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Market Retailing

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Introduction

In the context of the modern world, the economy of the UK relies largely on the grocery and the food market retail. £339 was the recorded value of the retail sales of the UK in 2015. With more than about 2.8 million employed in the UK market retails, the food retail continues to be an integral part of the markets of the UK. It has been seen that the 290315 retail outlets of the UK are the major source of the revenue of the country. It has been seen that about 12% of the total market retails of the UK has been made through the online media. Therefore, it has observed that the total online sales in the UK in terms of food and other market retailing have continued to grow by about 10% annually. In this study, the food market retailing has been described, according to the two companies including the Tesco Foods and Waitrose Foods (Goworek et al. 2012, p.944).

In this report, the different aspects of the UK food market retailing have been discussed and this includes the different analysis of the companies including the PESTLE analysis, SWOT, Competition analysis and Porter's Five force analysis. These analyses detected the different modes of operation of the companies, their directives, their threats and advantages in the modern markets of the country.

Evaluating the retail strategies on the competitive Environment

PESTLE Analysis

Political Currently, Tesco and Waitrose have its branches in the different parts of the UK and a total of six other countries in the world. In this context, the political structure of Tesco has been comprehensive, as the total opportunities provided by the Tesco in the modern world, to the young individuals of the UK are higher than the other companies in the UK. It employs a variety of individuals including the students and the older individuals. It has been directly influenced by the superior business conditions of the European Union laws and legislations. On the other hand, these services are not provided by the Waitrose.
Economic The economic factors are directly related to the financial stability and the prices of the products and services, which are imposed by Tesco and Waitrose. It is observed that one of the important factors that concern the UK is the unemployment and this has attributed to the lack of sales of the particular products at the desired levels in the country. It may be considered that the growing international business has a direct influence on the Waitrose markets in the UK.
Socio-cultural The social and the cultural factors are important for Tesco and Waitrose to have the increase in their market share of the UK food markets. It is seen that the people in the UK, belong to a variety of castes, religions, cultures and ethnicity. These diverse populations, the ageing and the young population pose a number of value-added products and services to be made available by the Tesco and Waitrose. The foods and the services by the Tesco have been currently oriented towards the tastes and the attitudes of the diverse population within the country. On account of the increased health awareness by the individuals, the healthier food section and the green packaging foods have become additional areas of retails and this has consequently increased the amounts of profits for the Tesco in the UK.
Technological This macro-environmental factor is related to the increased growth in the revenues for the Tesco and this has not been accounted for much in the case of Waitrose. It has been seen that the increase in the technological applications worldwide, poses additional advantages for the incorporation of these technologies in the retail markets of the Tesco. This implementation of the increased technologies allowed them to offer the online marketing systems and the improved customer services, in the recent years.
Legal The directives of the Food retailing Commission (FRC) adopted the implementation of the codes of practice in the business environment that is required to be adopted by the companies. Tesco has been able to successfully implement these codes of practices and the legislations of the government, the European Union and the FRC. Certain products are viewed to have lower prices as offered by the Tesco and this has been alternatively seen with the increase in the prices of the other products. These have been simultaneously met by the Waitrose in the UK.
Environmental Due to the increase in the demand for the promotion of environmental protection, the strategies and the plans for Tesco and Waitrose has been made, according to the environmental protection laws and policies. Therefore, the products of environmental friendly approach provided the additional services and products for their market retails. On the other hand, the protection of the environment initiative provided the platform for the increase in the trust among the customers.

Porter’s Five Forces

Supplier Power

The supplier power for bargains is lower, as compared to the bargaining power of the suppliers of the Waitrose in the UK. This increases the stability for the Tesco in the modern markets of the UK

Buyer Power

The power of the buyers is more in the cases of both Tesco and Waitrose. These conditions are similar in the cases of both the companies.

Competitive Rivalry

Tesco faces very minimum competitive rivalry by the other companies including ASDA and the Sainsbury in the UK. On the other hand, the Waitrose are subjected to significant rivalries with the other companies in the country.

Threat of Substitution

It has been seen that the Metro stores have been enormously rising in the streets of the UK in the recent years and this has been one of the major threat of substitution for the Tesco as well as Waitrose. In the context of the UK, it has been seen that the demand for the improved services and concept foods have grown and had higher chances of substitution for the Waitrose. On the other hand, the Tesco has adopted strategies to tackle this effect as newer concept foods and other improved services are provided by the Tesco.

