How Tesco Compete in a Highly Competitive Environment

How Tesco Compete in a in high spiritsly private-enterprise(a) Environment musical theme of the ResearchHow TESCO debate in highly private-enterprise(a) surround with sm any(a) price of products and serviceBackground to the StudyThe achieveres of organizations are mea reald through analysing the productivity of organizations. Productivity of an organization is highly dependent on the food commercialise share of the organization where they subscribe the demand for the products of the organization. In a belligerent environment having a proper market share is dependent on variety of factors. Accordingly the market share and the demand for the products has reverse a crucial factor for the victory of all organizations. Keeping and growing the market share consistency is a critical factor especially in a very matched environment.In most situations organizations implement and apply different strategies to ensure that their market share is self-colored and stabilized. Accord ingly they develop magnificent range of market strategies as one(a) method and at the same sentence different products such as diversifications are introduced to the market. Anyhow having a range of different strategies organizations fork up to keep and hold out their market share.This is a best sports stadium where a future manager or a leader should identify and vignette because as with the totally warlike market today organizations call for to apply different methods to keep their market share. Therefore to become a no-hit manager it is the duty of a potence manager to gain a magnificent knowledge in this particular(a) area.This knowledge will provide an insight and a proper framework to become a strategic manger in the field of work. Accordingly it was decided to tuition about the particular field of tuition on how the organizations become thriving in a agonistic environment while keeping their market share. When it comes to the study area it should be narrowed do wn in order to catch a proper knowledge and skill in the field of studies. Accordingly it was decided to study about how an organization competes in highly competitive environment with mild price of products and service. Accordingly it was decided to conduct the study for the TESCO PLC.Research Problem and JustificationAs described earlier it is not just an easier toil to compete and survive in a competitive business environment. Therefore it is required to identify how several organizations implement their strategies to compete in a competitive business environment. This is a critical fuss where each and every manger should address to identify different strategies implemented by organizations.As per the subject area is too widen at once it is impossible to conduct a inquiry on identifying different strategies of range of organizations. Therefore the best option is selecting a one organization in the competitive market and analyse the different strategies implemented by particu lar organization. Accordingly it was found that TESCO Plc has become more prosperous in the business for a long term of period and currently as well in a growing success. At the same time TESCO is in a very competitive market environment where market leaders such as ASDA and Sainsbury are also competing. At the same time TESCO maintains a range of low hail products and still having an extraordinary market share. Considering all these aspects it was decided to conduct the research on Tesco under the following topic, How TESCO compete in highly competitive environment with low price of products and service.This study will provide a comprehensive analysis on how Tesco compete in highly competitive environment with low price of products and service.Objectives of the StudyTo identify different type of strategies implement to compete in a competitive marketTo gain an overall knowledge on TESCOTo identify the strategies implemented by TESCO to compete in the marketScope and Limitations of the StudyThe successfulness of Tesco with the competitive market may not only due to the actions make in order to be stable in the market there may be different several reasons which affects for the success of the organization. For an example the long stigmatise image, the quality of the products may be merely the reason for the organizational success in the market. But this study only measures up a particular area which is the impact of strategies of the organization in order to survive in the competitive market. But when come to the actual situation there may be many more reasons which create the demand for the organization. Apart from that this study should not be conducted to a one particular organization it should be conducted to a range of organizations under the title of affect of organizational strategies to survive in a competitive market with low cost products likewise the study should be expanded to a level where we can do the study for several case studies which wi ll provide a mend framework to critically identify the factors behind successful organizations in terms of survival in a competitive market. It will cover a massive area of research study and will provide a better environment to identify the reasons behind organizational success in terms of preventing the market share.But here the electron orbit of this study is limited only to identify the strategies of Tesco in order to be successful in the competitive market. It is true that this scope of study covers a vast area but to be more successful this research study can be expanded to that area.Literature surveyThe literature refresh on this study is consisted with two main parts one is identifying about general strategies applied in order to achieve success through having a proper market share and then it is explained the literature on TESCO plc.Tesco was established in 1919 by Mr. Jack Cohen who began the business to sell additional groceries from a stall at the East End of Lond on.CDocuments and SettingsAdministratorDesktopuntitled.JPGIn 1924 Jack sold out his own- target product and at that time the first product was tea leaf production. After that he developed the business by intensifying it as TESCO stores.Accordingly the branches of TESCO were opened joined states, Taiwan, China etc and now they have become as a leading chain of supermarkets providing a high class guest service in UK and as well as in outside UK. sideline is a SWOT analysis of Tesco Plc.StrengthsWeaknessesThe business has an Increasing market share. Tesco has held a 13% share of the UK retail market.Successful trade in Insurance, Tesco Personal pay reached the milestone of one million motor insurance policies in fiscal 2003Tesco -online Super market- Tesco Provides an online supermarket and it is the worlds major online supermarket and this year the group had sales of over 577 millionHigh Brand value for the business- The earnings for the operations of this organization has overdo ne in 75% covering the countries in atomic number 63, Asia and Ireland in the last fiscal yearHas strengthen the UK market leadership- Tesco has developed a undefeated business strategy that has increased its avail. Tescos UK sales are now 71% larger than Sainsburys who is a competitor for Tesco dependance mainly upon the UK market- still mainly dependable on the UK market. 