MG408 Tesco Challenge: Market Analysis and Recommendations

This presentation provides a comprehensive analysis of Tesco's market position and performance. It begins with an introduction to Tesco Plc, highlighting its global presence and market leadership in the UK grocery sector. The presentation then explores current trends in the supermarket industry, emphasizing the impact of technology and e-commerce on consumer behavior and shopping experiences. A detailed review of Tesco's performance since 2015 is presented, including sales declines in Asia and challenges in Central Europe. A SWOT and PESTLE analysis is conducted to identify the company's strengths, weaknesses, opportunities, and threats, considering political and economic factors. The financial performance of competitors Aldi and Lidl is also examined, comparing their market share growth. The presentation concludes with key recommendations on how Tesco can regain market share and improve profitability, such as leveraging technology and conducting thorough market analysis. The presentation is supported by references using the Harvard referencing system.

THE CHALLENGES

Table of Content
• INTRODUCTIONINTRODUCTION
• Current trends in super marketCurrent trends in super market
• Tesco performance since 2015Tesco performance since 2015
• SWOT and pestle analysisSWOT and pestle analysis
• Financial performance of ALDI and LIDLFinancial performance of ALDI and LIDL
• ConclusionConclusion
• ReferencesReferences

INTRODUCTION
• Challenge is to call someone to participate or fight in a competitive situation. Presentation will lay focus on Tesco Plc.Challenge is to call someone to participate or fight in a competitive situation. Presentation will lay focus on Tesco Plc.
• Tesco Plc is a British Multinational grocery and general merchandise retailer that has been headquartered in England, UnitedTesco Plc is a British Multinational grocery and general merchandise retailer that has been headquartered in England, United
Kingdom. It is the third largest retailer in the world that has been measured by gross revenue and ninth largest measured byKingdom. It is the third largest retailer in the world that has been measured by gross revenue and ninth largest measured by
revenue.revenue.
• It has shops in seven countries across Asia and Europe, and is the market leader of groceries in the UK (where it has a marketIt has shops in seven countries across Asia and Europe, and is the market leader of groceries in the UK (where it has a market
share of around 28.4%), Ireland, Hungary and Thailand. Presentation will highlight current trends in super market.share of around 28.4%), Ireland, Hungary and Thailand. Presentation will highlight current trends in super market.
• It will also present the SWOT and PESTLE analysis on Tesco. It will also provide recommendation on how Tesco can improveIt will also present the SWOT and PESTLE analysis on Tesco. It will also provide recommendation on how Tesco can improve
its market share and regain its position in market.its market share and regain its position in market.

Current trends in super market
• Technology transforming E-commerce- Growth in market share will be supported by advancementTechnology transforming E-commerce- Growth in market share will be supported by advancement
in technology. It helps in improving the shopping experience of customers and fulfilment ofin technology. It helps in improving the shopping experience of customers and fulfilment of
capabilities.capabilities.
• Technology provides a significant opportunity to retailers and manufacturers to invest inTechnology provides a significant opportunity to retailers and manufacturers to invest in
personalization, convenience and combining offline and online to meet out the wide rage ofpersonalization, convenience and combining offline and online to meet out the wide rage of
shoppers needsshoppers needs

Tesco performance since 2015
• Sales in Asia in 2015 has declined by 4.1% which includes 3.2% impact on sales from foreignSales in Asia in 2015 has declined by 4.1% which includes 3.2% impact on sales from foreign
exchange. In South Korea, the impact of DIDA regulations has significant impact while, in Thailandexchange. In South Korea, the impact of DIDA regulations has significant impact while, in Thailand
the recovery in consumer spending has been slowly materialize as compared to expected.the recovery in consumer spending has been slowly materialize as compared to expected.
• Trading profit in Asia was 15.35 lower than last year due to operational gearing effect fromTrading profit in Asia was 15.35 lower than last year due to operational gearing effect from
negative impact on sales. Profitability of Central European business has been continued to be undernegative impact on sales. Profitability of Central European business has been continued to be under
pressure .pressure .

SWOT and Pestle analysis
• Strengths- Tesco is considered as one of the largest and most profitable supermarket andStrengths- Tesco is considered as one of the largest and most profitable supermarket and
retail industry in the world. The company has won many awards in retail excellency,retail industry in the world. The company has won many awards in retail excellency,
customer service and shopping experience.customer service and shopping experience.
• With improvement in the use of technology in its operations, Tesco has created more costWith improvement in the use of technology in its operations, Tesco has created more cost
efficiency in production and better service. Tesco has sufficient cash reserves whichefficiency in production and better service. Tesco has sufficient cash reserves which
provides it as strong financial position to deal in different economic cycles.provides it as strong financial position to deal in different economic cycles.
• Tesco has a good brand image in UK providing them assurance as the company will beTesco has a good brand image in UK providing them assurance as the company will be
operating long in futureoperating long in future

