Premium Essay

Supermarkets Economic and Legal Framework

In: Business and Management

Submitted By raluca89
Words 2365
Pages 10
| |

Have supermarkets become too big to the extent that they are damaging competition?
Executive Summary

Table of Contents 1. Introduction 3 2. Economic Structure 4 3. Non-Price Factors 7 4. Legal Framework and Political Structure 8 5 Conclusion 9 6 Recommendations 9 7 References 9 8 Appendices 9

1. Introduction

2.1 Purpose

The purpose of the report is to decide whether supermarkets have become too big to the extent that they are damaging competition by explaining and analysing the changes in legal framework and economic and political structure that has enabled them to become dominant in UK grocery retailing.

2.2 Supermarkets background:

The first supermarket opened in the UK after World War 2 (1948), which introduced the cheap agricultural food revolution. Today there are several different supermarkets and grocery stores all over the UK. In the supermarket industry the most dominating firms are Tesco with 30.4% of the market share, Asda with 16.6% of the market share, Sainsbury with 16.2% market share, and Morrisons with 11.2% market share. All these supermarkets opened their first self-service stores during 1950 – 1963.

Joanna Blythman, SHOPPED The shocking power of Britain’s Supermarkets (2004: 4) states that ‘in 1950, supermarkets had only 20 per cent of the grocery market while small shops and traditional Co-ops had 80 per cent between them’.

The average size of the Big 4 supermarkets has increased significantly in the past years. However, the Big Four have also incurred some problems with merging or taking over with many firms in the same industry too quickly as seen in the case of Morrisons, which led to them going through financial strains. This was because Morrisons had an aim to convert their Safeway stores into Morrison stores which was the largest conversion in British retail history. (BKEY402 Problems

Similar Documents

Premium Essay

International Bussiness

...EXECUTIVE SUMMARY By analyzing PEST model partly which contains four main factor as Economic; Political and Legal; Culture, Social and Ethics and some others (technology or environment), this paper has clearly presented penetration strategy Tesco PLC, a multinational retailer in grocery and merchandise towards Vietnam market. The paper conducted the report through collecting secondary data from General Statistics Office of Vietnam, Work Bank Data Source, CIA and some other trusted data source to indicate in detail whether Vietnamese market is a possible one for Tesco. The result point out that Vietnam could be a possible market for the core strategy of Tesco PLC. 1. INTRODUCTION Retail section has becoming one of the most potential businesses in the booming industry recently. Along with an active market, a level of competitiveness among retailers is also considered as a core factor influences each typical business strategy with the aim at obtaining big goal of profit. Numerous big retailer Groups in the world, now is trying to expand their business towards prospective market but not only domestic one such as Wal-mart or Metroto be able to perform, develop and compete through having effective plan and well performing. This report would like to examine Tesco PLC, the biggest retailer from the United Kingdom as a representative case for the effective expansion strategy implementation basing on analysing some key factors of host country’s market in a macro level. The chosen...

Words: 2700 - Pages: 11

Premium Essay

Global Forces and the Western European Brewing Industry

...and consequences global forces have, by using the PESTEL framework. This framework is used to help form a strategic analysis of the macro-environment; the outside factors beyond the control of a company. It categorises the environmental influences into six groups: political, economical, socio-cultural, technological, environmental and legal; making up the acronym PESTEL. Analysis Political factors Europe has traditionally been seen as the centre of the beer brewing industry. However, the level of alcohol consumption is gradually declining. This is because many of the key markets within Europe are increasingly more aware of the social and health issues caused by excessive alcohol consumption. Governments are actively campaigning against the abuse of alcohol and the possible consequences of drunk driving, ‘binge drinking’, and the long-term effects related to health. These key factors relate directly to government policies and their decisions towards the European beer market. Economic factors As a result of government intervention, there has been a marked decrease in product sales in public premises. As people are more and more likely to drink at home rather than out to bars, the alcohol sales has shifted from ‘on-trade’, where beer is consumed on public premises, to ‘off-trade’, where beer is purchased by retail and consumed on private property (e.g. at home). This has resulted in the increase of supermarket sales, along with the added incentive of discounted offers...

