INTERNATIONAL DECISION MAKING

International Decision Making



International Decision Making

Introduction

Tesco, the largest retail chain of UK and third largest chain in the world employing around 440,000 people in 13 markets with around 280,000 in the UK. On an average over 30 million people visit Tesco throughout the world every week. Tesco is one of such organisations that have given tremendous attention to its strategies to cope with all kind of challenges and to gain competitive advantage (Datamonitor, 4-27). Tesco places immense attention to this step of value delivery process, and establishes itself as a brand that is the symbol of reliability.

The main driver of success in this highly competitive industry is innovation and strategy. The industry is highly competitive, and the only way to survive is by implementing innovative strategies to stay ahead of the competition. International diversification will also play a vital role in the success of a firm in this industry. Tesco was the world's first online grocery retailer. It has around more than 2 million GBP sales right now from its online grocery section throughout the world. There are many exclusive services that Tesco's customers are entitled to, which include click & collect service, club card service and Tesco's talking shop. Tesco owns the two largest food brands in the entire UK, which are Finest and Everyday value with each having sales of more than GBP 1 million.

Although, Tesco has already expanded to around 14 international destinations, but there is a lot of potential for international expansion, especially in India and Thailand (Mctaggart, 8-10). Therefore, the company needs to improve its financial position and focus on improving liquidity.

2. Market Share and Market Structure

Market structure plays a key role in the determination of price and in making output decisions. Market structure as comprehended by Economics, and is basically a state of market with respect to the competition this market bears. If we are to discuss the impact of market structures on pricing and output decisions, we are to know the specifics of the market structures that exist. For instance, considering the market structure of Monopoly which pre-dominantly is characterized by the presence of numerous buyers and single seller, hence monopoly in the market, we will discuss its impact. The impact of monopoly on price and output decisions is huge and is directly under the control of seller, majority of the times. This is the aspect that prompts the term of market control being associated with monopoly market. The entry to market is restricted with single seller in the market, and the market usually benefiting from economies of scale. Thus, economies of scale define the output that is to be produced and the pricing decisions are taken in alignment to the supply and demand. But since monopoly is characterized by inelastic demand, the change in price does not usually impact the sales (Karlof, 1993).

UK supermarket is very competitive, and some might argue against the presence of oligopolistic structure but the dominance of players as Tesco, Sainsbury's etcetera points towards UK ...