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Tesco core competencies come from its strong customer focused strategy which is made very clear on their website home page were it states, “We are a team of over 530,000 people in 12 markets dedicated to bringing the best value, choice and service to our millions of customers each week”.Hamel and Prahalad (1990) suggested that a core competency must meet the following criteria:
•Customers should benefit
•Competitors should find it difficult to imitate
•Core competence can be transferred to many products and markets.
In more recent years we have been able to utilize the use of the Tesco club card to reward the customer but most importantly at the same time we have been able to collect vital information which has enabled us to analyze and understand the customer so much better. A USP which Tesco have been able to gain from the use of the Club card is their ability to almost predict what each individual is going to put into their baskets and this subsequently allows them to adapt each of their from their services to their stock. This all contributes to Tesco adding value to the overall customer experience. In a large complex company like Tesco it can become important for the organization to define the company as a set of strategic business units (SBUs). The reason behind this is mainly because when businesses become large they generally are slow, awkward and unmanageable and so SBUs are put in place to prevent/reduce this. The SBU I am going to be focusing on throughout my report is Core UK, its headquarters are in the UK and it takes care of the UK grocery operations. The grocery industry is still Tesco’s most important part of the business and is operating in a fiercely competitive market.
Tesco currently hold the largest share in the grocery market which is one of the most fiercely contested markets in the UK. The term marketing environment is used to describe all of the elements that have some impact on the actual performance of a market, these elements can occur both in and outside of the market itself, they can be called the macro environment and the microenvironment. The marketing environment enables us to understand the different forces that have a certain influence on the marketplace and how the market will react to different forces in different ways. For Tesco the marketing environment has a huge influence on how well the business is doing annually, for example the macro environment is always changing which affects Tesco
The table below shows what channels make up the UK grocery market in for 2013: ChannelShare in billions
Hypermarkets and superstores£74.1
Small super markets£34.9
The market environment is a term that is used to collectively identify all the elements that have some impact on the actual performance of a market. This includes events and factors that occur within the context of the market itself and also any elements that are based outside the market. The idea behind defining the market environment is to understand what forces are exerting some amount of influence in the marketplace and understand why and how a market reacts to those forces in certain ways.
Importance of environmental analysis (Debate & Evaluate)
-How can the marketing environment be defined? How can the marketing environment be defined to your company? -Can you summarise / synthesise information creatively in the form of tables / figures. -What are best practice approaches to environmental analysis? Here it may be tempting to go overboard and write very generically about environmental analysis but it is important to evaluate from the perspective of your chosen company: What is important in defining and approaching environmental analysis from the
context of your company?