Tesco: Company Description, Market Analysis, and Industry Nature

This article provides an overview of Tesco, including its company description, market analysis, and the nature of the retail industry. It discusses Tesco's history, market structure, and its position in the industry. The article also highlights the company's expansion in different markets and its strategies for success.

TESCO

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY..................................................................................................................................3
Company description...................................................................................................................3
Analysis of market.......................................................................................................................4
Different market structure in its history.......................................................................................6
Nature of the industry..................................................................................................................7
CONCLUSION................................................................................................................................8
REFERENCES..............................................................................................................................10

INTRODUCTION
There is a high competition which is present in the market and that has to be overcome by
the organization otherwise the company would lose their customer base. There must be a strong
planning and decisions making in the organization so that they can operate effectively and
performance efficiently in the market. The business needs to have a good environment for the
workforce to work within so that they can give in their best for the end product to match the
expectations of the customers. There has to be a good experience of businesses in the market in
order to compete effectively.
MAIN BODY
Company description
Tesco, currently this is one of the key retail businesses within the United Kingdom
(Nenycz-Thiel, Romaniuk and Dawes, 2016). The headquarter of this company has situated in
England, UK. The company was founded in 1919, it means 101 years ago, so this is literally too
long time for a retail organization within market place. Tesco is one of the oldest retail
companies in across the world. Jake Cohen was the founder of this giant retail company. This
PLC (public limited company) currently has the biggest or the largest distribution channel in
across the United Kingdom. At the international level, Tesco not has the largest distribution
channel, because American retail company Walmart has the biggest channel of distribution.
Nowadays this company has over 6800 retail stores and supermarkets in across the world.
However, its maximum supermarkets and stores has situated only in its home country the United
Kingdom. Tesco has a workforce of 450,000 effective employees. From establishment to date,
this upper management of Tesco always focuses on more and more expanding its business
operations in the global retail sector or industry.
On the other side, this company has very strict hiring process, because only an eligible
candidate can pass the hiring process here. The main objective of top-level management behind
making its hiring process strict is to gain a very effective workforce. According to upper
management, there are effective workforce is one of key reason behind the great success of
Tesco in the global retail market. Of course, there are many other factors or components also has
given their great contribution in all over growth of company, but employees’ contribution is very

much higher than other factors. Basically, HR manager of this retail company is very active in its
job role, because it always uses different motivational theories to make it’s all employees highly
motivated in their workplace (Liu and Yi, 2018). In the last year 2019, Tesco was generated
£63.911 Billion turnover with the net income of £1.320 Billion, in which these data fully show
the effectiveness of Tesco in the retail market. Currently upper management is fully able to run
Tesco on its progressive way.
Analysis of market
Tesco was founded 101 years ago, so in these all years of operations, this company has
highly expanded its business operations in many of market places in across the world. Basically,
the business expansion ability of the company’s top-level management is very strong, and this
the main reason that, currently this company mainly serves in 13 countries, like; United
Kingdom, United States, Hungary, Ireland, Czech Republic, Malaysia, Slovakia, Poland,
Thailand, Japan, France, South Korea and Turkey. Generally, these all mentioned countries are
key market places of this country. In most of the countries, Tesco has oligopoly market structure,
because there are lots of other retail companies also has already exists within market place. There
is oligopoly is a market situation, where many companies and businesses of the same industry
works in the same market place with their respective percentage of market shares. In this
situation, some companies have very large market shares and some has very minimum market
shares (Sparks, 2018). In the oligopoly market structure, a company always tries to set its price
of products something cheaper and favorable for different customers, because if a company not
provides favorable price to its customers in the market structure of oligopoly, then it will not
gain appropriate results in the market place.
On the other side, the Tesco has monopoly in very few markets, because currently
running a retail company or business is not very tough task to an individual or partners, so that
currently there are lots of retail companies already exists in almost all market places of Tesco.
Customers always get benefited in the oligopoly market structure, because in oligopoly structure
of market there are higher competition between companies always exists, in which for gaining
higher market shares, each company have to tries to make its rates or prices something cheaper
and favorable. That’s why this oligopoly market structure is very favorable to customers. When
we talk about the Tesco’s UK operation, this retail company is leading the retail industry here

