In economics, market structure is a term that describes the state of a market, with respect to competition. In 2007 Tesco received the Top online green award for their zero-emission delivery vans. In May 2010 the total value of UKs trade-in-goods exported to Member States of the EU was 11.3 billion. 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. Under monopolistic competition, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price. Buyers see different in sellers, products and will pay different prices for them. Tesco has promised more brand marketing to help reverse declining sales. Over recent years Tesco has become the world's third largest retailer and holds a dominant position in the UK's grocery market with a turnover of 42.6Billion in 2007 (FAME). By Sarah Vizard 10 Sep 2014. Twenty seven separate countries with widely differing economic performances and different languages have never before attempted to form a monetary union. 1] Perfect Competiton. Did you know that we have over 70,000 essays on 3,000 topics in our "A 'competition test' to curb the power of the supermarkets was unveiled by the Competition Commission last year as part of a planning shake-up designed to boost competition in the multi-billion pound grocery market. It has changed because interest rates are set in each country at the appropriate level for it. Tesco itself argues that it is an oligopoly, which suggests that they are also not flawed in the perfect rivalry category of the market structure. OFT plays a leading role in promoting and protecting consumer interests throughout the UK, while ensuring that businesses are fair and competitive. Firstly, there are several sellers but only a few big companies who have a large market share in the industry. In June 2010 the total value of UKs trade-in-goods exported to countries outside the EU was 10.9 billion. Market structure 1. Explore how the human body functions as one unit in Under monopolistic competition, the market consists of many buyers and sellers who trade over a range of prices rather than a single market price. 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. 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. An oligopoly market is characterized by a few firms producing the same product, and each firm's action influences the other firms. Retrieved from https://phdessay.com/market-structures-tesco/, Hire skilled expert and get original paper in 3+ hours, Run a free check or have your essay done for you, Didn`t find the right sample? 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 RBS's admission and agreement to co-operate. It has been providing its customers with many different products in one place and with convenience. These companies surpassed the revenues generated by Tesco Plc. Businesses regularly have to make appeals against Commission decisions if it seems like a unfair deal. ", Tesco has over 4,000 stores across the world and out of those 4,000 Tesco has more than half of them in the UK around 2362 stores and this does not include all the Tesco metro and express stores. Retail in the UK. Monopoly: Contacting their MEP and cast vote at the European Parliament elections the European Parliament enacts EU laws: (www.europarl.europa.eu). It is then checked by our plagiarism-detection software. In this type of competition the companies are forced to follow the competitive pricing strategy in order to survive in the industry, i.e. Tesco is a large U.K grocery firm and retailer whose main competitors are Sainsbury's, ASDA, and Morrison's, which are often called the Big Four in the United Kingdom. OFT (Office of Fair Trading) (2017, Dec 26). Market structure influences the behavior of firms to a great extent. Because Tesco is a big company would have a lot of legal structures to make sure that business is operating properly. The total 2010 year to date value of UKs trade-in-goods imported excluding May was 59.2 billion, which has been upwardly revised by 96.7 million. When the percentage change in the sales is more. It operates stores in various formats differentiated by size and range of products sold, including large, small, dotcom only and one-stop. It operates in twelve countries by 2005. A range of prices occurs because sellers can differentiate their offers to buyers. Under the new law, EU countries will have to reduce exposure to fine particles in urban areas by an average 20% by 2020. MARKET STRUCTURES. your own essay or use it as a source, but you need Managerial Economics, 6th edition. But, in economics, market is used in a wide perspective. 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. essay, Quasar Computers and Different Market Structures, Various Market Structures and Characteristics, Reflection Essay on Differentiating Between Market Structures, Differentiating Between Market Structures, Classifications of market structures in the US, Analyze the Price Elasticity for different market structures, Write The European Commission (representing the common EU interest). Competition regulators are important in business and are required to ensure equality and a fair deal for all, MARKET STRUCTURE MANAGERIAL ECONOMICS MBA SEMESTER 1 -PAYEL GHOSH 2. Oligopoly is defined as a concentrated market. Advantages: A single currency should end currency instability in the participating countries (by irrevocably fixing exchange rates) and reduce it outside them. 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. The European Commission has wide powers to make sure businesses and governments stick to EU rules on fair competition. the buyers have the power to influence the price of the product or services. In this sort of environment the businesses and trades people have somewhat control over their prices because of the products differentiations. Competition allows technological innovation to flourish. 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. This may lead to pockets of deeply depressed areas in which people cannot find work and areas where the economy flourishes and wages increase. To make these things happen, EU countries have set up bodies to run the European Union and adopt its legislation. Tesco has to focus on labor costing now in order to have a sound financial condition. The European Parliament (representing the people of Europe), The Council of the European Union (representing national governments). 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. There is a lack of competition. To make these things happen, EU countries have set up bodies to run the European Union and adopt its legislation. The organization currently has three locations (La Jolla, Del Mar, and Encinitas).. Public goods are goods from which the whole community can take benefit without the need of purchasing them. They operate under a Monopoly because of their substantial market dominance and the high obstacles of entry within the retail food business. Tesco's mission statement is "to be the champion for customers - to help everyone who shops . //= $post_title How has Tesco Responded to this Structure? In this type of industry firms usually follows pull strategy and make huge efforts in marketing and advertising to attract its target customers, the products in the industry could be highly differentiated or even be similar but hard of getting a hold and this is why businesses use branding or homogenous. 