Part 1 – Industry Trend Report

Introduction

This report analyses the business contexts of Tesco with analysing the internal and external environment of the company. It further includes discussion on the impact and influence of change and culture. There is an application of a range of models showing understanding the management practices in response to a business context and therefore, recommending business strategy as a part of a post-pandemic plan. In relation with Tesco, it is one of the leading British grocery and general merchandise retailers that operate globally. The company was founded in 1919 and currently, has its presence in nearly 12 countries. In its 2020/2021 financial year, the yearly revenue of Tesco determined to nearly 53 billion British pounds in the U.K. and the Republic of Ireland (Bedford, 2022). Some of the key internal and external issues of Tesco encompass intense competition, Brexit, the threat of cyber-crime, fast changing expectations of consumers, various controversies impacting brand goodwill and low emphasis on global expansion.

Analysis Of External Environment

Components Of Industry Sector

The key components of the industry sector in which Tesco operates include competition, bargaining power of customers and suppliers, the threat of new entrants and threat of substitutes. In relation to competition, Tesco competes with the convenience stores, which are achieving popularity with meet consumer taste shift over time. Some of its key competitors include Asda, Sainsbury’s, Morrison, Aldi and Lidl. However, in 2020, while all key retailers amplified their sales, Tesco has sustained to dominant in the market share i.e. for 27.9 % of the market in the UK. In the case of Tesco, the bargaining power of suppliers is also low due to having a network of extensive scale of suppliers’ network (Hill, 2022). However, the bargaining power for customers is high due to the presence of a number of retailers offering a cost advantage similar to Tesco. In contexts to threat of substitutes, it is medium while the threat of new entrants is medium as despite of solid financial capacity, there have been various new start-ups growing meeting new generation needs through delivering organic and grocery products and the government is also supportive in this case.