A Comparison Of Tesco And Sainsburys

Modern society needs are fast and to be able to race this speed where the new generation defines the competition and likes sudden changes. Technology which plays a role in good communication that increases the effectiveness of the business and the preserve globalisation. The speed of change is so rapid that it looks a different type of firm to be dominant and marked completely new period of business. This new era can also be indentified by the easy reaching of the technologies and a customer who has just adapted to live in this fast society and whose changeable favourites are revised with the speed of a T.V advert.

The industrial competition doesn’t remain a local challenge any more the faster developments has taken it as far as internationally. The pressure of the competitions persuades companies to manage their business in the most organised way as possible.

The management goes under a lot of pressure to cut down the costs and increase profits. Hamel and Prahalad argued “that the competition is not just about getting to the future first, but getting there with lowest possible costs”(Hamel and Prahalad,1994). The speed and potential of change distinguish form 1 forum to another. Companies must set up centre competencies, benchmark regularly and outsource persistently in order to increase reliability and to achieve the best practice. Plan as defined by porter is a make of a unique and valuable position which involves different activities (Porter, 1996).

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Company chosen and Comparison Company in the same sector:

The two companies that we will discuss the pros and cons about are Tesco Plc and Sainsbury’s Plc. these companies are counted in the top companies of UK are centre of attention to the public.

Reason for choosing the focused company:

Tesco Plc is our main company that we will focus on. We will compare Tesco against Sainsbury’s in order to provide a base for future opinion, we will look at where the company is heading towards and quality the company has which makes it the UK’s number one trader.

Aims and objectives of the report:

The aim of this report is to present work in rational and professional manners. A detailed report which discuses various financial ratios with discussions of both the company’s profits and loss account and balance sheet. The report should show why there is a range of difference between the two companies even though they are mostly trading the same sort of things. The report will also present our research and opinions. It will present information such as our group work and our short meetings.

Background Research on Tesco Plc:

Tesco was launched by Sir Jack in 1942. Mr Jack used his bonus from his Army service that he did in World War 1. In 1919 he was selling supplements in east London End market. Tesco name was used for the first time on the tea bags. Tesco opened its first ever store in 1922 in Burnt oak, Edgware. In 1947 holdings of Tesco Stores Ltd were hanged on the Stock Exchange, share price was 25p at that time and now in February 2010 the share price per share is about £4.35.

http://www.tesco.com/everyLittleHelps/csrenvironmentdetail.htm

Tesco became the customer’s eye by the early 1960s. it started with selling groceries, fresh foods clothing and many household goods. Tesco stores were situated in the high streets of many towns. The largest store of Europe was then opened and achieved a place in Geniuses book of record for 16,500 square feet of selling place in Leicester in 1961. By buying in bulk and keeping costs down, up until 1964 Tesco should have been able to sell at very reasonable prices to its customers. In the early 1990 Tesco was having very tough time from its rivals Tesco was always very good in buying and selling but they forget about customer service. When sir Teary Leah got the office CEO, he could see the rivals of Tesco, so he decided to provide ancillary customer service to attract customers. After that introduced Tesco club card which is the guarantee of customer loyalty, after that Tesco introduced many ancillary customer services like Tesco finance, Tesco insurance, Tesco.com and Tesco direct and many more. In September 2002 Tesco introduced its own clothing brand with the name of Cherokee and Florence Fred, these brands really give great boast to Tesco sales.

Tesco is a very visionary company at the moment Tesco is operating with more than 440,000 employees and 3700 stores globally. Now Tesco is operating more in 13 countries except UK, including USA, China, and indea.

http://www.guardian.co.uk/supermarkets/story/0,12784,1453893,00.html.

Background research on Sainsbury’s Plc:

John James and Mary Ann Sainsbury founded Sainsbury’s in 1869. Their first small dairy shop was opened in London Drury which was London’s poorest areas. This shop become very popular because of its quality food items and after that they opened their more branches in different areas and in towns.

By 1882 John James Sainsbury had four stores and had plans to expand his business further. He opened a deposit in Kentish Town, north-west London, which was to supply this growing chain and on the same site, built bacon kilns that produced the first Sainsbury brand product. It was also in 1882 that John James opened his first branch in the prosperous suburb of Croydon. This shop sold a wide range of high-class provisions. The interwar year, which brought depression and hardship for many, was a period of rapid expansion for Sainsbury’s. Sites were acquired in London’s expanding suburbs as well in new trading areas, including Luton, Cambridge and St Albans. The company expanded into the Midlands in 1963, with the achievement of the through good chain. By 1939 Sainsbury’s has 244 stores. All of which received daily delivery of fresh foods from the Black friars headquarters. Modifications were done to the design of the shops and new products, particularly fresh meat and package own-brand groceries, were added to the range. By the 1920’s branch of Sainsbury’s had six departments, which offered a larger product range than its rivals. Each shop offered delivery service in surrounding areas.

