All the EU countries have different cycles or are at different stages in their cycles. In June 2010 the total value of trade-in-goods imported to the UK from countries outside the EU was 15.4 billion. It is common to differentiate these markets across the following seven . The Commission can, does and has fined companies for all these practices. 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. Tescos 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 is the dominant supermarket it has fairly large competitors who also partly control the 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. Monopoly Vs Oligopoly Since the war the UK economy has tended to have an economic cycle closer to the US than the EU. In this type of competition the industry has a small numbers of large dominant firms that have a firm control over the market. From market stall to the UK's biggest supermarket. 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 Tesco Plc Company is on fourth place in terms of total revenues within the United Kingdom market segment alone. Tesco has to focus on labor costing now in order to have a sound financial condition. The EU also tries to make each market as similar as possible to ensure fair competition across national borders. The retail sector. News 'Have a loaf on us' to celebrate One Stop's 1000th store. Among these firms, Tesco Inc. leads in terms of sales and profits. Tesco makes extensive use of print and media advertising as a tested channel to send promotional messages to current and potential consumers. EU Exports. Any citation style (APA, MLA, Chicago/Turabian, Harvard). Get expert help in mere PhDessay is an educational resource where over 1,000,000 free essays are The UK is growing reasonably well, Germany is having problems. Tesco themselves say that it is an oligopoly, this is because Tesco is not the only supermarket in the UK, Tesco is the dominant shareholder but cannot be called a monopoly as there are many other firms which are in competition with Tesco e.g. In May 2010 the total value of trade-in-goods imported to the UK from Member States of the EU was 14.7 billion. Check out our terms and conditions if you prefer business talks to be laid out in official language. Since 1995 alone, about 100,000 young Britons have spent time studying in another European country. For example, De Beers is known to have a monopoly in the diamond industry. Noise, swimming water, rare species and emergency response -these are just some of the areas covered under the extensive body of environmental legislation that the EU has established over the decades. A multinational company like Tesco cannot merge with another giant if that would put them in a position to control the market, though practice this rule only prevents a small numbers of mergers going ahead. 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. The policy also allows technological innovation and the European Commission makes sure that these innovations are in the European Unions fair competition policy. The four main types of market structures are perfect competition, monopolistic competition, oligopoly and monopoly. In the business model of Tesco, we have seen that it has organized its business model with the best strategies. Find out more about our Board and Executive Team. Tesco is the third largest global retailer in the world which just behind Wal-Mart and Carrefour (Baidu, 2010). 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. Free Movement of Citizens: Types of Market Structure . The UK's retail sector involves a lot of spending by consumers both in shop and online. From my understanding there are many possible reasons that the government should consider while joining Euro, joining Euro would reduced exchange rate uncertainty for UK businesses and lower exchange rate transactions costs for both businesses and tourists. This penalty to the British Airways has been the highest ever imposed by the OFT for violation of competition law and this demonstrates the determination of the OFT to deal strongly with anti-competitive behaviour. Language in Europe is a huge barrier to labour force mobility. Tesco themselves say that it is an oligopoly, this is because Tesco is not the only supermarket in the UK, Tesco is the dominant shareholder but cannot be called a monopoly as there are many other firms which are in competition with Tesco e.g. OFT gathers intelligence about markets and trader behaviour from a wide range of sources and then they respond to complaints about markets from nominated consumer bodies, where the OFT is able to see potential problems, the OFT undertakes market studies and recommends to take action respectively. A single currency would help that transaction pass smoothly. 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. The multinational retailer employs more than 360 thousand people. ?>. 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. ?