TESCO

Coursework: Tesco's Strategy in a Competitive Global Food Retail Industry

Abstract

The purpose of this paper is to discuss Tesco's strategy in a competitive global retail market. The paper also critically examines the main arguments for and against globalisation in the food retail industry in terms of: a) The threat of new entrants and the bargaining power of consumers, and b) The impact of technological innovations in emerging markets. It includes a critical analysis of developments in the global food retail supermarket industry. Furthermore, it critically evaluates the global food retail market dynamics in the context of how Tesco Plc continues to expand into Asia-Pacific countries in order to secure future profitability. Lastly, the paper discusses the ability of Tesco's "new" CEO Phillip Clark to transform Tesco into a diverse multi-national enterprise MNE for long term growth by the year 2015.

Table of Contents

Abstractii

Introduction4

Company Profile4

Formats and Other Services4

Recent Performance7

Discussion7

Globalisation7

Global Food Retail Market8

Strategic Leadership and Management Theories11

Marketing Mix of Tesco14

Product14

Price15

Place15

Promotion15

Conclusion15

References16

Appendices18

Coursework: Tesco's Strategy in a Competitive Global Food Retail Industry

Introduction

Company Profile

Tesco Plc was established by Jack Cohen, back in 1919, and he opened the first Tesco store in 1929, in Middlesex. Tesco is a UK- based public company, and most definitely the biggest retailer in the United Kingdom. There are numerous Tesco stores all over the world; however, the sales in the UK contribute 75% to the entire sales of the Tesco group. The initial focus of the company was to deal in the retail of grocery in the UK. However, after seeing the opportunities for growth, Cohen decided to diversify the businesses portfolio. The company currently operates a diversified portfolio, consisting of food, clothing, toys, electronics, home furnishings, telecommunications, entertainment, broadband, insurance, banking facilities, tyres, technical support, a film studio, beauty salons, a record label and a gold exchange.

Formats and Other Services

There are 6 formats that Tesco stores operate in, and they include Tesco Superstore, Tesco Express, Tesco Extra, Tesco Metro, Tesco Homeplus and Tesco One Stop. These formats enable Tesco to operate in different areas of the country, from the centre of cities to the outskirts and the countryside. Since the company has originated from London, and has its roots in the city, there is a large network of Tesco stores in the Southeast part of England.

In order to provide additional value to their customers, Tesco introduced the loyalty card program in 1995. The loyalty card is known as the Clubcard, and customers can use it to gain points as an additional benefit to their shopping experience. Furthermore, Tesco introduced the service of internet shopping in 1995. The online shopping strategy began to be profitable in 2006, due to an increase in Internet usage. In the year 1997, Tesco and Esso formed a business alliance where Tesco introduced their Tesco Express stores.

Additionally, Tesco responded to the increasing need of technological advancements and launched their UK telecommunications division in 2004. This division was developed to complement the internet shopping service provided by ...