Market structures show the relations between sellers and other sellers, sellers to buyers, or more. European Union executes legislations in justice and home affairs, and maintains common policies on trade, agriculture, fisheries and regional development. From my understanding there are many possible reasons that the government should consider while joining Euro, joining Euro would reduced exchange rate uncertainty for UK businesses and lower exchange rate transactions costs for both businesses and tourists. Key Facts. Oligopolies lie between the definitions of perfect competition and pure monopoly. This aid can take many forms loans and grants, tax breaks, goods and services provided at preferential rates, or government guarantees which enhance the credit rating of a company compared to its competitors but in this case this does not apply to Tesco till today as Tesco is already on top of its game. Under the European Union the members can travel and trade freely without any constraints as long as the members are trading in euro (the single European currency). The Figure 2 below illustrates a typical organizational structure within Metro, Superstore and Extra formats. Contacting their MEP and cast vote at the European Parliament elections the European Parliament enacts EU laws: (www.europarl.europa.eu). (http://www.tescoplc.com/plc/about_us/map/) Loss of national sovereignty is the most often mentioned disadvantage of monetary union. Make sure that this guarantee is totally transparent. Tesco PLC organizational structure is decentralized, tall (hierarchical) and product-based. 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. Equity is the element of the capital structure of the company that is sourced through the issuance of shares or profits claimed by stockholders (Arnold, 2013). There is no gap where plagiarism could squeeze in. Another organisation that does similar commerce to what Office of Fair Trading do, Ofcom is an independent regulator and competition authority, for the UK communications industries, with responsibilities across television, radio, telecommunications and wireless communications services. The four leading supermarkets in the UK supermarket oligopoly are Tesco, ASDA, Sainsbury's, and Morrisons. It is one of the market leaders with the 3rd position in the market. Tesco and InterContinental plc are two UK businesses which get affected by market structures to adjust their output and pricing decisions. The European Union is not a perfect society but it is an evolving project and constantly has to be improved. 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. Homogenous products are identical products or business e.g. An end to internal currency instability and a reduction of external currency instability would enable exporters to project future markets with greater certainty. Retail in the UK. All businesses like Tescos are directly affected by this policy as this aims to cut energy consumption and greenhouse gasses by 20%, meaning Tesco will have to recycle more, reuse materials more and reduce wastage and use of non-biodegradable equipment which will have a small dent on their profit. In 2007 Tesco received the Top online green award for their zero-emission delivery vans. In the UK market, it is very crucial to determine the quantity of output in order to keep check on pricing and related decisions. Tesco is the third largest global retailer in the world which just behind Wal-Mart and Carrefour (Baidu, 2010). 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. Tesco PLC is a UK-based global supermarket chain and it has 7817 shops and 517,802 employees around the world. UK joining the Euro (Pros & Cons) My Advantages: A single currency should end currency instability in the participating countries (by irrevocably fixing exchange rates) and reduce it outside them. can use them for free to gain inspiration and new creative ideas for their writing Released by cars and trucks, these microscopic particles can cause respiratory diseases. 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. Competition regulators are important in business and are required to ensure equality and a fair deal for all, In economics, market structures can be understood well by closely examining an array of factors or features exhibited by different players. Released by cars and trucks, these microscopic particles can cause respiratory diseases. The UK's retail sector involves a lot of spending by consumers both in shop and online. Your bank details are secure, as we use only reliable payment systems. The decisions are made by Tesco after taking into considerations the . Below I have listed the advantages and disadvantages which were discussed by the chancellor Gordon Brown at the times of between 1999 and the year 2002 when the waves of countries in Europe joined the European Union and the currency: (http://news.bbc.co.uk/1/hi/special_report/single_currency/25081.stm). The firm needs to establish its price and output levels to achieve its business objective of profit maximization. European Union is a unique economic and political society which is in partnership between 27 democratic European countries. Perfect competition describes a market structure where a large number of small firms compete against each other with homogeneous products. It works in the United States because the labour market is mobile, helped by the common language and portability of pensions etc. Tesco's share . Due to the low degree of competition theses big giants can decide on their own price which is most suitable for its target audience and these prices will be non-competition prices however there could be potential for collusion and price fixing so that each dominant business can enjoy their market share and have profits accordingly i.e. Tesco and Sainsbury's had the largest share over the period . It can allow smaller companies to cooperate if this strengthens their ability to compete with larger ones such as Sainsburys and Tesco. 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. The company carries out business through multi-format stores and online. Among these firms, Tesco Inc. leads in terms of sales and profits. A range of prices occurs because sellers can differentiate their offers to buyers. The main competitors are Tesco, Sainsbury's and Asda, making the three firm concentration ratio high. Types of Market Structure . The oligopoly market structure is perhaps the most prevalent type anywhere in the world and hence deserves a careful study. 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. We use cookies to give you the best experience possible. 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. Eliminating exchange rates between European countries eliminates the risks of unforeseen exchange rate revaluations or devaluation, further those businesses who involved in commercial transactions in different member states would no longer have to face administrative costs of accounting for the changes of currencies. The total 2010 year to date value of UKs trade-in-goods exported excluding May was 46.2 billion, which has been upwardly revised by 273.6 million. One central bank cannot set inflation at the appropriate level for each member state. support@phdessay.com. As a comparison the total value of UKs trade-in-goods imported to the UK from Member States of the EU in April 2010 was 15.3 billion and for May 2009 was 12.2 billion. Businesses regularly have to make appeals against Commission decisions if it seems like a unfair deal. EU leaders launched the first EU sustainable development strategy in 2001 and updated it in 2006 to tackle shortcomings and take account of new challenges. Austria, Belgium, Czech, Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Iceland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Norway, Poland, Portugal, Slovakia, Slovenia, Spain, Sweden and Switzerland. The major market forms are: Perfect Competition; Monopolistic Competition . The article uses the SWOT Analysis technique to identify the market position of the company. Since the war the UK economy has tended to have an economic cycle closer to the US than the EU. Managerial Economics, 6th edition. Let us help you get a good grade on your paper. 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. To make these things happen, EU countries have set up bodies to run the European Union and adopt its legislation. 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. The policy also allows technological innovation and the European Commission makes sure that these innovations are in the European Unions fair competition policy. Order your essay today and save 15% with the discount code ESSAYHELP, Don't use plagiarized sources. Some of the basic aims of the European Union are peace, prosperity and freedom for its 498 million citizens in a fairer, safer world. This is the reverse of the position in 1990. 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 . 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. How does OFT checks anti-competition? 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 . An oligopoly market is characterized by a few firms producing the same product, and each firm's action influences the other firms. PhDessay is an educational resource where over 1,000,000 free essays are 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 . A single currency should result in lower interest rates as all European countries would be locking into German monetary credibility. 48 Vitosha Boulevard, ground floor, 1000, Sofia, Bulgaria Bulgarian reg. 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