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Porter's Five Forces Of Tesco

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Tesco is amongst the largest food retailers in the United Kingdom (U.K) with over 3,400 stores and staff amounting up to 310,000. Tesco operates predominately in Europe and America with their headquarters located in the U.K. Tesco has the greatest market share in the U.K dominating approximately 28% of the overall market at the end of 2017. However, there is a constant battle in the highly competitive U.K supermarket industry with the four major players being Tesco, Sainsbury, ASDA and Morrisons. In recent years, Tesco has had to change their business model as well as their services to stay a market leader and differ-entiate from the competition. To find the main sources of competitive advantage that Tesco has over its competitors an analysis of the structure of the industry should be under-taken (Porter, 1980). In order to analyse what extent Tesco U.K’s performance is attributa-ble towards industry characteristics, Porter’s five forces are broken up into competition, potential of new entrants, power of suppliers, power of customers and the threat of sub-stitute products. Below is an image of Porters 5-forces in relation to the U.K supermarket industry. 1. Rivalry amongst competitors The intensive rivalry in the U.K’s grocery sector is remarkably high. Tesco faces pro-found competition from its afore mentioned competitors. There are no switching costs for consumers which in turn intensifies the competition. Extreme discounters such as Aldi and Lidl have also caused
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INTRODUCTION Tesco PLC is one of the biggest grocery retailer in the UK with it headquarter located in Chestnut, Hertfordshire, England, UK. When compared with other retailer that deals on merchandise, it ranks third when profits is the measuring rod. Tesco PLC has over 2,318 stores around the globe and has to its name 1,878 stores in the entire UK. It has its operational stores in Asia and the rest of Europe. Tesco offers a broad range of services which includes both online and offline services.

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So to operate under the assumption, that as individuals but also as businesses, as tesco control very little. There is a lot that happens outside the control of a Tesco, so the mindset then shifts that if tesco cannot necessarily control these things the best that tesco can do is to try to pay attention, and predict them. And if tesco cannot predict them, then adapt to them obviously before they become an issue to where they are negatively affecting tesc. And that really is the goal, to try t0 make some changes so that tesco not necessarily caught flat footing and can make those adjustments. So whether it be a change in price or whether it’s a competitive doing something that can potentially affect tesco’s business.

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