A Merger Analysis of Carrefour and Tesco
Introduction
I have decided using my knowledge of trade across different countries to propose and a merger for this piece of coursework. This merger was an idea of mine as I thought Britain's largest supermarket operator should merge with France's largest supermarket operator. Neither one nor the other company has particularly large market shares in the market in Britain for Carrefour, and France for Tesco, although each company has stores currently operating in those countries. This is why I have decided to investigate a merger between these two large companies, to discover if this external economy of scale is too large to increase profits, too large
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This Anglo-European merger will affect not only the market dominance in their own countries but also in the entire world. This will heavily affect the global market dominance of Wal mart the world's biggest supermarket chain.
The merger will create new opportunities for the quaternary industries in creating greater capital for research and development of new products. This means that these new products are retailed in the stores, and the public will have a more diverse range of products to select.
The merger will also bring down supermarket prices on a global scale, due to increasing global competition, rather than national competition which would have happened if I had chosen a British merger, perhaps between J Sainsbury and Tesco, which on the international market would not have much success. These cuts in prices will benefit the consumers and in turn will increase the merged company's market share, meaning success.
Profits would rise and stores would be able to be set up all over
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Why Not Merge =============
The merger itself, will be very large and the new business created (which for the rest of the essay will be called Tefour) may form a diseconomy of scale, and communication will be less efficient as there will be a greater number of employees and more layers of management to deal with a greater amount of capital. This will be highly ineffective as a business and the merger will be seen as a failure unless something is done about it.
Another problem may be the corporate downsizing, which may take place (although unlikely due to the branches having a span across two countries so there would be little need to close down already running branches and therefore people can keep their jobs) due to a lot more retained profits every year, which means that they will not need so many employees as Tefour will be one large company, so people who work in the offices and some of the managers may be made redundant, as there is no use for two managers who do the same
Tesco is a UK based Supermarket Company which was founded in 1919 by Jack Cohen, since then it has grown to become a multinational company which specialises in a lot more than just groceries, this has improved the overall profit of the company. The overall employees recorded at the end of 2015 was 476,000+, this shows that is a source of employment for nearly half a million people in the UK. The supermarkets are no longer just in the UK they also have shops based in Malaysia, India and Poland, this presents that they are increasing the size of business to a multinational company and is also a good source of jobs for people in poorer countries. In the world over 75million people travels
Tesco is a Public limited company (PLC), which means it is owned by shareholders and it is in the private sector Also known as the for-profit sector and Activities outside the public sector organizations and businesses that provide services and products based on market demands for a cost with the purpose of producing a profit for owners and shareholders in the organisations. Tesco is the biggest employer in the UK with over 250,000 employees and over 1,800 stores.
Tesco is a public limited business and therefore is in the tertiary sector as it provides a service to the public, this means that the business is owned by many shareholders. Tesco sell their shares on the stock exchange and are number one out of its competitors in terms of number of shareholders. Having a high amount of shareholders means that the business needs to make and retain profit levels high so that they trust and gain loyalty to the
the world. " The Big Three" hold nearly 75% of the market and produce over 8
A merger is a partial or total combination of two separate business firms and forming of a new one. There are predominantly two kinds of mergers: partial and complete. Partial merger usually involves the combination of joint ventures and inter-corporate stock purchases. Complete mergers are results in blending of identities and the creation of a single succeeding firm. (Hicks, 2012, p 491). Mergers in the healthcare sector, particularly horizontal hospital mergers wherein two or more hospitals merge into a single corporation, are increasing both in frequency and importance. (Gaughan, 2002). This paper is an attempt to study the impact of the merger of two competing healthcare organization and will also attempt to propose appropriate clinical and managerial interventions.
They are highly skilled in areas of design, technology, training, and research and development. In addition, Tesco has a superior presence in the area of manufacturing.
