Pros And Cons About Are Tesco And Sainsburys Marketing Essay

Introduction:

Firstly we will be discussing competing organisations in the same industry, issues in the business industry and the environmental position of the international business. Secondly moving on to the BSGE chapter we will be looking at the growth of the industry. One of the main aims of this project is to examine current situation in the industry and the future preparation of the industry. In this chapter we will discuss industry in general, by over looking the market size, scope and recognizing the key players. In order for an organisation to do this they need to have a highly qualified workforce. Managers must recognize that it’s a continuing need to learn and it is vital to adapt to the changes in conditions which may well be in a short notice of time, by being bale to define a variety of options that are available and going a ahead in order to take a chance.

Today we are present in fast society where new age defines the competition, sudden changes, good and fast communication which increases the complexity of the business and the preserve globalisation. The speed of change is so rapid that it looks a different type of firm to be dominant and marked completely new period of business. This new atmosphere is also characterized by future reaching of advance technologies, and a customer who has just adapted to live in this fast society and whose changeable preferences are revised with the speed of a T.V advert.

The industrial competition doesn’t remain a local challenge any more the faster developments has taken it as far as internationally. The pressure of the competitions persuades companies to manage their business in the most organised way as possible.

The management goes under a lot of constant pressure to cut down costs and increase profits. Hamel and Prahalad argued “that the competition is not just about getting to the future first, but getting there with lowest possible costs”(Hamel and Prahalad,1994). The pace and strength of change distinguish form 1 forum to another. Companies must establish centre competencies, benchmark constantly and outsource insistently in order to increase reliability and achieve the best practice. Plan as defined by porter is a make of a unique and valuable position which involves different activities (Porter, 1996).

Company chosen and Comparison Company in the same sector:.

The two companies that we will discuss the pros and cons about are Tesco Plc and Sainsbury’s Plc. these companies are counted in the top companies of UK are centre of attention to the public.

Reason for choosing the focused company:

Tesco Plc is our main company that we will focus on. We will compare Tesco against Sainsbury’s in order to provide a base for future opinion, we will look at where the company is heading towards and quality the company has which makes it the UK’s number one trader.

Aims and objectives of the report:

The aim of this report is to present a portfolio in rational and professional manners. A detailed report which discuses various financial ratios with discussions of both the companies profits and loss account and balance sheet. The report should show why there is a range of difference between the two companies evern though they are mostly trading the same sort of things. The report will present our research and opinions. It will also present information such as our group work and our short meetings.

Background Research on Tesco Plc:

Sir jack Cohen founded Tesco in 1942. He used his gratuity from his Army service in the First World War to start selling groceries in London’s East End markets in 1919. The brand name of Tesco first appeared on packets of tea in the 1920s. The name was based on the initials of T.E Stockwell, a partner in the firm of tea suppliers, and the first two letters of Cohen. The first Tesco store was opened in 1992 in Burnt oak, Edgware. In 1947 Tesco Stores (Holdings) Ltd was floated on the Stock Exchange , with a share price of 25p. The price at the beginning of February 2002 was around 2.42p.

http://www.tesco.com/everyLittleHelps/csrenvironmentdetail.htm

Tesco became quite well known by the early 1960s. Tesco stores started their sale with groceries, fresh foods clothing and many household goods. Tesco stores were situated in the high streets of many towns. The Tesco store, which opened in Leicester in 1961, had 16,500 square feet of selling space and went into the Guinness Book of Records as the largest store in Europe. By buying in bulk and keeping costs down, Tesco should have been able to sell at very competitive prices to its customers, until 1964. However, suppliers were by law able to insists that retailers charged a set price for their products (the system known as Resale Price Maintainer), which meant that it wasn’t easy to cut down prices. The intention was to protect smaller shops against the lower prices that big retailers could offer their customers. Tesco introduced trading stamps so that it can bring lower prices to its customers. Other retailers soon copied Tesco for introducing the stamp book. Sir jack was one of the leaders in persuading Parliament to abolish Resale Price Maintenance in 1964. After this, Tesco continued to offer trading stamps until 1977. After from opening its own new stores, Tesco bought present chains of stores. In 1960 it took over 212 stores in the north of England and then another 144 stores in 1964 and 1965. In 1968 the Victor Value chain became part of the company. Tesco introduced the concepts of a superstore in 1967 when it opened a 90,000 square feet store in Westbury, Wilshire. Design of the store provided easy access to customers. “superstore” the term was first used when in 1968, Tesco opened its store in Crawley, West Sussex. In late 1970s, the Tesco’s market shares had increased from 7% to 12% and, in 1979, its annual turnover reached £1 billion for the first time. In 1987 it announced a £500 million program to build another 29 stores. By 1991, the popularity of Tesco petrol filling station at its superstores had made Tesco the biggest company of Britain’s and a independent petrol retailer. In September 2002 Tesco launched its exclusive clothing brand “Cherokee” in many of its UK stores. The Cherokee brand along with Florence & fred and Tesco own brand clothing saw sales increase by 6 times the market rate.

Present day Tesco is thriving. The store has good range of goods both food and non food and new initiatives such as gift vouchers and club cards.

http://www.guardian.co.uk/supermarkets/story/0,12784,1453893,00.html.

Background research on Sainsbury’s Plc:

John James and Mary Ann Sainsbury founded Sainsbury’s in 1869. Their first small dairy shop was opened in London Drury which was London’s poorest areas and the Sainsbury’s shop quickly became popular for offering high-quality products at low prices. It was so successful that further branches were opened in other markets and towns.

