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A strategic review of Tesco PLC in the United Kingdom

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  1. Analysis of Tesco's markets environment
    1. The PESTEL framework
    2. The Porter's five framework
    3. Analysis of the opportunities and threat
  2. Analysis of Tesco's ressource capability
    1. The value chain
    2. The strengths and weaknesses
  3. Strategic fit analysis
    1. Positive and negative elements of Tesco's strategic fit
    2. Suggestions to improve Tesco's strategic fit

Founded in 1924, Tesco is the largest supermarket chain in Great Britain and one of the most profitable organization, which sells food and non-food items. It now controls just over 30% of the grocery market in the UK. In 2007, it announced over £2.55 billion in profits. It has approximately 1880 sale points throughout United-Kingdom, which include: Extras stores, Superstores, Metro stores and Express stores. In recent years it has diversified its business. It sells non-food products, such as textiles, pharmaceuticals, information technology, optics, video TV, household travel etc. It offers also several financial services which includes insurance, loans, savings, credit cards. The Competition Commission is an independent public body which investigates the market and resolves the problems. If the merger of two companies allows them to hold more than 25 % of market shares it can turn out anticompetitive.

[...] In 2005, Tesco equipped itself with a large number of devices of identifiers with radio frequencies, RFID. These devices make it possible to monitor the supply line with the aim of improving the logistics and the follow-up of stocks. Tesco has several distribution centres, which are close to suppliers, to store all the products. There are more than 35 such centres in UK. OPERATIONS The leader of the wide retailing has not equipped itself with the system RFID only as regards its deliveries but also for its products on shelves. [...]

[...] Tesco holds a wide part of the market in the field of the large-scale retailing. If a company has a large share of the market it distorts the competition and the committee tries to stop it. Despite its large market share, the merger or takeover of companies may worry Tesco, it is a real threat. Though it is a leader in its market, a combined effort can take the leading position from Tesco. Suggestions to improve Tesco's strategic fit The company's Website could be used to counter the allegations made by the media. [...]

[...] We can see this strategy through the setting-up of Tesco Express and Tesco Metro in cities. Its logistics enables it to better manage its stocks that are to reduce the logistical costs and to avoid the shortages of stock, which could damage the image of the company as irritates the customer. Its Club card is strength because it not only develops loyalty of the customer but also provides information on the behaviour of purchase. Tesco can afterwards attract the customers with promotion. [...]

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