The market structure is of dissimilar types in different nations so Tesco has to adopt strategical measures regarding making pricing and output decision while carrying out its business in the overseas nations. Language in Europe is a huge barrier to labour force mobility. Among these firms, Tesco Inc. leads in terms of sales and profits. The competition policy stops the Tesco from growing further from their potential market share, something which Tesco has known to be done in the recent years. For Part 1 I will be describing the 4 different market structures that economist usually talk about are perfect competition, monopolistic competition, oligopoly and monopoly. It was founded by Jack Cohen in the East End of London in 1919. The article uses the SWOT Analysis technique to identify the market position of the company. Under monopolistic competition, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price. Released by cars and trucks, these microscopic particles can cause respiratory diseases. OFT (Office of Fair Trading) Since 1995 alone, about 100,000 young Britons have spent time studying in another European country. (http://europa.eu/pol/index_en.htm) The European Commission has wide powers to make sure businesses and governments stick to EU rules on fair competition. Now the focus is on putting policy into practice in to UKs market. It can allow smaller companies to cooperate if this strengthens their ability to compete with larger ones such as Sainsburys and Tesco. The market structure where the Tesco is operating, for example in the UK, there are many other players in the market which are offering the same products as the UK, hence the price and output of the products offered by Tesco is being decided by the supply and demand mechanism. This is because in the . Due to the low degree of competition theses big giants can decide on their own price which is most suitable for its target audience and these prices will be non-competition prices however there could be potential for collusion and price fixing so that each dominant business can enjoy their market share and have profits accordingly i.e. Once in a lifetime a family might make one large purchase or transaction across a European border such as buying a holiday home or a piece of furniture. Example of oligopolistic business industries are: supermarkets such as Tesco which alone owns 30.4% which is nearly 1/3 of the UK supermarket retail share market share, banking industry, chemicals industry, oil and energy industry, medical drugs and also the news and media broadcasting industry. By 2014, that number had declined by about 10 percent. It earned him the nickname "slasher Jack". The report analyses the pricing strategies, cost curves, elasticity of goods and portfolio of goods that Tesco sells. Monopolistic Competition Market Structure: Unlike perfect . The price of goods and services in a firm depend on the levels of demand, cost conditions and competition . Oligopolies lie between the definitions of perfect competition and pure monopoly. aviation all airlines prove one service which is to get their customers from one location to their destination and most customers have no preference or specific type of airline that they want to travel with, most customers will just look for the cheapest airline. One central bank cannot set inflation at the appropriate level for each member state. In addition, faced with the saturation of domestic market, high competition and self-development demand, Tesco expanded oversea markets in time and translated its store format to international market such as Turkey, China and Poland. The Commissions extensive powers to investigate and halt violations of European Union competition rules are subject to legal review by the European Court of Justice. How can the members have their say? The transfer of money and fiscal competencies from national to community level would mean economically strong and stable countries would have to co-operate in the field of economic policy with other, weaker, countries, which are more tolerant to higher inflation. If governments were obliged through a stability pact to keep to the Maastricht criteria for perpetuity, no matter what their individual economic circumstances dictate, some countries may find that they are unable to combat recession by loosening their fiscal stance. Example of oligopolistic business industries are: supermarkets such as Tesco which alone owns 30.4% which is nearly 1/3 of the UK supermarket retail share market share, banking industry, chemicals industry, oil and energy industry, medical drugs and also the news and media broadcasting industry. 48 Vitosha Boulevard, ground floor, 1000, Sofia, Bulgaria Bulgarian reg. The European Union has some of the highest environment standards in the world, developed over decades to address a wide range of issues. The final total value of UKs trade-in-goods imported for January 2009 to December 2009 remains at 147.3 billion. A concentration ratio is a way . Tesco PLC is a British grocery and general merchandise retailer that operates internationally with headquarters in Hertfordshire, England. Market structure 1. In recent years, Tesco has had to change their business model as well as their services to stay a market leader and differ-entiate from the competition. with free plagiarism report. This will unleash a greater potential for growth. EU Exports. Advantages: A single currency should end currency instability in the participating countries (by irrevocably fixing exchange rates) and reduce it outside them. From market stall to the UK's biggest supermarket. Most of the products available in Tesco are also available in other retailer store too. This is the reverse of the position in 1990. May 2010 showed a 4.2 per cent decrease in imports compared to April 2010 and a 20.8 per cent increase in imports compared to May 2009. Tesco's market structure described by the media is believed to be a monopoly, Tesco has also been through the legal proceedings to prove their innocence, Tesco has accused of being manipulative and gaining monopoly by building stores across towns and cities through the country and Europe but realistically Tesco is an oligopoly, although Tesco . Disclaimer: If you need a custom written term, thesis or research paper as well as an essay or