Tesco Case Study

Table of contents pages

01.Introduction of logistic and value chain 04

1.1Supply chain 04

1.2Value chain 04

1.3Importance of Supply Chain Management 04

1.4What reasons for multinational enterprises operate in abroad? 05

1.5Supply factors 05

1.6Demand factors 05

1.7Political factors 05

02. Value Chain Analysis 06

03. Porter is five forces analysis 08

04. Induction of Tesco. 10

4.1Porter is five forces analysis of Tesco 11

4.1 Detailed SWOT Analysis of Tesco 13

4.2Value Chain Analysis of Tesco 16

4.3Conclusion 18

05.List of References 19

List of figures page

Figure 1 porter is value chain 07

Figure 2 Porter is five forces analysis 08

Figure 3 market positions in UK. 10

Figure 4: Tesco - Yearly Growth 13

Figure 5 Tesco swot analysis 15

Figure 6 value chain analysis of Tesco 16

Introduction of logistic and value chain

Logistic and value chain management are very informants from early 1980s. That time all the business gone some of changes. Growth has important for their companies. After that new technology linked with customer demand and supply has driven their expand products and services so business have to focused on manufacturing and distribution efficiently, seeking to cost cuts. This is turn has made to overseas operations therefore all the business seeking to find the lower cost markets for the manufacturing. Now companies are operating their business in abroad.(Alan R. & Stave W,[e-book] pg6)

Supply chain

Supply chain is method of the business which is human being, IT, information systems involve in moving a product and service from main suppliers to consumers.

Supply chain working together to control and manage, improve the flow material and information from supplier to end customer.

Value chain

Value chain is a activities for a business operation in a company, it is appropriate level for made of a value chain. In order to all the moment are working, at each activities the product gains some value. The value chain functions give the products more added values, .(Alan R. & Stave W,[e-book] pg12)

Importance of Supply Chain Management

During the last ten years, information technology, outsourcing. Globalization has able many businesses such as Tesco to successfully operate their supply chain with their partners. Tesco focuses on only a few strategic activities.

In the 2000s, many changes have in the business environments and it developed the supply chain networks. First, globalization, the growth of multinationals, alliances, joint ventures, partnership, franchising, it was identified as successful. Second, technological changes, highly fall in communications costs, which are a part of the transaction costs, have led to change in link between the other partners.

What reasons for multinational enterprises operate in abroad?

MNE simply be an estimated higher present value of future profit from establishing a production facility in other countries as alternative. And FDI decision is a complex process that may be involved by social relationships within and out of business. It is called motivation factors which is classify in to three factors such as supply, demand, political. Alan G. & Stuart W, 2007, pg194)

Supply factors.

A number of supply factors may be encouraging the business to resort to FDI. This might be important for the business it called major objective is to reduce cost by operate business in abroad. These costs are lower which Production costs are: abroad market places more attractive to business because of the low costs of labors and unskilled labors, land prices so lower, tax rates are lower in some countries. So it is relative to lower production cost. And distribution costs: where transport cost are low to total costs, so business may choose abroad do a business to reduce the transports costs, availability of natural resources: this very important to some business such oil, gas, mineral, in Oder to get raw materials. Access to new technology: it is easy invest in cheap countries rather than put expensive staff. (Stuart W. Sonal M. Bronwen R, 2010, pg 31)

Demand factors

It is encouraging the business to resort to FDI. This may important for enter new market. In these case MNE to licensing to establish. Marketing advantages: there are lots of advantages in that may be reaped from investing in overseas. And gain buy local attitude. Preservation of bra A number of supply factors may be encouraging the business to resort to FDI. this might be important for the business it called major objective is to reduce cost by operate business in abroad and names and customer mobility.

Political factors.

There are number of political factors may involve in FDI. One is avoid trade barriers by government and advantages of economic development incentives.

Value Chain Analysis

The value chain was conceptualized by porter in 1985.the main purpose of value chain is generic value adding function of the business. The value chain management tool identifies key activities within a business. First one is primary activity. Primary activities are related with production. Which are product and services and including inbound logistics, components and other