Words: 1246 - Pages: 5

Premium Essay

Business Paper Yakult

...with an intro statement, reasons why you are doing the marketing plan, market situation, industry description, major competitor description, objectives of the plan, target market, key marketing strategies, and a brief description of the action plan for the 4Ps of marketing) II. Current Marketing Situation A. Industry Analysis (Describe the industry where the product is competing in.) - Porter’s Framework (A schematic diagram of Porter’s framework should be done with corresponding explanation) Major Players in the Industry (Include only the key players or main competitors of the product) Competitive Profile Matrix (A tabulation of the major competitors, which includes description, and their 4Ps + other details) Consumer perception and buyer behavior (Include the result of survey here). B. Macro-Environmental Forces (Should include only relevant information / data that impacts on the category the product is competing in. Cite sources properly. Only 7 sentences are needed per macro-environmental force.) - Socio-Cultural Technological Economic Political-legal Demographic Natural / Environmental C. Company Profile (A brief description of the company. Include logo, other product offerings.) - Vision - Mission - Values D. Product Profile - FBA Matrix (Features, Benefits and Advantages in tabular form) - Unique Selling Proposition (USP- how does your product differ from the others. What’s the big idea?) III. Opportunities and Issue Analysis A. SWOT Analysis...

Words: 953 - Pages: 4

Premium Essay

Supermarket Pestel

...products and services -Comment on the organisation’s current marketing mix (using the 7Ps)   You must base your report on any one of the following companies. Aldi Asda Lidl Morrison Sainsbury Tesco Waitrose     The report should be 1500 words maximum (without appendices) Assessment Criteria *The use of the relevant marketing theories and analytical framework in your answer to the above tasks.   *Evidence of well-structured and logical marketing report *Word limit 1500 words maximum (excluding appendices)   If you are one of those students leaving before the Christmas break, you must hand in your report (uploaded on-line via turn-it-in from 7th JANUARY 2016.  The closing date for all on-line submission is 21 JANUARY 2016 at 3.00PM.   Please note Plagiarism is the act of using someone else’s words or ideas as if they are your own.  In line with university regulations any form of plagiarism will have severe consequences.  Please make every effort to reference all sources of material in both text and reference pages. Intro Founded in 1899 and based in Bradford, Morrisons is the fourth largest supermarket chain in the UK, since it was founded the chain was mainly focused on serving the north of england, however, in 2004 the company took over Safeway (market chain) and expanded its business all over the uk. At the moment Morrisons has 125.000 employees and 569 stores around the UK, 100 stores have closed down in the last year and...

Words: 543 - Pages: 3

Free Essay

Cole

...the grocery industry Coles Supermarkets Australia October 2012 Analysis of the grocery industry Contents Glossary ..................................................................................................................................... i Executive Summary.................................................................................................................. iii 1 Introduction .................................................................................................................... 1 1.1 1.2 Project approach and objectives........................................................................................ 1 Report structure ............................................................................................................... 2 2 3 Coles – an overview ........................................................................................................ 3 Economic contribution of Coles ....................................................................................... 5 3.1 3.2 3.3 3.4 3.5 3.6 3.7 Modelling approach .......................................................................................................... 5 Direct economic contribution ............................................................................................ 6 Indirect economic contribution ......................................................................................... 6 Total economic contribution ...................