Pestle analysis
• Political Factors- As being operational worldwide and in different countries,Political Factors- As being operational worldwide and in different countries,
Political factors greatly influence on the performance of Tesco. It includes taxPolitical factors greatly influence on the performance of Tesco. It includes tax
rates, stability of the country, government regulations which makes changes inrates, stability of the country, government regulations which makes changes in
Tesco operation in that country and accordingly allot its expenses in variousTesco operation in that country and accordingly allot its expenses in various
sector.sector.
• Also, financial instability all over the world many governments enforces retailersAlso, financial instability all over the world many governments enforces retailers
to create employment for the domestic population and this is being done by Tescoto create employment for the domestic population and this is being done by Tesco
and in return its workforce gets diversified and increases demand for its products.and in return its workforce gets diversified and increases demand for its products.
These were the ways in which Tesco gets affected through political factors.These were the ways in which Tesco gets affected through political factors.

Current financial performance of ALDI and
LIDL
• ALDI and LIDL both the stores are slowly growing in UK. Aldi has already overtakenALDI and LIDL both the stores are slowly growing in UK. Aldi has already overtaken
the Co-Op to become Britain's fifth biggest supermarket by market share, according tothe Co-Op to become Britain's fifth biggest supermarket by market share, according to
data from Kantar World panel, while Lidl has pipped Waitrose for seventh place.data from Kantar World panel, while Lidl has pipped Waitrose for seventh place.
• In the 12 weeks to 22 April 2018, Aldi commanded 7.3% of the UK grocery market, andIn the 12 weeks to 22 April 2018, Aldi commanded 7.3% of the UK grocery market, and
Lidl was on 5.4%. They have a combine share of 80% in the market since the year 2013.Lidl was on 5.4%. They have a combine share of 80% in the market since the year 2013.
• In November 2014 ALDI has announced a plan to increase its store from 450 to 1000 tillIn November 2014 ALDI has announced a plan to increase its store from 450 to 1000 till
20202020

RECOMMENDATION
• Tesco can regain its market share by making use of advance technology. Company can engage inTesco can regain its market share by making use of advance technology. Company can engage in
utilizing the human resource effectively that will help them in regaining the lost market share.utilizing the human resource effectively that will help them in regaining the lost market share.
• Tesco must also involve in doing market analysis before launching any new and innovative product.Tesco must also involve in doing market analysis before launching any new and innovative product.
The goods which can be deliver must be according to the needs and demands of consumers.The goods which can be deliver must be according to the needs and demands of consumers.
• Before making any changes to the company, consider the education of professionals in differentBefore making any changes to the company, consider the education of professionals in different
areas of the businessareas of the business

Conclusion
• From the above study it has been summarized that company has a strong brand image which has helpedFrom the above study it has been summarized that company has a strong brand image which has helped
them in creating a strong consumer base. They have been involved in providing quality products to theirthem in creating a strong consumer base. They have been involved in providing quality products to their
consumers.consumers.
• This has assisted them in enhancing their market share and also reach large range of customers. ManyThis has assisted them in enhancing their market share and also reach large range of customers. Many
taxes, laws, rules and regulations has also been followed by company which has supported them intaxes, laws, rules and regulations has also been followed by company which has supported them in
making their brand image good.making their brand image good.
• It has created a positive perception in the mind of customers. Company has also been recommended toIt has created a positive perception in the mind of customers. Company has also been recommended to
make use of advancing technology by which they are able to attract large range of customers. This hasmake use of advancing technology by which they are able to attract large range of customers. This has
supported firm in increasing their market share and profitability.supported firm in increasing their market share and profitability.

References
• Johnson, S. and et.al., 2018. Tesco Bank Wellbeing Case Study. In WELL-BEING (pp. 179-188).Johnson, S. and et.al., 2018. Tesco Bank Wellbeing Case Study. In WELL-BEING (pp. 179-188).
Palgrave Macmillan, Cham.Palgrave Macmillan, Cham.
• Gonen, N. and et.al., 2017. Correction: Normal Levels of Sox9 Expression in the DevelopingGonen, N. and et.al., 2017. Correction: Normal Levels of Sox9 Expression in the Developing
Mouse Testis Depend on the TES/TESCO Enhancer, but This Does Not Act Alone. PLoS genetics.Mouse Testis Depend on the TES/TESCO Enhancer, but This Does Not Act Alone. PLoS genetics.
13(2).p.e1006584.13(2).p.e1006584.
• Sreenivasan, R. and et.al., 2018. Mutant NR5A1/SF‐1 in patients with disorders of sex developmentSreenivasan, R. and et.al., 2018. Mutant NR5A1/SF‐1 in patients with disorders of sex development
shows defective activation of the SOX9 TESCO enhancer. Human mutation, 39(12). pp.1861-1874.shows defective activation of the SOX9 TESCO enhancer. Human mutation, 39(12). pp.1861-1874.

Continue
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