International Management Decision Making Assignment

International Management Decision Making - Assignment Example The market in which Tesco operates is a very competitive market. The retail grocery market in UK is home to hundreds of firms but the competition revolves around 4 major players in the market. These include Tesco, Asda, Sainsburry’s and Morrison’s. The overall firm concentration of these four firms is 76%. Thus, the nature of the market in which Tesco operates is an oligopoly. In an oligopoly market, a few larger firms dominate the market and the industry. The UK retail and super market has become increasingly concentrated in the last couple of year. With very few players in the industry, the market share of each of these players continues to rise. This is an oligopoly market and under the oligopoly theory these are the following basic characteristics that govern the market ; the competition is non-price based; there is intensive branding and brand loyalty; prices don’t fluctuate; the competitors are extremely interdependent on each other; the barriers to entry are strict; there is economies of scale ; a lot of focus on advertisements; every move by competitors is followed and looked at and the potential for a collusion. All these aforementioned characteristics prevail in the market in which Tesco operates. There the competition is not just about the product that is sold in the stores, but the overall experience that these super markets offer to their customer. Tesco’s market share as of December 2009 was 30.5%. In the last couple of year its market share has risen above 25%. The company lay it’s foundations on the basis of this idea : â€Å"Pile it high and sell it cheap†. Tesco started off from small service stores initially and then went on to expand its operations nationally and globally. In 1956, Tesco opened its first self service supermarket. During the 1960s, Tesco continued to expand and acquired various store chains. Tesco’s primary aim was to