Words: 19655 - Pages: 79

Premium Essay

M & S Business Strategy

...extremely high quality food and a variety of home products. M&S strategy is to become a global multi-channel retailer (Bolland, 2011) in order to reduce its dependency on the UK market conditions and economic climate and to create a powerful brand serving a worldwide customer base. With an extraordinary understanding of customers selective needs based on a complex combination of market analyses and research feedback to identify trends and factors influencing their choices and decisions, M&S provides quality, value and innovation, positioning customers at the heart of the entire business. This report presents an overview of M&S activity and perspectives using a) a comprehensive PESTEL analysis to point out the trends and the environmental influences affecting the business, b) Porter’s five forces framework to explore and evaluate M&S attractiveness, c) a detailed SWOT analysis to highlight the company’ main advantages and hot spots and to identify any opportunity it can capitalize on and challenges that may endanger its future evolution and d) a value chain analysis. PESTEL Analysis According to Fahey and Narayanan (1986), macro–environmental conditions set the fundamental context in which industries operate, so the PESTEL- Political, Economic, Social, Technological, Environmental Legal- framework helps us to identify and understand what changes of the external climate influence the evolution of M&S business....

Words: 2407 - Pages: 10

Premium Essay

Pokka Swot

...Singapore Pokka Company Pokka Company was established in January 1977 by Pokka Sapporo Food & Beverage Limited (previously known as Pokka Corporation Japan). Pokka is a leading food and beverage group in Singapore and Asia Pacific. The company manufactures and markets a wide range of beverages under the reputable brand name "Pokka". Also, they own and operate several restaurant chains, serving varied culinary delights. In Japan, their representative is President and CEO Tsutomu Kamijo. (Pokka Singapore, 2013) SWOT Is a tool to identify the strengths, weaknesses, opportunities and threats of an organization. The method of SWOT analysis is to take the information from the environment then analyse and separate it into internal and external issues. Once it is completed, SWOT analysis determines what may assist the firm in accomplishing its objectives. (Swot analysis, 2013) Singapore Pokka Swot Analysis Strength - Pokka in Singapore targets consumers’ health. Without them thinking of the products might cause harm but to enjoy the beverages which benefits them. Example, Green Tea has the benefits of helping consumers calm down and lead good and healthy lifestyles. Weakness - Pokka should get a unique and appealing packaging because of customers demand. Consumers are more attracted to eye-catching packaging and also not harmful to the Opportunities – Pokka can add tea into their foods to be creative and attract more...

Words: 1597 - Pages: 7

Premium Essay

Global Forces and the Western Euoropean Brewing Industry

...PESTEL ANALYSIS OF THE WESTERN EUROPEAN BREWING INDUSTRY The PESTEL framework provides a comprehensive list of influences on the possible success or failure of particular strategies (Johnson et al, 2008, p55). PESTEL stands for Political, Social, Technological, Environmental and Legal. Political- Governments in Europe were campaigning strongly against drunken driving. This affected the propensity to drink beer in pubs and restaurants. Economic- Some low consumption European markets have been showing good growth. Pubs have suffered as a result of large supermarket chains such as Tesco and Carrefour who often use cut price on beer to lure people into their shops. The result was that an average of about 50 pubs closed per week during the recessionary year 2009. Social- There was increasing awareness of the effects of alcohol on health particularly in the UK. This led to a growing hostility to excessive alcohol consumption in pubs. Beer consumption in the UK as well as in Germany began to fall as a result of this. Wines were becoming increasingly popular as Europe was turning off beer. There was an increasing demand for Exotic imported beer more especially in Belgium, Denmark, Finland and the Netherlands according to Table 2 of the case study. (ii) FIVE FORCES ANALYSIS OF THE WESTERN EUROPEAN BREWING INDUSTRY According to Johnson et al (2008), Porter’s five forces framework was developed as a way of assessing the attractiveness (profit potential)...

