Porter's Five Forces Model-Tesco

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Porter's Five Forces Model-Tesco

Porter's Five Forces Model-Tesco


In today's world where entrepreneurship and owning your own business is considered to be the latest fashion to acquire wealth and status we see a lot of new businesses launching every month and every year but only few of them are able to maintain their position in the cutthroat competition and rivalry. Maintenance of the success of the business totally depends on the strategies a business owner adopts to operate it. Strategies are the nub that decides the success or failure of an organization. As we all well aware of the fact that, the main purpose of operating or conducting a business is to earn a profit and to run the business in a lucrative way. In order to fulfil this main ambition of the business, managers totally and completely rely on the strategies and the plan that they devise. Strategies and plans provide direction to the business. The aim of this paper is also to talk about strategies and plans. In this paper, strategies and the marketing expansion plan of a renowned and first class retail brand with the name of Tesco are discussed in a significant detail.

The company

The company that I have chosen to conduct strategic analysis is Tesco. Tesco PLC (Public, LON: TSCO) is an international seller. The company is engaged in retail and related activities in the United Kingdom, the Republic of Ireland, Hungary, Poland, the Czech Republic, Slovakia, Turkey, Thailand, South Korea, Malaysia, Japan, China, and the United States. The company also provides retail banking and insurance services through its subsidiary of Tesco Personal Finance PLC (formerly Tesco Personal Finance Group Limited) (FPT). The company has two business segments, retail and financial services. Services of retail channels include online shopping company, tesco.com and Tesco Direct, Telecommunications, Tesco Personal Finance (TPF), and business consumer research (Conner, 1993).

Today it is the third largest global retailer based on revenue, behind Wal-Mart and French Carrefour, but the second largest based on profit, ahead of Carrefour. In 1919, Tesco Plc was established by Jack Cohen, by utilizing the bonus which he achieved for his services in the World War I army. Then in 1924, he purchased a tea consignment from the company TE Stock well. He decided to put the initial three alphabets of TE Stock well, and the initials of his name Cohen collectively to name his brand 'TESCO'. In 1929 Cohen opened the very first Tesco store in Edgware, London. Originally, Cohen's formulated the strategy of "Piling it high, selling it cheap"(Tipples, 2002).

Despite the fact that this strategy assisted Tesco in attracting a great amount of consumers, it also assisted Tesco in branding itself as a store for average class consumers and even earned an image as a low-end store. Furthermore, Tesco had small and poorly equipped stores, as well. The only competitive edge Tesco had been the price. The products that were available at the store seemed to be of ordinary. Due to the rise in the income of customers ...
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