across a large geographical area. It has changed because interest rates are set in each country at the appropriate level for it. The loss of national sovereignty is the most often mentioned reason for the UK not joining the monetary union is the transfer of money and financial proficiency from national to community level would mean that economically strong and stable countries would have to co-operate in the field of economic policy with other weaker countries. Tesco's Promotional Strategy. Tesco, a UK retailer that operates in the grocery sector. TESCO Leadership and Organisational structure. The four leading supermarkets in the UK supermarket oligopoly are Tesco, ASDA, Sainsbury's, and Morrisons. European Unions rewards businesses and organisations, which reduce their CO2 emissions and penalises those that exceed limits. Tesco Board of Directors consists of 10 members. MARKET STRUCTURE Market structure is the interconnected characteristics of a market, such as the number and relative strength of buyers and sellers, degree of freedom in determining the price, level and forms of competition, extent of product differentiation and ease of entry into and exit from the . The total 2010 year to date value of UKs trade-in-goods exported excluding June 2010 was 45.5 billion, which has been downwardly revised by 6.9 million. Your email is safe, as we store it according to international data protection rules. Tesco is simplifying its marketing structure under three teams in a move that will result in some redundancies at senior level as it looks to up its focus on the customer. Making it one of the best grocery store chains in the . The policy also allows technological innovation and the European Commission makes sure that these innovations are in the European Unions fair competition policy. If Tesco plans to merge with its competitor, Tesco needs approval from the European Commission, the EUC (European Union Commission) marks their decision depending on the amount of business that Tesco has within the European boundaries. Tesco deals with a wide range of products, which has high demand in the market aiming at full customer satisfaction. June 2010 showed a 15.5 per cent increase in exports compared to May 2010 and a 33.0 per cent increase in exports compared to June 2009. Essay. Eliminating exchange rates between European countries eliminates the risks of unforeseen exchange rate revaluations or devaluation, further those businesses who involved in commercial transactions in different member states would no longer have to face administrative costs of accounting for the changes of currencies. How has Tesco Responded to this Structure? An oligopoly is most likely to have a kinked . . As a result of uncertainty in the market, Tesco broadened its forecast of profits for this year to between 2.4bn and 2.6bn - less than the 2.84bn predicted by analysts. The total 2010 year to date value of UKs trade-in-goods imported excluding May was 59.2 billion, which has been upwardly revised by 96.7 million. Under the system, European Union governments set limits on the amount of carbon dioxide emitted by energy-intensive industries and if they want to emit more CO2 than their quota, they have to buy spare permits but most supermarkets stores do not manufacture and this means that they will have to use eco friendly methods of business and equipment. In the UK, the five big supermarkets totally have 3/4th of the market . Twenty seven separate countries with widely differing economic performances and different languages have never before attempted to form a monetary union. Save time and let our verified experts help you. across a large geographical area. Since then there have been significant efforts in terms of policy. they will be extremely affected by any slowdown in the UK food market. It has changed because interest rates are set in each country at the appropriate level for it. 1093 Words5 Pages. The characteristics of the market structure will have a major-influence on the competitive strategies and tactics that are implemented by firms. Actual monopoly is where the firm has somewhat majority of the market share in the industry, in this case Tesco is the most famous example, Tesco owns over 30.4% of the market share and is the leader in supermarket industry. OFT plays a leading role in promoting and protecting consumer interests throughout the UK, while ensuring that businesses are fair and competitive. The conditions for a monopolistic market are as follows: there is only one firm, which is large in size. As Tesco manly sells general groceries they are affected by the European Union's environment policy, in a way that it has to source materials from the suppliers who obey and follow the European Union's environment policy, this means that Tesco has limited p of potential suppliers. May 2010 showed a 2.9 per cent decrease in exports compared to April 2010 and a 21.3 per cent increase in exports compared to May 2009. All the sellers of the market are small sellers in competition with each other. Tesco focuses on attracting customers through its signature low prices strategy. What results so far? Tesco PLC organizational structure is decentralized, tall (hierarchical) and product-based. One of the few reasons that the United Kingdom did not want to join the single European currency with the first wave of countries on 1 January 1999 is that according to the chancellor of the Exchequer at that time in 1999 who was Gordon Brown our current prime minister said that, although the government supported the principle of the single currency Britain would not be ready to join at least until the second wave of countries which occurred in 2002 and during that time he told the European Union that the country should begin to prepare for monetary union but up till now there have been no indications of the United Kingdom joining the European Union currency, Euros. In May 2010 the total value of UKs trade-in-goods exported to Member States of the EU was 11.3 billion. The European Commission has wide powers to make sure businesses and governments stick to EU rules on fair competition. OFT is a non-ministerial government regulator that was established by government in 1973. The report analyses the pricing strategies, cost curves, elasticity of goods and portfolio of goods that Tesco sells. European Union is a unique economic and political society which is in partnership between 27 democratic European countries. Kudler Fine Foods is an organization that offers gourmet foods and wines to the San Diego Metropolitan area. The Commission can, does and has fined companies for all these practices. from 14.0 billion to 15.4 billion, hence the UK economy is dependent on the import of essential raw and prepared materials; today the service sector is more and more important to the UK economy as a result of the weakening