The European Commission (representing the common EU interest). A single currency should end currency instability in the participating countries (by irrevocably fixing exchange rates) and reduce it outside them. Pure monopoly in where the firm is the industry, for example Transport for London, the firm which owns all buses and underground tubes in and around London, this is where consumers have no or very limited choice. Pure monopoly in where the firm is the industry, for example Transport for London, the firm which owns all buses and underground tubes in and around London, this is where consumers have no or very limited choice. In oligopoly there are many entry and exit barriers such as huge investments etc. Perfect competition is a theoretical market structure. Tesco PLC is a multinational grocery and general merchandise retailer. - The industry is characterised by freedom of entry and exit. Introduced in 2005, the scheme takes in about 12,000 factories and plants responsible for about half the EUs emissions of CO2. 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. 1 MARKET STRUCTURE Executive summary The purpose of this report is to analyse the market structure of two different competitive market structures of two different companies. Actual monopoly is where the firm has somewhat majority of the market share in the industry, in this case Tesco is the most famous example, Tesco owns over 30.4% of the market share and is the leader in supermarket industry. This work is done using the powers granted to the OFT under consumer and competition legislation. The Commission's extensive powers to investigate and halt violations of European Union competition rules are subject to legal review by the European Court of Justice. We use cookies to give you the best experience possible. In the United States economy most markets can be classified into four different markets structures. The article uses the SWOT Analysis technique to identify the market position of the company. (Source: UK Jobs Dependent) Released by cars and trucks, these microscopic particles can cause respiratory diseases. In another case, The Royal Bank of Scotland or RBS has also paid a fine of 28.59 million about 2 months ago in March 2010, after admitting breaches of competition law between October 2007 and February or March 2008, the fine for the bank was reduced from 33.6 million to 28.59 million and this was done to reflect RBSs admission and agreement to co-operate. aviation all airlines prove one service which is to get their customers from one location to their destination and most customers have no preference or specific type of airline that they want to travel with, most customers will just look for the cheapest airline. TESCO Leadership and Organisational structure. European Union executes legislations in justice and home affairs, and maintains common policies on trade, agriculture, fisheries and regional development. Tesco and Sainsbury's had the largest share over the period . Austria, Belgium, Czech, Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden and Switzerland. 1093 Words5 Pages. It works in the United States because the labour market is mobile, helped by the common language and portability of pensions etc. et al, 2008:298). Introduced in 2005, the scheme takes in about 12,000 factories and plants responsible for about half the EU's emissions of CO2. This means there is a few dominant firms in the market. 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. These companies surpassed the revenues generated by Tesco Plc. 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. Key Facts. It operates in twelve countries by 2005. Released by cars and trucks, these microscopic particles can cause respiratory diseases. This assignment reflects the market analysis for TESCO PLC, which is one of the leading retail and super market chain in the world. According to the principles of microeconomics market structures can be identified as perfect competition, oligopoly or monopoly. Tesco itself argues that it is an oligopoly, which suggests that they are also not flawed in the perfect rivalry category of the market structure. A concentration ratio is a way . 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. EU Exports. In May 2010 the total value of UKs trade-in-goods exported to Member States of the EU was 11.3 billion. If governments were obliged through a stability pact to keep to the Maastricht criteria for perpetuity, no matter what their individual economic circumstances dictate, some countries may find that they are unable to combat recession by loosening their fiscal stance. The characteristics of the market structure will have a major-influence on the competitive strategies and tactics that are implemented by firms. But, each and every market in the United States is completely unique from the others.. Aid for research and innovation, regional development or small and medium-sized enterprises is often allowable because these serve overall EU goals. MARKET STRUCTURE MANAGERIAL ECONOMICS MBA SEMESTER 1 -PAYEL GHOSH 2. 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. 