TESCO PLC AND THE NATURE OF MARKETS IN WHICH IT OPERATES Essay

TESCO PLC AND THE NATURE OF MARKETS IN WHICH IT OPERATES - Essay ExampleAs one of the biggest players within the UK retail food product fabrication, Tescos market share was 30.5% back in December 2009. In line with this, Tescos well-nigh competitor includes Asda (16.9%), Sainsbury (16.9%), and Morrisons (12.3%). Having only four major players in the market, the market structure of retail grocery industry in UK is oligopoly.Within an oligopolistic market that targets many buyers, the industry is commonly dominated by only a very few acts of sellers that offer homogenous products to its target consumers (Arnold 2008, p. 512). One of the very few factors that hatful trigger the development of oligopoly is the fact that a bulk of companies are entering into merger and acquisitions as a result of tight market competition caused by globalization. The problem with oligopoly is that a very few number of competitors within the industry can enter into collusion making them able to dictat e the market hurt of heterogenous products they are selling in the market (Gans 2005). Considering that market consequences of a few-firm concentration ration, a lot of economists believe that a market that is characterized by oligopoly is almost similar to the market consequences associated with anti-competitive domestic or world-wide market activity.Although it is possible for players within an oligopoly market to dictate the market price of goods, this is not true in the case of Tesco and its competitors. Since grocery and merchandise retailers are selling homogenous products, its target customers will always make water the opportunity to decide where to regularly purchase their weekly consumption of grocery items. In line with this, Tescos existing customers can anytime decide to purchase their grocery items from Asda, Sainsbury, Morrison, Waitrose, M&S, Somerfield, Aldi, Lidl, and Netto among other small-scale supermarket throughout the linked Kingdom (Tesco 2010 b).There i s a strong price competition within the grocery