>, Order original essay sample specially for your assignment needs, https://phdessay.com/market-structures-tesco/, Similarities & Differences of Perfect Competition and Monopolistic Competition, Monopoly, Oligopoly, Perfectly Competition, And Monopolistic Competition, Monopoly, Perfect Competition, Imperfect Competition, Analysis and Comparing the Physical Storage Structures and Types, Organisational Types and Management Structures, Analysis Of Different Types Of Competition Economics Essay, get custom When the percentage change in the sales is more. It is illegal under EU rules for businesses to fix prices or carve up markets between them. - The industry is characterised by freedom of entry and exit. Tesco is an oligopoly as it is one of the few dominant firms in the supermarket market. A single currency should result in lower interest rates as all European countries would be locking into German monetary credibility. Coca Cola Market Structure Analysis. The main objective is to find out the market position of Tesco in relation to the other competitors in the market. In the UK, the five big supermarkets totally have 3/4th of the market . The total value of UKs trade-in-goods imported for January 2009 to December 2009 was 162.7 billion, which has been upwardly revised by 238.0 million. Financial Turnaround: Thanks to the leadership of Dave Lewis, Tesco recovered from an annual loss of 6.4 billion in the annual report of 2015 to an operating profit of 1.9 billion in the annual report of 2020. OFT plays a leading role in promoting and protecting consumer interests throughout the UK, while ensuring that businesses are fair and competitive. In a perfect competition there are few entry and exit barriers, in this type of competition the companies target the mass audience and they differentiate their product with minor changes in the product attributes (Homogenous). The Commission may agree to a company having a monopoly in special circumstances - for example where costly infrastructure is involved ('natural monopolies') or where it is important to guarantee a public service. UK joining the Euro (Pros & Cons) Competition regulators are important in business and are required to ensure equality and a fair deal for all. Now the focus is on putting policy into practice in to UK's market. Twenty seven separate countries with widely differing economic performances and different languages have never before attempted to form a monetary union. Oligopoly: UK Supermarket Oligopoly - Key takeaways. Value of International markets to UK This means there is a few dominant firms in the market. Some of the basic aims of the European Union are peace, prosperity and freedom for its 498 million citizens in a fairer, safer world. Following are the 4 leading supermarket chains in the United Kingdom Tesco, Asda, Sainsburys and Morrisons, these fantastic four have a combined share of 75.6 percent of the UK grocery market accord to the research done in the 12 weeks ending 1 November 2009 (Source: Kantar World pane) http://TNS_Worldpanel If Tesco plans to merge with its competitor, Tesco needs approval from the European Commission, the EUC (European Union Commission) marks their decision depending on the amount of business that Tesco has within the European boundaries. Tesco Entering the Us Market. The OFT has a 5 step method of keeping a good eye on business and other organisations these 5 steps start with Analysis, Prioritisation, Prevention, Partnership and Evaluation, the details of all the steps are on their website under What we do. Therefore, the general trend toward expansion and search for innovations allows the industry to grow. 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. The total 2010 year to date value of UKs trade-in-goods exported excluding May was 46.2 billion, which has been upwardly revised by 273.6 million. European citizens have the freedom to live, work, study, and travel in any other EU country. The single market benefits the firms, by making it easier & cheaper to do business in other EU countries. Either the physical products can be varied in quality, features, style or the accompanying services can be varied. The fist chief executive officer was Dave Lewis. Aid for research and innovation, regional development or small and medium-sized enterprises is often allowable because these serve overall EU goals. In the United States economy most markets can be classified into four different markets structures. As a comparison the total value of UKs trade-in-goods imported to the UK from Member States of the EU in April 2010 was 15.3 billion and for May 2009 was 12.2 billion. We will work on your paper until you are completely happy with the result. 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. In a recent investigation by the OFT has reviled that British Airways has been found guilty over the price of 'long-haul passenger fuel surcharges' and has paid a penalty of 121.5m to be imposed by the OFT, therefore enabling the OFT to close its civil investigation and resolve this case. ", Following are the 4 leading supermarket chains in the United Kingdom Tesco, Asda, Sainsbury's and Morrisons, these fantastic four have a combined share of 75.6 percent of the UK grocery market accord to the research done in the 12 weeks ending 1 November 2009 (Source: Kantar World pane) http://TNS_Worldpanel. In a Monopoly Market Structure, there is only one firm prevailing in a particular industry. The disadvantages of a monopoly is that customer are exploited to high prices and potential supplies have limited choice for demand and this means that the consumers have less choice and again might have to pay higher prices than normal or the monopoly can even use very low price to push their competitors towards administration or bankruptcy. There are three different types of monopolies listed as below: Tesco Plc (Tesco) is a multinational retailer of general merchandise. Businesses regularly have to make appeals against Commission decisions if it seems like a unfair deal. 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