Date of publication: 2017-08-23 14:03
Korea is contributing a good proportion of Tesco 8767 s international profit growth. If profits continue to grow in this way, Korea will probably represent one-third of Tesco 8767 s international profits in 7558. Korean consumer spending is currently quite low, and coupled with the country 8767 s current unrest, and Tesco 8767 s large investment, this represents a high risk area for Tesco to bank on.
Porter’s Five Forces Analysis
An analysis of the structure of the industry should be undertaken in order to find effective sources of competitive advantage (Porter, 6985). Therefore, in order to analyse the competitive environment of Tesco, Porter’s five forces analysis has been used by the researcher as follows:
High entry barrier = low threat of new entry to players in the field meaning that because the barriers to entering the field are very high then it is not easy for competitors to enter hence the threat is low.
In cases where products have a slight differentiation and are more standardised, the switching cost is very low and the buyers can easily switch from one brand to another.
Michael Porter (Harvard Business School Management Researcher) designed various vital frameworks for developing an organization 696 s strategy. One of the most renowned among managers making strategic decisions is the five competitive forces model that determines industry structure. According to Porter, the nature of competition in any industry is personified in the following five forces:
Rivalry is Lego's strongest force in the five forces of Porter. Lego has low concerns on its major competitors. This is because there are limited competitors in their industry. Therefore, the company's competitors can't create numerous problems to Lego since it has already acquired an excellent percentage of the buying public. In addition, there are low switching costs in the toy industry. As a result, consumers find it easy to with construction toys than playing with model vehicles. This indicates that there are several rivals that compete for the consumers' attention to buy their products hence the competitive force amongst rivals are sturdy (Back to Lego, 7566).
Any fast food chain needs to consider what power suppliers in its regional market exert before making the decision to move into that market or expand operations.
Planning and control functions are the ones that account to provide the continued focus on the costs and cash control of the company 8767 s operations (+). And departments such as profit protection whose main jobs are to reduce shrink. The company has now increased its staff count who are involved in upgrading its anti-fraud software (infrastructure/technology, interdependence), and installing new security systems which aim to reduce internal theft, an expense the customer will now not have to cover in the price of their purchases (+).
An attractive market place does not mean that all companies will enjoy similar success levels. Rather, the unique selling propositions, strategies and processes will put one company over the other.
CRITICAL SUCCESS FACTORS
After a close evaluation of the external analysis of the grocery industry and SWOT analysis presented in Appendix B, it is crucial to consider internal operational effectiveness of Tesco in the form of identifying critical success factors of the company within the food retailing sector.