TESCO CONQUERS THE WORLD

Tesco Conquers the World



Contents

Tesco Conquers the World3

Introduction3

Company Overview3

Strategy - Theoretical Perspectives3

PEST Analysis4

Political Factors4

Economical Factors5

Social/Cultural Factors6

Technological Factors7

Porter's Five Forces8

Threat of New Entrants8

Bargaining Power of Suppliers9

Bargaining Power of Customers9

Threat of Substitutes10

Bargaining Power of Competitors11

Tesco's Strategy12

Cost Leadership12

Differentiation12

Tesco Direct13

Telecommunications13

Strategic Direction14

Competitive Forces15

Possible Future Strategic Directions18

Growth21

Sales Growth21

International22

Alliances22

Lock-in Customers22

Loyalty23

Customer Information23

Innovations Sustainable Energy24

Conclusion24

Tesco Conquers the World

Introduction

The case presents the company that is considered as UK's most successful grocery retailer. In this report, we discuss possible future strategic directions for Tesco, having in mind strategies that company had followed from its origins. This will tell how tesco has imerged in the market and what strangth and weaknesses it has, as well as the risks and opertunities. If diversification is to be chosen as strategic direction for company in future, it can be achieved through mergers and acquisitions. As previously mentioned, Tesco have been successfully using this method when penetrating foreign markets. It will analyze relevant theories of corporate strategy and review how they are used by Tesco's strategic management.

Company Overview

Tesco Plc employs over 326,000 people and operates in 2,318 stores throughout 12 countries around world. The company made the profit of £2,029m in 2005 and continues to show increased sales revenue. This report will give the critical and insightful analysis of Tesco's current strategy in order to discover what makes them so successful.

Strategy - Theoretical Perspectives

Strategic management relates to managerial decisions that deal with long term performance of corporation. It determines overall vision and direction of company. Before management can implement the strategic option it is essential they understand its suitability. Suitability relates to how appropriate option is to organization, firstly they must consider their strategic position. A number of concepts have been devised by theorists and managers can use them to give insight to their current position (Burt, Dawson, Sparks, 2003).

PEST Analysis

Political Factors

Operating in a globalized natural environment with markets round the globe (Tesco now functions in six nations in Europe in supplement to the UK; Ireland, Hungary, Czech Republic, Slovakia, Turkey and Poland. It furthermore functions in Asia: in South Korea, Thailand, Malaysia, Japan and Taiwan), Tesco's presentation is highly leveraged by the political and legislative situation of these nations, encompassing the

European Union (EU).

For paid work legislations, the government boosts retailers to supply a blend of job possibilities from flexible, lower-paid and locally-based occupations to highly-skilled, higher-paid and centrally-located occupations (Balchin, 1994). Also to rendezvous the demand from community classes for example scholars, employed parents and older citizens. Tesco realizes that retailing has a large influence on occupations and persons components (new shop expansion are often glimpsed as decimating other occupations in the retail part as customary shops proceed out of enterprise or are compelled to slash charges to compete), being an inherently localized and labor-intensive sector. Tesco uses large figures of; scholar, handicapped and aged employees, often giving them smaller rates. In commerce with a normally high employee's revenue, these employees offer a higher grade of commitment and thus comprise attractive employees.

Economical Factors

Economic components are of anxiety to Tesco, because ...