P4. Discuss the effect of internal, external and competitive environment on a given
business.
In this assignment, I am going to discuss and explain the internal, external, and competitive
environment of Tesco.
TESCO
Tesco is a British multinational groceries and general merchandise retailer with headquarters
in Welwyn Garden City, Hertfordshire, England, and United Kingdom. Tesco is the largest
grocery retailer with outlets across Europe, USA, and Asia. In the UK Tesco now has over
2,200 stores ranging from the large Extra hypermarket style stores to small Tesco Express
high street outlets.
COMPETITIVE ADVANTAGE FACTORS
Differentiation
Tesco differentiates through their products and services – with unique features, great
quality at affordable prices, and a unique Tesco offer – and through customer experience,
for example by simplifying their systems for ordering online, and delivering consistently
great service in store. Tesco will be able to create brand loyalty for their offerings, and
thus, price inelasticity on the part of buyers. Breadth of product offerings, technology,
special features, or customer service are popular approaches to differentiation. Tesco is on
a journey to rebuild trust in their brand. As the brand strengthens, they could invest more
in those things that make the Tesco brand and experience unique.
Pricing policies
Tesco pricing strategy can be described as cost leadership. The pricing strategy is
developed according to its business strategy and the pricing strategy contributes to its
competitive advantage. Specifically, Tesco pricing strategy is based on its marketing
message of ‘Every Little Helps’. Tesco management aims to reduce the cost of purchase
and operational costs through economies of scale and a set of other measures in order to
pass the cost advantage to customer as the main brand value. The company also uses
economy pricing, psychological pricing, product line pricing and geographic pricing
strategies.
Market leadership
Tesco and Sainsbury's had the largest share over the period under consideration, holding
41.8 percent of the market together as of October 2020. In March of 2019 Asda's share
surpassed Sainsbury's which could recover the second position on the market in the
following month. Prior to the popularity of the discounters, the grocery retail market was
dominated by the 'big four' supermarkets: Tesco, Sainsbury's, Asda and Morrisons.
Reputation
Tesco is the 5th most popular supermarket chain and the most famous. Tesco is described
by customers as: Good value, Family-friendly, Accessible, Great loyalty scheme, and Good
offers/deals. Tesco creates a new company vision and ensuring employees at all levels are
aware not only what customers expect of them, but what Tesco expects of them too, then
