Operations Outside the Usa

Operations outside the US are potentially subject to a number of risks and limitations that are not

present in domestic operations, including trade restrictions, investment regulations, governmental

instability, and other potentially detrimental governmental practices or policies affecting companies

doing business abroad. Operations outside the US are also subject to fluctuations in currency values.

The functional currency of each of the company’s non-US operations is generally the local currency.

Actually, rivalry tends to intensify as the number of competitors increases and as they become more equal in size and capacity. As a result it can be said that the intensity of rivalry in the retailing industry where Tesco belongs is very stiff. Also in this force, rivalry is usually stronger when demand for the product is growing slowly, as is the case of the retailing industry. In addition, rivalry increases in proportion to the size of the payoff from a successful strategic move and becomes more volatile and unpredictable the more diverse the competitors are in terms of their strategies, corporate priorities, resources, personalities, and countries of origin. The above conditions all apply in USA in which their marketing arm Fresh & Easy plays.

Ø Suppliers

There are a lot of dominant suppliers in the industry, but they so far have not threatened to integrate forward to the industry, or threaten to set up their own retail outlets due to absence of strong Internet presence and powerful IT platform, so the bargaining power of suppliers is relatively controlled.

Ø Substitute

Threat of substitutes is also high, as the price to shift from one supermarket and retail business is relatively