73.8% of there revenue is from there UK marketdecrease of Debt- Tesco is not predictable to decrease its debt until at least 2006OpportunitiesThreatsNon-food trade high demand- The growth in Tescos hypermarket format in the UK means that there are prediction of seeing its 13% share of retail salesIncreasing demand for Health and beauty- Tescos UK health and beauty ranges go on to growFurther international expansion on the business area-expanded business to Asia Europestructural modify of UK could flash a price warOverseas income could be reduced due to hazards in those countries world(prenominal) growth of co mpetitorsThe Corporate dodging of TESCOThe fundamental for the corporate strategy of TESCO is to widen the range of the business which can bring strong sustainable long-term growth by following the customer into large growing markets at residents such as financial services, non-food and telecoms and new markets abroad, initially in Central Europe and Asia, and more recently in the United States.Accordingly the strategy of diversify the trade of TESCO was started from 1997 and it became the basis of Tescos success in recent past. The objectives of Tesco corporate strategy are as follows,To become a unbeaten international retailerTo grow the heart of the business in UKTo become powerful in non-food services as in food service.To put up retailing services such as Tesco Personal Finance, Telecoms and Tesco.comTo give main concern to the community on what Tesco does.The Strategies of Tesco is based on five main elements as Core UK, Community, Non-food, Retailing services, Internationa l.Maintaining UK as the CoreGrowth in the UK business Tesco is more consider to new spaces, additions to existing stores and a multi-format approach. Sales of non-food, which shapes an some other severalise part of their strategy, also add to the overall UK growth picture.Consider about CommunityThey are having Community Plans in each nation which based some their community promises actively behind topical anesthetic communities buying and selling their products responsibly caring for the environment giving customers healthy choices and good jobs for local people and replicates the needs of the local communities they serve.Non Food BusinessTheir strongest range of non-food can be seen in Extra stores and Homeplus, including electrical, home entertainment, clothing, health and beauty, stationery, cook shop and soft furnishings, and seasonal goods such as barbecues and garden furniture in the summer.Retailing ServicesThe Tescos main strategy on this is they consider that their cu stomers are diverse and their needs are ever-changing always. So they try to offer more than one way to shop. Accordingly they are having Tesco Personal Finance (TPF), Tesco.com, and Tesco Telecoms to offer wide range of services.Consideration on International MarketTesco operations operate in 13 markets outside the UK, in Europe, Asia and North America. Their latest strategy is to enter into the Indian market where they have taken first step in last year, by establishing a cash carry business.The above literature covers a vast area on the TESCO which is highly important in doing a research study because in actually without having a proper understanding about the organization it is difficult to study a particular area of the organization. Accordingly after gaining an overall understanding about the organization the following literature has been discussed on strategies done to ensure competitive advantage in general and as well the specific strategies of Tesco to compete in high com petitive market.Competitive AdvantageMany firms put their fullest essay to achieve the competitive advantage. Some businesses try to get the competitive advantage by offering lesser prices or providing excellence services or other benefits that rationalize a higher price. But organizations essential always try to build the strongest competitive advantage which is a strategy that cannot be simulated by the other companies.Michael Porter (1980) introduces three strategies to accomplish competitive advantage asCost leadershipDifferentiationFocusOnce the competitive advantage is civil it is not the end result, because once accomplish that company should try to retain in that situation. It means the firms should have to be in a sustainable position. The competitive advantage of that stage is sustainable competitive advantage. In order for a firm to reach a sustainable competitive advantage, its broad strategy must be stranded in a quality that meets four criteria. Those are as follows Valuable -it is of value to consumers.Rare -it is not commonplace or considerably obtained.Inimitable -it cannot be advantageously imitated or copied by competitors.Non-substitutable-consumers cannot or will not substitute another product(Info Abstracted by Competitive Advantage. encyclopedia of Business, 2nd ed. By Dena Waggoner)The following section assesses the different strategies implemented by Tesco in order to compete in highly competitive environment with low price of products and service.The analysis of data and information of Tesco Plc was done by identifying the different faces of stake management and how can that effect to achieve the competitive advantage. As the cosmos was given about brand management at the literature review if an organization need to be in a position of sustainable competitive advantage position. That brand should bear following four characteristics.Valuable -it is of value to consumers.Rare -it is not commonplace or easily obtained.Inimitable - it cannot be easily imitated or copied by competitors.Non-substitutable -consumers cannot or will not substitute another product(Info Abstracted by Competitive Advantage. Encyclopaedia of Business, 2nd ed. By Dena Waggoner)Competitive Advantage strategies of TescoA company should be strategic complete to assess the possible techniques of brand management and then select the most appropriate and price enough competitive advantage