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. Contacting their local MP - European Union policies are part of national politics. Contacting their NGOs (consumer associations, environmental pressure groups, etc.) The market structure is of dissimilar types in different nations so Tesco has to adopt strategical measures regarding making pricing and output decision while carrying out its business in the overseas nations. support@phdessay.com. Perfect competition describes a market structure where a large number of small firms compete against each other with homogeneous products. The Commission can, does and has fined companies for all these practices. Best Essay writing tips, 10 Tips on How to Write a Good Article Review, Best Tips on How to Write an Annotated Bibliography. The European Commission (representing the common EU interest). No customs tax is charged on goods that are sold or transported between member states. (http://europa.eu/pol/index_en.htm) The four leading supermarkets in the UK supermarket oligopoly are Tesco, ASDA, Sainsbury's, and Morrisons. with free plagiarism report. Among these firms, Tesco Inc. leads in terms of sales and profits. cite it. The four leading supermarkets in the UK supermarket oligopoly are Tesco, ASDA, Sainsbury's, and Morrisons. Contacting their MEP and cast vote at the European Parliament elections the European Parliament enacts EU laws: (www.europarl.europa.eu) Under monopolistic competition, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price. The transfer of money and fiscal competencies from national to community level would mean economically strong and stable countries would have to co-operate in the field of economic policy with other, weaker, countries, which are more tolerant to higher inflation. In economics, the term "market" does not mean a particular place but the whole area where the buyers and sellers of a product are spread. The conditions for a monopolistic market are as follows: there is only one firm, which is large in size. There are four basic types of market structure: perfect competition, imperfect competition, oligopoly, and monopoly. In such type of competition most of the companies use Push strategy, i.e. The Council of the European Union (representing national governments) The Tesco Plc Company is on fourth place in terms of total revenues within the United Kingdom market segment alone. cookie policy. The company carries out business through multi-format stores and online. 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. (http://www.tescoplc.com/plc/about_us/map/) can use them for free to gain inspiration and new creative ideas for their writing 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. In the second part of the assignment I will describe the value of international and EU markets to UK firms. 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. database? Leadership. Market Share: According to Kantar, Tesco has 26.9% of the grocery market share in Great Britain. In this type of industry firms usually follows pull strategy and make huge efforts in marketing and advertising to attract its target customers, the products in the industry could be highly differentiated or even be similar but hard of getting a hold and this is why businesses use branding or homogenous. from 14.0 billion to 15.4 billion, hence the UK economy is dependent on the import of essential raw and prepared materials; today the service sector is more and more important to the UK economy as a result of the weakening of the manufacturing sector now imports are crucial and that is why using the international market the UK economy is on the growth as the export data depicts that UKs export is increasing from 8.2 billion to 10.9 billion. 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 . It is then checked by our plagiarism-detection software. One of the few reasons that the United Kingdom did not want to join the single European currency with the first wave of countries on 1 January 1999 is that according to the chancellor of the Exchequer at that time in 1999 who was Gordon Brown our current prime minister said that, although the government supported the principle of the single currency Britain would not be ready to join at least until the second wave of countries which occurred in 2002 and during that time he told the European Union that the country should begin to prepare for monetary union but up till now there have been no indications of the United Kingdom joining the European Union currency, Euros. 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 . 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. The . OFT plays a leading role in promoting and protecting consumer interests throughout the UK, while ensuring that businesses are fair and competitive. The four main types of market structures are perfect competition, monopolistic competition, oligopoly and monopoly. A single currency would help that transaction pass smoothly. Tesco and InterContinental plc are two UK businesses which get affected by market structures to adjust their output and pricing decisions. 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. An oligopoly market is characterized by a few firms producing the same product, and each firm's action influences the other firms. Either the physical products can be varied in quality, features, style or the accompanying services can be varied. In the business model of Tesco, we have seen that it has organized its business model with the best strategies. By continuing well assume youre on board with our Though there are many companies operating chain retail shop . An oligopoly is most likely to have a kinked . Market structure is a classification system for the key traits of a market. An oligopoly is most likely to have a kinked . TESCO SUSTAINABILITY REPORT CASE STUDY 4 Source: Thus, Tesco Inc. operates in an oligopoly market structure and competes with Asda and Sainsbury. Tesco organizational structure is highly hierarchical reflecting the large size of the business. The total equity consisted of the following items: 409M of share capital, 5 . To find the main sources of competitive advantage that Tesco has over its competitors an analysis of the structure of the industry should be under-taken (Porter, 1980). 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. Tesco trades on the London Stock Exchange and is part of the FTSE 100 index. In recent years, Tesco has had to change their business model as well as their services to stay a market leader and differ-entiate from the competition. 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.". 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. A market is the area where buyers and sellers contact each other and exchange goods and services. 