If somehow UK market collapses then Tesco will be in a greater amount of risks. 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. In economics, market structure is a term that describes the state of a market, with respect to competition. Over recent years Tesco has become the world's third largest retailer and holds a dominant position in the UK's grocery market with a turnover of 42.6Billion in 2007 (FAME). 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? Businesses regularly have to make appeals against Commission decisions if it seems like a unfair deal. The total value of UKs trade-in-goods exported for January 2009 to December 2009 was 124.2 billion, which has been upwardly revised by 48.5 million. The European Commission has wide powers to make sure businesses and governments stick to EU rules on fair competition. Most common examples of monopolistic competitions are: restaurants as in the right area and right type of food they can have their own small portion of monopoly, professional solicitors, building and project managing firms and finally plumbers as there are less of them and more required. 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. Because the Euro would have the enhanced credibility of being used in a large currency zone, it would be more stable against speculation than individual currencies are now. The market structure is the setting in which the enterprise receives competitive 'discipline' or through which the rule of competition is made effective. In this type of competition the industry has a small numbers of large dominant firms that have a firm control over the market. They may have differentiated products. As a comparison the total value of UKs trade-in-goods imported to the UK from countries outside the EU in May 2010 was 14.0 billion and for June 2009 was 12.0 billion. June 2010 showed a 9.6 per cent increase in imports compared to May 2010 and a 28.4 per cent increase compared to June 2009. Value of European markets to UK Value of International markets to UK In March 2015, UK consumers spent around 34 billion. Being in the Top 50 retailers globally as of 2021, Tesco's annual revenue worldwide in 2020 was 58.09B, a 9.1% decline from 2019 (due to the Pandemic & disposing of its Asia operations, to focus on the core business in Europe). 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. It is then checked by our plagiarism-detection software. Climate change is one of the gravest challenges facing humanity. This will unleash a greater potential for growth. MARKET STRUCTURE Market structure is the interconnected characteristics of a market, such as the number and relative strength of buyers and sellers, degree of freedom in determining the price, level and forms of competition, extent of product differentiation and ease of entry into and exit from the . Save time and let our verified experts help you. Did you know that we have over 70,000 essays on 3,000 topics in our The European Union plans to reduce greenhouse gases at least 20% by 2020 (compared with 1990 levels), raise in renewable energy's share of the market to 20% and cut overall energy consumption by 20% (compared with projected trends). 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. It has been providing its customers with many different products in one place and with convenience. The policy also allows technological innovation and the European Commission makes sure that these innovations are in the European Unions fair competition policy. collected. Quasar monopolized the market with the creation of an all-optical imputer known as Neutron. It is important to note that the structure below . (http://www.tescoplc.com/plc/about_us/map/). Tesco has already proven that they are committed towards being eco-friendly, "Tesco Plc, the world's No.4 retailer, plans to spend over 100 million pounds with British green technology companies over the coming year as it steps up its drive to halve carbon emissions by 2020.". United Kingdom supermarket share Making it one of the best grocery store chains in the . 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. Types of Market Structure . A single currency should end currency instability in the participating countries (by irrevocably fixing exchange rates) and reduce it outside them. The four leading supermarkets in the UK supermarket oligopoly are Tesco, ASDA, Sainsbury's, and Morrisons. 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. Effective competition provides goods and services, automatically raises quality and customer choices increase with competition. Tesco and InterContinental plc are two UK businesses which get affected by market structures to adjust their output and pricing decisions. 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. Market Structure Pricing and Output Decision. Competition regulators are important in business and are required to ensure equality and a fair deal for all, Another company in the market structure of oligopoly has been analysed. Competition allows technological innovation to flourish. 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 the business model of Tesco, we have seen that it has organized its business model with the best strategies. Aid for research and innovation, regional development or small and medium-sized enterprises is often allowable because these serve overall EU goals. 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. 