P.E.S.T Analysis on Tesco

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TITLE: INFORMATION SYSTEMS REPORT EXECUTIVE SUMMARY J P Morgan Chase is the second largest financial holding company in the United States with over $1.2 trillion in assets and $ 106 billion in stockholder 's equity. With operations in more than 50 countries and many other banking subsidiaries, the firm has a staff of over 160,000. In 2002 the management made a strategic decision to outsource a significant portion of their Information Technology infrastructure to IBM to gain a better position in various markets. This decision however did not workout as expected, the firm faced a decrease in productivity due to fall in employee moral caused by the shift and management faced difficulties in carrying out their day to day duties.…show more content…
These rules of competition are embedded in five competitive forces which are entry of new competition, the threat of substitute products, the bargaining power of buyers, the bargaining power of suppliers, and the rivalry among existing competitors. If we look at Diagram 2 we can see a simple view of the Five Forces Model. http://en.wikipedia.org/wiki/Five_forces Threat of new entrant As new firms enter to a market, they have the potential to extract the profit unless the demand grows faster than new entrants to a market, average profitability will decline. The threat of entry or entry barriers is to discourage other companies from entering a market as new competitors by establishing a level of service or value to the customer that will be expensive or difficult for the new entrant to replicate. IS/IT often require large investment in complex software. JP Morgan Chase invests millions of dollars into IS. In comparison with other banks, JP Morgan Chase would spend more than twice as much on technology per employee, approximately $28,000 compares to $13,000. Because of this it has become more difficult for new firms to enter the market as they will have to meet high standards and spend a great deal on IS in order to gain competitiveness. . Threat of Substitutes This represents the buyer propensity to surrogate one firm 's product for another product. The strength of competition

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