Global Marketing Management

International Business Strategy: Tesco



International Business Strategy: Tesco

Introduction

In today's world where entrepreneurship and owning your own business is considered as the latest fashion to acquire wealth and status. We see a lot of new businesses launching every month and every year but only few of them are able to maintain their position in the cutthroat competition and rivalry. Maintenance of the success of the business totally depends on the strategies a business owner adopts to operate it and strategies are the nub that decide the success or failure of an organization. The main objective of this paper is to select a company and critically analyze its international business strategy. The accomplishment of this objective would reflect how an organization can expand the business with the aid of its effective and efficient strategies in World.

Selected Organization

The core objective of this paper is to perform the analysis of an organization and to determine in how it can implement it across the world. The selected organization for performing this analysis is Tesco.

About Tesco

Tesco came into existence in 1919. It was Jack Cohen's idea that gave rise to such a huge and gigantic organization. Tesco is involved in grocery and general merchandising retailing. Tesco is considered on number three largest retailer in the world if we gauge its position in terms of revenue. First store of Tesco started its operation in 1929. Tesco is one of the companies that are listed in London Stock Exchange. Tesco has diversified both geographically and into areas such as retailing of books, clothing, electronics, furniture, finance, telecom and music download (Data monitor report, 2003, pp. 1). Tesco is operating over 3,700 stores globally, in 13 countries, and employing over 440,000 people.

International Expansion Strategies of the Organization

Tesco is the only U.K. food retailer with an international growth platform. In contrast to more-challenging domestic markets, international markets are a bigger revenue pool, and offer more promising growth prospects as they are growing faster and are more fragmented with fewer scale competitors. In international markets local scale is a key driver of operating margin. Tesco is one of the few companies that appear to have incorporated this insight in to its international strategy. Tesco has followed a deliberate expansion path, entering relatively few countries, but building scale in those where it has entered. As a result, operating margins in international markets have quickly matched those enjoyed in the U.K. market (Data monitor report 2003).

Strategies for Expansion

With this immense success that Tesco had achieved over the period of time, it has clear prospects to expand itself in international market and they are actually expanding into international market. But, they have clear strategies develop that guides them about how to enter a new marker in a geographical location. Before entering into any new market they research properly that the market is substantial enough or not, the new prospect market should give rise to the overall growth of Tesco (Palmer, 2004, 1075). These strategies of Tesco reveal preparation of Tesco before entering into ...