dissertation sample, choosing Course Scholar - a relatively cheap custom writing service - is a great option. It can allow smaller companies to cooperate if this strengthens their ability to compete with larger ones such as Sainsburys and Tesco. In the United States, Texas could not avoid a recession in the wake of the 1986 oil price fall, whereas demand for Sterling changed in the light of the new oil price, adjusting the exchange rate downwards. This task for Business environment is split in two parts. Value of International markets to UK Noise, swimming water, rare species and emergency response -these are just some of the areas covered under the extensive body of environmental legislation that the EU has established over the decades. In this type of competition the companies are forced to follow the competitive pricing strategy in order to survive in the industry, i.e. Value of European markets to UK It was estimated that a traveller visiting all twelve member states of the (then) EC would lose 40% of the value of his money in transaction charges alone. It has changed because interest rates are set in each country at the appropriate level for it. Perfect competition describes a market structure where a large number of small firms compete against each other with homogeneous products. Language in Europe is a huge barrier to labour force mobility. European Union is a unique economic and political society which is in partnership between 27 democratic European countries. Actual monopoly is where the firm has somewhat majority of the market share in the industry, in this case Tesco is the most famous example, Tesco owns over 30.4% of the market share and is the leader in supermarket industry. Tesco makes extensive use of print and media advertising as a tested channel to send promotional messages to current and potential consumers. Agriculture Media Competition Consumers Education, Employment Environment External trade Fight against fraud Human rights, Taxation Transport Justice, freedom Internal market Customs, Impact of European Union's Competition policy on Tesco. One central bank cannot set inflation at the appropriate level for each member state. All the sellers of the market are small sellers in competition with each other. The business that I have chosen for this assignment is Tesco; this is because Tesco is a multibillion pound international business. Explore how the human body functions as one unit in number: 206095338, E-mail us: In our society today and the way business is conducted, market structures are. Many fast food franchises fit all or most of these characteristics. EU has set binding limits on emissions of fine particles known as PM2.5. The characteristics of the market structure will have a major-influence on the competitive strategies and tactics that are implemented by firms. Pure monopoly in where the firm is the industry, for example Transport for London, the firm which owns all buses and underground tubes in and around London, this is where consumers have no or very limited choice. If somehow UK market collapses then Tesco will be in a greater amount of risks. The organization currently has three locations (La Jolla, Del Mar, and Encinitas).. Public goods are goods from which the whole community can take benefit without the need of purchasing them. Get Your Custom Essay on. A monopoly has high barriers to entry and firms have strong controls over their prices and they also control the supply of their product which can increase demand of popular products, because a firm with a monopoly has majority of the market share it can decide to have low prices in order to destroy their competitors. UK Supermarket Oligopoly - Key takeaways. In November 2007 Tesco one of the top three largest UK Supermarket chains and a major global retailer opened its first stores in the USA under the brand name 'Fresh & Easy'. 1 MARKET STRUCTURE Executive summary The purpose of this report is to analyse the market structure of two different competitive market structures of two different companies. The stability pact (the main points of which were agreed at the Dublin summit of European heads of state or government in December 1996) will force EU countries into a system of fiscal responsibility which will enhance the Euros international credibility. OFT is a non-ministerial government regulator that was established by government in 1973. can use them for free to gain inspiration and new creative ideas for their writing Some exceptions to the general rules are possible. A single currency should result in lower interest rates as all European countries would be locking into German monetary credibility. The European Commission (representing the common EU interest). If Tesco plans to merge with its competitor, Tesco needs approval from the European Commission, the EUC (European Union Commission) marks their decision depending on the amount of business that Tesco has within the European boundaries. So all the firms in such a market are price takers. The disadvantages of a monopoly is that customer are exploited to high prices and potential supplies have limited choice for demand and this means that the consumers have less choice and again might have to pay higher prices than normal or the monopoly can even use very low price to push their competitors towards administration or bankruptcy. Once in a lifetime a family might make one large purchase or transaction across a European border such as buying a holiday home or a piece of furniture. The competitive market structure an organisation belongs to is determined by the nature of their product, the number and size of other firms in the market and the entry and exit conditions of that market. Founded in 1919 by Jack Cohen, Tesco has emerged to become the biggest retailer in the UK and more than 80 million shopping trips are made to Tesco stores each week (Annual Report, 2015). An oligopoly is most likely to have a kinked . The Commission can, does and has fined companies for all these practices. The retail sector. Your email is safe, as we store it according to international data protection rules. The Tesco Plc Company is on fourth place in terms of total revenues within the United Kingdom market segment alone. Competition regulators are important in business and are required to ensure equality