For Part 1 I will be describing the 4 different market structures that economist usually talk about are perfect competition, monopolistic competition, oligopoly and monopoly. Type your requirements and I'll connect What is European Union? 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. your own essay or use it as a source, but you need What is Tescos market structure? Key Facts. With the learnings from Jack's now applied, the time is right to focus on ensuring we continue to deliver the best possible value for customers in . A single currency would help that transaction pass smoothly. One central bank cannot set inflation at the appropriate level for each member state. Your email is safe, as we store it according to international data protection rules. A monopoly has high barriers to entry and firms have strong controls over their prices and they also control the supply of their product which can increase demand of popular products, because a firm with a monopoly has majority of the market share it can decide to have low prices in order to destroy their competitors. Value of International markets to UK From market stall to the UK's biggest supermarket. The policy also allows technological innovation and the European Commission makes sure that these innovations are in the European Unions fair competition policy. There are three different types of monopolies listed as below: The chosen organization for this study is Tesco Plc that operates in the retail industry of UK. In 2015, Tesco's ad spend declined sharply to less than 80 million, marking a huge shift compared to just . Among these three major entities, Tesco is the market leader in terms of global sales and its total market share. You can use it as an example when writing Market structures are basically the number of firms in the market that produce identical goods and services. Following are the 4 leading supermarket chains in the United Kingdom Tesco, Asda, Sainsburys and Morrisons, these fantastic four have a combined share of 75.6 percent of the UK grocery market accord to the research done in the 12 weeks ending 1 November 2009 (Source: Kantar World pane) http://TNS_Worldpanel In a perfect competition there are few entry and exit barriers, in this type of competition the companies target the mass audience and they differentiate their product with minor changes in the product attributes (Homogenous). (Octotutor, 2014). To make these things happen, EU countries have set up bodies to run the European Union and adopt its legislation. The 'Office of Fair Trading' is the UK's consumer and competition authority and their mission is to make markets work well for consumers. May 2010 showed a 4.2 per cent decrease in imports compared to April 2010 and a 20.8 per cent increase in imports compared to May 2009. 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. UK Supermarket Oligopoly - Key takeaways. In a recent investigation by the OFT has reviled that British Airways has been found guilty over the price of long-haul passenger fuel surcharges and has paid a penalty of 121.5m to be imposed by the OFT, therefore enabling the OFT to close its civil investigation and resolve this case. Did you know that we have over 70,000 essays on 3,000 topics in our The Tesco Plc Company is on fourth place in terms of total revenues within the United Kingdom market segment alone. A concentration ratio is a way . The characteristics of the market structure will have a major-influence on the competitive strategies and tactics that are implemented by firms. The European Commission has wide powers to make sure businesses and governments stick to EU rules on fair competition. Research has shown that there are numerous market structures with unique pricing strategies in place. The loss of national sovereignty is the most often mentioned reason for the UK not joining the monetary union is the transfer of money and financial proficiency from national to community level would mean that economically strong and stable countries would have to co-operate in the field of economic policy with other weaker countries. Copy. It is estimated the 3.5 million British jobs are dependent on* Britain's membership of the EU. Among the most well known forms of oligopoly are in. This means there is a few dominant firms in the market. Tesco PLC is a multinational grocery and general merchandise retailer. The total value of UKs trade-in-goods imported for January 2009 to December 2009 was 162.7 billion, which has been upwardly revised by 238.0 million. If Tesco plans to merge with its competitor, Tesco needs approval from the European Commission, the EUC (European Union Commission) marks their decision depending on the amount of business that Tesco has within the European boundaries. A single currency should end currency instability in the participating countries (by irrevocably fixing exchange rates) and reduce it outside them. Oligopoly: In 2013, Tesco spent approximately 110 million on marketing efforts in traditional outlets. 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 . Tesco Entering the Us Market. While the cohesion funds attempt to address this, there are still great differences across the EU in economic performance. In a Monopoly Market Structure, there is only one firm prevailing in a particular industry. As a comparison the total value of UKs trade-in-goods exported to Member States of the EU in April 2010 was 11.6 billion and for May 2009 was 9.3 billion. Today the main priorities are combating climate change, preserving biodiversity, and reducing health problems from pollution and marking sure that natural resources are being used more responsibly. In June 2010 the total value of trade-in-goods imported to the UK from countries outside the EU was 15.4 billion. Thus, the supermarket industry in the UK could be described as an Oligopoly Market. Tesco adding eCommerce to the mainstream business model. database? Pure monopoly in where the firm is the industry, for example Transport for London, the firm which owns all buses and underground tubes in and around London, this is where consumers have no or very limited choice. The major market forms are: Perfect Competition; Monopolistic Competition . Get Your Custom Essay on. European citizens have the freedom to live, work, study, and travel in any other EU country. Competition regulators are important in business and are required to ensure equality and a fair deal for all, 2008. aviation all airlines prove one service which is to get their customers from one location to their destination and most customers have no preference or specific type of airline that they want to travel with, most customers will just look for the cheapest airline. Language in Europe is a huge barrier to labour force mobility. 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 May 2010 the total value of UKs trade-in-goods exported to Member States of the EU was 11.3 billion. OFT plays a leading role in promoting and protecting consumer interests throughout the UK, while ensuring that businesses are fair and competitive. The Figure 2 below illustrates a typical organizational structure within Metro, Superstore and Extra formats. The characteristics of perfect competition include: large number of buyers and sellers, easy entry to and exit from the market, homogeneous products, and the firm is the price taker. - The industry is characterised by freedom of entry and exit. (http://europa.eu/pol/index_en.htm) Sainsbury which owns 16.3% of the UK supermarket shares and Morrisons which owns 11.5%, this means the entry barriers to entry are very high because the industry is dominated by small number of large firms which control and own that share market. 