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MODULE TITLE: BUSINESS MANAGEMENT MODULE NUMBER: 221BSS STUDENT NUMBERS: 1) 1641231 2) 1556094 3) 1556164 4) 1431850 5) 1640164 COURSEWORK NUMBER 1: STRATEGIC ANALYSIS WORD COUNT: 2,196 MODULE LEADER: SUKI MANAK SEMINAR LEADER: BRENDA HOLLYOAK CONTENTS 1. Introduction 3 2. Tesco's History 3 3. Strategic Management 3 4. Understanding Porters framework 4 4.1. Industry competitors and extent of rivalry 4 4.2. Threat of new entrants 4 4.3. Threat of Substitutes 5 4.4. Buyer Power 5 4.5. Supplier Power 6 5. Useful analytical tools 6 6. Recommendations 7 7.APPENDIX 1 - PORTER'S FIVE FORCES 9 8. APPENDIX 2-SWOT ANALYSIS 10 8.1. Analysing the SWOT analysis 10 9. APPENDIX 3 - PEST ANALYSIS 11 9.1. Analysing the PEST analysis 11 10. APPENDIX 4 - THE UK MARKET 12 11. REFERENCES 13 12. BIBLIOGRAPHY 14 1. Introduction In this report we have been asked to choose a major organisation/company of our choice within a chosen industry sector. We then will be applying an analytical tool which we feel will be most relevant, and carry out a strategic analysis, and a detailed evaluation of the company in question. We have chosen to conduct our report on the fast-growing market leader Tesco's and we have decided to look at their competitors in a competitive analysis. In this we will use models such as Porters' Five forces, and we will also conduct a SWOT and a PEST analysis. These tools will assist us in understanding Tesco's and the industry it works within. 2. Tesco's History Tesco's is a public limited company, which was founded in 1919 by Jack Cohen, with Terry Leahy acting as the CEO. ...read more.


When a substitute becomes available both demand and prices are reduced. If beans or bread are too expensive in Tesco then buyers will exploit their power and move to one of their competitors. Substitution strengthens buyers' power. The market has matured as prices are high but are coming down. Between 2000 and 2006 Tesco prices have fallen by 17%. Tesco's are extending their food range and reducing their prices to meet customers' needs and provide more choice. 4.4. Buyer Power Buyer power for Tesco is high but decreasing. This is because customers are price sensitive therefore there is a 'lock in' of these customers which limits there power as they are very unlikely to shop elsewhere. Tesco is also able to offer a premium service of one stop shopping. This is because buyers are time poor but cash rich which essentially means a buyer would rather spend the extra few pounds to save time than search elsewhere to save money instead. For an organisation like Tesco this means a greater profit margin. Hence, in the last tax year gone Tesco's pre tax profits were in excess of �1billion. Buyers seek a large range of products at once and in dong so has meant that the balance has tipped in favour of a firm like Tesco and rather than buyers having power over Tesco, Tesco has now increased its power over buyers instead. There have even been attempts to take on such firms like Tesco and increase buyer power; however the effects have been fairly minute, for example renowned chef Jamie Oliver's attempts to influence buyers when buying chicken. The sad fact is that the majority of buyers will not consult their ethical conscience before buying goods and such factors mean that buyer power is decreasing and a firm like Tesco can expect even higher profits in the coming years. ...read more.


9. APPENDIX 3 - PEST ANALYSIS Political Economic GM-Food Planning Policy Guidance Competition Commission EU Competition Law 2007 Market value: �35.6 billion Relative Recession proof industry Social Cultural Technological Organics and healthy eating Eating out and take-away Environmental aware >3/4 of shoppers travel by car Communication/ IT Supply Chain Optimisation Transport/ Cool Storage Bar Code/ Stock Management 9.1. Analysing the PEST analysis A PEST analysis is a tool that management would use to evaluate the external macro-environment. It allows a business to look in particular at Political, Environmental, Socio-Cultural and Technological factors. As these factors are generally beyond the control of the organisation and so are usually considered as opportunities or threats. This PEST analysis for Tesco's, shows that they have a fairly equal number of factors for each external area. Tesco policy on Genetically Modified (GM) is driven by the view of the customers, 75% of Tesco customers do not want GM food. So therefore, Tesco stick to the rules and regulations and try to keep GM food off their shelves. They also keep the cost of their products and goods at a reasonable price. Technology is changing the life of work, for instance, Tesco's have club cards for customers to use. This allows customers to collect points and gain more out of their shopping. Also other technology such as computers allows managers in store to keep up to date with their stock on a daily basis. The user may interact with the retailer to order goods and products and also pay for them over the system linked to their bank or Credit Card Company, this will also save time and money for the business. 10. APPENDIX 4 - THE UK MARKET 11. ...read more.

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