Business Patterns of Change

Business Patterns of Change

Introduction

The Grocery industry and market has been evolving at a rapid rate as the four leading supermarkets and grocery stores namely Asda, Morrison, Sainsbury and Tesco have taken over the major chunk and share of entire food retailing business since the year 2000. Two of the leading supermarkets namely Tesco and Sainsbury have been quick in their expansion into convenience and smaller stores to get access to every high and low of the society. In this way they are now competing with smaller chains of stores and that of independent stores as well.

Discussion

The business environment of every organization consists of different environmental and internal factors that affect the operations and competitive strategies of the organization. These factors are namely customers, competitors, stakeholders, suppliers, regulations, technological factors etc. All the above mentioned factors play an important role in bringing changes in the market structure and how firms operate and compete in order to survive and remain sustainable in the industry. Bayard has defined business environment as the sum of all the things that are prevailing in the external environment of any firm affecting the business and operations of the organization (Ukessays). Though there are many other factors that affect the operations of an organization but the above mentioned factors are the most important ones and the organizations has to act according to the trends in the industry with regards to the above mentioned factors. These external factors shape the structure of the market as well as future industry trends and organization's reactions.

The market structure of the UK grocery industry consists of supermarket multiples that are Asda, Morrison, Sainsbury's and Tesco. There are smaller chains like Somerfield, Waitrose, Marks and Spencer and some discount stores namely Aldi, Lidl and Netto. Another group that has been identified in the market is that of symbol groups that may be defined as chain of those stores that have similar product line but their ownership is fragmented like in case of Musgrave that operates under the fascias of Budgens and Londis. The third group is that of Coops that are operating in a similar fashion as symbol groups. While the fourth group is that of independent store that owned and run by independent owners.

Authors suggest the market of UK grocery industry to be an oligopoly and there are few big players that are dominating the market but Tesco still remain the leading party due to their disproportionate power.

The major change and development in this business area is related to that of convenience stores. The movement of bigger supermarkets like Tesco and Sainsbury is the main reason behind the growth and development of this sector and symbol groups namely Spar and Costcutter have also benefited from this expansion in the form of considerable market share. Another major reason behind this change in trend has been driven by customers changing patterns in shopping. Another major trend that has brought changes in operations of the grocery industry is extreme price cuts and discounts ...