tesco-swot-analysis

Tesco SWOT Analysis In A Nutshell

Tesco was founded in 1919 by Jack Cohen, as a small group of market stalls. After rapid expansion in the following years, the company became the largest retailer in the UK and is now the second-largest in the world. To put their dominance into perspective, consider that Tesco serves around 66 shoppers per second across 7000 retails stores, delivering approximately $180,000 worth of sales every minute.

Strengths

  1. Market share – Tesco dominates the grocery retail sector in the United Kingdom, with a 27% market share. 
  2. Market diversification – Tesco has diverse product offerings, including clothing, homewares, school uniforms, cell phones, and financial services.
  3. Technology integration – Tesco supermarkets are supermarkets of the future. The company uses automated barcode stocktake systems and has developed an app to streamline its customer shopping experience.
  4. Resilience – the company has significant cash reserves and a large property portfolio, allowing it to be more resilient. 
  5. Longevity – Tesco has been operating in the United Kingdom for over 100 years. This gives the company brand equity and gives consumers assurance that it will continue to operate long into the future.

Weaknesses

  1. Unprofitable subsidiaries – although diversified, Tesco remains vulnerable to external factors that affect profitability. For example, the finance arm of the company was impacted by the recent UK credit crisis and has not recovered.
  2. Global appeal – although Tesco operates in several European and Asian countries, its attempts to gain a foothold in the USA and Japan failed. This suggests that the company has some difficulty in assessing the viability of overseas markets.
  3. Economic mismanagement – in 2015, Tesco overstated their income by GBP 208 million, leading to the resignation of the CEO and substantial damage to the brand and its stakeholders. 
  4. Competition – Tesco is more susceptible to competitive pressures in the food and retail industry because of its low-cost business model with small profit margins.

Opportunities

  1. Expansion – there are several emerging economies that Tesco can explore, such as Indonesia, Turkey, and Brazil. Nevertheless, any such expansion plans would need to be researched and planned for thoroughly.
  2. Online shopping – although Tesco has some presence in eCommerce, there exists the potential for the company to increase its visibility online. Through offering a more diverse range of non-food products in a non-physical store, profit margins might be higher.
  3. Strategic alliances – to counter the introduction of German low-cost supermarket chains such as Aldi and Lidl, Tesco might form strategic partnerships with other companies to attract more customers and increase market share.

Threats

  1. Consistent negative press – Tesco has been involved in several scandals that have permanently impacted on their brand image. In addition to under-reporting profits, the company faced social media backlash in 2017 after airing a Christmas TV advertisement that disrespected the Christian faith. In the same year, Tesco was also accused of creating fake farm names in its food marketing campaigns.
  2. Brexit – now that the UK has left the European Union, Tesco is at the mercy of revised trade deals that may render traditionally reliable European markets to be unprofitable.
  3. Competition – although Tesco enjoys a large market share in the UK, competitors such as Sainsbury’s are actively trying to close the gap. Tesco’s other main competitor, ASDA, has also been acquired by Walmart – strengthening its market position and putting further pressure on Tesco.

SWOT Analysis Case Studies

McDonald’s SWOT Analysis

mcdonalds-swot-analysis

Nike SWOT Analysis

nike-swot-analysis

Samsung SWOT Analysis

microsoft-swot-analysis
Samsung was founded in South Korea in 1938 by Lee Byung-Chul. Originally a trading company, it took Samsung 22 years to become the fully-fledged electronics company that most people recognize today. Indeed, the company is a leader in technological innovation through telecommunications, electronics, and home appliances.

Costco SWOT Analysis

costco-swot-analysis
Costco is a large American multinational corporation with a focus on low-cost, membership-only retail warehouse clubs. Costco is the 4th largest retail operator in the world, operating 785 warehouses in 10 different countries. Indeed, it has enjoyed rapid success growing from zero to $3 billion in sales within six years.

Walmart SWOT Analysis

walmart-swot-analysis
From humble beginnings just over 50 years ago, Walmart has grown to become the world’s largest retail company. A single small discount store in Arkansas has now expanded to over 11,000 stores in 28 countries. Some reports suggest that the company now makes $1.8 million of profit every hour.