By 1882 John James Sainsbury had four stores and had plans to expand his business further. He opened a deposit in Kentish Town, north-west London, which was to supply this growing chain and on the same site, built bacon kilns that produced the first Sainsbury brand product. It was also in 1882 that John James opened his first branch in the prosperous suburb of Croydon. This shop sold a wide range of high-class provisions. The interwar year, which brought depression and hardship for many, were a period of rapid expansion for Sainsbury’s. Sites were acquired in London’s expanding suburbs as well in new trading areas, including Luton, Cambridge and St Albans. The company expanded into the Midlands in 1963, with the achievement of the through good chain. By 1939 Sainsbury’s has 244 stores. All of which received daily delivery of fresh foods from the Black friars headquarters. Modifications were done to the design of the shops and new products, particularly fresh meat and package own-brand groceries, were added to the range. By the 1920’s branch of Sainsbury’s had six departments, which offered a larger product range than its rivals. Each shop offered delivery service in surrounding areas.

http://www.j-sainsbury.co.uk/ar_2010/index.asp?pageid=28

In the early 1970s, even though it had reached a scale and stature that warranted public status. The company’s profile flotation in 1973 was at the time the largest ever floatation on the Stock Exchange, with a 45-fold oversubscripition for shares. Small share holders were given more Preference in the allocation of shares. Choices of products were doubled by Sainsbury’s in 1994 which continued to reflect the company’s historic strength in fresh foods exotic fruits ready meals speciality breads and reduced-fat milks were introduced in response to customer’s increasingly sophisticated tastes. Many other products showed customer’s wider social and environmental concerns. Which allowed Sainsbury’s to introduce fair trade marked products. The new era has screen shifts in customer’s needs with organic and GM food ingredients, farming for biodiversity, healthier options and convenience foods. We have responded to customer needs and are proud of the idea we have in place. All Sainsbury’s own-brand products have been GM free since 1999 in April 2004 Sainsbury’s won the soil Association’s Organic Supermarket of the year for the third successive year. Sainsbury’s opened their Bank in 1997 which now provides a good range of services including life and health cover, health insurances etc. Sainsbury’s was presented the best overall provider in the Your Money Direct Awards in 2003.

J Sainsbury’s plc employs around 150,000 people. www.sainsbury.co.uk

SWOT Analysis of Tesco’s:

Strengths:

Begin your SWOT analysis; this can be done by producing a picture of Tesco’s strengths by using calculated marketing reports and other reliable business resources. Specific analysis techniques to employ

Weaknesses:

In performing a SWOT analysis of Tesco’s weaknesses, we need to think about weakness of the other companies that they share with Tesco. For Example: doing a comparison between Tesco’s and British airways can get us thinking about how dependent Tesco is on the UK market (73.8% of 2003 revenues.) or doing a comparison of Tesco with Amazon might bring out flaws in its challenge to move into new markets.Opportunities:

internet can provide us with some of Tesco’s main opportunities. We can easily serve the internet and compare Tesco with its oppositions. Now the question we can ask our selves that what things are there that Tesco is missing out on. Which opportunities is Tesco exploiting? For Example, we can start by comparing Tesco (ww.Tesco.com) and Amazon (www.amazon.com). Things to look at would be we general but important source of information such as how do the prices of books compare? Which website holds good features? What things Tesco has that Amazon might be missing?

Threats:

Having Discuss and investigating the weaknesses strengths and opportunities for consumers investigated the strengths; facing Tesco you should now be able to have good idea about some of the threats facing it. Focus especially on strategic planning to counter threats from other companies. E.G. examine how Tesco’s financial products compare with those from more recognized providers. A SWOT analysis of Tesco must judge all the competition in detail.

Tesco PESTLE analysis:

A PESTLE analysis of Tesco looks at the main exterior factors which impacts on the company:

Political Factor:

this is can be local, national or international. This can involve many governments. For Example, Tesco might have to deal with British and Columbian politics in regards to its coffee supply.

Economic factors:

These are the factors that have a large impact and instability in the stock market, otherwise the increase in tax can highly affect the bottom line of a company like Tesco.

Sociological factors:

Sociological factors can differ from the impact of immigration, to changes in trend. Modern technologies have a good impact. For instance, getting hands on things online as given a peak to Tesco’s success.

The changes which are made by all these external factors can head too many legal problems. At the end of day all big organisations have an impact on the environment. For Example Tesco uses fossil fuels in its transport network. Cutting down on this demand is a major challenge. 

PESTLE analysis on Sainsbury’s

Political factors:

The political factors can be local, national or international. Many governments can be involved. Some of the other political factors include the agricultural industry. Some time back supermarkets were able to reduce prices of their stock by buying it in a large quantity from abroad. This gave a reduced income to British farmers and casuing the Britsh agriculture industry to suffer.

Economical factors:

this factor can be used to discuss things on Economies of scale and how these organisation can take advantage of purchasing in bulk therefore leaving lower costs for customers. The competition increased in which we can discuss things like taking over the stores such as Walmart taking over Asda and Morrison’s taking easy way too by buying out Safeway. as Aldi.

Social factors:

Sociological factors can distinguish from the impact of immigration, to changes in trends. The development of technologies has had a great impact. For Example, getting hands on things online as given a peak to Sainsbury’s success.

The changes which are made by all these external factors can head too many legal problems. At the end of day all big organisations have an impact on the environment. For Example Sainsbury’s uses fossil fuels in its transport network. Cutting down on this demand is a major challenge. 

SWOT Analysis Sainsbury’s:

Strengths:

Sainsbury’s has its own very good position on green and environmental issues because of its various recent plans, on of which is buying fair-trade goods (economist.com 2008 [online]). More of its help in closing down gang master (Taylor 2008) has had a positive impact on the public in general. Sainsbury’s has a positive customer brand and it’s preferred by both green activists and its customers.