Tesco(supermarket) lost market share - Essay Example

TESCO SUPERMARKET MARKET SHARE By Location Tesco supermarket market share Problem Tesco supermarket was losing its market share as some of its closest competitors continued to gain market share. The market share experience a drop from 30.2% in 2013 to 28.8% in 2014. It is believed that there were some management issues that led to this decline in this situation and the possible solutions are discussed herein.RecommendationThere are a number of reasons as to why Tesco supermarket has been losing their market.

Unlike their competitors such as Aldi and Lidl, Tesco has ignored the need to be price competitive, thus being unattractive to limited income consumers. On the other while some of the players in this industry such as Waitrose have been expanding the number of stores, Tesco has been doing very little with regard to their geographical accessibility. Despite the extension of floor space having been a major driver in the growth of Tesco in the past, they have not been doing it as aggressively as they used to do before.

There are a number of things that Tesco Supermarket can do to regain market share. Tesco might consider staying relevant through innovation. One of the best ways through which a business organization can remain competitive is by identifying emergingtrends, trends before their competitors do (Kotler&Kotler 2012, p. 119). This will be possible if they pay close attention to the things that change in the lifestyle of their customers. Tesco supermarket should also consider getting in touch with their customers.

At this age public relations is not all about receiving the complaints of customers. However, it has developed to the extent that business has to seek to know some of the things that they customers wish they could get from supermarkets. They should make sure that they do not make any assumptions about what their customers want, but get but creates avenues for continuous communication between them and their customers (Shafer 2011, p. 91). They should consider acting on the possible recommendations of their customers as soon as possible.

Tesco supermarket should also consider simplifying the buying process. When buying processes are deemed to be lengthy and complicated, many customers will always opt for somewhere where the process is simpler. ImplementationAccessibility is always important for any chain of stores. Customers might be willing to purchase from a certain supermarket, but fail to do so because the supermarket does not have any stores in their locality (Gordon 2002, p. 201). Given that Tesco has not been recently active in terms of expansion, it would be beneficial for them to start opening up new stores in places where they do not have any.

At a time where the global economy is a mess, it is very important for a supermarket to have an appropriate pricing policy (Sirsi 2005, p. 123). Tesco should consider being more price competitive. Their main competitors were able to earn more market share at their expense because they were price competitive. If they become price competitive they will be able to win back those customers who opted for the other store because of lower prices. Tesco should also come up with a way through which they can reward their most loyal customers.

When loyal customers are appreciated they usually tend to have a stronger bond with the business making it easier for a business to retain them. Tesco should consider using things like cumulative discounts, loyalty cards, and giving away item when multiple purchases are made (Denny 2009, p. 187). Possible challenges of implementationGiven the fact that this is a highly competitive industry entering price competitions might prove to be costly to the supermarket because it can lead to losses. Expansion also needs resources, which at the moment the supermarket does not have much.

If in any case their new stores do not perform well due to the market capital that they have already lost then they will not earn any profits from their expansion.BibliographyDenny, R 2009, Selling to win, Kogan Page, London.Gordon, I 2002, Competitor targeting: winning the battle for market and customer share, Wiley, Toronto.Kotler, P &Kotler, M 2012, Market Your Way to Growth 8 Ways to Win, Wiley, New York. Shafer, R 2011, Grab more market share how to wrangle business away from lazy competitors.

Wiley, Hoboken, N.J. Sirsi, AK 2005, Marketing led - sales driven: how successful businesses use the power of marketing plans and sales execution to win in the marketplace, Trafford, Victoria, B.C.