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Abstract

The competitive scenario of the UK retail industry changed with the entry of Wal-Mart through its purchase of ASDA in 1999. ASDA intensified the competition through its strategy of ''every day low prices’. It quickly established itself as the low price retailer. However, focus on quality and customer service helped Tesco to become the leading retailer in the UK. To compete with ASDA in terms of low prices, Tesco also started to greatly reduce their prices. This counter strategy of Tesco helped it hold a major market share of the retail market, leading ahead of its competitors. On the other hand, ASDA in spite of providing low prices, saw its market share continuously decrease in the year 2005. The case highlights the competition between the two leading retailers, Tesco and ASDA, along with the differences in the strategies adopted by them. This case study provides scope to discuss the sustainability of competition squarely based on price. It also triggers a debate on and the desirability of counter strategies under such circumstances.
Location:
Industry:
Other setting(s):
November 2005

About

Abstract

The competitive scenario of the UK retail industry changed with the entry of Wal-Mart through its purchase of ASDA in 1999. ASDA intensified the competition through its strategy of ''every day low prices’. It quickly established itself as the low price retailer. However, focus on quality and customer service helped Tesco to become the leading retailer in the UK. To compete with ASDA in terms of low prices, Tesco also started to greatly reduce their prices. This counter strategy of Tesco helped it hold a major market share of the retail market, leading ahead of its competitors. On the other hand, ASDA in spite of providing low prices, saw its market share continuously decrease in the year 2005. The case highlights the competition between the two leading retailers, Tesco and ASDA, along with the differences in the strategies adopted by them. This case study provides scope to discuss the sustainability of competition squarely based on price. It also triggers a debate on and the desirability of counter strategies under such circumstances.

Settings

Location:
Industry:
Other setting(s):
November 2005

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