and a fair deal for all. Loss of national sovereignty is the most often mentioned disadvantage of monetary union. Introduced in 2005, the scheme takes in about 12,000 factories and plants responsible for about half the EUs emissions of CO2. The Commission may agree to a company having a monopoly in special circumstances for example where costly infrastructure is involved (natural monopolies) or where it is important to guarantee a public service. The loss of national sovereignty is the most often mentioned reason for the UK not joining the monetary union is the transfer of money and financial proficiency from national to community level would mean that economically strong and stable countries would have to co-operate in the field of economic policy with other weaker countries. An end to internal currency instability and a reduction of external currency instability would enable exporters to project future markets with greater certainty. (Source: UK Jobs Dependent). Monopoly: Tesco, a UK retailer that operates in the grocery sector. A Natural Monopoly Market Structure is the result of natural advantages like a strategic location or an . What are its aims? The Commission can, does and has fined companies for all these practices. (http://news.bbc.co.uk/1/hi/special_report/single_currency/25081.stm) Retrieved from https://phdessay.com/market-structures-tesco/, Hire skilled expert and get original paper in 3+ hours, Run a free check or have your essay done for you, Didn`t find the right sample? The two organisations I will be comparing and contrasting are Tesco and Sainsbury's which I believe belong to the Oligopoly market structure. Contacting their NGOs (consumer associations, environmental pressure groups, etc.) The Price elasticity of demand measures the responsiveness of the quantity of goods sold to the changes in the products price. By sending us your money, you buy the service we provide. Not only is Tesco one of the most valuable brands in the . The . Best tips on how to write a literature Review? Sustainable development has long been one of the overarching objectives of EU policy. Private goods on contrast are ones from which the public can only. Tesco themselves say that it is an oligopoly, this is because Tesco is not the only supermarket in the UK, Tesco is the dominant shareholder but cannot be called a monopoly as there are many other firms which are in competition with Tesco e.g. If a community or even an individual has an important point to show to the union they must do some of the following starting with: The EU has developed a single market system of laws which apply to all member states, and ensures the free movement of people, goods, services, and capital, including the elimination of passport controls by the Schengen Agreement between 26 European Union states which I have listed below. European Union executes legislations in justice and home affairs, and maintains common policies on trade, agriculture, fisheries and regional development. assignments. United Kingdom supermarket share A multinational company like Tesco cannot merge with another giant if that would put them in a position to control the market, though practice this rule only prevents a small numbers of mergers going ahead. The total 2010 year to date value of UKs trade-in-goods imported excluding May was 59.2 billion, which has been upwardly revised by 96.7 million. Contacting their MEP and cast vote at the European Parliament elections the European Parliament enacts EU laws: (www.europarl.europa.eu) European Union's rewards businesses and organisations, which reduce their CO2 emissions and penalises those that exceed limits. OFT gathers intelligence about markets and trader behaviour from a wide range of sources and then they respond to complaints about markets from nominated consumer bodies, where the OFT is able to see potential problems, the OFT undertakes market studies and recommends to take action respectively. The European Union has some of the highest environment standards in the world, developed over decades to address a wide range of issues. The firm has to provide the markets supply, and there are. Homogenous products are identical products or business e.g. EU has set binding limits on emissions of fine particles known as PM2.5. Much of . Today the main priorities are combating climate change, preserving biodiversity, and reducing health problems from pollution and marking sure that natural resources are being used more responsibly. In 2013, Tesco spent approximately 110 million on marketing efforts in traditional outlets. The Figure 2 below illustrates a typical organizational structure within Metro, Superstore and Extra formats. This aid can take many forms loans and grants, tax breaks, goods and services provided at preferential rates, or government guarantees which enhance the credit rating of a company compared to its competitors but in this case this does not apply to Tesco till today as Tesco is already on top of its game. Order your essay today and save 15% with the discount code ESSAYHELP, Don't use plagiarized sources. It is estimated the 3.5 million British jobs are dependent on* Britains membership of the EU. You will get a personal manager and a discount. The four leading supermarkets in the UK supermarket oligopoly are Tesco, ASDA, Sainsbury's, and Morrisons. One of the few reasons that the United Kingdom did not want to join the single European currency with the first wave of countries on 1 January 1999 is that according to the chancellor of the Exchequer at that time in 1999 who was Gordon Brown our current prime minister said that, although the government supported the principle of the single currency Britain would not be ready to join at least until the second wave of countries which occurred in 2002 and during that time he told the European Union that the country should begin to prepare for monetary union but up till now there have been no indications of the United Kingdom joining the European Union currency, Euros. This work is done using the powers granted to the OFT under consumer and competition legislation. EU leaders launched the first EU sustainable development strategy in 2001 and updated it in 2006 to tackle shortcomings and take account of new challenges. 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