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. The European Union plans to reduce greenhouse gases at least 20% by 2020 (compared with 1990 levels), raise in renewable energys share of the market to 20% and cut overall energy consumption by 20% (compared with projected trends). The four different types of market structure are discussed below: Perfect Competition Market Structure: In a perfectly competitive market, the forces of supply and demand determine the number of goods and services produced as well as market prices set by the companies in the market. essay, Quasar Computers and Different Market Structures, Various Market Structures and Characteristics, Reflection Essay on Differentiating Between Market Structures, Differentiating Between Market Structures, Classifications of market structures in the US, Analyze the Price Elasticity for different market structures, Write they work with the EU on shaping policies. In 2007 Tesco received the Top online green award for their zero-emission delivery vans. Effective competition to provide goods and services cuts prices, raises quality and expands customer choice. In doing business with smaller firms, Tesco cannot use their bargaining power to impose conditions which would make it difficult for their supplier or customer to do business with its competitors. Using the 4 market structures I will illustrate using real life case studies and examples how a selected business of my choice has behaved/responded to its market structure and finally describe how the OFT and other regulatory bodies check against anti competitive behaviours. (Source: UK Jobs Dependent). Retail in the UK. EU Exports. All the EU countries have different cycles or are at different stages in their cycles. A single currency should result in lower interest rates as all European countries would be locking into German monetary credibility. Best tips on how to write a literature Review? How has Tesco Responded to this Structure? et al, 2008:298). For example, De Beers is known to have a monopoly in the diamond industry. Many fast food franchises fit all or most of these characteristics. It operates in twelve countries by 2005. (https://www.uktradeinfo.com/index.cfm?task=noneufullreport) 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. Markets and Market Structures. (Octotutor, 2014). The chosen organization for this study is Tesco Plc that operates in the retail industry of UK. 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 . Businesses, involved in commercial transactions in different member states, would no longer have to face administrative costs of accounting for the changes of currencies, plus the time involved. A market structure is the environment in which a business operates and relies on factors like how competitive the market is, how easy it is for a new company to enter the market and how differentiated each company's products are. 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. European Union policies ensure safer food and a greener environment, better living standards in poorer regions, joint action on crime and terror, cheaper telecoms and communication, millions of opportunities to study abroad and more. 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. 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. The article uses the SWOT Analysis technique to identify the market position of the company. The European Union is currently active in a wide variety of policies from human rights to transport and trade; below is the list of some of the policy areas of the European Union. It earned him the nickname "slasher Jack". Competition policy: Effective competition provides goods and services cuts prices, raises quality and expands customer choice, allows technological innovation. Get Your Custom Essay on. In this type of competition the companies are forced to follow the competitive pricing strategy in order to survive in the industry, i.e. In June 2010 the total value of trade-in-goods imported to the UK from countries outside the EU was 15.4 billion. ", 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. 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). They would be unable to devalue to boost exports, to borrow more to boost job creation or cut taxes when they see fit because of the public deficit criterion. 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. This will unleash a greater potential for growth. Language in Europe is a huge barrier to labour force mobility. No customs tax is charged on goods that are sold or transported between member states. You will get a personal manager and a discount. Twenty seven separate countries with widely differing economic performances and different languages have never before attempted to form a monetary union. Examples of a perfect competition to its closest definition are in the financial market like stock exchange, currency exchange market and the bonds/certificates market. Sainsbury which owns 16.3% of the UK supermarket shares and Morrisons which owns 11.5%, this means the entry barriers to entry are very high because the industry is dominated by small number of large firms which control and own that share market. Perfect competition is a theoretical market structure. the buyers have the power to influence the price of the product or services. European citizens have the freedom to live, work, study, and travel in any other EU country. they will be extremely affected by any slowdown in the UK food market. Tesco Plc (Tesco) is a multinational retailer of general merchandise. More Jobs: The report analyses the pricing strategies, cost curves, elasticity of goods and portfolio of goods that Tesco sells. The European Commission (representing the common EU interest). It follows a hierarchical structure, which truly matches the demand of the huge size of the company. harmony in order to life, Types of Market Structures and Competition in UK. 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