Tesco’s strategy in the UK market: i) Core UK Business Tesco has established supremacy in the United Kingdom; the keys’ factors of their success are characterized by the quality of their products, price and their strong relationship with their customers. ii) International strategy Tesco’s international expansion strategy has also been successful; they have stores in 14 countries across Europe (Czech Republic), Asia (China...), and North America (USA…). The
Tesco have a variety of aims and objectives, there main aim is to make a profit as they are a profitable organisation, a stakeholder that may influence this objective is Tesco’s competitors which are other supermarkets for example Asda and Morrisons, the reason for this is because all supermarkets main aim is to make a better profit than its competitors and offer better value for money therefore Asda and Morrisons are influencing this aim by competing with Tesco on price and value of products. Also the Competition Commission has announced that it will advise the government to add a "competition test" to supermarket planning applications. Tesco immediately criticised the move as "senseless" which is an indicator of how significant this is. It is the first time that a government body has recognised that one supermarket's dominance might be bad for consumers - and for small retailers, suppliers and the high street. If the government agrees the test would stop a supermarket opening a new store if it already had more than 60% of the grocery sales in an area within a 10-minute drive, or if there were fewer than three rival supermarkets in the area.
There was not one dominant player within the industry; they were more equally balanced thus increasing rivalry. The High fixed cost for running a discount store resulted in an economies of scale effect, this can be seen when Wal-Mart decided to gain economies of scale by building their own distribution centres to add value. Going public in order to finance the extra storage was important for Wal-Mart to utilise capacity as efficiently as possible, they did this by creating distribution hub around 15-20 stores. The increased rivalry continues, this was due to the low levels of product differentiation and little in the way of own branding, products were standard in nature through all discount stores. Also the low switching cost and consumer awareness of shopping around to find the best bargains increased competition around stores to capture customers.
According to the recent annual report published by the company, its group sales in 2009 are found to be 59.4 billion euro (Tesco, n.d.). Business Strategy Tesco’s well established and consistent business strategy has enabled it to strengthen the core UK business and expand into new markets successfully. Tesco’s business strategies are mainly focusing on huge domestic market of financial services, telecoms and non-food. One of the main objectives of Tesco’s business strategy is to create sustainable long term growth and according to the company this could be achieved by expanding into global market. The company initially focused on Asia and central Europe.
As we all know Wal-Mart`s strategy to win against its competitors is its offered prices. The company is considered leader in the market because it has the capability to offer the lowest prices for this reason Wal-Mart is considered to have a large negotiating power. They can negotiate with suppliers to drop prices and consequently lower prices. In my opinion NAFTA benefits plus Wal-Mart`s purchasing power was the combination that allowed the company to be successful. Wal-Mart uses time inventory system which allows them to keep track of what they need
I also believe that by following my recommendations, Barilla will succeed in influencing its distributors and Sales personnel to work together and implement the JITD program. This will not only result in better performance in terms of time and money but also promote trust and good relations among all the partners in the supply chain. 2. Identification of the problem Barilla is suffering from what is known as Bull whip problem- high inventory, -magnification of demand variability across the chain-frequent promotion – only one way of flow of information. • Promotions: Barilla’s sales strategy relied heavily on the use of promotions, in the form of price, transportation and volume discounts.
12 Competitive Advantage in Mature Industries We are a trite "penny profit" business. That means that it takes bard work and attention to detail to be financially successful - it isfarfrom being a sure thing. Our store managers must do two things well; control costs and increase sales. Cost control cannot be done by compromising product quality, customer service, or restaurant cleanliness, but rather by consistent monitoring of the "vital signs" of the business through observation, reports, and analysis. Portion control is a critical part of our business.
The success of strategies depends on ability of an organization to satisfy customer needs better than its competitors in market. Krishna & Vasant (2006). Therefore it can be said that marketing mix strategies in retail are highly influenced by the customer’s needs and requirements and strategies adopted by competitors. That aim of marketing mix strategies in retail sector is to satisfy specific customer needs with price strategy that can make some profit for the organization (Kurtz et al,2009) Blankson(2010) explain that retail marketing mix strategies should aim to create distinct image in the mind of consumer while mix can vary on the basis type of specific market requirements. Many elements can be placed to form marketing mix of any organization but most significant elements are given as follows (i) Store location (ii) Merchandise and Category Management (iii) Pricing (iv) Inshore marketing (v) Customer Relationship Management These retail marketing mix strategies at Argos are discussed here in detail (i) Store Location:- The selection of store location is most significant and important decision and success of business heavily relies on this decision.
Customers who are loyal to a name-brand company are more likely to try the new product, as opposed to someone who is not loyal. For example, a popular burger place could offer a new smoothie drink at a premium price. Many loyal customers will purchase the new drink because they are pleased with the products they already buy from the company. Loyal customers also draw new customers for the company through word of mouth. Market Share A customer with a strong brand has a high market share because of its reputation, and this makes it difficult for new entrants to enter the marketplace.
I think Supermarkets have a minimal competitive impact because they try to reach a different target market, even though Supermarkets and the wholesale club industry both carry similar products. As customers, we are always looking for the best deal and price, and the demand in this industry is very high. The ability to provide better prices hinges on the company’s relationship with its suppliers. 2. Do all three warehouse club rivals—Costco, Sam’s, and BJ’s Wholesale—have highly similar strategies?