cookie policy. OFT plays a leading role in promoting and protecting consumer interests throughout the UK, while ensuring that businesses are fair and competitive. Market structure 1. June 2010 showed a 9.6 per cent increase in imports compared to May 2010 and a 28.4 per cent increase compared to June 2009. The 'Office of Fair Trading' is the UK's consumer and competition authority and their mission is to make markets work well for consumers. 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. The final total value of UKs trade-in-goods exported for January 2009 to December 2009 was 101.5 billion. We will work on your paper until you are completely happy with the result. Tesco has increasingly looked overseas for growth with 1376 stores outside the UK; international sales of 11billion in . 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. Another organisation that does similar commerce to what Office of Fair Trading do, Ofcom is an independent regulator and competition authority, for the UK communications industries, with responsibilities across television, radio, telecommunications and wireless communications services. It can allow smaller companies to cooperate if this strengthens their ability to compete with larger ones such as Sainsburys and Tesco. 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. The European Commission has wide powers to make sure businesses and governments stick to EU rules on fair competition. How has Tesco Responded to this Structure? You have to be 100% sure of the quality of your product to give a money-back guarantee. May 2010 showed a 2.9 per cent decrease in exports compared to April 2010 and a 21.3 per cent increase in exports compared to May 2009. A market structure is the environment in which a business operates and relies on factors like how competitive the market is, how easy it is for a new company to enter the market and how differentiated each company's products are. Effective competition provides goods and services cuts prices, raises quality and expands customer choice, allows technological innovation. Sustainable development has long been one of the overarching objectives of EU policy. A range of prices occurs because sellers can differentiate their offers to buyers. It is estimated the 3.5 million British jobs are dependent on* Britain's membership of the EU. Tesco PLC is the leading English distribution group. 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. Though the number of sellers in . 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. How does it work? EU leaders launched the first EU sustainable development strategy in 2001 and updated it in 2006 to tackle shortcomings and take account of new challenges. The European Parliament (representing the people of Europe), The Council of the European Union (representing national governments). In May 2010 the total value of UKs trade-in-goods exported to Member States of the EU was 11.3 billion. Buyers see different in sellers, products and will pay different prices for them. MARKET STRUCTURE MANAGERIAL ECONOMICS MBA SEMESTER 1 -PAYEL GHOSH 2. Market structure can be broadly classified into three distinct categories: Bullish Market Structure: A bullish structure is defined by a series of higher highs (HH) and higher lows (HL). they work with the EU on shaping policies. All the EU countries have different cycles or are at different stages in their cycles. The chosen organization for this study is Tesco Plc that operates in the retail industry of UK. Under the new law, EU countries will have to reduce exposure to fine particles in urban areas by an average 20% by 2020. 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. (Source: UK Jobs Dependent) 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. 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. 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. Businesses regularly have to make appeals against Commission decisions if it seems like a unfair deal. - All firms are price takers - All firms have a relatively small market share - Buyers know the nature of the product being sold and the prices charged by each firm. Let us help you get a good grade on your paper. It works in the United States because the labour market is mobile, helped by the common language and portability of pensions etc. What are its aims? Managerial Economics, 6th edition. 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 . As a result of uncertainty in the market, Tesco broadened its forecast of profits for this year to between 2.4bn and 2.6bn - less than the 2.84bn predicted by analysts. Perfect competition: Some exceptions to the general rules are possible. They operate under a Monopoly because of their substantial market dominance and the high obstacles of entry within the retail food business. The oligopoly market structure is perhaps the most prevalent type anywhere in the world and hence deserves a careful study. In November 2007 Tesco one of the top three largest UK Supermarket chains and a major global retailer opened its first stores in the USA under the brand name 'Fresh & Easy'. Tesco management aims to reduce the cost of purchases and operational costs through and a set of other measures in order to pass the cost advantage to customer as the main brand value. EU Exports. 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. 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. Many fast food franchises fit all or most of these characteristics. The company is now one of the world's largest retailers, with more than 6,800 locations across Europe and Asia. Market structures describe the competitive environment in which a firm operates. As the companies are bound to follow market prices the only way the company can have advantage over its competitors is by reducing its operating costs and working at optimum level of efficiency They may have differentiated products. As of February 2017, the total shareholder's equity of Tesco was 6.414B ("Annual report," 2017). 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. Now the focus is on putting policy into practice in to UKs market. A concentration ratio is a way . OFT is a non-ministerial government regulator that was established by government in 1973. Either the physical products can be varied in quality, features, style or the accompanying services can be varied. Contacting their NGOs (consumer associations, environmental pressure groups, etc.) We'll send you the first draft for approval by. European citizens have the freedom to live, work, study, and travel in any other EU country. Thus, the supermarket industry in the UK could be described as an Oligopoly Market. 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 . What results so far? across a large geographical area. Waitrose is another . Tesco realized, however, that changes in this particular marketing strategy had to occur. across a large geographical area. In such type of competition most of the companies use Push strategy, i.e. In the business model of Tesco, we have seen that it has organized its business model with the best strategies. A single currency should end currency instability in the participating countries (by irrevocably fixing exchange rates) and reduce it outside them. Impact of European Unions Competition policy on Tesco 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. MARKET STRUCTURE Market structure is the interconnected characteristics of a market, such as the number and relative strength of buyers and sellers, degree of freedom in determining the price, level and forms of competition, extent of product differentiation and ease of entry into and exit from the . Tesco is headquartered in Welwyn Garden City, Hertfordshire, England in the United Kingdom. The European Commission (representing the common EU interest). Tesco's share . My In 2015, Tesco's ad spend declined sharply to less than 80 million, marking a huge shift compared to just . It is then checked by our plagiarism-detection software. Non EU Exports. Some exceptions to the general rules are possible. Tesco's mission statement is "to be the champion for customers - to help everyone who shops . This may lead to pockets of deeply depressed areas in which people cannot find work and areas where the economy flourishes and wages increase. 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. In our society today and the way business is conducted, market structures are. 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