http://www.j-sainsbury.co.uk/ar_2010/index.asp?pageid=28

In the early 1970s, even though it had reached a scale and stature that warranted public status. The company’s profile flotation in 1973 was at the time the largest ever floatation on the Stock Exchange, with a 45-fold over subscription for shares. Small share holders were given more Preference in the allocation of shares. Choices of products were doubled by Sainsbury’s in 1994 which continued to reflect the company’s historic strength in fresh foods exotic fruits ready meals speciality breads and reduced-fat milks were introduced in response to customer’s increasingly sophisticated tastes. Many other products showed customer’s wider social and environmental concerns. Which allowed Sainsbury’s to introduce fair trade marked products. The new era has screen shifts in customer’s needs with organic and GM food ingredients, farming for biodiversity, healthier options and convenience foods. We have responded to customer needs and are proud of the idea we have in place. All Sainsbury’s own-brand products have been GM free since 1999 in April 2004 Sainsbury’s won the soil Association’s Organic Supermarket of the year for the third successive year. Sainsbury’s opened their Bank in 1997 which now provides a good range of services including life and health cover, health insurances etc. Sainsbury’s was presented the best overall provider in the Your Money Direct Awards in 2003.

J Sainsbury’s plc employs around 150,000 people. www.sainsbury.co.uk

SWOT Analysis of Tesco’s:

Strengths:

Begin your SWOT analysis; this can be done by producing a picture of Tesco’s strengths by using calculated marketing reports and other reliable business resources. Specific analysis techniques to employ

Weaknesses:

In performing a SWOT analysis of Tesco’s weaknesses, we need to think about weakness of the other companies that they share with Tesco. For Example: doing a comparison between Tesco’s and British airways can get us thinking about how dependent Tesco is on the UK market (73.8% of 2003 revenues.) or doing a comparison of Tesco with Amazon might bring out flaws in its challenge to move into new markets.

Opportunities:

internet can provide us with some of Tesco’s main opportunities. We can easily serve the internet and compare Tesco with its oppositions. Now the question we can ask our selves that what things are there that Tesco is missing out on. Which opportunities is Tesco exploiting? For Example, we can start by comparing Tesco (ww.Tesco.com) and Amazon (www.amazon.com). Things to look at would be we general but important source of information such as how do the prices of books compare? Which website holds good features? What things Tesco has that Amazon might be missing?

Threats:

Having Discuss and investigating the weaknesses strengths and opportunities for consumers investigated the strengths; facing Tesco you should now be able to have good idea about some of the threats facing it. Focus especially on strategic planning to counter threats from other companies. E.G. examine how Tesco’s financial products compare with those from more recognized providers. A SWOT analysis of Tesco must judge all the competition in detail.

Tesco PESTLE analysis:

A PESTLE analysis of Tesco looks at the main exterior factors which impacts on the company:

Political Factor:

this is can be local, national or international. This can involve many governments. For Example, Tesco might have to deal with British and Columbian politics in regards to its coffee supply.

Economic factors:

These are the factors that have a large impact and instability in the stock market; otherwise the increase in tax can highly affect the bottom line of a company like Tesco.

Sociological factors:

Sociological factors can differ from the impact of immigration, to changes in trend. Modern technologies have a good impact. For instance, getting hands on things online as given a peak to Tesco’s success.

The changes which are made by all these external factors can head too many legal problems. At the end of day all big organisations have an impact on the environment. For Example Tesco uses fossil fuels in its transport network. Cutting down on this demand is a major challenge.

PESTLE analysis on Sainsbury’s

Political factors:

The political factors can be local, national or international. Many governments can be involved. Some of the other political factors include the agricultural industry. Some time back supermarkets were able to reduce prices of their stock by buying it in a large quantity from abroad. This gave a reduced income to British farmers and causing the British agriculture industry to suffer.

Economical factors:

this factor can be used to discuss things on Economies of scale and how these organisations can take advantage of purchasing in bulk therefore leaving lower costs for customers. The competition increased in which we can discuss things like taking over the stores such as Walmart taking over Asda and Morrison’s taking easy way too by buying out Safeway. As Aldi.

Social factors:

Sociological factors can distinguish from the impact of immigration, to changes in trends. The development of technologies has had a great impact. For Example, getting hands on things online as given a peak to Sainsbury’s success.

The changes which are made by all these external factors can head too many legal problems. At the end of day all big organisations have an impact on the environment. For Example Sainsbury’s uses fossil fuels in its transport network. Cutting down on this demand is a major challenge.

SWOT Analysis Sainsbury’s:

Strengths:

Sainsbury’s has its own very good position on green and environmental issues because of its various recent plans, on of which is buying fair-trade goods (economist.com 2008 [online]). More of its help in closing down gang master (Taylor 2008) has had a positive impact on the public in general. Sainsbury’s has a positive customer brand and it’s preferred by both green activists and its customers.