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Tesco - Industry Trend Analysis

Competitor Analysis of Tesco Plc

The competitors of Tesco can broadly be categorized into two groups based on the direct competition as well as indirect competition. To conduct the competitors’ analysis for Tesco Plc, analysis has been made on competitors’ profile, market share using SWOT analysis including their strengths, weaknesses, opportunities, and threats.

SWOT Analysis

Strengths:The most significant internal strength of Tesco against its competitor is that Tesco possesses the largest market share in the food retail industry. Only Tesco Plc. possesses 30.6% of the whole market share while competitors possess 70% of the total market share. ASDA alone has 16.6% of the market share and is the biggest competitor of TESCO Plc while Sainsbury’s is almost equal to ASDA with 16.3% market share (Newman& Cullen, 2002). Get guaranteed essay writing service online before the deadline.

Weaknesses:The marketing strategy of the Tesco Plc. has not been effective in attracting the customers while competitors of Tesco such as Sainsbury’s, ASDA and Morrisons have adapted their marketing strategy through their corporate strategy. Effective marketing strategy of competitors is the reason, competitors are gaining 70% of the total market share (Lindgreen& Hingley, 2009).

Opportunity: The positioning of Tesco amongst its competitors is adjusted based on their services such as Sainsbury’s positions first as food specialist, and ASDA ranks at third position as non-food specialist while Tesco ranks second as food with non-food.  Since Tesco has created effective brand identity for its products and service, there is opportunity for Tesco to launch itself not only as food and non-food provider but also as specialist (Newman& Cullen, 2002).

Threats:The most considerable threat for the Tesco is the numbers of competitors in the industry that are likely to gain the market share. Tesco Plc. has six major competitors namely Sainsbury’s, Marks& Spencer, Asda, Morison’s, Waitrose and Subway while other independent stores or shops are also included in the direct competition of Tesco Plc (Plunkett, 2005). Buy custom dissertation writing and enjoy the free time by observing the progress of our writers and providing your feedback upon the quality of work.

Customer Analysis of Tesco Plc

In order to analyze the customers of Tesco Plc, STP model is the most appropriate model to use that includes segmentation, targeting and positioning.

STP– Segmentation, Targeting and Positioning

Segmentation:However, there are four types of segmentation used to identify the customers such as demographic, geographic, psychographic and behavioral segmentation. Tesco Plc. has mainly identified its customers through psychographic and behavioral segmentation while demographic segmentation is also used to specify the customers.

  • Demographic Segmentation: Tesco has identified its customers of age between 20 and 40, male and female both with any ethnic background.
  • Psychographic Segmentation: Tesco mainly focuses on the family centered customers with interest in shopping and food.
  • Behavioral Segmentation: The customers who want to experience wide range of quality and healthy food products (Lindgreen& Hingley, 2009).

Targeting:Tesco targets the identified customers through different means and communication medium. To market its brand, Tesco accesses the customers through electronic media, such as television commercials and web services while outdoor media such as billboard and mall-banners are also used efficiently (Newman& Cullen, 2002). 

Positioning:The market positioning of Tesco is perceived as food and non-food products provider along with wide range of quality food products (Plunkett, 2005). Our goal is to help students with bother-free coursework writing service that would allow them to get outstanding results

PESTEL Analysis

In order to make the industry analysis and its effects of external environment on Tesco, PESTEL analysis model is used.

Political Analysis:Tesco being a global retailer is influenced by the global political changes, as political and legislative conditions in different countries may change and in result, they affect the operational activity of Tesco. Tesco is currently operating in numbers of countries including EU states, it has put great pressure on the Tesco to comply with diversified nature of political scenario and legislative changes. The change in the government and political condition has led to the changes in the employment policy of the Tesco. In the UK, the government has launched employment legislation, according to which food retailers are motivated to provide job opportunities ranging from lower-paid to highly skilled employees. Moreover, the employment opportunities are also needed to be provided for the students, working parents and other senior citizens. To respond to such demand and effects of political conditions, Tesco has developed new stores so that it can create the job vacancy in the company and could comply with the legislative compliance (Plunkett, 2006).

Economic Analysis:Tesco is greatly affected by the changing economic environment because of change in demand of the products, cost of the products, and price of competitors and market profit. Tesco is highly affected by the high unemployment level that is likely to reduce the effective demand of its products. Moreover, due to unemployment, there is reduction in the total sale of specific products (Plunkett, 2006). When you order thesis online, the writer has to investigate the requirements precisely to bring the document to the broader context for the chosen readers.

Social Analysis:There are demographic changes in the societies such as aging population, high rate of female workers and decline in the homemade food in the UK. It has caused the Tesco to focus on the products that could increase the value of the services such as lunching new brands under its own labeling and changing the cost of specific products (OECD, 2006).

Technological Analysis:Tesco is also affected by the technological changes. It is found that technology affects the product-line development in the Tesco, as using technology can benefit the Tesco in terms of having increased sale of products. Moreover, Tesco is also using the technology to provide innovative and convenient shopping experience for its customers through online shopping service (Smith, 2001).

Environmental Analysis: Since there is increased effects of the social corporate responsibility on the financial statement of the food retailers, Tesco has realized the environment protection as its social responsibility. The acknowledgement of environment protection as social responsibility has made the Tesco to incorporate government regulations regarding environment protection (Lindgreen& Hingley, 2009). When you  order assignment online, we assure to deliver perfectly tailored assignment within the promised deadline.

Legal Analysis:Legislation and other legal authority have significant impact on the operational activity of Tesco, as it influences the overall performance of the company in the industry. Food Retailing Commission that suggested the food retailers to implement Code of Practice set up restricting numbers of the activity performed by the food retailers such as asking for payments from suppliers and adapting the price without any notice. It is because existence of competitors with strong brand identity put considerable threat on the product differentiation (Newman& Cullen, 2002).

Reference

Lindgreen, A.& Hingley, M.K., 2009. The new cultures of food: marketing opportunities from ethnic, religious and cultural diversity. Gower Publishing, Ltd.

Newman, A.& Cullen, P., 2002. Retailing: environment& operations.  Cengage Learning EMEA.

OECD, 2006.Supermarkets and the Meat Supply Chain: The Economic Impact of Food Retail on Farmers, Processors and Consumers.  OECD Publishing.

Plunkett, J.W., 2005.Plunkett's retail industry almanac. Plunkett Research, Ltd.

Plunkett, J.W., 2006. Plunkett's Food Industry Almanac 2006 (E-Book) Plunkett Research, Ltd.

Smith, D., 2001. Food industry and the Internet. John Wiley and Sons.