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

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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.


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


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.


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).


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


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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 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


SAINSBURRY SWOT


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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


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.


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.


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•  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.


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


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

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

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SAINSBURY’S

Cash Discount :

Reward Card

Promotional allowance :

Discount after repositioning

its place

Quantitative Discount

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MAIN CAPABILITIES •  Retailing diversified product •  Distribution channel •  Customer relationship management



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 PDF

Documents

club card

strategy developmenttesco

discount strategy

bulk shopping

promotional

cash discount

sainsburys

customers