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Saturday 18 June 2016

Unit 3: Essential last minute material

Guys,

I really think the two topics below could come up in case study questions. I would like to see you all in school Sunday/Monday to discuss.

1. E-Commerce and it's effect on industry and barriers to entry.

In this revision video we look at the rapid growth of e-commerce and consider the impact on market competition in different industries. Pure play e-commerce firms such as Uber and AirBNB are now significant challengers to established products and brands but bricks and mortar businesses are fighting back especially with the use of omni-channel retailing.




2. Dis-economies of scale, mergers and de-mergers

Many big companies that have grown and merged to diversify are now realising that in many cases, the clash of culture is too difficult to overcome. A question that tests your ability to see the downside of mergers and growth.

Dave Lewis is continuing with his strategy of focusing Tesco on its core retail activities with a series of business disposals.
Today Tesco have announced the sale of Dobbies Garden Centres for £217million.
Last week Tesco announced that it had sold the Giraffe chain of family restaurants as well as its 95% shareholding in Turkish grocery business Kipa.
Investment analysts had long questioned the strategic logic of Tesco investing in garden centres and family restaurants, suggesting that it was an inappropriate strategy of related diversification.
These are just three examples of Dave Lewis managing Tesco's business portfolio to bring much greater focus to the group and to realise cash for non-core assets.
Lewis is also taking steps to reduce the operating costs of the key UK supermarket business. The Guardian reports today that another series of Tesco superstores are abandoning 24-hour opening.


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