Threat of New Entrants

In this context and according to the modern perspectives of the UK, Waitrose has been subjected to a huge amount of threat for the new entrants. It has been seen that the supermarkets and the roadside one stop shopping stores have attracted a large number of customers and the variety of products and services available at a single store, have reduced the market shares for Waitrose. On the other hand, the Tesco have implemented systems and strategies, to meet these situations in modern markets of the UK. Additional impacts have further been evident on the butchers and the traditional ration shops.

SWOT Analysis

Tesco

Strengths Weaknesses Opportunities Threats
  • Huge area coverage provides huge market profits for the company.
  • A large number of stores allows the company to attract a huge number of people to their stores regularly.
  • Managing the efficient operations, on account of its huge size of its UK market is one of the weaknesses of the company.
  • Increasing the number of young employees may provide an opportunity to lower the quality of services, offered by the Tesco.
  • On account of its size, the higher market stability is obtained by the company.
  • As it is based on the middle-class markets with additional discounts, it provides a huge opportunity for increasing the annual profits for the company.
  • Difficult to maintain the management of the company employees.
  • Difficult situations may be evident on account of the political instability of the company employees.

Company’s weakness may turn into strengths

It is essential for the companies to analyse their individual weaknesses. These weaknesses may be produced as a result of the continuous and thorough evaluation and the analysis of the companies, in terms of their products and services. The analysts are generally hired by the different companies in order to have their individual analysis and compared them, with that of the other companies. It is seen that the study of the weaknesses of the companies, allow them to analyse their weaknesses accordingly. Additional strategies and plans are made to implement the procedures of turning their weaknesses into strengths. In the context of the UK, it has been noted that in the recent past, the market sales in terms of the quality of the services of the Tesco had decreased considerably and this accounted for the lower market prices and shares. However, careful evaluation of the situation, Tesco introduced the active investment programme into its business and soon reached the desired heights that it used to hold previously. These indicate that the efficient strategies and analysis of the weakness are required to be made, in order to turn the strengths into weakness for a company (Wood and McCarthy, 2014, p.142).

Objectives

Tesco

The major aim of the Tesco is to make their products and services to be made available to the people of the UK as well, as that of the other countries of the world. It aspires to increase their non-food division to reach the heights of the food division. Currently, it is second largest grocery retail of the world and the largest supermarket retail in the UK. Other major customer-oriented objectives are to meet the acute demands of the customers and allow the customers to avail their products and services at the competitive prices and superior qualities (Chakraborty et al. 2014, p.24).

Waitrose

One of the major objectives of the Waitrose is to increase the margin of their sales by increasing their number of stores in the UK. It has been seen that the Waitrose aims at increasing their stores in the UK markets and projects that these stores are of attractive architecture, which may lead to the increased bases of the customers. Waitrose further aims at increasing the levels of promotion, without the lowering of prices, which are the opposite of the plans and strategies of the other companies of the close competitive markets (Jones et al. 2013, p.28).

Positioning, Targeting and Image

TescoIn the context of Tesco, it has been seen that the services and the products of the company are not widely accepted by the people of the country. This has been sourced to the differences in the cultures of the different people of the country. Therefore, the needs of the different cultured people of the country are different. Therefore, the company has adopted the segmentation strategy to implement their market retail plans, according to the needs and the demands of the general people.

Range of Merchandise

Food retail, fashion, banks, gardens and resorts.

Location

The location of the different stores and the supermarkets of Tesco have been situated at almost every place of the country, in the roadside, near the petrol pumps, near the markets and in the airports. This establishes the dominance of the company in the markets of the UK. It has accounted for the highest marketing retail company in the UK in the recent years.

Pricing

The pricing of products for the Tesco is made according to the seasons and the customer demands. Moreover, additional discounts are provided in certain products, based on the demands and the availability of the product in the markets of the UK. The pricing is generally achieved after then careful evaluation of the demography and the annual economic stability assessment of the general people of the locality.

Store Design

The store designs are not an integral factor for Tesco. Tesco basically focusses on the quality of the products and the services that are offered. At the same time, it prefers its lower pricing strategy to be a factor that is associated with the stability of the business. However, it has been noted that the Tesco implements varied models of architecture in their respective supermarkets in the UK and around the world.

