In the paper, a proposal on how Tesco can position a product in a new market will be examined. The microenvironment mostly consists of the various factors that impact the company’s operations directly or indirectly especially from an internal perspective. A rivalry is one of these factors. Tesco has several rivals in the business such as Morrison and Sainsbury’s and needs to keep its position in the market. They have to make sure that their quality, pricing, products, and convenience keep them above their competitors. This is because these are some of the strongest factors that may drive profits to zero if not looked into carefully. A threat of substitutes is another factor that needs to be considered. This is because the products may be sourced from other companies in the same business environment and this would reduce its attractiveness to its clientele. It is, however, benefiting from its bulk purchases since it gets its products at cheaper prices and with greater benefits trickling down to the clients at the end of the day. Suppliers also determine how a company fairs. This is a horizontal factor that needs to be highly regarded. It affects the production costs and eventually the pricing. They have, however, maintained a tight grip on their suppliers which has made it difficult for the suppliers to look for alternatives. They take bulk orders which the suppliers’ desire and thus making it possible for Tesco to regulate the prices to suit their clientele. The threat of a new entrant poses considerable danger to the company because it has the ability to influence profitability and control the market share. To counter this, they engage in expensive advertising which makes it difficult for the smaller or new companies to match.
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