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. Tesco was born and the first shop was opened in 1929 in north London. Competition allows technological innovation to flourish. The disadvantages of a monopoly is that customer are exploited to high prices and potential supplies have limited choice for demand and this means that the consumers have less choice and again might have to pay higher prices than normal or the monopoly can even use very low price to push their competitors towards administration or bankruptcy. All the sellers of the market are small sellers in competition with each other. But the tribunal agreed with Tesco that the commission did not fully take account of the fact that the test, relating to planning decisions for larger stores, might have adverse effects for consumers, among other matters. Under monopolistic competition, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price. Contacting their MEP and cast vote at the European Parliament elections the European Parliament enacts EU laws: (www.europarl.europa.eu). Tesco is not the only supermarket in the United Kingdom, Tesco is the dominant shareholder, but it should not be considered a monopoly since there are several other companies competing with Tesco . One of the few reasons that the United Kingdom did not want to join the single European currency with the first wave of countries on 1 January 1999 is that according to the chancellor of the Exchequer at that time in 1999 who was Gordon Brown our current prime minister said that, although the government supported the principle of the single currency Britain would not be ready to join at least until the second wave of countries which occurred in 2002 and during that time he told the European Union that the country should begin to prepare for monetary union but up till now there have been no indications of the United Kingdom joining the European Union currency, Euros. 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. Best Essay writing tips, 10 Tips on How to Write a Good Article Review, Best Tips on How to Write an Annotated Bibliography. Loss of national sovereignty is the most often mentioned disadvantage of monetary union. 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 . can use them for free to gain inspiration and new creative ideas for their writing In another case, The Royal Bank of Scotland or RBS has also paid a fine of 28.59 million about 2 months ago in March 2010, after admitting breaches of competition law between October 2007 and February or March 2008, the fine for the bank was reduced from 33.6 million to 28.59 million and this was done to reflect RBSs admission and agreement to co-operate. The Commission also monitors closely how much assistance EU governments make available to business (state aid). they will be extremely affected by any slowdown in the UK food market. Each paper is composed from scratch, according to your instructions. Founded in 1919 by Jack Cohen, Tesco has emerged to become the biggest retailer in the UK and more than 80 million shopping trips are made to Tesco stores each week (Annual Report, 2015). The conditions for a monopolistic market are as follows: there is only one firm, which is large in size. Tesco is headquartered in Welwyn Garden City, Hertfordshire, England in the United Kingdom. The changes will see Sharry Cramond take up a role as head of brand and . 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. But the tribunal agreed with Tesco that the commission did not fully take account of the fact that the test, relating to planning decisions for larger stores, might have "adverse effects for consumers", among other matters. Effective competition provides goods and services, automatically raises quality and customer choices increase with competition. 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. The single market benefits the firms, by making it easier & cheaper to do business in other EU countries. June 2010 showed a 15.5 per cent increase in exports compared to May 2010 and a 33.0 per cent increase in exports compared to June 2009. ?>. Market structure 1. This should lead to more investment, more jobs and lower mortgages. A market is the area where buyers and sellers contact each other and exchange goods and services. Most common examples of monopolistic competitions are: restaurants as in the right area and right type of food they can have their own small portion of monopoly, professional solicitors, building and project managing firms and finally plumbers as there are less of them and more required. It was estimated that a traveller visiting all twelve member states of the (then) EC would lose 40% of the value of his money in transaction charges alone. Since the war the UK economy has tended to have an economic cycle closer to the US than the EU. they work with the EU on shaping policies. Actual monopoly is where the firm has somewhat majority of the market share in the industry, in this case Tesco is the most famous example, Tesco owns over 30.4% of the market share and is the leader in supermarket industry. Monopolistic Competition Market Structure: Unlike perfect . The four different types of market structure are discussed below: Perfect Competition Market Structure: In a perfectly competitive market, the forces of supply and demand determine the number of goods and services produced as well as market prices set by the companies in the market. By sending us your money, you buy the service we provide. In our society today and the way business is conducted, market structures are. We use cookies to give you the best experience possible. To make these things happen, EU countries have set up bodies to run the European Union and adopt its legislation. An oligopoly is most likely to have a kinked . My description will include an evaluation of the pros and cons of UK joining the Euro along with that I will describe the impact of 2 EU policies on UK businesses. Agriculture Media Competition Consumers Education Tesco organizational structure is highly hierarchical reflecting the large size of the business. Introduced in 2005, the scheme takes in about 12,000 factories and plants responsible for about half the EU's emissions of CO2. As of February 2017, the total shareholder's equity of Tesco was 6.414B ("Annual report," 2017). Find out more about our Board and Executive Team. Explore how the human body functions as one unit in You will get a personal manager and a discount. What are its aims? It is illegal under EU rules for businesses to fix prices or carve up markets between them. But in applying these rules, it can take account of the interests of innovation, unified standards, or small business development. Patents promote innovation for inventors, which allow exclusive rights to do business for a specific duration. The Council of the European Union (representing national governments) Market structures describe the competitive environment in which a firm operates. 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