Marketing Essay Example | Topics and Well Written Essays - 3000 words - 10

Marketing - Essay Example ly highly competitive but also very difficult to survive due to high food prices; it is difficult for large retail stores like Tesco to provide substantial discounts. Moreover, research needs to carried out to determine what are the factors due to which the customers grocery habits are changing in favour of smaller stores as compared to Tesco. Porter’s five competitive forces model was developed by Michael E Porter and provides insight into the opportunities and threats that c corporate strategy should cater to. The Five competitive forces are supplier bargaining power, bargaining power of customers, 1.Supplier Bargaining Power: In this particular case, since Tesco is selling may brands and is not dependent to a great extent on sales of any particular brand to keep people coming back for more, the supplier power is minimum. The customers perceive Tesco itself as a brand. Due to this the supplier power is minimized. Infact the suppliers themselves want to retain a good relationship. 2.The Competition (Competitive Rivalry): An article on U Talk Marketing.com identifies the current â€Å"chicken fight† going on between Asda and Tesco in order to maximize their share of the target market, the housewives, purse. The approach of Asda is to indulge in offensive price wars with Tesco with a â€Å"loss leading strategy, whereby the product chicken would be the loss leader product in order to drive more customer traffic to other product lines of ASDA. Tesco’s response is a no compromise on quality or prices approach.3This identifies the foremost issue of Tesco i.e. an overly competitive market in which survival is based on entirely the volume of sales rather than the profit margin per sale. 3. Bargaining Power of Customers: due to the highly competitive conditions, the ultimate power lies in the hands of the customers. The price focus in marketing strategies and the price wars are benefiting the customers and the customers choose the best value for money deal for their