The Impact of the Recession on Tesco's Strategies and Competitive Advantage

by

ACKNOWLEDGEMENT

I would take this opportunity to thank my research supervisor, family and friends for their support and guidance without which this research would not have been possible.

DECLARATION

I, [type your full first names and surname here], declare that the contents of this dissertation/thesis represent my own unaided work, and that the dissertation/thesis has not previously been submitted for academic examination towards any qualification. Furthermore, it represents my own opinions and not necessarily those of the University.

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ABSTRACT

This research provides analyses on the impact of recession of 2008 on Tesco Plc. Furthermore, explore how recession affected the entire UK and retail sector specifically. In addition to this, the research provides an analysis of strategies used by Tesco in dealing with the impact of recession.

TABLE OF CONTENTS

ACKNOWLEDGEMENTII

DECLARATIONIII

ABSTRACTIV

CHAPTER 1: INTRODUCTION1

Background of the study1

Research Aims and Objectives1

Research Questions1

CHAPTER 2: LITERATURE REVIEW3

Recession in UK3

Recession and Retail Industry of UK3

Tesco Plc4

CHAPTER 3: METHODOLOGY5

Research Method5

Data collection procedure5

Search Technique6

CHAPTER 4: DISCUSSION AND ANALYSIS7

The Impact of Recession on Tesco Plc7

Strategies used by Tesco to sustain recession8

CHAPTER 5: CONCLUSION9

REFERENCES10

CHAPTER 1: INTRODUCTION

Background of the study

During 2007 and 2008, the financial crisis resulted in huge loss for a number of companies and significantly brought the price of assets down. This led the financial institution towards liquidation and raised major concerns of their solvency. These issues raised soon became concerns of almost all of the major non-financial institutions, the facility of credit payments was withdrawn and consumers' and businesses' confidence vanished.

The recession resulted in retraction of the demand of households, specifically in connection with some of major durable purchases of the consumers (such as cars and houses), both of which were significantly depended on the credit market (Devinney, 2008, 261). Where recession was affecting all parts of the world, it also hit the retail industry in UK. The indicators were used by publications to highlight the impact of recession on the retail sector trends in United Kingdom. It is indicated to be on third number in the list, which was highly affected by recession in terms of financial crisis and unemployment rate.

Research Aims and Objectives

The research aims and objectives are stated below:

To examine the impact of recession on Tesco Plc

To analyse the ways in which Tesco dealt with recession

Research Questions

The research questions which are the base of the study are stated below:

What is the impact of recession on Tesco Plc?

What are the strategies used by Tesco to deal with recession?

CHAPTER 2: LITERATURE REVIEW

Recession in UK

Recession is explained as zero-negative level growth in terms of GDP in two quarters successively. The GDP volume in United Kingdom increased to 27 in the first quarter of 2008. After this, five successive quarters showed a reduction in the economic activities. Even though, the recent contraction in the second quarter of the year 2009 signalled that recession may be in its ending season. The volume of economic activities reduced to 0.3percent as compared to the precious year (Hammett & McMeikan, 2010, ...