Customer Service

The customer service is an integral part of the business operations of the companies including the Tesco. It has been observed that the improved customer services provide the way for the improved and increased levels of customer retention and relationship. Therefore, it has been seen that the customer services for the increase in the market share of the UK have been mitigated by the establishment of the efficient customer service relationship department in the company.

Atmospherics

The atmospherics play a dominant role in the status of the business that is performed by the different countries. In the context of the Tesco, it has been seen that the variety of cultures and the different aspirations provided the essence and the atmospherics for the development of the diversity of the products and the services that are offered by the Tesco, over the years in the UK.

Waitrose

Waitrose operates nearly 350 branches in the UK and currently, accounts to the sixth largest grocery in the context of the UK in the recent years. It has been observed that the company had the direct relationship with the queen of the country and it provided her with the regular supply of superior wine and therefore, the availability of superior wine is one of the key features of the company.

Range of Merchandise

It offers food, wines, fashion apparels.

Location

Waitrose currently accounts to about 350 stores in the UK. Further, the Little Waitrose stores are also dominant in 30 different spots. It has been observed that the stores of the Waitrose have been located on the basis of the density of the population and not on the demands of the population.

Pricing

A strict pricing system is employed by the Waitrose. The major strategy behind the success of the Waitrose is that they focus on the increase in the advertisements and at the same time, keeping the values of the products and services constant. They believe that the better advertisements hold the key for the people to betray their brand loyalty and join new brands. Therefore, in many cases, it has been evident that the other companies with the additional discounts attract more people as compared to the customer attraction and retention in the Waitrose.

Store Design

Waitrose employs a blend of technology and artistry to implement their designs in the stores and the mini stores of the UK. It has been established that the superior designs and the concepts of architecture of the stores attract a large number of customers in the UK.

Customer Service

The increase in the levels of customer services is preferred by the Waitrose, similar to that of the Tesco. It induces the companies to have the superior services and products offered to the general people of the country.

Atmospherics

In the context, of the Waitrose, it has been seen that the atmospherics and competitive rivalries have been a collaboratively a dominant force, that resulted in the development of the business of the particular organisation in the UK. The major difference is that the Waitrose is a completely employee-owned retail market company in the UK.

Conclusion

It is established that the overall base of the success and the profits of the companies in the food retail markets of the UK are prone to huge rates of competition ion the recent years. It is established that the future scopes of the development of companies including Tesco and Waitrose are dependent on the different modes of analysis including the PESTLE, SWOT, Porter's Five Forces and a number of internal administrative analysis. A number of other plans including the selection of the appropriate area, people, and the cost of the services or the products are important for the companies top to have an improvement of the overall process of their individual’s market retailing in the modern context of the country.

References

  • Aguzzoni, L., Argentesi, E., Ciari, L., Duso, T. and Tognoni, M., (2016). Ex Post Merger Evaluation in the UK Retail Market for Books.The Journal of Industrial Economics,64(1), pp.170-200.
  • Chakraborty, R., Dobson, P.W., Seaton, J.S. and Waterson, M., (2014). Market consolidation and pricing developments in grocery retailing: a case study.World Scientific, Singapore, pp.3-29.
  • Chkanikova, O. and Lehner, M., (2015). Private eco-brands and green market development: towards new forms of sustainability governance in the food retailing.Journal of Cleaner Production,107, pp.74-84.
  • Goworek, H., Fisher, T., Cooper, T., Woodward, S. and Hiller, A., (2012). The sustainable clothing market: an evaluation of potential strategies for UK retailers.International journal of retail & distribution management,40(12), pp.935-955.
  • Jones, P., Comfort, D. and Hillier, D., (2013). Local food and the UK’s leading food retailers: rhetoric and reality.World Review of Entrepreneurship, Management and Sustainable Development,9(1), pp.26-36.
  • Wood, S., Wrigley, N. and Coe, N.M., (2016). Capital discipline and financial market relations in retail globalization: insights from the case of Tesco plc.Journal of Economic Geography, p.lbv045.
  • Wood, S. and McCarthy, D., (2014). The UK food retail ‘race for space’and market saturation: A contemporary review.The International Review of Retail, Distribution and Consumer Research,24(2), pp.121-144.
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