method. According to Michael Porter differentiation is a one best method of strategic competitive advantage. Differentiation can be done by People differentiation, market differentiation, price differentiation, and product differentiation and so on. In this differentiation accompany should be able to make sure the customer wants, understands, and understands the difference offered.If we get the product differentiation that difference should be significant, unique, superior, communicable, primitive, reasonable, and profitable. Otherwise that variety will not become a competitive advantage and it will be a waste to the organization. When an organization do a differentiation which is important, distinctive, superior, communicable, primitive, affordable, and profitable, it will get popular within the society and immerge as a brand. That is the success of the competitive advantage.So if we get the case study of Tesco Company, it first came out with the Tesco brand in 1924. Today Tesco is known as the British largest retailer by global sales an also domestic market. And as well it is the third largest retailer of the world. So the study of the manner that they are controlling the brand name Tesco in order to achieve the competitive advantage is a good opportunity to gather massive knowledge in this subject area. It was done by studying different viewpoint of brand management in Tesco.Brand value of TescoAs per the literature embraces on consumer ideas the main reason for this strong brand image is because of the good quality, consistent goo ds that represent outstanding value. Tescos original ways of improving the customer shopping understanding, as well as its heavily work to branch out into finance and insurance have also capitalized on this brand image. Because of this brand value the profits of Tescos operations in Europe, Asia and Ireland enlarged by 78% during the last fiscal year. Their main market base is UK. So the way that they are doing the brand management is as follows.Brand worry of UK Market BaseAs the prime retailer in the UK, the customer expectation on Tesco is high. So a small failure in upholding the brand image will lose the trust and confidence of the organization. That is why they gained competitive advantage should be sustainable and brand management should be done to retain that. So the consideration of potential risks for the Tescos brand image is extremely important.According to the analysis we can describe they have used the present affecting Tesco brand image of people to expand into new areas such as retail services and non-food and to identify the commercial urgent to do the exact thing for all their stakeholders and evade the loss of such loyalty of people. They are upholding Tescos values at every level and the organizations Code of Ethics guides staffs behaviour in their transactions with customers, employees and suppliers.They try to work out with all the levels stakeholders to get their views and to make sure that the strategies are reflects of the stakeholders. The initiate of the Community Plan in 2006 which was established their pledge to engaging in a wide range of social and environmental issues. Tesco is having eminent level of committees, including the Executive Committee, Corporate Responsibility Committee and Compliance Committee, to guide and monitor their policies.International Brand ManagementTesco is having more than ten years of experience in foreign countries they are using strategy based on six fundamentals in international brand managementBe flexible each market is exceptional and requires a diverse approachAct local local customers, local cultures, local supply chains and local regulations require a modified offer conveyed by local staffUphold focus on a few countries to be the leading local brand is a long term effort and they believe that it cannot do like growing mushrooms.exercising multi-formats no single format can reach the whole of the market. A whole range from convenience to hypermarkets is necessary and they require to take a discount store move towards all the way throughDevelop ability Its not about scale, its about skill so they want to build that they have enough capability through people, processes systemsBuild brands brands allow the building of significant continuing relationships with customers.Methodology of the StudyThe methodology of this research study can be split into several sections.The first section of the research study deals with the literature review on several aspects, firstl y it finds out various articles, definitions, different studies to exactly go under about different strategies of organizations applied to compete in a challengeable business environment.After clarify above two from the literature, above broad review of literature has been carried out on TESCO plc starting from its history in to a broad study of organizational products, services, low cost products and strategies. This will be a major part of the literature review which really analyses the literature on organization in analysing its strategies to compete in highly competitive environment with low price of products and service.After that comprehensive literature study the questioner survey will be conducted with the clients of the Tesco to find out its impact on strategies. Apart from that a study will be conducted as a direct interview with the senior management of Tesco selecting a proper sample.ConclusionThis is a research aim based on the topic of How TESCO competes in highly co mpetitive environment with low price of products and service. Accordingly this study discusses about the background to the study and the problem of the study and the justification of the study. After that the consideration was given to identify the objectives of the study and then it was discussed the scope of the study and as well the limitations of the study.After identifying the above topics the methodology of the study has been described and after that a comprehensive literature review has been conducted.As a conclusion that this research proposal provides a better and a comprehensive framework to conduct the research study in a meaningful manner.Accordingly it can be elaborated that in the real research study further we can find out more secondary information on the organization and as well on the factors behind successful strategies to become highly competitive environment with low price of products and service.Further the research study can be completed as a study which discu sses a wide area on the factors in finding competitive strategies of organizations with fruitful findings to apply for national and international business environment.