The European Union Commission can allow companies like Asda and Morisons to cooperate in developing a single technical standard for the market as a whole. Tesco and Sainsbury's had the largest share over the period . Market structure is said to be the characteristics of the market. Sustainable development has long been one of the overarching objectives of EU policy. In June 2010 the total value of trade-in-goods imported to the UK from countries outside the EU was 15.4 billion. Tesco Plc (Tesco) is a multinational retailer of general merchandise. Monopoly Vs Oligopoly Financial Turnaround: Thanks to the leadership of Dave Lewis, Tesco recovered from an annual loss of 6.4 billion in the annual report of 2015 to an operating profit of 1.9 billion in the annual report of 2020. Abstract. Either the physical products can be varied in quality, features, style or the accompanying services can be varied. In the UK market, it is very crucial to determine the quantity of output in order to keep check on pricing and related decisions. Below I have listed the advantages and disadvantages which were discussed by the chancellor Gordon Brown at the times of between 1999 and the year 2002 when the waves of countries in Europe joined the European Union and the currency: (http://news.bbc.co.uk/1/hi/special_report/single_currency/25081.stm). Eliminating exchange rates between European countries eliminates the risks of unforeseen exchange rate revaluations or devaluation, further those businesses who involved in commercial transactions in different member states would no longer have to face administrative costs of accounting for the changes of currencies. Tesco management aims to reduce the cost of purchases and operational costs through and a set of other measures in order to pass the cost advantage to customer as the main brand value. The European Commission has wide powers to make sure businesses and governments stick to EU rules on fair competition. Managerial Economics, 6th edition. Austria, Belgium, Czech, Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden and Switzerland. This assignment reflects the market analysis for TESCO PLC, which is one of the leading retail and super market chain in the world. the buyers have the power to influence the price of the product or services. This work is done using the powers granted to the OFT under consumer and competition legislation. Tesco organizational structure is highly hierarchical reflecting the large size of the business. The article uses the SWOT Analysis technique to identify the market position of the company. Another organisation that does similar commerce to what Office of Fair Trading do, Ofcom is an independent regulator and competition authority, for the UK communications industries, with responsibilities across television, radio, telecommunications and wireless communications services. database? - The industry is characterised by freedom of entry and exit. How has Tesco Responded to this Structure? 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. While the cohesion funds attempt to address this, there are still great differences across the EU in economic performance. By 2014, that number had declined by about 10 percent. The chosen organization for this study is Tesco Plc that operates in the retail industry of UK. In a recent investigation by the OFT has reviled that British Airways has been found guilty over the price of long-haul passenger fuel surcharges and has paid a penalty of 121.5m to be imposed by the OFT, therefore enabling the OFT to close its civil investigation and resolve this case. The 'Office of Fair Trading' is the UK's consumer and competition authority and their mission is to make markets work well for consumers. 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. The UK is growing reasonably well, Germany is having problems. support@phdessay.com. Retail in the UK. European Union's rewards businesses and organisations, which reduce their CO2 emissions and penalises those that exceed limits. In May 2010 the total value of trade-in-goods imported to the UK from Member States of the EU was 14.7 billion. - All firms are price takers - All firms have a relatively small market share - Buyers know the nature of the product being sold and the prices charged by each firm. Tesco PLC is a multinational grocery and general merchandise retailer. The OFT has a 5 step method of keeping a good eye on business and other organisations these 5 steps start with Analysis, Prioritisation, Prevention, Partnership and Evaluation, the details of all the steps are on their website under What we do. 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 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. Introduced in 2005, the scheme takes in about 12,000 factories and plants responsible for about half the EU's emissions of CO2. The report structure also focuses on the competitive landscape of the Global Parchment Baking Paper Market, this report introduces in detail the market share, market performance, product situation . Tesco adding eCommerce to the mainstream business model. In a Monopoly Market Structure, there is only one firm prevailing in a particular industry. In 2007 Tesco received the Top online green award for their zero-emission delivery vans. Sellers try to develop differentiate offers for different customer segments and, in addition to price, freely use branding advertising and personal selling to set their offers apart. In a perfect competition there are few entry and exit barriers, in this type of competition the companies target the mass audience and they differentiate their product with minor changes in the product attributes (Homogenous). An oligopoly is most likely to have a kinked . Delivering a high-quality product at a reasonable price is not enough anymore. How does OFT checks anti-competition? There may be a large number of firms, but most are small and relatively unimportant, while a small number of large firms produce most of the outputs of the . Under monopolistic competition, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price. This task for Business environment is split in two parts. 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. We'll send you the first draft for approval by. Thus, the current strategic purposes for business that Tesco should consider include expansion and . The imports of UK data shows that the import from the non European Union zone is increasing i.e. 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. The total 2010 year to date value of UKs trade-in-goods exported excluding May was 46.2 billion, which has been upwardly revised by 273.6 million. All businesses like Tesco's are directly affected by this policy as this aims to cut energy consumption and greenhouse gasses by 20%, meaning Tesco will have to recycle more, reuse materials more and reduce wastage and use of non-biodegradable equipment which will have a small dent on their profit. The characteristics of perfect competition include: large number of buyers and sellers, easy entry to and exit from the market, homogeneous products, and the firm is the price taker. They may have differentiated products. Under the European Union the members can travel and trade freely without any constraints as long as the members are trading in euro (the single European currency). The Commission also monitors closely how much assistance EU governments make available to business (state aid). Monopoly: It can be concluded that UK has less exports to the non EU zone compared to the European market, in June 2010 total value of goods exported to Europe was 11.3Billion compared to the total value of goods exported to the international market which was 10.9Billion. 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. The European Union is not a perfect society but it is an evolving project and constantly has to be improved. Tesco is operating within an oligopoly market where the market is highly dominated by a very little number of big companies. Tesco PLC organizational structure is decentralized, tall (hierarchical) and product-based. 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. In our society today and the way business is conducted, market structures are. ", Tesco has over 4,000 stores across the world and out of those 4,000 Tesco has more than half of them in the UK around 2362 stores and this does not include all the Tesco metro and express stores. MARKET STRUCTURE MANAGERIAL ECONOMICS MBA SEMESTER 1 -PAYEL GHOSH 2. Because Tesco is a big company would have a lot of legal structures to make sure that business is operating properly. How can the members have their say? It is estimated the 3.5 million British jobs are dependent on* Britains membership of the EU. As a result of uncertainty in the market, Tesco broadened its forecast of profits for this year to between 2.4bn and 2.6bn - less than the 2.84bn predicted by analysts. 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. 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. 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'. 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. This is the reverse of the position in 1990. It is important to note that the structure below . Aid for research and innovation, regional development or small and medium-sized enterprises is often allowable because these serve overall EU goals. can use them for free to gain inspiration and new creative ideas for their writing Contacting their NGOs (consumer associations, environmental pressure groups, etc.) Perfect competition: ?>. Equity is the element of the capital structure of the company that is sourced through the issuance of shares or profits claimed by stockholders (Arnold, 2013). Prevailing in a Monopoly market structure, there is only one firm prevailing in Monopoly... 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