Tesco’s Cost Leadership Strategy (Essay Sample)

UK Grocery Market the Case
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UK Grocery Market the Case
Question 1: Tesco’s Cost Leadership Strategy
Tesco’s cost leadership strategy incorporates Porter’s competitive forces model especially since it aims at offering low costs to establish a competitive advantage in the market. Strategies such as high asset utilization through large output production to mitigate the force of customer power since it provides diversified products (Wada, 2018). The strict supply chain control helps to deal with the power of the suppliers to ensure that they do not drive the prices of the inputs up and result in increased spending. Tesco’s cost leadership strategy prepares for potential new entrants into the market by ensuring minimal indirect or direct costs in the distribution and production processes. Closing one of the Tesco’s online shopping sites is a good idea as it allows the company to focus more on the other platform and thus offer quality products and services to customers.
Question 2: Lidl and Aldi’s E-Commerce Venturing Strategy
Lidl and Aldi’s e-commerce venturing strategy is a good idea as it will help in reducing difficulties faced in online operations. Furthermore, they have invested millions to launch online websites thus facilitating increased buying from customers and accessing more consumers (Laudon & Laudon, 2014). Most of the people in the United Kingdom has access to social media and thus likely to purchase Lidl and Aldi’s products. E-commerce venturing will offer Lidl and Aldi’s business opportunities through improved marketing thus selling more products and generating more sales. Therefore, Lidl and Aldi’s e-commerce venturing strategy is a good idea as it has facilitated the development of a website that ensures more customers access although there will be competition from Tesco. As a result, there is a provision of convenient services that boosts Lidl and Aldi’s business.
Question 3: Tesco’s Discount Chain Opening Strategy
The strategy used by Tesco’s opening discount chain is an effective initiative to increase its profitability. The decision to open more than 60 discount chain stores in the United Kingdom enables the organization to join the fast-growing discount market effectively. Opening discount chain would help Tesco to recover its former market position especially since it has a strong customer buying power and managers and marketers are experienced. Additionally, the discount chains will help in restoring the company’s reputation by lowering costs and thus attracting more customers (Laudon & Laudon, 2014). Tesco will increase its purchasing power and thus ensure increased sales. The use of discount chain strategy in Tesco will lead to increased profits crucial for retaining its original market positions. Furthermore, the company s using online websites which are es