The LBS Portfolio Level 1



The LBS Portfolio Level 1

Introduction

Psychology of Human Behaviour is the key understanding regarding the trend of financial and stock market. The increase and decrease in price of the company shares depends on the disposal income of the country. In order words, when purchasing power of the people increase the demand of the product tends to increase increasing the share prices of the company. This paper focuses on the TESCO share price movement and what factors contributes to the share price and demands of eth product.

Discussion

Overview of Tesco

Tesco is one of leading food retailer in Ireland and United Kingdom with the 2715 stores in the country. Tesco has been ranked on number 19 at FTSE All-Share Index Ranking close on Thu, 5 April 2012 with the capitalization £26,012m with share price £324.50 volume of 14,552,315 in UK market.

Tesco's plc has an ultimate product ranges those are Groceries, Telecoms, Financial service and Consumer good. Recently Tesco operates in the food retail sub-industry, 95% of revenues generated through their food products. Their main competitors are Wal-Mart, Sainsbury's, Morrison's, Safeway, and Whole Foods. Tesco has been offering many products in the above categories which prices differs from other competitors. (See appendix for pries).

HHI & Monopoly position of Tesco

The grocery market in the UK has a 75% stake owned by the supermarket chains. Moreover, the rest of the food distribution industry is split between convenience stores, traditional shops and alternative channels such as online sales or cataloge sales.

Despite what they show certain economic indicators such as rising energy costs, transportation and housing, the grocery market remains stable and continues to show growth potential. Within the sector, discount chains have been those that have experienced the greatest growth in the past year (TESCO Annual report 2011).

Market segments:

Supermarket chains:

As it is already mentioned the supermarket chains accounts for 75% of total retail food sector in the UK. The main ones are: Tesco (31.4% of total), Asda / Wal Mart (17.1%), Sainsbury / s (15.7%) and Morrison's (11.2%).

Sale discount:

Retail chains discount are currently experiencing a "boom" in the UK. Chains Aldi and Lidl are leaders, both of German and British market presence from 90. Discount chains have 5.3% of the total market, which represents the highest share in the history, and they are the industry's fastest growing. Despite this growth, its market share is still small compared with that shown in Germany (38%) and France (11%). Finally note that some supermarket chains standard sales are starting to sell off product lines, Tesco being the most notable example.

A particular aspect of the supermarkets in the UK is that they are smaller (in area of ??each store) than in other European countries, given the strict regulation plans of cities. This has led to unions between small and large chain stores, and certain partnerships between companies (e.g. Tesco with Esso) to distribute food in places such as gas stations.

Shopping on-line:

Although today these sales represent only 2% of the total sector, strong growth is ...