Friday 29 May 2009

Tesco Ireland and the "law of unintended consequences"

The law of unintended consequences states that any purposeful action will produce some unintended consequences. Whilst this can lead to some positive outcome/s, (lower prices leading to increased share, stemming tide of cross-border shopping, political support…) it helps to keep in mind the negative or perverse effects (loss of share), and potential problems
In the Irish market we believe that Tesco faces the possibility of the following unintended consequences:
* Farming lobby resistance (see earlier blog)
* Irish agents of UK suppliers becoming non-viable (with EU penalties of up to 100% of an agent's annual purchases from the supplier in the case of early termination of contract)
* Irish economic fall-out: Tesco being blamed for Irish supplier/retailer business failures or closing of factories, everywhere
* Price-cuts eventually being insufficient to negate the above 'negatives'
* A Government awaiting the emergence of a scapegoat...
..and all of this in an environment dictated by Murphy's Law (anything that can go wrong, will) i.e. 'secret' reports, 'internal' documents…

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