Tesco vs Sainsburry PDF
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Transcript of Tesco vs Sainsburry PDF
TESCO VS SAINSBURRY CASE ANALYSIS :
Tesco Vs Sainsburry
PRESENTED BY 1. Rahmat Adil Indrawan 2. Syahrul Yaser 3. Rizka Ainaeny 4. Rinawan Wijaya 5. Restu Pratiwi 6. Yohannes W. Sudjana 7. Vitrio Wibisono 8. Widi Irawan 9. Nur Thalia Budi Utami 10. Mushashi Pangeran Batara Sitanggang
Tesco Vs Sainsburry 2
BA
CK
GR
OU
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• In 2009, UK retail sales were over £285billion and are
growing, despite the economic downturn in 2007. During
2010, the industry created an extra 12,750 full-time jobs,
a 2.1% increase on the previous year.
http://www.prospects.ac.uk/industries_retail_overview.htm
• This industry is very much affected by economic
condition, especially by inflation rate and employment.
Tesco Vs Sainsburry 3
HISTORY
• Established 1869 by John James and Mary Ann Sainsbury • 1922 J.sainsbury become private company J Sainsbury plc. • 1973 Company become the largest floatation on London Stock Exchange • 1995 Its surpassed in by Tesco • 2003 It was pushed to third place by ASDA
• Established 1919 by Jack Cohen • 1924 Tesco brand first appear • 1973 Jack cohen resigned, Lesli Porter “Pile it high and sell it cheap” • 1977 launched “Operation Checkout” • 1990 mid-sized food chain far behind its rival
Tesco Vs Sainsburry 4
GENERAL ENVIRONMENT • Supermarket retail is the largest industry in UK.
• Economics segment => retail industry affected by customer earnings.
• Supermarket industry is market oriented => customer is very important.
• Technology => customers more aware on technological innovation (internet base).
• Social culture => customer toward one stop and bulk shopping, more aware on healthy product.
Tesco Vs Sainsburry 5
GENERAL ENVIRONMENT • Economic à relatively stable.
• Physical à in 2005 Tesco’s buildings collapsed (city council rules), bbc.co.uk, 2006.
• Sociocultural à customer toward one stop and bulk shopping, more aware on healthy and organic product
• Global à retail industry is acceptable globally.
• Technological à customers awareness on internet.
• Political à “Need-test” 1996 and deleted in 2007 by government white-paper (thisismoney.co.uk, 2007).
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COMPETITOR ENVIRONMENT
• 1990 beginning UK retail market
become more competitive. Three
player dominated the food market:
Asda, Sainsbury, Tesco.
• Mid 1990 competition intensified
as a price war among these player
emerged
• Market entry of discounters :
Aldi and Lidl
Tesco Vs Sainsburry 7
TY
PE
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Tesco Vs Sainsburry 8
FIVE FORCES
Tesco Vs Sainsburry 9
Internal Rivalry
Supplier Power Buyer Power
Substitute Threat of New Entrants
Intense
Low, own private brand & mas production
High because of low switching cost
• Online Store • Traditional Market
High because of low entry barrier
Strength 1. Highest market share in UK 2. All market segments 3. Wide demographic market 4. Innovative (club card, online
store) 5. First mover
Opportunity 1. Expand non food retail 2. Development of healthy and
beauty products 3. International growth market
Weakness 1. Abandoned Cohen
philosophy “pile it high and sell it cheap” (stagnating bad image in 1977)
2. Too aggressive in expansion
Threat 1. Restaurant business picking 2. ASDA international
expansion 3. Product substitution 4. Intense price war
Tesco Vs Sainsburry 10
TESCO SWOT
Strength 1. Mass & High End Market 2. Strong Brand (Early
Established) 3. Store Network 4. Private Brand
Opportunity 1. Expand the number of store 2. Expand product offering
Weakness 1. Price 2. Declining Profitability 3. Lack of International
Presence 4. Supply Chain Disruption
Threat 1. Intense price war 2. Product Substitution
Tesco Vs Sainsburry 11
SAINSBURRY SWOT
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STO
RE
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RM
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• “Sainsbury’s SaveCentre”
Hypermarket format as joint
venture with British Home stores
• No separate Brand
• Operate with three formats:
Regular Sainsbury’s
Store,Sainsbury’s local Store,
Sainsbury’s Central Store.
• “The Tesco Way” focus on
people, both employees and
customers
• Tesco store divided into : Tesco
extra, Tesco superstores, Tesco
Metro, Tesco Express and One
Stop
BUSINESS LEVEL STRATEGY
TESCO
• Integrated cost leadership/
differentiation strategy.
SAINSBURY
• Differentiation high quality
product
Tesco Vs Sainsburry 13
BUSINESS LEVEL STRATEGY/ FACT
• Asda = price leader followed by Tesco. Sainsbury = upper price segment, between mass market and high end.
• Tesco service offering: offer upper, medium, low-income customers in the same store, investing in its own brand.
• This wide reaching demographics, reliability and trustworthiness keep shoppers return to Tesco.
Tesco Vs Sainsburry 14
BUSINESS LEVEL STRATEGY/ FACT
• Tesco ditribution strategy: draw goods from suppliers into regional distribution centers for preparation and delivery to stores.
• Sainsbury distribution strat. : heavily invested in fully automated depot (4) ----- failed.
• Tesco Innovation: Club card. To gather consumer information, cater to specific potential customers need and wants.
• Sainsbury is a late follower—showing no immediate response. Introduce multiparty card (Nectar) but its being worst card schemes offered.
Tesco Vs Sainsburry 15
CO
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OR
ATE
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TR
ATE
GY
• Tesco and Sainsbury’s do
diversification strategy – un related
from food to non food (clothing,
financial service, &
telecommunication).
• Tesco has wider global market than
Sainsbury.
Tesco Vs Sainsburry 16
STRATEGY DEVELOPMENT
Tesco • to be a successful international retailer;
• to grow the core UK business;
• to be as strong in non-food as in food;
• to develop retailing services; and
• to put community at the heart of what we do
• Customer focus through Clubcard
• Employee focus
Tesco Vs Sainsburry 17
STRATEGY DEVELOPMENT
Sainsbury • Healthy & green product at fair prices
• Accelerating the growth of complementary non-food and services
• Reaching more customer through additional channels
• Growing supermarket spaces
• Active property management
• Customer focus through questionaires
• Financial Policy : Cutting half of dividend
• Employee focus
Tesco Vs Sainsburry 18
Tesco
Cash Discount : Clubcard
Time Discount : Christmas, New year
price cut after 6 pm
Promotional allowance : Buy 1 get 1
free
Quantitative Discount : Buy 2 get 1 free, buy 3 for 2
Local segmented :
Different price in different
country
DIS
CO
UN
T S
TR
ATE
GY
Tesco Vs Sainsburry 19
SAINSBURY’S
Cash Discount :
Reward Card
Promotional allowance :
Discount after repositioning
its place
Quantitative Discount
DIS
CO
UN
T S
TR
ATE
GY
Tesco Vs Sainsburry 20
MAIN CAPABILITIES • Retailing diversified product • Distribution channel • Customer relationship management
Tesco Vs Sainsburry 21
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Addi$onal References
1. http://www.thisismoney.co.uk/news/article.html?in_article_id=420939&in_page_id=2
2. http://news.bbc.co.uk/2/hi/uk_news/5261844.stm 3. http://www.accountancyage.com/aa/news/1934865/tesco-sainsburys-
attack-lease-accounting-proposals
Tesco Vs Sainsburry 23