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Analysis Of The Uk Grocery Retail Industry

Essay by   •  June 16, 2011  •  313 Words (2 Pages)  •  1,275 Views

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Porters 5 forces on Tesco:

Porter's five forces look's into the external factors impacting on a company.

Competitive Rivalry:

Tesco's has a very high competitive rivalry in many aspects of the market from some major competitors in the food retail Industry like Asda, Sainsbury, Morrison and Waitrose. They compete with one another through price, product and promotions periodically. Tesco's express' main rivals are the Sainsbury local and the Co-op one way in which they compete with Tesco's is through distribution. These businesses have stores where Tesco's has making it competitive to sustain its customers.

Tesco's also compete with petroleum suppliers these include Shell, Esso, Bp and Texaco. They compete by using the same principles by having price wars and the introduction of special branded (high octane) fuels.

Power of Suppliers:

The power of suppliers is the suppliers demanding that retailers pay a certain price for their goods. This basically means that is the retailer does not pay the demanded price by the suppliers for the goods then the retailer will not have the goods to sell. Therefore the retailer will not be fully stocked and create bad customer service and a bad relationship with the suppliers. Tesco's has an advantage over the smaller shopkeepers as most of the general public tend to do their big shops at the larger supermarkets such as Tesco's therefore the larger store have the ability to dictate the price they want to pay to the suppliers and if the suppliers do not agree then they will be left with no retailers to do business with (sell to).

Power of Buyers:

The power of buyers can force the product prices down. This

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