• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Why Tesco consider their competitors to be Sainsbury's or Asda and not Aldi or Netto.

Extracts from this document...

Introduction

Why Tesco consider their competitors to be Sainsbury's or Asda and not Aldi or Netto. Tesco, Asda and Sainsbury's are much bigger stores than the discount stores like Aldi and Netto. This means the bigger supermarkets will be able to sell more goods and gain a bigger profit. If Aldi and Netto were to make their stores bigger they would be able to compete with Tesco, Asda and Sainsbury's in the sales department. This will mean that they will be able to contain more goods and sell more to gain a larger profit. It will give them the opportunity to sell more different types of foods and different brands. The larger supermarkets are now using diversification and sell more different types of products e.g. electrical goods and clothing. Expansion of the smaller supermarkets would also give them the opportunity to diversify their product range and start competing with the bigger ones. ...read more.

Middle

They would also need to start selling branded goods, this is because the majority of people prefer to buy branded goods because they fell that they are guaranteed high quality goods. The bigger supermarkets are located in easy accessible, popular shopping areas and get a lot of people shopping there. They are accessible for most types of transport. Some of the smaller supermarkets do not have very big car parks and are not situated in very popular, upmarket areas. If they wanted to start competing with the bigger supermarkets then they would have to situate the supermarket in more popular 'richer' areas that has good access. Aldi and Netto do not really have a good reputation for being high quality supermarkets unlike Tesco, Sainsbury's and Asda who all have reputations for being high-class supermarkets. In order to compete with these large supermarkets, Aldi and Netto need to gain a good reputation for being a high-class supermarket that sells high quality goods. ...read more.

Conclusion

This princing stratergy will make people visit the supermarket in the first place. I would suggest that the smaller supermarkets use the consumer value pricing stratergy on a premium range of goods or on high quality branded goods. This will allow them to charge high prices for the prestige goods, therefore make a large profit on them. The large supermarkets use going rate pricing, this means that they are immediately competing with the other supermarkets with a certain type of product. The large supermarkets use loss-leading pricing to make the customers look around the supermarket. The smaller companies should use this if they want to compete. The supermarket staff should put certain objects in popular places to make them buy them while they are buying the chosen cheap product. The large supermarkets use this effectivaly. The larger companies have extra facilities (that you have to pay to use) in the supermarkets to gain extra profit. They have things like caf´┐Ż's and newsagents to make extra money on top of the money made inside the main store. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our AS and A Level Structures, Objectives & External Influences section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related AS and A Level Structures, Objectives & External Influences essays

  1. Introduction to Tesco

    competitive prices; the slogan 'Pile it high and sell it cheap' was the title of Sir Jack Cohen's autobiography. But as people were becoming better off, they were starting to look for more expensive luxury items as well as everyday household and food products.

  2. Drayton Manor - its competitors, and success.

    only expects people to travel a distance of 50 miles, whereas Alton Towers expects people to travel from all of the UK. When travelling to Alton Towers and Drayton by car, there are car parks in both theme parks. However, Drayton Manor car park is free and Alton Towers car

  1. For my portfolio, I was asked to do an assignment on two businesses. I ...

    Suppliers: The suppliers of Tesco have to be aware of their competition, as they want to be the main suppliers to their company. Tesco's suppliers are interested in whether the business is stable and is able to increases their

  2. External influences on business. At ASDA we have to follow the following employment legislations ...

    to make our employees aware of the chance. At ASDA we abide to this employment relations act 2004 as we make all our employees aware of their specific trade union within five working days provided and they have given us a trade union to contact.

  1. Introduction to J Sainsbury plc

    (Source: www.j-sainsbury.co.uk) The fifth objective explains that Sainsbury's is recognised in local communities as a good neighbour, good employer and one that meets local food retailing needs and support local causes. It is also reducing the impact of their organisation on the environment through a programme of continuous improvement.

  2. Introduction into my first business Tesco.

    The shares have peaked a high price of 603p. With this growth Tesco's is now the largest super market chain. How Did Tesco actually start? Tesco was founded in 1924 by Sir Jack Cohen. He used his gratuity for his Army service in the World War to start selling groceries in London's East End markets in 1919.

  1. Investigating Business. Tesco PLC. I will be describing the aims and objectives of ...

    Tesco aren?t the only supermarket chain in the market as they have four other competitive markets. As they are the market leader, Tesco?s need?s to think carefully about the competition they have before making a decision on setting their prices.

  2. Applied Business. Investigating a business Preston Manor High School

    gym, Astro turf, clean classrooms, learning area for sixth formers, the library, the school departments (music, science, drama etc) on the taster day makes a good impression on the students because they provide a lot of high class facilities (as examples given above)

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work