Tesco PLC

Tesco, PLC

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 plc is a grocery and general consumer goods retailer outlet with global reach. Tesco has its headquarters in UK and it enjoys the status of being the 3rd largest retailer in the world in terms of revenue and 2nd biggest in terms of profits. Tesco has stores in more than 14 countries of the world.n Tesco is a popular retailer of clothing, electronics, furniture, books, petrol, internet services, financial services, DVD rentals and music services and mobile phones (Humby, 2007).

Discussion

Demand & Supply Curve

Retail food stores and companies are an example of Oligopoly. An oligopolistic market consists of only a few producers. Furthermore, entry by new firms into the market is impeded; consequently, firms in an oligopolistic industry can earn substantial economic profits over the long run. Products produced by oligopolies can be relatively homogeneous, as in the case of Retail stores, they are food products, frozen foods, drugs and healthcare products, beverages etc.

The term oligopoly means "few producers", i.e. a small number of companies controlling the production of X article. This situation creates a relationship of interdependence among firms, in the sense that if a producer decides to increase production and lower their price, or scarce the product and raise prices, while all other producers of the article will be affected to such decisions and especially if the company has great importance in the market. That's why in an oligopoly, rival firms can spend all the time in the world guessing what the next move of his opponent.

This rivalry between firms can include different forms of competition at the price of like goods, such as advertising and product modification. The number of possible ways in which the oligopolists can act and react is broad.

To determine the demand curve of oligopolistic competition, such as retail, one must make assumptions about how companies react when other companies make their decisions.

In a simple model, it is assumed that each firm expects that any price change is matched by its competitors. This results in the demand curve for each oligopolistic is equivalent to the demand curve proportionally equivalent to 1 / n D, where n is the number of companies and D total demand. Below is the diagram that shows the demand curve of the retail market, which includes Tesco, as well.

As a way to market, the oligopoly can be both the supply side and the demand side, so a supply oligopoly is when demand is served by a few suppliers. On the other hand, when a small number of plaintiffs to absorb the good or service produced by a large number of bidders, we face a demand also called oligopoly.

For oligopoly, usually means a market structure involving few producers, whether they produce a homogeneous good as differentiated ...