FINANCIAL ANALYSIS

Financial Market and Product Risk

Financial Market and Product Risk

Introduction

Tesco is a giant retailer with a strong reputation and healthy brand equity in the international market. It is the service quality and customer trust which makes Tesco the customer's first choice. The competitive advantages of Tesco made it different from the other players in the market. Customer regard Tesco as the best retailer of UK, which deals in processor and other related items the company has employed more than 440,000 employees all around the world. The financial markets and market analysts termed Tesco as a share of blue chip nature. Tesco is operating in 14 international markets such as Asia, North- America and Europe. The company has well defined strategy designed in such a manner that it may fulfill the future targets and to link the customer with maximum satisfaction.

The analysis of Tesco's financial statement highlights the fact that the company has earned revenue of £60 billion with an overall net operating income of £3 billion. The financial statistics of the company shows that the company is on the top of the charts in the whole UK, whereas it is recognized and ranked internationally as the world's third largest retailer after Wal-Mart.

Tesco is considered as the largest distributor of UK, Ireland and Asia. The total market capitalization is approximately around 35.73 billion at the end of 15th of July 2011. It is basically the strategy of the company which makes it competent enough to lead the market. The company is extending its business network to different parts of the world in order to impress their business revenues.

According to the management of the company it is our defined values and principles which make us competitive in the market. This strategy helps us in developing customer value which in returns blessed the company with increased clienteles. The core purpose of our business is not only to earn profits but to earn large number of customers therefore the company establishes a certain working environment in which they are emphasizing on increasing the coordination among teams and the management so as to simplify the business process and to link them in accordance with the defined principles (Agrawal & Madhu, 2004, pp. 30).

Strategic Capabilities

Strategic capabilities of a company is termed as the competetiveadvatage. Some of the strategic capabilities of Tesco are as follows:

Inventory Turnover

Higher revenues

Experienced Teams

Specialized and trained management

Perfect groth rate and Margin ratio as compared to the industry.

Low turnover of employees.

Strategic planning unit define strategies for all the regions

Analysis of the Retail Sector

The retail sector of UK is very attractive and it contains a large number of retail businesses in competition with each other in order to lead the major market share. The worst economic conditions and low buying power slow down the economic progress of the region in the second half of 2011. According to PWC (Price Water House) there are 953 shops and local stores which have been closed in the recent years due to economic ...