Introduction The purpose of this report is to undertake financial analysis of the position of the three major supermarket chains (Tesco plc, Morrison plc and Sainsbury plc) in the UK, using the financial tools such as Horizontal and Vertical Analysis and Ratio Analysis. The calculations done are considering the figures from the income statement and balance sheet of these three companies for the last 2 years (2008 & 2007). Doing these calculations is an effort to find out the current position and if any forecast on their performance. Tesco Plc *Interpreting the Horizontal and Vertical *Analysis The balance sheet’s horizontal analysis reveals the first worrying statistics about the company- the fact that stock level has increased by 25.84% in the year, even though net assets have increased by only 12.59%. The vertical analysis of the balance sheet again highlights the increase in amount of stock held by the company at the end of 2008 and increase in current assets. Interpreting the Ratio Analysis By looking at the ROCE* ratio it is clear that the business has not generated any higher return in the period 2007-2008. Though there is a marginal decrease in the returns (0.14% from 0.16%), however when compared with returns of other competitors Tesco plc has performed much better. Drop in asset utilisation ratio in the year 2008 indicates that the company did not use its assets efficiently to generate sales. As a result profit margin dropped down to 5.91% in 2008 from 6.21% in the year 2007. The Acid test ratio also doesn’t meet the ‘ideal’ ratio of 1:1. In other words Tesco had only 38p of quickly realisable assets to meet each £1 of current liabilities. Stock turn shows the effect of increased stock at the end of 2008 as it s...
Costco is the largest discount wholesaler which can compete with the Sam’s Club of Wal-Mart. Target can be the biggest threat in terms of competing with Wal-Mart in all levels. The low price strategy followed by the Target is the same strategy which is Wal-Mart using. Target is gaining recently more market share by adding more grocery options in stores and expended its stores internationally. Tesco is a British retailing company that is known to have gained large international and domestic market share. Tesco is the third largest retailing firm behind Wal-Mart and Carre-Four. Like other retail companies, Tesco wants to have clients that will patronize their product. The company uses a loyalty program to gain the loyalty of its clients. Compared to Wal-Mart, Tesco has started to concentrate on the housing market but it has not been that successful as of
I will first of all define business analysis as a practice of enabling change in an organization setting, by defining needs and recommending solutions that deliver value to stakeholders. Business analysis help businesses do better, it identifies and articulates the need for and how change in organization’s work and hence facilitate the change. Business analysis identifies and defines the solutions that will maximize the value delivered by the organization’s stake holders. The process of business analysis begins with the orientation were we get to understand or get the feel of what’s underway. Clarifying roles and determining primary stakeholders to engage in defining the project’s scopes and business objectives. Next in the process is to define
This is a positive thing for Tesco has a larger demand for their products allow them to grow and expand due to greater profits.
We all know Tesco as a food retailer, and we know that they are in constant competition with other retailers such as Sainsburys and Asda, yet we do not know much about what goes on beyond the shelves and the tills, the marketing plans and the day to day tactics that have to be devised to stay the number one food retailer in the United kingdom today.
The current situation puts Sainsbury's in the UK's third-largest supermarket chain, with a market share of around 16% .with 823 stores, unveiled profits of £488m, up 28% on last year's levels, with 15 consecutive quarters of sales growth,
Barclays group PLC is one of the largest financial providers in America, Europe, Asia, Australia, Africa and Middle East. , It which is mainly engaged deals with credit cards, retail banking, investment banking, corporate banking, and wealth management. The bank is made up of investment and corporate banking, global retail banking and wealth management, each of which has several business units (Burn, Cartwright &Maudsley, 2009).
A successful organization recognizes its need to adapt changes to survive global competition. Locally and around the globe, mergers and acquisitions are becoming more common between companies. Mergers occur when two or more companies combine their operations and participate as equal partners in order to achieve strategic and business objectives (Sudarsanam, 2003). Sudarsanam, S 2003, Creating Value from Mergers and Acquisitions The Challenges An Integrated and International Perspective, Harlow FT Prentice Hall. An acquisition occurs when a company takes over a smaller company and gets control to determine how combined operations will be managed (Shook & Roth, 2010). Shook, L V & Roth,
UK’s exit from the European Union following the Referendum on 23rd June 2016 has exerted tremendous and profound impact on UK grocery industry. Many experts warn that devalued sterling will force the prices to go up and bring a tough time for the industry. However, Lidl, a German no-frills supermarket, has emerged to be the fastest growing supermarket with a 12.2 percent increase on sales from June to August (Denton, 2016). In the early 90’s, Lidl opened its first UK store. Insisting on providing qualified products with low prices, it has expanded rapidly in UK and owns more than 640 stores now. It also won the 2016 Good Housekeeping Awards as the Best Supermarket (Lidl, 2016). With no doubt, Brexit greatly changes the business