1. Factor Conditions
Factors can be grouped into human resources (skilled labor, qualification level, cost of labor, commitment etc.), material resources (natural resources, vegetation, space etc.), knowledge resources, capital resources, and infrastructure. They also include factors like quality of research on universities, deregulation of labor markets, or liquidity of national stock markets.
Porter points out that these factors are not necessarily nature-made or inherited. They may develop and change. Political initiatives, technological progress or socio-cultural changes, for instance, may shape national factor conditions.
To established the retail industry in UK almost the same factor conditions work for ASDA and TESCO. Both have skilled workforce and sophisticated infrastructure, skilled human resources or a scientific base, speed of creation, speed of upgrade, and degree of specialisation in retail industry.
2. Related and Supporting Industries
A set of strong related and supporting industries is important to the international competitiveness of firms. This includes supplier and related industries. When local supporting industries are competitive, firms enjoy more effective and innovative inputs. Internationally competitive home-based suppliers create advantage in downstream industries through superior inputs, co-ordination in the value chain and innovation and upgrading.
The competitiveness of retail industry is benefit from the local industries, local producers and local farmers. ASDA and TESCO are both selling almost similar items like Grocery, Fresh, Wine, Clothing, Phone accessory, Electronic goods. We can see both retail company-ASDA and TESCO has a good supply chain with their local Industries, local Producers, local Farmers and foreign suppliers.
3. Firm Strategy, Structure, and Rivalry
The context of characteristics of firm strategy, structure and rivalry in different countries also helps explain bases of advantage. The conditions in nation governing how companies are created, organized, and managed, as well as the nature of domestic rivalry.
TESCO implement a clear cost leadership strategy, as market leaders they benefit heavily from economies of scale. The introduction of their own brand allowed the company to cut their costs and increase their profit margins. Tosco's current strategy is very much one of growth. Depend on the feature aimed at the high street consumer TESCO offering different categories shop and services-
In ‘'Tesco's Extra'' stores here are over 15,000 of their own brand products. Customer can buy any product in cheaper price. "Tesco Extra" stores, selling not just food, like other supermarkets but material products such as kitchen accessories, entertainment items such as televisions and VCR players and CDs, magazines and cleaning products.
"Tesco Metro" was introduced. This was a feature aimed at the high street consumer while offering the benefits of a large supermarket.
"Tesco Express" in essence a petrol station with a small Tesco store onsite. This offered customers convince products i.e. bread, milk and essential grocery items.
Tesco Direct - The recent interim results show how Tesco's non-food products have made good progress. Tesco's Direct will offer the vast range to anyone with computer access.
Telecommunications - Tesco launched