Business Opportunity

 

The EU’s renewable energy directive sets a binding target of 20% consumption from renewable sources by 2020 [1]. Within this, European countries will be required to have at least 10% of their transport fuels come from renewable sources. In UK, the requirement is approximately 13.5%. According to Renewable Energy Association (REA) report from June 2014, the biggest contribution to renewable transport, both today and in the recommended option for the future, comes from sustainable biofuel. This predictions means that within the next 5 years the biofuel industry in this country has the potential to explode and grow rapidly.

 

The graph below shows the projected U.K deliveries of bioethanol and biodiesel in 2020.

                               

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

In addition to their 35% equity, Tesco has two representatives to the Greenergy board of director, which give us an advantage in terms of the company’s decision-making and ultimate strategy. As Figure 4 shows, Greenergy is a significant player in the industry, currently holding a 15% market share, and is the second largest biodiesel supplier.

 

According to the Roger’s Adoption Bell, if Tesco enter the market as soon as possible, we will be categorized as an early adopter, which gives us a great advantage to seize a significant market share. In terms of the competition from other supermarkets, we will be an innovator. This is a great advantage, as it will give us the opportunity to develop a strong brand image for sustainability, which we are already targeting, shown in Figure 9. An added bonus is the ability that we will be given to set up barriers for entry and develop an unofficial monopoly.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The following 2 figures, 10 and 11, show our SWOT and PESTEL analysis for Tesco’s market entrance and presence.