Tesco’s Fresh and Easy economic essay

Tesco’s Fresh and Easy

Fresh and easy is a chain of supermarkets on the west coast of United States of America and a subsidiary of a UK based company.Tesco is rated as the third worlds largest retail grocery and employs thousands of workers worldwide. In the attempt of Tesco to expand its operations to cover a wider market, it has established fresh and easy stores in United States. Since its first operations in the country, fresh and easy has been involved in opening of new branches in the attempt to meet the rising demand for its goods and services (Curran, 1999, p. 34).

The key driving force in the market in United States is demand and supply and these two forces have played a key role in determining the prices for the goods and services. With increase in global concern over promoting good eating habits among people and more so eating fresh food stuffs, the demand for the products for fresh and easy has been increasing at an alarming rate over the years. (Curran, 1999, p. 45).

Demand and supply

At the optimal point, the quantity demanded should be equal to the quantity supplied

I.e. Qd=Qs

In its expansion plan, Fresh and easy has ensured that the high demand for its products is matched with increase in quantity supplied. This is one of the reasons that has seen fresh and easy plan to open as many outlets as possible to serve the increasing demand.

Pricing

Quantity demanded is a function of price.

Qd=f (p)

This means that when prices are high, the quantity demanded is low and vice versa. In an extensive research that was carried out, it was established that one of the underlying factors contributing to the success of fresh and easy in United States is the fact that its prices are relatively low hence attracting more customers. This factor has enabled fresh and easy to sail through in terms of attracting many customers in a market that is characterized by high levels of competition

Production

Production of any industry is analyzed through looking total output of an industry resulting from a combination of various inputs.

I.e. Q= f (X1, X2, X3...X4)

Where Q= total output

X= factors of production such as labor, capital, land or raw materials.