Tesco Plc Strategy Analysis Coursework Example | Topics and Well Written Essays - 750 words

Tesco Plc Strategy Analysis - Coursework Example It also operates financial institutions as a joint venture with the royal Bank of Scotland (Data Monitor, 2004). Mullins (2010) says that a marketing strategy primarily focuses on effectively allocating and coordinating marketing resources and activities in order to accomplish firm’s objectives within a specific product market (Mullins & Walker, 2010). The critical issue that concerns the scope of a marketing strategy is specifying the target market(s) for a particular product or product line (Mullins & Walker, 2010). This is followed by the motivation to seek competitive advantage and synergy through a well-integrated program of marketing mix that is custom made to the needs and wants of potential customers in the market segment (Mullins & Walker, 2010). Michael Porter identifies three generic strategies and these include: the cost leadership strategy, the differentiation strategy and the focus strategy (Mullins & Walker, 2010). These strategies are based on strategic scope a nd strategic strength of a firm. The strategic scope is used to mean market penetration while strategic strength is used to mean the firm’s sustainable competitive advantage (Mullins & Walker, 2010). Tesco uses the cost leadership strategy in its operation. With this strategy a company aims at becoming the lowest-cost producer in the industry (Stephane, Girod, & Rugman, 2005). It is a strategy that is often associated with large-scale businesses that offer generally standard products that comprise of little differentiation and are perfectly acceptable to majority of the market customers. This strategy is aimed at gaining market share by cutting costs so that a firm can offer lower prices and in the process gain market share (Stephane, Girod, & Rugman, 2005). High volume is leveraged to create low costs by getting the best prices from suppliers and more efficiently utilizing fixed costs. In order for any company to use this strategy it must be cost conscious in every aspect of the business (Kim, Nam, & Stimpert, 2004). This strategy therefore is characterized by tight budgeting, elimination of waste and thin personnel staffing. Scholars agree that this strategy is often adopted when there are many providers, growth is flat and providers are trying to steal the market share from each other by lowering prices (Kim, Nam, & Stimpert, 2004). Last year in September Tesco began a new strategy where it began to put its focus on permanent low pricing as opposed to its previous specific price promotions. This was as a result of its losing a great percentage of its market share to its competitors such as Sainsbury, Asda and Wal-Mart (Poulter, 2011). Market segmentation refers to the process of dividing the total market for a product or service into groups with similar needs such that each group is likely to respond favorably to a specific marketing strategy (McDonald & Dunbar, 2004). There are many variables to which a market can be segmented and these include the following: behavioral, demographic, psychographic and geographic segmentation. Behavioral segmentation is a strategy based on customers’ needs and subsequent reaction to those needs or towards the purchase of intended product or services (McDonald & Dunbar, 2004). Demographic segmentation considers aspects such as age, gender, education, income, occupation, size of the family etc. psychographic segmentation is all about diving people according to their lifestyles and values and how

Extinction of Banks Assignment Example | Topics and Well Written Essays - 2500 words

Extinction of Banks - Assignment Example Financial innovations and deregulations have enabled the financial markets to achieve perfection with institution that do not adopt deregulatory measures lagging behind in the provision of services to customers1. Financial innovations and deregulation have facilitated contractual agreements with governments seeking to institute reforms adopting relevant measures. Discussion Diminishing roles for banks In the contemporary society, banking institutions are being faced by a likelihood of extinction in case they do not formulate measures of keeping up with the times. The increasingly interconnected world, owing to globalization, is a threat to the banking institutions due to the emergence of mobile financial solutions. Customers are becoming more and more accustomed to faster and time-conscious responses from the companies while banks are lagging behind when it comes to finding means of proactively responding to the needs of their customers2. Lack of relevant targeted offers on the part of the banks is to blame for this development as it is vivid that the banks are not focusing on the needs of their customers. According to Gorton and Rosen (1993, p. 22), banks have plenty of funds to invest but are unable to notice emerging opportunities in the financial world. In the light of this, there is a need for the banks to see themselves as not only playing the traditional role of banking but also providing customer services that go beyond convectional boundaries of their present duties. Banks have for a long time been playing the role of consumer trusted advisors but this trust is slowly fading. In case necessary measures are not instituted to embrace innovation in order to capture newer grounds, the banks will lose out. Brigham and Ehrhardt (2010, p. 565) indicate that in the near future, customers will realize that they do not need banks but they need banking services. This will be a dangerous scenario for banks, as they will be at the verge of becoming extinct just lik e dinosaurs3. In addressing this problem, the banks need to have a new outlook. Investing in innovation will be instrumental in boosting banking operations. Moreover, bankers need to find other avenues of inspiration in order to secure a wide customer base. Although the technology that banks need in order to become responsive to the needs of their customers and in order to open up new streams of revenues already exists, the banks can look up to other avenues. Among these avenues are algorithmic trading, borrowing technology from the telecommunications industries and offering services that are location-based. Consequently, the banks can make use of information about what customers are likely to buy and when to develop new and more targeted products and services4. There is the need by the future banks to embrace technologies from various sectors in order to respond to customers’ actions and turn such scenarios into opportunities for securing more revenue and garnering consumer loyalty. In the near future, consumer will be buying most of their items on their credit card and this will enable them to access promotions and offers from traders in their vicinity. These traders are also banks’ customers who are likely to be bought in by the banks since the providers of their payments become an important avenue of accessing new customers. There is the need to tap into the trends of the consumers, if the banks are keen on