SWOT analysis for Tesco Research Paper Example

SWOT analysis for Tesco Research Paper Example SWOT analysis for Tesco Paper SWOT analysis for Tesco Paper Strengths:– -Their size which allows Tesco to buy competitively so they can buy more products than other supermarkets so they can sell them cheaper because when you buy in bulks you get price reductions, Tesco can use this because they are bigger than all other supermarkets so they have a opportunity to make more money, The larger you become the more economy of scale you achieve. For example if you ten thousand tins of beans its cheaper than buying one tin of beans per unit therefore the more you buy the cheaper they get their products. -Tesco also have strong senior management which helps the store because their management of the store is strong so they can manage Tesco a lot more efficiently and the staff in it, their senior staff is also useful because they will always know how to manage the store because they do it well, They make great recommendations, decisions for Tesco as they are one of the best supermarkets in the UK and couldn’t be that without the senior management team. -Tesco are hypermarkets which are big hyper stores which mean you can buy big bulks at lower prices at their warehouses; they have the widest range of products to offer for their customers all over the UK, These are cheaper alternatives to customers who need more at cheaper prices which makes them strong because they will make more money and they are the only supermarket with a strong hypermarket portfolio. -Tesco has national UK coverage which is a strength because they have supermarkets open all over the UK, this help’s Tesco because it makes them well known and people have more Tesco’s to shop at, Their UK national coverage helps more people because they have more branches of Tesco to shop at rather than travelling large distances to use the Tesco services. -Tesco has a Increasing Level of Investment which is helpful because they have lots of investors that have invested in the business who help keep it running, the investors helped Tesco become what it is now, and more people want to invest into Tesco which makes it a strong business because it is a High selling supermarket. -Tesco have a strong price message which will be strength for them because they are accurate about their price range and are cheaper than other supermarkets in the area, the Tesco price message helps the business to keep its strength because they are clear about their prices and have cheaper prices than other supermarkets in the area, They also give customers things like club cards and special offers which can help them reduce the price they have to pay for their products which helps because more people want to use the Tesco services. -Tesco have expanding non food and online offers which means that if you shop online or buy stuff other than food from them you will get offers such as cheaper rates for ordering online, This helps Tesco because they are one of the only supermarkets doing online offers, Customers who use the computer will use this to order their shopping online and get it delivered to their house, This also means that they have moved onto things like electrical products, phone networks as well as groceries. -Tesco have Efficient distribution because they always have enough products and supplies for the customers to purchase, Tesco will always order in advance to ensure that they always have enough products for their customers, they always make sure that they have a distribution chain to get products to the stores, They use many different methods such as vans and lorries to get the products to Tesco on time. Weaknesses:– -Increasing geographical spread makes focus on specific markets difficult, this affects Tesco because the more supermarkets that open in the different areas there will more places for customers to go so they might move away from Tesco and go somewhere else which will be bad for Tesco because they can loose money. -International expansion requires substantial investments, this is a weakness of Tesco because when they want to expand international they will need substantial investments to open up new businesses, and this is a weakness because Tesco might not have the investments to open up the new businesses. -High reliance on UK market is a weakness of Tesco because their business is going sluggish because of things like customers not having enough money to spend which will cause them to downgrade, if the customers don’t have enough money to buy products or less products than usual Tesco won’t make enough money. Opportunities:– -Growth of non-food is an opportunity of Tesco because they can start growing things like plants and flowers and sell them in store, not many other have a flowers/plant range so this could be an Opportunity for Tesco, also to sell genetically modified food to prevent shortage of the products in the future. -Enter new Asian markets is an opportunity of Tesco because they can do something for all types of customers so they can get everything from under one roof rather than going to different stores to get their shopping, Entering the Asian Market for Tesco will help them because they will have a new market and it will benefit their customers, Also because they will branch out more Asian countries which will make them more well known. -Effective use of Club card database to increase basket size is an opportunity of Tesco because when a customers buys products from Tesco they earn club cards points which they can later trade in for things like reductions, this is a opportunity for Tesco as they are the only ones who offer a Club Card and it will help their customers because they will want to spend more to earn more points. -Develop additional services is an opportunity of Tesco because they could start new services which other business don’t have for example Tesco already have the self pay tills that customers can use, and they benefit the customers, Tesco can develop new services that will help them because they will have services other businesses don’t. Threats:– -Faces range of diverse competitors internationally which is a threat for Tesco because they have moved internationally and they will competitors that are more well know at the location, Tesco are threatened because the other stores are more well know and there is more of a chance that the customers will visit that store instead of Tesco. -Increased level of eating out in the UK is a threat of Tesco because if people are eating from out more often they are not buying food from Tesco; this is a threat because if people continue to eat out Tesco will loose money because people are not buying from them. -Restrictive planning guidelines in UK and Asia is a threat of Tesco because if Tesco wants to increase the size of their supermarkets they must follow the restrictive guidelines, they can build a supermarket but they must follow how many Square feet and set in the guidelines, This is a threat for Tesco because if they want to expand a supermarket they won’t be able to increase it buy much.