The Impact of New Technology on the Supermarket Industry

The Impact of New Technology on the Supermarket Industry

Introduction

The food and drink retail sector makes up one of the largest industries in the United Kingdom. The industry is so large that it provides employment for over three million people. According to Datamonitor (2003), retail accounted for approximately 9% of the country's gross domestic product. Even though the industry is responsible for so much positive influence in the country, is has fallen to increased scrutiny over the specific treatment of suppliers. The development of supply chains and networks is a vital part of supermarkets.

Discussion

Tesco

Tesco is an extremely popular food retail chain. It is also one of the largest in the world. It operates up to two thousand four hundred stores and has employees that number approximately three hundred thousand. The chain's largest market is in the United Kingdom. It successfully operates under the following banners; Metro, Superstore, Express and Extra. The company proudly sells approximately forty thousand food products, clothing items and other accessories with plans to maximize even further. 50% of sales are due to the company's own label products. These products are three distinct levels that are value, normal and fine. Numerous stores have also adapted gasoline retail and this has helping it to become one of the largest petrol retailers in the United Kingdom. Tesco also offers personal financing services.

The purpose of this paper is to take a closer look at the supermarket industry, with special attention paid to Tesco. The paper will analyze the company's competence, resources, external environment and culture. The paper goes on to provide strategic option based the resource based strategies observed in this report.

PESTEL Framework

Political Factors

Tesco operates internationally. In the European region, it operates in The Republic of Ireland, Czech Republic, Turkey, Slovakia, Hungary and Poland. In Asia, Tesco operates in Thailand, Japan, South Korea, Malaysia and Taiwan. Performance is influenced by the political and legislative policies of each respective country.

The government has legislature that speaks of labor. It encourages retailers to create a mixed variety of jobs. They must create opportunities that range from flexible, low pay and local jobs to high skill, high pay and centralized positions (Balchin, 1994, pp.43-57). The government also encourages retailers to create positions for the disabled, elderly and students. Tesco understands its potential impact on the job market. As competitors cut costs or shut down stores, jobs are reduced. Tesco employs working parents, senior citizens students and disabled individuals. They have policies that protect individuals from discrimination based on age, gender and race. This specific industry exhibits high staff turnover. By employing elderly, disabled and students, Tesco creates loyalty among its employees. This results in desirability and higher rates of workforce retention as compared to other supermarket chains.

Economical Factors

As for any business, economic factors are a cause for concern to Tesco. These factors influence supply and demand, which directly influences prices and consequently profits. High unemployment rates affect the economy in a very direct ...