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. (http://www.tescoplc.com/plc/about_us/map/). 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. Patents promote innovation for inventors, which allow exclusive rights to do business for a specific duration. Tesco Board of Directors consists of 10 members. This essay was written by a fellow student. Environment: Tesco has to focus on labor costing now in order to have a sound financial condition. What are its aims? Order custom essay Types of Market Structures and Competition in UK A single currency would help that transaction pass smoothly. Our business in numbers. There are three different types of monopolies listed as below: The firm has to provide the markets supply, and there are. My Free Movement of Citizens: 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). In 2007 Tesco received the Top online green award for their zero-emission delivery vans. In the United States, Texas could not avoid a recession in the wake of the 1986 oil price fall, whereas demand for Sterling changed in the light of the new oil price, adjusting the exchange rate downwards. European Unions rewards businesses and organisations, which reduce their CO2 emissions and penalises those that exceed limits. A market structure is a tool used to determine the pricing power of certain products in diverse firms. 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. This should lead to more investment, more jobs and lower mortgages. 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. While the cohesion funds attempt to address this, there are still great differences across the EU in economic performance. Under the new law, EU countries will have to reduce exposure to fine particles in urban areas by an average 20% by 2020. A perfect competition market is a structure that contains many different companies, which means that each company individually only has a small amount of influence over the entire market. 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. However, Tesco ranks second, following after Wal-Mart, in terms of net profits. In May 2010 the total value of trade-in-goods imported to the UK from Member States of the EU was 14.7 billion. The top three competitors of Tesco are Wal-Mart, Carrefour, and Metro. Tesco's share . The main ones are: The European Parliament (representing the people of Europe) Below I have listed the advantages and disadvantages which were discussed by the chancellor Gordon Brown at the times of between 1999 and the year 2002 when the waves of countries in Europe joined the European Union and the currency: (http://news.bbc.co.uk/1/hi/special_report/single_currency/25081.stm). As the OFT only supervises what happens in the United Kingdom, there is the European Union which is active in a wide range of policy areas, from human rights to transport and trade, the European Union monitors all of the 27 countries that are part of the union, using similar techniques as the OFT but on a much larger scale, the policy to monitor and control competition is said as "A fair deal for all" and this policy is described as: "Effective competition to provide goods and services cuts prices, raises quality and expands customer choice. 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. However, from a regulatory view, monopoly power exists when a single firm controls 25% or more of a particular market. It shifted from Brick & Mortar to Brick & Click stores. Oligopoly is defined as a concentrated market. A good and most current example of a monopoly is the Apple Company which has created the iPhone, because of the degree of the monopoly there is a high possibility of price discrimination where the customers and the consumers have their choices limited to what is available in the market. Your email is safe, as we store it according to international data protection rules. There may be a large number of firms, but most are small and relatively unimportant, while a small number of large firms produce most of the outputs of the . Net sales break down by activity as follows: - distribution in Central Europe (7%): operation, at the end of February 2022, of 537 stores located in the Czech Republic (185; of which 126 franchised), Hungary (198) and Slovakia (154; of which 15 franchised). The characteristics of perfect competition include: large number of buyers and sellers, easy entry to and exit from the market, homogeneous products, and the firm is the price taker. The final total value of UKs trade-in-goods imported for January 2009 to December 2009 remains at 147.3 billion. Under the system, European Union governments set limits on the amount of carbon dioxide emitted by energy-intensive industries and if they want to emit more CO2 than their quota, they have to buy spare permits but most supermarkets stores do not manufacture and this means that they will have to use eco friendly methods of business and equipment. A range of prices occurs because sellers can differentiate their offers to buyers. As the OFT only supervises what happens in the United Kingdom, there is the European Union which is active in a wide range of policy areas, from human rights to transport and trade, the European Union monitors all of the 27 countries that are part of the union, using similar techniques as the OFT but on a much larger scale, the policy to monitor and control competition is said as A fair deal for all and this policy is described as: An oligopoly is a market structure with a small number of firms, in which none can prevent other from having a significant influence in the industry. Market structure is said to be the characteristics of the market. It has been providing its customers with many different products in one place and with convenience. OFT is a non-ministerial government regulator that was established by government in 1973. In June 2010 the total value of trade-in-goods imported to the UK from countries outside the EU was 15.4 billion. 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