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Tesco has been the UK's most dominant supermarket for more than two decades and it is still the biggest supermarket in the UK. But all is not well for the giant food retailer. Since 2013, the company has posted declining UK sales. The food retailing giant has also been losing market share in the UK from a high of 30.9% in 2012 to the current 27.6% as of 2018. It has had to close loss making Tesco Direct, and is currently contending with a possible merger of Sainsburys and Asda (Sainsdas) which if successful will mean a more potent rival bigger than Tesco, further putting a squeeze on market share and Tesco margins in a competitive environment that is already characterized by price wars, high inflation and slow wage growth. Using Porters Five Forces, this report examines the current micro environment and some of the most critical factors Tesco faces and how the industry structure is being changed by the emergence of Aldi and Lidl before an analysis of current strategies Tesco is applying to recover lost ground and how it can supplement them with new recommended strategies.

HARVARD

Kush, Jonathan (2018) "Porters Five Forces Analysis of Tesco 2018" 123 Writing [Online] at https://www.123writing.com/sample/porters-five-forces-analysis-of-tesco-2018

Tesco Business Strategy Case Study


Key Learning Outcomes

By the end of the case, students should be able to:
  • Use Porters five forces model to analyse an industry on the basis of the five competitive forces.
  • Analyse the UK food retailing industry and how the five forces have affected Tesco and rival supermarkets and the impact on industry structure, attractiveness, and profitability.
  • Understand how Tesco has managed to defend against intense competition from Aldi, Lidl and Sainsburys and the strategies it uses to create 'blue oceans' that are defensible, helping it capture market share and maintain competitive advantage.

 

Analyse Tesco through the lens of Porters five forces to assess how the five forces affect it and the food retailing industry

1.0 Introduction


Tesco has been the UK's most dominant supermarket for more than two decades and it is still the biggest supermarket in the UK. But all is not well for the giant food retailer. Since 2013, the company has posted declining UK sales. The food retailing giant has also been losing market share in the UK from a high of 30.9% in 2012 to the current 27.6% as of 2018. It has had to close loss making Tesco Direct, and is currently contending with a possible merger of Sainsburys and Asda (Sainsdas) which if successful will mean a more potent rival bigger than Tesco, further putting a squeeze on market share and Tesco margins in a competitive environment that is already characterized by price wars, high inflation and slow wage growth. Using Porters Five Forces, this report examines the current micro environment and some of the most critical factors Tesco faces and how the industry structure is being changed by the emergence of Aldi and Lidl before an analysis of current strategies Tesco is applying to recover lost ground and how it can supplement them with new recommended strategies.

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