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

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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.

Recently I have noticed that Aldi have started diversifying in their product range slightly. They now have their own sporting make and sell camping equipment, sporting equipment and electrical appliances etc. This will increase their market share and make them more competitive.  Tesco have now set up their own mobile phone networks, bank, insurance company and clothing company.  Asda and Sainsbury's are now attempting to follow in Tesco's footsteps in order to continue competing with Tesco.  The smaller discount companies would also have to invest in these services if they wanted to compete with them.

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Another reason why Tesco consider their competitors to be Asda and Sainsbury's and not Netto and Aldi is that the two supermarket groups aim their products at different people.  Netto and Aldi are renowned for being 'Discount supermarkets'.  The prices of their products are low because they aim them at the less wealthy people.  In order to compete with the bigger supermarkets they would need to start selling high quality goods sop they could charge higher prices for them and make a larger profit.  They would also need to start selling branded goods, this is because the majority of ...

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