with 27% of market shares (Śmigielska and Oczkowska, 2017). It means, there is no any other
retail company exists in the UK which can effectively compete with Tesco, because due to
having large market share, this company has he large customer base as well. After Tesco, there is
Sainsburys is the second leading retail company in the United Kingdom with 15.4%. This
company also give great competition to Tesco, so that Tesco get influenced to run its business
operations in oligopoly market structure. After Sainsburys and Tesco, Asda is the third largest
retail venture in the United Kingdom with 14.9% market shares. Basically, Asda was able to gain
this higher market shares on that time, when American giant retail venture Walmart has
purchased Asda for effectively running its business in the United Kingdom.
Currently Tesco’s competitor Asda is taking lots of advantages through the strongest
distribution channel of its parent company Walmart. However, currently only Tesco has the
strongest and biggest distribution channel in the United Kingdom. There is no any other retail
company has the strongest distribution channel as Tesco here, and this is the main reason that,
this company is able to maintain its great reputation in its home country’s business operations
(Vivanco, Kemp and van der Voet, 2016). After these all three leading retail companies, there
are Morrisons and Aldi are next two more retail companies which has market shares of 10.1%
and 8.1% respectively. In this situation, Tesco’s upper management always has required to make
appropriate strategy to effectively dealing these two retail companies as well. After mentioned
market shares of these all retail businesses, the cooperative retail business has 6.6% of market
shares, Lidl has 5.9%, Waitrose has 4.9%, Iceland foods ltd has 2.1% and other companies has
1.9% market shares. These all data have projected that the great reputation of Tesco in its home
country United Kingdom. Currently lots of customers within this country very much like to buy
different services & products only through Tesco, because this company always provides quality
products with very favorable rates and prices.
In the United States, this company was entered in 2007, but still this company is not able
to gain very much market shares within this country as its United Kingdom’s operations
(Moodley and et.al., 2020). Currently, Walmart is the leading retail company in the United States
which has generated over $534.7 Billion of revenue last year. After Walmart, the next leading
retail companies of the US are Amazon.com Inc and Costco company which has generated
revenue of $321.8 Billion and $160.9 Billion in their last year operations. In the United States,

Tesco still not succeeded in comes under the list of the US’ top 20 retail companies, because
these positions already have taken by different other companies which runs their business
operations in the United States before Tesco. In business operations of other countries, like;
Hungary, Ireland, Czech Republic, Malaysia, Slovakia, Poland etc. Tesco runs its business
operations in oligopoly structure of market, because other existing retail companies within these
all countries gives very higher competition to Tesco here. That’s why Tesco still not able to run
its business operations in monopoly market structure, because different retail companies in each
market segment gives very tough competition to Tesco.
Different market structure in its history
The company was established in 1919, in which top-level management of this company
has gained opportunity to run its business operations in both types of market structures called;
monopoly and oligopoly (Kunc and Križan, 2018). According to different business experts, run
business operations in monopoly market structure is not a small task to a company, because a
company has always required to offer an exclusive or different range of products within market
place. If any company offer only ordinary and common goods and services, then that company
will not achieve chance for running its business operations in oligopoly market place. In
beginning stage of company, Tesco was able to run its business operations in monopoly market
structure, because on that time only Tesco was one of few retail companies in the UK’s retail
market sector. Basically, after having monopoly market structure, this company had opportunity
to set prices of its products and services on the self-choices. Most companies in the market
always like to make monopoly within their selected market places. Nowadays, Tesco’s upper
management also puts is huge efforts for creating own monopoly within market, but currently
this company is not succeeding to do this, because currently there are lots of new retail
companies comes within the market. Top-level management within other retail companies also
tries to make their monopoly in the market (Woodward and Veal, 2019). That’s why currently no
any business or company within the retail industry is able to make monopoly within market.
However, in the initial stage of Tesco, upper management of this company had not need
to put its great efforts to make monopoly within market, because on that time only few
companies exist within market as a retail business with Tesco. After few years, many other retail
companies came in the retail industry of the United Kingdom. For example; Asda was

