The Pattern of Business Styles and Structure of Organization - PowerPoint Presentation Example

CORPORATE STRATEGY PRESENTATION Number] September 8, Corporate Strategy Presentation The Tesco and ASDA Companies The U.K`s grocery market is becoming ever-increasingly concentrated with the country`s top five grocers accounting for more than 50% of the grocery retail standard sales. Their strength in the market is under increasing levels of scrutiny by the opposition authorities in an attempt to prevent the emergence of a monopoly. Due to this, more large scale concentration is being highly resisted, making large grocery retailers to diversify into various store formats. For example, Tesco diversified into online shopping in order to increase market entry and avoided food stuffs sales. In this review, we are going to focus on Tesco and ASDA companies in the UK`s grocery market. Tesco and ASDA are two among the top five companies in the UK grocery market. Tesco is the worlds 3rd biggest grocer by sales and is still the mainly accepted place to buy food in Britain. ASDA is the second largest grocer by sales in the UK. Being among the top five in the grocery market, the two companies have built up competition and adoption of major strategic plans to counter competition and maintain their share in the market. Over the past several years, price wars flooded the grocery retail due to increased popularity of the private labels and discounters. As a way of challenging the growing share Tesco and ASDA broadened and enlarged their discount lines. Another stronghold trend observed in the UK is the Internet retailing. This channel was the least affected by the economic slowdown and was forecasted to see the strongest development in the medium to extensive term. ASDA internet is covering only Croydon and South London. This is a shortcoming to the company since; if they could invest more and cover the other areas of London they will be benefitted. This an added advantage for Tesco over ASDA. This is because Tesco has a wider coverage in London terms of their coverage and customer reach. However, ASDA`s clothing brand named George expected to spread across London, is a score point and profitable for them. If they could maintain this level, it could be a cash cow for them in the near future. Apart from other products, ASDA`s groceries are generating a huge number of good money. This is an advantage for it over its competitors and thus a cash cow for them. A plan to allocate funds to the furniture sector is also a great step in their operational targets. This is one of the major and critical strategies that need be taken into consideration in order to counter competition from giant competitors. Consumers continue to use the Internet in order to seek out bargains and weigh against prices. Another positive trend towards these grocery markets is that, with increased wide use of smart phones, consumers no longer need to sit behind their computers in order to place an online order. Customers have appreciated the use o internet shopping on the go and it has been a growth propelling factor for the two companies. In the recent past, it was shown by figures that Tesco saw its shares in the UK grocery market immerse below 30%. It went further down to about 29% a year later. This led to the description of the December trading period as “disappointing” by the Tesco Company due to their sales dropped by a margin of 2.3%. In contrast, ASDA Company saw its market share make significant gains on the same trading period. ASDAs share rose prickly from 16.9% to 17.5%, this was due to the switching of NETTO stores to the ASDA trademark. This gives ASDA an opportunity to secure growth in the share market during these periods when competitors are experiencing shortcomings. Tesco has experienced tremendous challenges in the recent past with operational sales falling by -1.5 despite in growth of the market as whole. In addition, Tesco is in the process of giving away 50% of Tesco Japan. In December of the year the 2012, Tesco signaled that it may be in the verge of leaving the US market altogether. Tremendous losses at the Tesco`s American Subsidiary Fresh & Easy will reach the highest value ever experienced in the history of Tesco. With sales growth below the established market average it is expected to take critical steps towards solving the matter. Top British supermarkets were involved in price war over the festive period of December which was started by Tesco`s £500 million Big Drop Price campaign which launched in early December. Later the company admitted that its spending on the campaign was not fruitful and had not countered competition from its major competitors. However, Tesco is the first British supermarket to carbon footprint label owns brand products. Taken over three month’s period market share was drawn slightly with 30% share improvement. To counter competition, ASDA established a financial service split up, following in the footsteps of Tesco. ASDA simply attaches its own brand to products provided by other companies. This has extensively grown to cover for services which include insurance services, credit cards and loans which are provided by the Funding Corporation. ASDA does not directly sell the services to their respective customers; rather they use the supplier of that product by telephone, online or postal application. For example, credit cards were offered to their customers by GE Capital Bank and other partners. The only good news for Tesco Company is that now it’s coming out of Ireland, where sales remained steady for the first quarter of the financial or fiscal year. Despite problems in Japan Tesco expects international business to count for 36% of revenue by 2014 up from 30% in the year 2011. In 2008 Tesco had an outstanding commercial record and stood out in the global market place thus winning the `World Retail Awards. Analysts say that this is a major achievement for Tesco Company. For this reason it is likely to grow further and assurance of sustainability. As ASDA and Tesco are conducting business in the same industry internationally they have some likeness in their strategic planning according to their tangible and intangible, styles, structures, systems, skills, expertise, staff and the total shared value. One key feature common to these companies is that they are using their monopolistic ideas to conduct their business. Each company is trying to promote their own brands in the market. Their strategic plan could be different from place to place and from one country to another but the concept remains the same. Both companies are applying same tactics in conducting international business, for example, they are trying to cost leadership business approach to over the world where they have interests. Both Tesco and ASDA have employed team efforts, self check out approaches, staffing policies, company shared value, staff bonus to encourage and motivate them, pattern of business styles, structure of organization are the same form the past, the present and they will remain to be the same in the future. However, little bit changes are expected where the management feels there is need to. References feeding you grocery news and reviews, 2011. UK supermarkets: business strategy and global economy, 2009. Degree Essays: Read More