Analysis of Tesco

Tesco

1.0 Introduction

In my assignment the focus will be on analysing the business environment within the food retail industry in relation to Tesco. Also, there will be an analysis of Tesco’s resource capability on their domestic market in UK.

Tesco is United Kingdom’s leading hypermarket. They started out by operating in the food industry, but as the business grew, they now operate within food, non-food (books, DVD’s and clothes.) and they sell different services like car and travel insurance, telecommunication products and have their online site Tesco.com, where you can buy everything online and get It delivered directly to your door.

Since the mid-90s, Tesco has been investing in new markets overseas like Poland, Hungary, Thailand, China and now USA. The group operates in 13 markets outside the UK and is expanding their business throughout the globe.

2.0 Task A вЂ" analysis of Tesco’s business environment

3.0 Microenvironment - Porter’s Five Forces (Porter, M.E - 1980)

3.1 Threat of entry

When a new competitor enters the food retail industry, the entry is low, but there are high barriers to entry, the important factors are seen below.

The newly started company would not be able to get the same cost benefits as the experienced players in the industry like Tesco. When entering the food retailer industry, the capital requirements is quite high. It is needed to rent/buy a store, either take a loan in the bank or use your own capital and arrange a deal with different food suppliers. As a new player in an industry it is hard to know the supply and distribution channels, so the company may not know where to begin and whom to negotiate with.

New players do not have any experience in the specific industry, so experience and knowledge in the food retail industry is gained when the company has been in the game for years, for that reason it is tough for newly started...