Uber SWOT Analysis

uber-swot-analysis
Headquartered in San Francisco, California, Uber started as a peer-to-peer ridesharing platform. In more recent times, the company has moved into food delivery, rental cars, and bike-sharing. In one form or another, Uber now has a presence in over 900 cities worldwide.

Disney SWOT Analysis

disney-swot-analysis
It would be hard to argue the case for a more recognizable entertainment brand than Disney. Disney is of course synonymous with Walt Disney, but it was Walt and his brother Roy who started the company in 1923 in Burbank, California. Disney content is now broadcast on over 100 channels in 34 different languages across the globe.

Coca-Cola SWOT Analysis

coca-cola-swot-analysis
Coca-Cola is the market leader of the soft drink industry. It is also the most widely recognized brand, with a Business Insider study revealing that a staggering 94% of the world population recognizes the red and white logo. However, Coca-Cola faces significant challenges with increasingly health-conscious consumers and less access to water resources.

Ford SWOT Analysis

ford-swot-analysis
Founded in 1903 by Henry Ford and is the fifth-largest family-owned company in the world. Ford is a globally recognized brand in the automotive industry for a couple of reasons. First, Henry Ford is well-known as the inventor of the production line and thus the modern automobile industry. Today, Ford has also maintained relevance as the seventh-largest car manufacturer worldwide, selling a range of passenger cars, trucks, and vans.

Tesco SWOT Analysis

tesco-swot-analysis
Tesco was founded in 1919 by Jack Cohen, as a small group of market stalls. After rapid expansion in the following years, the company became the largest retailer in the UK and is now the second-largest in the world. To put their dominance into perspective, consider that Tesco serves around 66 shoppers per second across 7000 retails stores, delivering approximately $180,000 worth of sales every minute.

Nestlé SWOT Analysis

nestle-swot-analysis
Nestlé is a large multinational food and beverage manufacturer with more than 2000 brands spread across 197 countries. Some of Nestlé’s well-known brands include Nescafe, Kit-Kat, Purina, Aero, Butterfinger, Maggi, and Haagen-Dazs. Originally a producer of infant food in 1867, it is now considered to be the world’s largest food manufacturer.

Amazon SWOT Analysis

amazon-swot-analysis
Amazon is among the most diversified business model in the tech industry. The company is well-positioned to dominate e-commerce further. And while its online stores have tight profit margins, Amazon still unlocks cash for growth, while consolidating its dominance in the cloud and grabbing new opportunities like voice.

Facebook SWOT Analysis

facebook-swot-analysis
Facebook, with its products, with its strong appeal, and consumer brand has a solid business model, threatened in the last years by privacy concerns, which open up the way to potential regulation to break up the company. If that will not happen, Facebook will have the chance to expand to define other markets like VR.

Starbucks SWOT Analysis

swot-analysis-of-starbucks
Starbucks is a global consumer brand with direct distribution, recognized brands, and products that make it a viable business. Its reliance on the Americas as a primary operating segment makes it a weakness. At the same time, Starbucks faces risks related to coffee beans price volatility. Yet the company still has global expansion opportunities.

Tesla SWOT Analysis

tesla-swot-analysis
Among the most recognized car manufacturers, Tesla is valued more than the combined market capitalization of GM and Ford. While the company’s direct distribution is a strength, its lack of financial viability is a weakness. Competition is a future threat. However, if Tesla defines a new market for car manufacturing its potential growth will be massive.

Netflix SWOT Analysis

netflix-swot-analysis
Netflix is among the most popular streaming platforms, with a subscription-based business model. The brand, platform, and content are strengths. The volatility of content licensing and production are weaknesses. The streaming market is a potential blue ocean. Inability to attract and retain premium members, and its fixed long-term costs are threats to its business model.

Apple SWOT Analysis

apple-swot-analysis
Apple can leverage a strong consumer brand and set of successful products as a strength. Yet the company is still too reliant on the iPhone as a primary revenue stream. Though Apple is working to open up new markets as an opportunity, it has to make sure to sustain its stores’ sales.

Google SWOT Analysis

google-swot-analysis
Google’s strength is its strong consumer brand. The company is grabbing new opportunities by opening up industries like voice search and consolidating in industries like the cloud. As a weakness, its revenues primarily come from advertising. A primary threat is the quick change of search and potential intervention by regulators.

Read Next: SWOT Analysis, Personal SWOT Analysis.

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