Industry Analysis and Porters Analysis of Tesco

ONLINE EXAM

Industry Analysis
This is the evaluation and the analysis of all the important and the specific areas and
branch that focus on the manufacturing, trade and all the services. It is the changing dynamics of
the market and also the general compliance with the adaptive analysis managed to enforce and
maintain the identification of the core weakness and the strength of the company. this helps in
out bringing all the growing patterns, factors and the forecasting with which the industries can
gain growth in the market. Porters five forces is the analytical tool which helps to analyse the
company’s competitive environment as well as the affecting its performance. This Five Forces
focuses on measuring the company’s position like threat of new entrants, threat of substitutes,
bargaining power of buyers, bargaining power of suppliers and competitive rivalry.
Porter's Five Forces framework analysis helps to determine the present position in the
market which is based on factors like competitors, customers, suppliers, financial strength &
alternative solutions. In order to evaluate the core strength, the areas in which the company is
lacking there is required different effective tool with which the management and the competition
can be implemented. This tool provides the strategy which the company will have to opt in order
to manage the growth and also to generate the revenue with which they can frame an established
image of their industry. This tool analyses the factors and the operating environmental conditions
with which the competition in the organisation and all the micro level changes can be opted.
Porter's five forces model is based on the perception of an organisational strategy which should
be consider to encounter the opportunities and threats in the organisation's external settings. In
short Porter's five forces analysis is a framework which attempts to analysis the level of
competition in the industry and develop the businesses strategy.(Dağdeviren, and Yüksel, 2010)
Overview of the company
The organisation chosen in this report is Tesco which is the largest food retailers in the
world, which is operating around 2,318 stores and employing over 326,000 people. It is also
providing the online services to customers through its subsidiary, Tesco.com. Tesco is a British
Multinational groceries and general merchandise retailer. It was founded in 1919 by Jack Cohen
as a classification of market stalls in Hackney, London. Tesco headquartered in welwyn garden
city England. It is the third largest retailer in the world which is measured by gross revenues and
the ninth largest in the world which is measured by revenues. Tesco has stores in five countries
across Europe.

Porters Analysis of Tesco
1. Threat of new entrant- It refers to the Threats of the new competition or competitors to
beat the current players within an industry. In short when the new competitors entered
into the industry and offered the same products and services to the consumers in low cost
then it is risk for the current company. As Tesco is a British multinational retailer
industry which is focused on general merchandise. Which is one of the largest retailers in
the world. The main factors affecting the operations of Tesco is the threat which is by the
new entrants into the market. But for any new entrant it is difficult to set up the store and
starting its operation demands a lump sum amount of capital requirements in UK
supermarkets. Particularly coming into the UK supermarket industry the threat of new
entrants is LOW because of the capital requirement.(Hafezi, and et.al., 2020)
2. Threat of Substitutes- When companies within one industry are forced to compete with
industries which producing the substitute products or services. In other words, Threat of
substitutes refers to the availability of a product which is consumer can purchase instead
of the industry’s services and products. A substitute is defined as a product which is from
another industry that offers the same or similar product or services to the consumer
within the industry. The Threat of Substitutes in the Tesco is MODERATE. As it aims
to fulfil consumer needs and wants. It satisfies their consumer with their product. But as
we know that price is also play a virtual role in the industry for deciding the factor for the
regular customers of the product. If other company offered customer similar products and
services at lower price, then people can may buy from them.(Wen, and et.al., 2021)
3. Bargaining power of Customers- It is the pressure by the customer or consumer for the
product and services which is provide higher quality products and better customer
services at a lower price. This power force is LOW for Tesco as their main objective is to
manage the customers with friendly prices. Tesco offered with high quality products
which any other competitors cannot offered in the industry.
4. Bargaining power of Suppliers- it refers the pressure put on companies by the suppliers
by enormously increasing their prices, lowering their quality and reducing the availability
of their product in the market. This power force in Tesco is LOW, there are so many