Performance Evaluation of Tesco: Market Trends and SWOT Analysis

This report provides a comprehensive performance evaluation of Tesco, a leading UK supermarket chain. It examines current trends in the retail industry, including the impact of digitalization and technological advancements. The report analyzes Tesco's performance since October 2015, highlighting its strengths, weaknesses, opportunities, and threats (SWOT). Key strengths include Tesco's market share and diversified stores, while weaknesses include declining operating profits and past failures in international markets. Opportunities include strategic alliances and online shopping, while threats include Brexit and increasing competition. The report concludes with growth opportunities and recommendations, emphasizing the need for careful consideration of new opportunities and the potential impacts of Brexit. The analysis is based on several academic references and provides a detailed overview of Tesco's current market position and future prospects.

Performance evaluation
of TescoGROUP MEMBERS:
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Current trends in the supermarket
sector
 Tesco is having its operations in retail industry, it is one of the leading
brand in UK amongst different supermarket chains present. Currently
retail industry is affected by digitalization and effective use of advanced
technology developing aggressively. Technological advancement are
changing grocery retailing and have profound impacts on the future of
retail industry(Mok and Jiang, 2017). Technological innovation and
online stores are shifting buyers expectations and preferences towards
it. People nowadays need more comfort and ease which is provided by
technology to them and this also effects the grocery industry and retail
business.

Tesco performance since October
2015
 Tesco, Britain's biggest retailer is becoming stronger day by day by
every passing year its performance and sales are rising resulting in
better earnings and effective performance of the company. Tesco is
improving its operations regularly according to the changing market
condition and workplace environment(Mok and Jiang, 2018)
(Ravichandran and et. al., 2017). In past years company had to close
some of stores due to poor performance in that particular market still
this does not have any harmful impact on overall performance of
company. This is due to it's strong position and sales in its domestic
market where Tesco is a leading brand fulfilling the needs and
requirements of people by providing them best quality goods.

Current performance of Tesco
 Tesco is a very strong and big organization having several stores in
domestic and international market. Currently company is having good
operations in all different marketplaces where they have the stores.
Tesco is facing some issues due to Britain not being the part of
European Union anymore in other words due to Brexit(Athey and et. al.,
2017). Also Tesco faced failure in the American and Japanese market
and had to close that stores and leave that marketplace. Still the
organization is earning good profits which are enough for Tesco to
survive in in dynamic market condition throwing good competition to
others in retail industry. Tesco is still the leading brand having great
market share and market position from other competitors.

SWOT analysis of Tesco
 This is a framework which is used by several organizations for
understanding and gaining knowledge about its internal environment
and different external factors. SWOT is an acronym for strengths,
weakness, opportunities and threats(Bawa and Watson, 2017). These
are four factors which helps entity to understand their strengths and
weaknesses so that they can explore their strengths and take
precautionary measures to reduce the impacts of weaknesses. Also to
external factors which are opportunities and threats enables company
to work with new chances and reduce the impacts of potential threats.

STRENGTHS
 Biggest grocery retailer in UK- Tesco is the leading grocery retailer and
number one supermarket chain in UK. It house highest sales and revenue
units as compared to other supermarket chains and its competitors.
 Leading market share- Tesco dominates the grocery retail market with
27% of market share amongst the big four supermarkets.
 Diversified stores- Company has launched different form of stores in
different locations having unique divisions Tesco motors, Tesco home plus
and Tesco express(Dickey and et. al., 2017).
 Obtained several international awards- Due to its successful
commercial performance Tesco has received several awards.

WEEKNESSES
 Decrease in operating profits- The share price of Tesco fell down in
past few months due to declining operating profits. This reduction in
profit is due to Brexit or in other words it is a effect which is the result
of Brexit.
 Low cost strategy- Another weakness of Tesco is its low cost strategy
it is leading the company towards reduce profit margin. Although Tesco
is a price leader still this works as weakness for company.
 Field operations in US and Japan- Tesco had to exit from American
and Japanese market. Discourse field exporting operation forced the
company to close their stores from Japan and after sometime from the
America(Jou, 2017).

OPPORTUNITIES
 Strategic alliance with other brands- Developing strategic partnerships
with other repeated organizations can be a great opportunity for Tesco
enabling it to offer more product or services to its customers and increase its
customer base and loyalty (Leki, 2017).
 Online shopping- Tesco can avail the opportunity by growing and upgrading
its operations online. Company can sell its products to ultimate buyers and
provide them is by using digital technology and selling goods online.
 Emerging markets- Company also have the opportunity to diversify its
business to new emerging markets. Tesco operates and serve to several
customers from its different stores but company can expand its business into
new developing markets and earn better profits.

THREATS
 Brexit- The biggest threat right now Tesco is facing is Britain exiting
European Union. The effects of Brexit are very severe and have huge
impacts on the business of Tesco possessing very big threat on the company.
 Economic crisis and credit crunches- Different laws and regulations in
post by government and economic upheavals can affect the efficiency and
performances of Tesco in critical regions.
 Increasing competition- A very big threat for every organization is
increasing competition same is the case with Tesco (Artino Jr and et. al.,
2018). With rise and growth and performance of competitors it is becoming
difficult for Tesco to survive which possesses a very big threat on Tesco's
market position and market share it acquired in past few years.

GROWTH Opportunities &
Recommendations
 Tesco is a leading multinational supermarket store which has huge
operations in several sections of the world. The market is changing
regularly bringing several opportunities for the company to become
better and attain better position in market. Tesco can explore the
opportunity of earning greater profits by effective use of digital
technology as it is becoming a part of day to day life of human beings.
Also Tesco can explore its possibility of developing good market in new
emerging market place such as South Korean market. The only
recommendation for the company is they have to be very careful while
exploring new opportunities as the recent effects of Brexit which can
change these new chances and their positive impacts into negative.

Conclusion
 After conducting thorough study and gaining proper understanding of
Tesco and environment in which it is operating it can be concluded that
the company is in good position and working effectively. Past
performance of company is analyses and current trends are also
studied and their impacts are seen on Tesco. SWOT analysis is
conducted of Tesco in which internal and external factors are evaluated.
All these factors are determined for knowing the performance level of
Tesco and knowing its current market condition in which entity is
operating.

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