SWOT, PESTEL, Porter 's Five Forces and Value Chain Analysis of Tesco | |
Introduction
This report is aimed at critically analysing the macro, meso and micro business environment of Tesco, one of the largest food and grocery retailers in the world, operating around 4,331 stores. Strategic evaluation tools such as PESTEL, Porter’s Five Forces, SWOT and Value Chain analysis have been used by researchers in order to achieve this aim.
Tesco – Company Overview
Tesco is among the largest food retailers in the world with revenue in excess of £54 billion in 2009 and employing over 470,000 people . They operate approximately 4,331 stores in 14 countries around the world. The company operates primarily in the USA, Europe and Asia and their
…show more content…
The percentage of overall consumer spending on food has risen considerably over the years, as shown below (Euromonitor, 2010):
Fig 2: UK Spending on Food as % of Overall Consumer Spending 2004 to 2008
The economic downturn has been brought to light with the assistance of the following GDP growth graph since 1989 (Mintel, 2009):
Fig 3: UK GDP Growth 1989-2009
Social
* An analysis of the UK population shows that there are more retired people than children representing the Baby Boom generation (Herald Scotland, 2010). The ageing population is discouraging for the food retailers older people tend to eat less . They are less likely to travel to supermarkets to shop compared with the younger generation. Although internet literacy level drops over the age of 65 years within the population (Turban et al., 2001), it has nevertheless been predicted that the ageing population would find online shopping more convenient. However, small deliveries are considered to be ineffective and expensive. * Consumers’ attitude towards food is incessantly changing as they have become more health- conscious . An increase in the demand for organic food has been accommodated by Tesco to reflect this change in demand. Payment by cheques and cash at the checkout was first made possible by Tesco .
Technological
* One of the key macro-environmental variables that have directly influenced the supply chain, operations and processes of
Tesco is a British multinational grocery and general merchandise retailer, it has stores in 14 countries across Asia, Europe and North America and is the grocery market leader in UK, where it has a market share of around 30%.
Tesco is the Public Limited Company I will explore. To understand the size of Tesco, it has stores in 12 countries across Asia and Europe. There is a sum of 3739 Tesco stores within the UK (as of 2017). They also have 460,000 Colleagues at the end of 2016. This shows the size of Tesco and gets us to understand the effect that Tesco has on the UK’s economy and needs and goods of UK’s communities.
The dollar menu section of this documentary focused on how processed foods and fast food are typically less expensive than healthier foods. The documentary shows one family having the dilemma at the grocery store: a family is aware that the father who has diabetes needs a healthier diet with more fresh, but they are forced to buy foods they can afford. As the film implies people with lower incomes are more likely to eat processed, cheaper, foods, leading to a higher rate of diabetes, obesity and other health problems. The federal government spends billions each year subsidizing commodity crops. Over time, prices of certain crops, like soybeans and corn, were lowered due to these subsidies causing overproduction which made them a lot cheaper than other crops. Since these crops were so cheap, meat and food producers started using them for a variety of purposes, such as, high-fructose corn syrup, animal feed and hydrogenated oils. The lowest-priced options at the grocery are processed foods made from subsidized ingredients that have refined grains with added fats and sugars. This cheap food has had the greatest impact on low-income families. Because are on a tight budget, the price difference between fresh healthy foods and food with subsidized
the past 20 years there has been a dramatic increase in the United States? (Nutrition,1).
Macro environment are the external and uncontrollable factors that influence an organization’s decision making and affects its performance and strategies.
Tesco PLC is a major food retailer that operates primarily in the United Kingdom. The company operates 2,291 supermarkets, superstores and convenience stores in the United Kingdom, the rest of Europe and Asia. The company also offers financial products, such as insurance and banking services, as well as electrical appliances and telecommunication products. For the year 2007 to date, Tesco PLC achieved revenues that totaled £ 46,611 million, an increase of 10.9% against the previous year revenues that were £42,016 million. Tesco is one of the largest food retailers in the world, operating around 2,318 stores and employing over 326,000 people.
It is clear that the proportion of people who ate hamburger, fish and chips increased dramatically, and the amount of pizza consumption decreased steadily.
It is also proven that people in United States have been paying a lot for their poor dietary habits. According to the CDC (2004), nationwide obesity-related disease expenditures for Medicare and Medicaid was a whopping $78.5
Tesco PLC, the top three retailer in the world, which was establish by Jack Cohen in 1919 year, which has near 100-Year history. In these days, it has been thrived to 12 country all over the world, including United Kingdom, Malaysia, India, Hungary, Ireland, Kipa, Slovakia, Poland, Czech, Thailand, even South Korea, and China (Tescoplc.com, 2012). Tesco is a public limited company. According to Marcouse (2011:92), “Public limited company (Plc) is a larger type of company that must have at least £50,000 of share capital and has its shares traded on the stock market”, therefore Tesco can have greater capital source and shareholders in their business.
These factors represent the culture of the society in which the organization operates with in. Change in social values towards healthy livings has adjusted purchasing behaviour and now people are more focusing towards organic produce. For this reason organic domestic retail sales have increased by more than 50% in the last two years from 623 million to 947 million (Keith, 2012). Availability and distribution of this healthy food have increase rapidly. Woolworths, Coles and Aldi all over Australia stock a range of private label goods.
Tesco plc is a global grocery and general merchandising retailer headquartered in Cheshunt, United Kingdom. Tesco is the fourth-largest retailer in the world measured by revenues, after Wal-Mart, Carrefour and Metro. The second-largest measured by profits after Wal-Mart. It has stores in 14 countries across Asia, Europe and North America and is the grocery market leader in the UK (where it has a market share of around 30%), Malaysia and Thailand.
Tesco is the leading food retailer in Britain, they have also focused on building non-food sales which are available in store and online. Tesco is one of the world’s largest retailers with approximately 4,331 stores in 14 countries which include Asia, Europe and the United States. (Tesco, 2011). See appendix 1 for a map of the countries Tesco operate in.
Tesco is the largest supermarket retail chain in the United Kingdom with Sainsbury being their closest rival. It is also the third largest retail chain in the world. In the beginning Tesco started off by selling basic groceries before diversifying into many different markets. In 2007 Tesco was operating in the following fields:
In the US the food proportions are a lot larger than the proportions in other
The purpose of this report is to compare and discuss the performance of Sainsbury and Morrison’s, check their performance as a food retailers and evaluate them on CORE framework analysis. The framework comprises four stages: context, overview, ratios and evaluation together with external and internal analysis which will help evaluate and compare two retail companies.