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 . The report structure also focuses on the competitive landscape of the Global Parchment Baking Paper Market, this report introduces in detail the market share, market performance, product situation . Tesco is the third largest global retailer in the world which just behind Wal-Mart and Carrefour (Baidu, 2010). Copy. The European Union has some of the highest environment standards in the world, developed over decades to address a wide range of issues. Get any needed writing assistance at a price that every average student can afford. The competition policy stops the Tesco from growing further from their potential market share, something which Tesco has known to be done in the recent years. I write a summary of market structure and how it affects the pricing and output decision based on Keat, P., and Phillip Young. European Union executes legislations in justice and home affairs, and maintains common policies on trade, agriculture, fisheries and regional development. Abstract. Your email is safe, as we store it according to international data protection rules. (https://www.uktradeinfo.com/index.cfm?task=noneufullreport) This task for Business environment is split in two parts. 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. Tesco makes biggest ever investment in hourly pay, taking the rate to over 11 an hour . 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. Language in Europe is a huge barrier to labour force mobility. There are four basic types of market structure: perfect competition, imperfect competition, oligopoly, and monopoly. Tesco was founded in the East End of London, London in 1919. What is European Union? My 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. you to an academic expert within 3 minutes. European Union policies ensure safer food and a greener environment, better living standards in poorer regions, joint action on crime and terror, cheaper telecoms and communication, millions of opportunities to study abroad and more In the UK, the five big supermarkets totally have 3/4th of the market . A single currency would help that transaction pass smoothly. What are its aims? 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. In March 2015, UK consumers spent around 34 billion. 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. Noise, swimming water, rare species and emergency response -these are just some of the areas covered under the extensive body of environmental legislation that the EU has established over the decades. Effective competition provides goods and services, automatically raises quality and customer choices increase with competition. This penalty to the British Airways has been the highest ever imposed by the OFT for violation of competition law and this demonstrates the determination of the OFT to deal strongly with anti-competitive behaviour. Buyers see different in sellers, products and will pay different prices for them. Contacting their NGOs (consumer associations, environmental pressure groups, etc.) Tesco offers a wide array of food and non-food products . Market Share: According to Kantar, Tesco has 26.9% of the grocery market share in Great Britain. Aid for research and innovation, regional development or small and medium-sized enterprises is often allowable because these serve overall EU goals. 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 structure and finally describe how the OFT and other regulatory bodies check against anti competitive behaviours. Scholars It is common to differentiate these markets across the following seven . The observed change has affected Tesco, the market shares of which grew by 4.5% to reach a total of 22.3% ("Tesco reclaims top spot," 2018). As the OFT only supervises what happens in the United Kingdom, there is the European Union which is active in a wide range of policy areas, from human rights to transport and trade, the European Union monitors all of the 27 countries that are part of the union, using similar techniques as the OFT but on a much larger scale, the policy to monitor and control competition is said as "A fair deal for all" and this policy is described as: "Effective competition to provide goods and services cuts prices, raises quality and expands customer choice. Tesco Board of Directors consists of 10 members. Value of European markets to UK Order custom essay Types of Market Structures and Competition in UK Thats why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe. 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. Market structures describe the competitive environment in which a firm operates. 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. But in applying these rules, it can take account of the interests of innovation, unified standards, or small business development. 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 oligopoly there are many entry and exit barriers such as huge investments etc. However, Tesco ranks second, following after Wal-Mart, in terms of net profits. (Source: UK Jobs Dependent) The Council of the European Union (representing national governments) An oligopoly is a market structure with a small number of firms, in which none can prevent other from having a significant influence in the industry. A range of prices occurs because sellers can differentiate their offers to buyers. EU has set binding limits on emissions of fine particles known as PM2.5. The Price elasticity of demand measures the responsiveness of the quantity of goods sold to the changes in the products price. Loss of national sovereignty is the most often mentioned disadvantage of monetary union. Effective competition to provide goods and services cuts prices, raises quality and expands customer choice. By 2014, that number had declined by about 10 percent. How does OFT checks anti-competition? The market share of of the leading supermarkets in Great Britain (GB) from January 2017 to December 2022 has remained fairly stable. The total 2010 year to date value of UKs trade-in-goods imported excluding June 2010 was 67.5 billion. This is the reverse of the position in 1990. There may be a large number of firms, but most are small and relatively unimportant, while a small number of large firms produce most of the outputs of the . The European Union is not a perfect society but it is an evolving project and constantly has to be improved. Sometimes it is hard to do all the work on your own. In the United States, Texas could not avoid a recession in the wake of the 1986 oil price fall, whereas demand for Sterling changed in the light of the new oil price, adjusting the exchange rate downwards. There are three different types of monopolies listed as below: European citizens have the freedom to live, work, study, and travel in any other EU country. 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. Views 1142. In oligopoly there are many entry and exit barriers such as huge investments etc. Natural monopoly is where there are high fixed costs for example the energy industry like gas and electricity as well as water, telecommunications and the transportation industry like underground and rail. The four leading supermarkets in the UK supermarket oligopoly are Tesco, ASDA, Sainsbury's, and Morrisons. The imports of UK data shows that the import from the non European Union zone is increasing i.e. UK joining the Euro (Pros & Cons) The European Union is currently active in a wide variety of policies from 'human rights' to 'transport and trade'; below is the list of some of the policy areas of the European Union. //Www.Uktradeinfo.Com/Index.Cfm? task=noneufullreport ) this task for business environment is split in two parts set binding limits on of... Across the following seven and customer choices increase with competition high obstacles of entry within the retail business. 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