Words: 1160 - Pages: 5

Premium Essay

Entrepreneurs in Sri Lanka

...MACRO AND MICRO ENVIRONMENT ANALYSIS FOR NINTENDO Macro Environment Macro environment is said to be the most general layer of the environment. This consists of broad environmental factors that have an impact on the organisation. The PESTEL framework helps us to identify the future trends which might impinge on Nintendo and therefore identify the key drivers of change. On the other hand the five forces framework helps to understand how the competitive dynamics within and around the video game industry are changing. The two frameworks are discussed below: PESTEL Framework: This categorises environmental influences into six main types, namely: political, economic, social, technological, environmental and legal. A PESTEL analysis on the video game industry is carried out below: Political: Factors such as taxation policies, foreign trade regulations and social welfare policies influence the video game industry. Video games have a tendency to play with the emotions of people which inturn can threaten peace and law, a country being multicultural. Therefore Government has the authority to control the contents of the video game frames. Economic: Places such as U.S and Japan are largely dominated by the video game business. Therefore contributing towards the GDP of their countries. Interest rates have not much impact on the video game business as they manufacture their own units. The disposable income of the consumers in the video game industry has an effect on their...

Words: 2936 - Pages: 12

Premium Essay

Corporate Governance

...1.0 INTRODUCTION Corporate governance generally refers to the set of mechanisms that influence the decisions made by managers when there is a separation of ownership and control.[1] It therefore refers to the manner in which the power of a corporation is exercised in the stewardship of the corporation’s total portfolio of assets and resources with the objective of maintaining and increasing shareholders value and satisfaction of other stakeholders in the context of its corporate mission.[2] It involves a set of relationships between a company’s management, its board, its shareholders and other stakeholders. Corporate Governance mainly deals with prevention and mitigation of the conflict of interest of stakeholders[3] through processes, customs, policies, laws and institutions which have an impact on the way a company is controlled.[4] The 1992 Report of the Committee on the Financial Aspects of Corporate Governance (section 2.5), known as the Cadbury Report, describes corporate governance as the system by which companies are directed and controlled. Corporate governance is the direction and control of an organization for the benefit of its stakeholders. While ‘corporate governance’ primarily refers to organizations with commercial and business operations, in particular limited companies, we use the term in its widest sense and apply it to all types of organization in the private and public sectors. The underlying principle for corporate governance is preclusion or palliation...

Words: 3818 - Pages: 16

Premium Essay

Innocent Smothies Analysis

...The success of Innocent’s marketing techniques Introduction This assignment is about the Innocent company, its brand portfolio and the potential entry into the Spanish market. In the first part I give information about the company itself including its history, its current operations, markets and distribution channels. In the third section I conduct a macro environmental analysis and a more market-specific analysis by the 12C - framework as well as the Porters Five Forces – model. The fourth section comprises an assessment of the principal challenges that the Spanish market represents to the company in selling its products. The last part involves a personal evaluation of relevant entry modes for the company into the Spanish market. The Innocent company History and Facts The 'Innocent' company is originally a manufacturer and distributor of smoothies. It was founded in 1999 by Richard Reed, Adam Balon and Jon Wright (Datamonitor, 2009). Their business of selling fruit drinks without adding sugar or concentrates growth rapidly. Starting with a turnover of £0.2 millions in 1999 they could record revenue of £114 millions in 2007 with a 71 % value share of the UK smoothie market. This success is lead back to the constant expansion of new product lines and markets. Innocent developed the new brand 'This water' and launched it in 2007. To extend its product range the company initiate 'Orange juice' and 'Vegetable pots' in 2008. Starting from offering their products within...

Words: 2200 - Pages: 9

Premium Essay

Tesco

...Tesco's is a United Kingdom based international supermarket chain. It is the largest British retailer both by global sales and by domestic market share. Originally specialising in food, it has moved into areas such as clothes consumer electronics, consumer financial services internet services and consumer telecoms. The Current Position In 1995 Tesco overtook Sainsbury's as the UK's largest supermarket. In 2001 Tesco occupied 15.6% of the UK grocery retail market and was the market leader by 6%. Tesco's enormous share still grew and by September 2004, it had increased to a massive 28%, around 12% more than its nearest market rival, Asda. In the year ended 26 February 2005 Tesco made a pre-tax profit of £1.962 billon on turnover of £33.974 billion. Some would argue that if we were to include Tesco's share of the convenience store market (bizarrely considered a separate sector by UK competition authorities) in this figure, Tesco could be said to control 34% of the grocery market. Considering how concentrated and cut-throat the 'supermarket' market is, this is quite an achievement. Tesco is equally impressive when considering its share of the total retail market. In its interim statement of results (August 2003), Tesco claimed 'our share of the total retail market is just 12.3% and there is a lot left to go for.' Already, 'just 12.3%' means that almost one pound in every eight spent in the UK is spent in Tesco. Tesco profits have increased every year but one since 1987. In...

