Uk Retail Industry
Introduction
The grocery industry in the United Kingdom has been dominated in the last ten years by large chain Supermarkets. There has been a fight for supremacy between the likes of J. Sainsbury, Tesco, Marks and Spencer, Asda, and further south, Waitrose. Around ten years ago, Sainsbury 's used to have the top spot but their loyal shoppers started turning their heads towards Tesco and better value for money later on in the nineties.
I will analyse the United Kingdom 's grocery industry, involving a P.E.S.T. analysis, which is a way of evaluating different parts of a business. (Political, Economical, Social, and Technological.)
Political
The government can basically decide how a business is run; by all the laws and safety acts it can impose. Nowadays there is so much legislation, businesses don 't have much say in what happens and there is not much leeway between similar companies. Supermarkets are told more or less everything; from what they stock, to how they stock it, how it is sold, who is allowed to sell it etc. The Government has to regulate prices too, because it has been known in the past for companies to price fix, which means that they have a monopoly on the market, but they share it with another company, charging the exact same price, so they get an equal profit share. This prevents any new companies from entering the market and taking a percentage of their market share.
The supermarkets dominating the British market would be classed as an oligopoly because there are four or five major players, dominating the market. But this is the way that the government prefers; they will not allow any merging or taking over. We know this because Tesco has tried to buy out Asda in the past. This would give Tesco too much of the market and the business would rapidly overtake all of the contenders. Officially, a firm has to have more than twenty five percent of the market to be classed as a monopoly, but even if by taking over Asda, Tesco still didn 't
The grocery industry in the United Kingdom has been dominated in the last ten years by large chain Supermarkets. There has been a fight for supremacy between the likes of J. Sainsbury, Tesco, Marks and Spencer, Asda, and further south, Waitrose. Around ten years ago, Sainsbury 's used to have the top spot but their loyal shoppers started turning their heads towards Tesco and better value for money later on in the nineties.
I will analyse the United Kingdom 's grocery industry, involving a P.E.S.T. analysis, which is a way of evaluating different parts of a business. (Political, Economical, Social, and Technological.)
Political
The government can basically decide how a business is run; by all the laws and safety acts it can impose. Nowadays there is so much legislation, businesses don 't have much say in what happens and there is not much leeway between similar companies. Supermarkets are told more or less everything; from what they stock, to how they stock it, how it is sold, who is allowed to sell it etc. The Government has to regulate prices too, because it has been known in the past for companies to price fix, which means that they have a monopoly on the market, but they share it with another company, charging the exact same price, so they get an equal profit share. This prevents any new companies from entering the market and taking a percentage of their market share.
The supermarkets dominating the British market would be classed as an oligopoly because there are four or five major players, dominating the market. But this is the way that the government prefers; they will not allow any merging or taking over. We know this because Tesco has tried to buy out Asda in the past. This would give Tesco too much of the market and the business would rapidly overtake all of the contenders. Officially, a firm has to have more than twenty five percent of the market to be classed as a monopoly, but even if by taking over Asda, Tesco still didn 't
Bibliography: Corporate Strategy 3rd Edition – Richard Lynch www.quickmba.com www.themanager.org Business Studies 2nd edition – Hall, Jones, Raffo Brooks and Weatherston – 2000 The Strategy Process – H. Mintzberg, J. B. Quinn, S. Ghosal