Blue Ocean Strategy

 

The above predictions and subsequent profit for the company work under the assumption that customers will be willing to purchase and use Tesco’s biofuel over their conventional diesel and indeed our competition. The following Blue Ocean Strategy will justify our reasons for success and differentiation in the market.

 

Create Uncontested Market Space

 

Tesco will move into an uncontested position in the mass market. The sales of 100% biofuels in the UK are restricted to local businesses that offer pumps at individual locations. The national market has not yet been utilised so our venture will benefit from a first mover advantage. Petrol stations do currently offer 5% biofuels, but these along with standard petrol and diesel are not seen as a direct competition initially.

 

Make the Competition Irrelevant

 

Due to out ability to reduce cost, in addition to economies of scale, we do not see small-scale producers as a threat to our venture. We also have the dominant advantage over them of being easily accessible and nationwide. The niche that we have in this market over the traditional energy suppliers as well is that our product will be made entirely from food waste, not only reducing the input costs, but also avoiding external environmental and social pressures introduced from taking away agricultural land in the ‘food versus fuel’ debate.

 

The potential future threats of competition come from the other large supermarkets, or companies who could provide significant amounts of biomass. In order to prevent this from happening we will negotiate with these companies to form a partnership to purchase all of their food waste, offering a service that benefits instead of costs them while allowing us to maintain a monopoly and additional product supply.