Words: 4928 - Pages: 20

Premium Essay

Doc, Docx, Pdf

... Korea Dear Mr. Smith I appreciate the opportunity to advise you regarding this tax matter. To ensure a complete understanding between us, I am starting the pertinent information about the advice that I will be rendering and the facts I have researched. Responsibilities I use my judgment in considering the potential and value of Vietnamese retail & distribution market. Unless you instruct me otherwise, I resolve such questions in your favor whenever possible. However, I cannot guarantee the outcome in the event of force majeure such as war, political crisis. Facts The following facts are based on my research on the Vietnamese macroeconomics and microeconomics as well as the available forms of legal entity under Vietnamese regulations. To specify, on the Vietnamese macroeconomics aspects: Population : 90,000,000 ( 90 million in 2013, source: generation family planning office for population of Vietnam ) , Vietnam is holding " gold retail index " compared with other countries in the world with 68 % of the population...

Words: 1060 - Pages: 5

Free Essay

Sainsbury's Egypt

...a partnership retailer store, presently it is the third largest retail supermarket chain in UK market with a total market share of 16.3%. Sainsbury is the UK’s oldest and major food retailer. In the early of 1990 Sainsbury was the market leader, however due to some reason it lost its position to Tesco and come in third position in terms of leading retailer in UK (J Sainsbury plc. 2015). The downfall involves several reasons, such as lack of innovative marketing strategy, unhealthy acquisition in Egypt, changing management and misleading in sustainability aspect, which obstruct in communicating right message to the customers. Background of Sainsbury: Sainsbury is looking to drastically their business operation by launching new outlets across the south of England. The company had opened fifty high street shops in England by 2014 which significantly has boosts the employment opportunities in the respective area (RetailWeek. 2013). However, the company is looking for international market opportunities from the last few years and already has owned a chain in the US and a chain in Egypt in addition to their core domestic business. Based on the Appendix-1, it can be inferred that the financial performance of Sainsbury are tending to downwards in terms of profit margin. The net profit margin was 5.50% in 2011, which dropped to 5.40% in 2013. The prime reason for drop down in their profit margin can be economic downturn, unethical business practice, and so on. In March 2013, the total...

Words: 3759 - Pages: 16

Premium Essay

Global & International Business Context

...Individual Assessment SM0269 Global & International Business Context Nurhuda Binte Md Yassin Student ID: 12034616 Word count: 3,189 words INTRODUCTION This report aims at facilitating the company’s decision-making process concerning the consideration of expanding its international operations in food retailing to South Africa. The overall competitiveness and investment attractiveness will be based on the extended version of Porter’s National Diamond and supplemented with key management issues of South Africa food retail industry, to which the company can tailor its strategy. The analysis recommendations will be made, that need to be considered by the company before deciding in opening its operations in South African food retail industry. Brief Summary of South Africa Food Retail Industry |South Africa, a growing retail market with a population of around 49 million people, possesses a modern infrastructure supporting relatively | |efficient distribution of goods to urban centres, townships and rural areas throughout South Africa and Southern Africa (Ntloedibe, 2010). South | |Africa have been identified among the ten new markets most likely to appeal to multinational store groups, along with four other African countries -| |Algeria, Kenya, Morocco and Nigeria (Ventures Africa, 2012). ...

Words: 4597 - Pages: 19