Threats
1. UK and American markets have been affected by economic concerns through the “credit crunch”. Lower available income will impact and strategic focus may need to change to lower priced basic products with less focus on higher priced brands suggesting a switch in price architecture.
2. Rising raw material costs from both food and non food will impact profit margins overall.
3. Sourcing changes to Far East locations with regards exporting restrictions on some non food product areas will reduce margin rates on products with already low margins.
4. Changes to consumer buying behaviours require further analysis - as technology develops consumer buying patterns change which will result in product areas requiring evaluation.
5. For TESCO there is a persistent threat of takeover from the market leader Wal-Mart who has both means and motive to pursue such action.