TESCO VS. SAINSBURY CASE STUDY

Tesco vs. Sainsbury Case Study



Tesco vs. Sainsbury Case Study

Introduction

The main purpose of this paper is to review the case study of Tesco and Sainsbury, and make an analysis of the global retail food/non-food industry, and identify the forces that exert the greatest pressure on industry rivalry. This paper also compares and contrasts the value-creating activities of Tesco. This paper also conducts the contrasting resource based view analysis of Tesco and Sainsbury.

Question 1:

Perform an analysis of the global retail food/non-food industry and identify the force you feel which exerts the greatest pressure on industry rivalry.

Answer 1:

Around the globe, supermarkets are the dominant force in retail (retail) and people feel they are destroying the soul of cities and towns. Most people buy loque need for your home in any of the yield of supermarkets. People have realized that by spending their money, they are giving revenue to independent shops that are located in the commercial area of towns and villages, and many are disappearing. Despite this, it is difficult resistive at low prices and convenience offered by supermarkets to small shops that cannot compete (Aaker, 2009, p. 137). During the past two decades, grocery has shifted from an industry dominated by small grocers serving local markets to one characterized by large retailers present in international markets. Supercenter and warehouse stores continue to expand into the retail grocery industry due to many factors, including supply chain management strategies, which drastically lower costs compared with traditional grocers, fewer weekly trips to supermarkets by consumers, and evolving store formats. The Schumpeterian tradition would suggest that the “creative destruction” introduced by supercenter and warehouse stores should drive economic progress, but concerns have emerged that the large international grocers are, in a position to harm consumers. The traditional global retail grocery outlet has been the supermarket, but non-traditional large retail grocery formats began to take hold in the mid-1970s as Meijer began opening supercenters and the first Sam's Club warehouse store opened. At first, the rate of expansion of the large grocers was relatively slow, but the number of store openings exploded during the mid-1990s, especially for Wal-Mart Supercenters. Three new retailers (Wal-Mart, Target, and K-Mart) began opening supercenters in the late 1980s. These large chains opened an average of 165 new stores per year from 1995 to 2005, 90 percent of which are Wal-Mart Supercenters.' Even though Wal-Mart is only one of several supercenter and warehouse club firms, its tremendous growth shows how quickly the grocery industry has changed and reinforces the importance of evaluating this transformation (Wells, 1994, p. 817). In 1987, Wal-Mart did not sell groceries. By 2002, the company surpassed Kroger Foods to become the largest retail grocer in the United States. This rapid growth is expected to continue, with one prediction that Wal-Mart will control 35 percent of the U.S. retail grocery sales for many consumer products by 2010 (Tidd, 2009, p. 45). Perhaps as a response to the explosion in growth by supercenter and warehouse stores, traditional ...