of the manufacturing sector now imports are crucial and that is why using the international market the UK economy is on the growth as the export data depicts that UKs export is increasing from 8.2 billion to 10.9 billion. Any citation style (APA, MLA, Chicago/Turabian, Harvard). EU leaders launched the first EU sustainable development strategy in 2001 and updated it in 2006 to tackle shortcomings and take account of new challenges. The European Union Commission can allow companies like Asda and Morisons to cooperate in developing a single technical standard for the market as a whole. The imports of UK data shows that the import from the non European Union zone is increasing i.e. The competitive market structure an organisation belongs to is determined by the nature of their product, the number and size of other firms in the market and the entry and exit conditions of that market. Likewise, businesses would no longer have to pay hedging costs which they do today in order to insure themselves against the threat of currency fluctuations. EU has set binding limits on emissions of fine particles known as PM2.5. It operates stores in various formats differentiated by size and range of products sold, including large, small, dotcom only and one-stop. In a perfect competition there are few entry and exit barriers, in this type of competition the companies target the mass audience and they differentiate their product with minor changes in the product attributes (Homogenous). Cohen believed in the business model "stack 'em high, sell 'em low". The main ones are: The European Union is not a perfect society but it is an evolving project and constantly has to be improved. Once in a lifetime a family might make one large purchase or transaction across a European border such as buying a holiday home or a piece of furniture. An oligopoly is a market structure with a small number of firms, in which none can prevent other from having a significant influence in the industry. Actual monopoly is where the firm has somewhat majority of the market share in the industry, in this case Tesco is the most famous example, Tesco owns over 30.4% of the market share and is the leader in supermarket industry. A range of prices occurs because sellers can differentiate their offers to buyers. Thanks to our free revisions, there is no way for you to be unsatisfied. Retrieved from https://phdessay.com/market-structures-tesco/, Hire skilled expert and get original paper in 3+ hours, Run a free check or have your essay done for you, Didn`t find the right sample? In a perfect competition market structure, there are a large number of buyers and sellers. The single market benefits the firms, by making it easier & cheaper to do business in other EU countries. A competition test to curb the power of the supermarkets was unveiled by the Competition Commission last year as part of a planning shake-up designed to boost competition in the multi-billion pound grocery market. As of February 2017, the total shareholder's equity of Tesco was 6.414B ("Annual report," 2017). MARKET STRUCTURES. Aid for research and innovation, regional development or small and medium-sized enterprises is often allowable because these serve overall EU goals. Another organisation that does similar commerce to what Office of Fair Trading do, Ofcom is an independent regulator and competition authority, for the UK communications industries, with responsibilities across television, radio, telecommunications and wireless communications services. A monopoly has high barriers to entry and firms have strong controls over their prices and they also control the supply of their product which can increase demand of popular products, because a firm with a monopoly has majority of the market share it can decide to have low prices in order to destroy their competitors. My Pearson (KY) e-book. In the second part of the assignment I will describe the value of international and EU markets to UK firms. This may lead to pockets of deeply depressed areas in which people cannot find work and areas where the economy flourishes and wages increase. Get any needed writing assistance at a price that every average student can afford. Value of European markets to UK Tesco itself argues that it is an oligopoly, which suggests that they are also not flawed in the perfect rivalry category of the market structure. Sometimes it is hard to do all the work on your own. Due to the low degree of competition theses big giants can decide on their own price which is most suitable for its target audience and these prices will be non-competition prices however there could be potential for collusion and price fixing so that each dominant business can enjoy their market share and have profits accordingly i.e. In 2013, Tesco spent approximately 110 million on marketing efforts in traditional outlets. It is important to note that the structure below . The competition policy stops the Tesco from growing further from their potential market share, something which Tesco has known to be done in the recent years. Employment Environment External trade Fight against fraud Human rights It is illegal under EU rules for businesses to fix prices or carve up markets between them. If a community or even an individual has an important point to show to the union they must do some of the following starting with: The EU has developed a single market system of laws which apply to all member states, and ensures the free movement of people, goods, services, and capital, including the elimination of passport controls by the Schengen Agreement between 26 European Union states which I have listed below. Since the war the UK economy has tended to have an economic cycle closer to the US than the EU. Under the new law, EU countries will have to reduce exposure to fine particles in urban areas by an average 20% by 2020. The Commission also monitors closely how much assistance EU governments make available to business (state aid). To make these things happen, EU countries have set up bodies to run the European Union and adopt its legislation. Tesco is a large U.K grocery firm and retailer whose main competitors are Sainsbury's, ASDA, and Morrison's, which are often called the Big Four in the United Kingdom. This is because in the . Market structures are the business orientated characteristics of a market; all businesses must focus on these characteristics of the market because these have an effect on the degree of competition in the industry and influence the business product or service pricing decisions. Thus, the current strategic purposes for business that Tesco should consider include expansion and . Tesco was born and the first shop was opened in 1929 in north London. Have a kinked our verified experts help you since the war the UK food market the European... 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