established in 1949, so this company also has succeeded in running its business operations for 71
years. However, Tesco’s other key competitors called; Sainsburys and Morrisons runs their
business operations more long time period than Tesco. For example; Sainsburys runs its business
operations from 1869, it means upper management of this company runs its business operations
for 151 years, which is not a small thing to a retail company (Walton, Petrovici and Fearne,
2017). On the other side, Tesco’s another competitor Morrisons runs own business operations
from 1899, it means this company was established in market 121 years ago. According to these
findings, Tesco has not gained chance to effectively run its operations in monopoly market
segment, because every time any retail business or company always give very tough competition
to this company.
There are after having the biggest distribution channel in the United Kingdom, this
venture gets chance to run its business operations in monopoly structure of market. Reason is,
sometimes market suffers from shortage of different goods and services, so other retail
companies not able to reach their products and services to customers on time. In this type of
situations, only Tesco is able to fulfils customers needs in time just because of having an
effective and strongest distribution channel. Tesco’s supermarkets and stores has always filled
with almost all goods and services, so that in the situation of product shortage, Tesco enable to
run its business operations in monopoly structure of market. However, this is not easily possible
to Tesco for making its monopoly within this highly competitive and dynamic market structure.
Nature of the industry
Currently Tesco run its operations of business within retail industry (Potter and et.al.,
2016). It means, this company serves those all products and services which comes under the
retail category. Any customer can simply buy any retail product or service from this retail in this
time period. Currently the retail industry has gained the largest market shares in across the world.
No any other industry in all around the world is able to gain profit margins than this retail
industry, because businesses or companies which runs their business operations in retail industry
always offers products and services which are very essential for humans. According to Maslow’s
hierarchy of needs, humans’ prime needs are food, clothes, water and air etc. In this situation,
retail industry mainly fulfils prime needs of customers. That’s why this retail industry has the
largest market shares in across the world.

Of course, different market structure is more optimal this firm, because different market
structure always provides great growth opportunity to each business or each company
(Rodriguez, 2019). Different structure of market, mostly encourage to top-level management of
different companies to be learnt about ways or methods which can provide very great profit to
companies. Top-level management of Tesco has faced different market situation in its business
operation of 101 years. One century of business operations is not small thing to a retail venture.
In this time period of 101 years, Tesco had deal with many of market structures and situations.
For example; world wars, economy deflection, political crisis, financial crisis, pandemics etc.
But, upper management at Tesco has highly succeeded in running this business in each type of
market situation or structure. That’s why nowadays, Tesco leads the retail industry of the United
Kingdom. In its business operations of 101 years, existing management of this company has
succeeded in highly expanding its operations of business as well in many lots of countries.
According to top-level management, the company got only few chances from establishment to
date for running own business operations in monopoly market structure, because most of the
time, Tesco enable to run its business operations only in oligopoly market structure just because
of having high competition in the market.
Government intervention within the society is very appropriate thing for different people
or businesses, because government always tries to work in public or social welfare in the society.
For example; currently the main objective of the UK’s government is to highly grow economic
conditions of own country at the international level by proving better and progressive lifestyle to
different people here. Government intervention is very favorable for different businesses as well
including Tesco within the society, because government always formulates or passes some
productive legislations, regulations and standards, which gives opportunity to different
businesses or individuals for running their daily operations in ethical and legal manner (Bollani
and et.al., 2017). Currently, intervention of government of the United Kingdom is very positively
affecting Tesco and many other businesses as well. That’s why this intervention is very
necessary to society.
CONCLUSION
From the above report it can be concluded that there has to be a good planning and
structure for the organization so that there would be a strong functioning. There is a high

competition which is present in retailing industry and for that there has to be good decision-
making skills which have to be present in the organization. There are policies which have to be
followed in the company in order to get competitive advantage for them. There are a lot of
changes which are taking place in business and they have to be monitored effectively so that they
can increase the brand image in market.

REFERENCES
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