Explain the concepts/theories learnt and based on your
observations you have made during the trip.
The market system is driven by supply and demand. Supply refers
to the amount of a product the firms are willing to sell at a given price. Demand
refers to the willingness of consumers to pay for the quantity of a product or
service desired by them. As an example, Tesco sells products like daily
necessities which is needed by the consumers.
The opportunity cost of a choice is the higher valued
alternative forgone in a situation where choice is made between several
alternatives due to the limited resources. For instance, a consumer with
limited resource tend to consume both rice and cold drinks. Thus, he has to
forgo the second best choices which is the cold drinks.
Shortage and surplus is market disequilibrium. Shortage is
the excess demand where the consumers are willing to buy more than producers
are willing to sell. Surplus is the excess supply where the producers are
willing to sell more. For example, Tesco is facing shortage of mineral water as
there is an excess in demand for water during the period of water rationing.
Illustrate using five photos highlighting
the economic issues faced by TESCO Hypermarket.
One
of the economic problems that Tesco is recently facing is about the customers.
The lack of customers at Tesco which is as shown in the picture above will make
a loss for the company. The lack of customers at Tesco happens during all the
weekdays and it will definitely affect the company’s in the making of profit.
This
picture shows a serious problem that Tesco is facing currently and the
management must have to take action to solve this problem. On the day we
visited Tesco, most of the workers did not actually turn up during the working
hours. It causes most of the counters to be closed and there are only a few of
the counters were operating. This may cause inconvenience to the customers as
they might have to queue up for a longer time to make payment if there are many
customers queuing up at the same counter.
Another
problem of Tesco is clearly shown in the picture. Tesco does not have enough
supply for the product which results in the company to have difficulty to
restock the product for their customers after their products are out of stock.
As a result, the customers will lose trust towards the company and go for
another company which has stock in this product. This will make a loss in
profit and a decrease in the loyalty of the customers for Tesco.
Despite
facing the shortage for certain products, Tesco is also having problem with
products that are overwhelming in the market which is shown in the picture
above. Therefore, Tesco have to come up with a strategy plan such as doing
promotions for the products to attract and target more customers to consume the
product in order to clear off their stock.
The jam
on the road is also a cause of the problem for Tesco. This is the only route
for the customers to use in order to reach Tesco. Customers that are going to
Tesco will have to face consequences such as stuck in the jam during the peak
hours which will lead to the wasting of time of the customers.
Three methods to improve the competitiveness of the traders at TESCO Hypermarket.
The competitiveness of the traders is the characteristics
that permit the traders to compete effectively with each other. Competitive
gives advantage on offering consumers the best product or service and also a
greater perceived value. One of the methods to improve the competitiveness of
the traders is the quality of the product they are selling. Quality assurance
and quality control of the products is the most significant way to be done by
the traders in order to fulfil the quality requirements. These could be the act
for the traders in giving confidence to the consumers so that consumers will
stay loyal to them and give trusts towards them for the high quality products.
I would also like to suggest another method which is
pricing which can help in improving the traders’ competitiveness. The price of
a product is the main emphasis of the consumers on whether or not to consume
the product. In order to surpass the other traders, a trader should set the
price of their products reasonably or even lower so that there is a higher
amount of consumers compared to the others.
Staff training is utmost important for a trader as most of
the profit that a trader makes is depending on the performance of staff. By
training the staff, they will become competent and will be able to offer good
services to customers. This can play a part in attracting customers and then
generating profits. It can also create a sense of loyalty for the staff so that
they will give their best to the company.