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TESCO VS SAINSBURRY
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
BACKGROUND
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
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
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. 5
Tesco Vs Sainsburry
GENERAL ENVIRONMENT
Economic relatively stable. Physical in 2005 Tescos buildings collapsed (city council rules), bbc.co.uk, 2006. Sociocultural customer toward one stop and bulk shopping, more aware on healthy and organic product Global retail industry is acceptable globally. Technological customers awareness on internet. Political Need-test 1996 and deleted in 2007 by government white-paper (thisismoney.co.uk, 2007).
Tesco Vs Sainsburry
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
TYPE OF COMPETITOR
Tesco Vs Sainsburry
FIVE FORCES
High because of low switching cost
Supplier Power
Buyer Power
Internal Rivalry
Intense
Substitute
Tesco Vs Sainsburry
TESCO SWOT
Strength 1. Highest market share in UK 2. All market segments 3. Wide demographic market 4. Innovative (club card, online store) 5. First mover Weakness 1. Abandoned Cohen philosophy pile it high and sell it cheap (stagnating bad image in 1977) 2. Too aggressive in expansion
Opportunity 1. Expand non food retail 2. Development of healthy and beauty products 3. International growth market
Threat 1. Restaurant business picking 2. ASDA international expansion 3. Product substitution 4. Intense price war
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SAINSBURRY SWOT
Strength 1. Mass & High End Market 2. Strong Brand (Early Established) 3. Store Network 4. Private Brand Weakness 1. Price 2. Declining Profitability 3. Lack of International Presence 4. Supply Chain Disruption
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STORE FORMAT
Tesco store divided into : Tesco extra, Tesco superstores, Tesco Metro, Tesco Express and One Stop
Sainsburys SaveCentre Hypermarket format as joint venture with British Home stores
No separate Brand Operate with three formats: Regular Sainsburys Store,Sainsburys local Store, Sainsburys Central Store.
Tesco Vs Sainsburry
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SAINSBURY
Differentiation high quality product 13
Tesco Vs Sainsburry
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, lowincome customers in the same store, investing in its own brand. This wide reaching demographics, reliability and trustworthiness keep shoppers return to Tesco. 14
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Tesco and Sainsburys do diversification strategy un related from food to non food (clothing, financial service, & telecommunication). Tesco has wider global market than Sainsbury.
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Tesco Vs Sainsburry
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
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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
STRATEGY DEVELOPMENT
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DISCOUNT STRATEGY
Tesco
Quantitative Discount : Buy 2 get 1 free, buy 3 for 2
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DISCOUNT STRATEGY
SAINSBURYS
Quantitative Discount
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MAIN CAPABILITIES
Retailing diversified product Distribution channel Customer relationship management
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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-sainsburysattack-lease-accounting-proposals
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