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ECO 201 Principles of Macroeconomics

   

Added on  2020-05-04

8 Pages1714 Words141 Views
Running head: MARKET STRUCTURE OF RETAIL INDUSTRY IN UKMARKET STRUCTURE OF RETAIL INDUSTRY IN UKName of the StudentName of the UniversityAuthors Note

1MARKET STRUCTURE OF THE RETAIL INDUSTRY IN UKTable of ContentsIntroduction......................................................................................................................................2Market structure of the retail industry.............................................................................................2Key success factors while operating in this retail industry..............................................................3Conclusion.......................................................................................................................................5References........................................................................................................................................6

2MARKET STRUCTURE OF THE RETAIL INDUSTRY IN UKIntroductionThe objective of this report is to analyze on the market structure of the retail industry inthe UK. The chosen organization for this study is Tesco Plc that operates in the retail industry ofUK. This company has been ranked as the third biggest retailer in the globe in terms of profit andninth biggest in terms of revenue (Rios, McConnell and Brue 2013). Market structure relates tothe feature of the market that influence the competition and product pricing. There are four typesof market structure such as – perfect competition, monopoly, oligopoly and monopolisticcompetition. The report also highlights on the key success factors when operating in this retailindustry. Market structure of the retail industry UK retail industry has the oligopolistic market structure and contributes a huge amount tothe GDP ( Gross Domestic Product) of this nation. The three significant companies in thisindustry of UK are- Tesco Plc, Sainsbury and Asda. Among these three major entities, Tesco isthe market leader in terms of global sales and its total market share. Though the number ofsellers in this industry is small, each retailer’s action influences the other. The main feature ofthis market structure in this industry is that the companies are interdependent on each other inmaking their business decision (Frank, Bernanke and LUI 2015). The companies in the UK retailindustry takes considerable market share that leads to high degree of concentration in the market.The retailers in this market structure have ideal knowledge about the production cost and thetarget market but the information about the inter-firm is incomplete. On the other hand, thebuyers in this industry have imperfect market knowledge about the price and quality of theproduct. Unstable prices prevail in this market as the firms strategize to reduce the prices based

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