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

Case Study: Tesco and Dobbies. Analyse the benefits to Tesco taking over Dobbies.

Extracts from this document...

Introduction

Pg. 537 Case Study: Tesco and Dobbies (a) How will James Barnes benefit from the takeover of Dobbies? The sale will net a windfall of 10 million (pounds) for James Barnes (the chief executive of Dobbies). He owns 6.7 per cent of the company and his father and sister own another 2 per cent. (3) (b) (i) Explain the affect on Dobbies' share price of the Tesco bid. In June 2007, Tesco paid 15 (pounds) a share for the Scottish garden centers chain. By observing figure 3 we can see that since the start of April 2007, there is a significant increase in the price of the Dobbies share price. The reason for this is probably because a change in demand, the price of a share always depends on demand. ...read more.

Middle

I believe that if they had waited some time more before announcing that they weren't interested, the share price would have increased even more. (4) (c) To what extent will Tesco be able to exploit economies of scale as a result of the takeover? I don't believe that Tesco will be able to really exploit economies of scale, as I don't believe that the real motive of the takeover was to enjoy of economies of scale. I think the principle motive was to diversify, as like this, they reduce risks. Tesco and Dobbies wouldn't be really able to buy in bulk, as they sell really different things, Tesco is in the grocery sector and Dobbies is in the garden sector. ...read more.

Conclusion

due to large competition and as a result they tried to explore new and different opportunities, and this was Dobbies, as they are in an already attractive and growing market. Tesco said that the acquisition of Dobbies would give it access to a market for which it was not catering at present and it reflected a strategy of developing the company's non-food operations. Andrew Higginson, the Tesco finance director, said that the supermarket saw potential to expand the range of environmentally-friendly products in Dobbies, adding that it offered a 'big emerging market' in consumer spending. Overall I believe that Tesco did a good deal taking over Dobbies, asd it is the UK's third largest garden center chain, with 21 store based mainly in Scotland and the north of England. (8) Silvia Sans Y-12 ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our International Baccalaureate Business Studies 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 International Baccalaureate Business Studies essays

  1. In this paper, we will study the case of Intel, a semiconductor chip maker, ...

    These values define who they are and how they act as employees and as a company. These values move forward toward common goals-in business and corporate responsibility. According to Paul S. Otellini, Intel President and Chief Executive Officer, corporate responsibility is about doing the right things right.

  2. Should easyJet further penetrate the market for air travel between the UK and Greece? ...

    from independent sources A degree of risk associated with the company?s unwillingness to provide confidential data Ensure data availability in advance Introduction EasyJet plc. Was " first in February 1994 serving domestic routes in the UK. It has been a product of the deregulation in the airline industry and Sir S.

  1. Case Study on Alibabas Taobao

    Alipay formed partnerships with leading Chinese banks and signed a long-term agreement with China Post, which meant customers without a debit or bank card could fund their Alipay accounts at any of its 66,000 offices. Final result Taobao developed into a diverse e-commerce platform where businesses sell a very wide

  2. Questions on Globalisation and International Trade

    Still, problems persist. Actions taken by the government continue to limit efficiency gains for private companies and the country?s high rate of poverty is still a major problem. d. India?s gains in information technology and pharmaceuticals are impressive. The country has emerged as a vibrant global center for software development,

  1. Introduction to e-commerce. Benefits, risks and legislation.

    Hardware devices and how they support e-commerce business: - Mobile devices: It gives the ability to manage commerce using a mobile device, such as a mobile phone, a Personal Digital Assistant (PDA) and a smartphone. Mobile devices have become a part of ecommerce since new applications have been introduced.

  2. Case Study of IKEA with Indian Rugs and Child Labour

    The fact that IKEA does not have its own manufacturing facilities; instead it uses subcontracted manufacturers all over the world for supplies makes it more complex and difficult to keep track of the company?s suppliers and subsuppliers. It is even more difficult to keep track of children working in homes where whole families worked on looms from the subsuppliers? level.

  1. Case Study of Reach Out, a business providing therapy to children with autism.

    However most changes must be well communicated to the staff because there will often be a resistance to this change. In such a situation a Force Field Analysis is apt. This is because it helps to create an understanding of the pressures for and against any change in an organization.

  2. Organisational Behaviour (in short called as OB) is concerned with the study of the ...

    These departments are divided according to their organizational outputs. Examples include departments created to distinguish among production, customer service, and geographical categories. This grouping of departments is called divisional structure. These departments allow managers to better focus their resources and results.

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