TESCO

Challenges and Opportunities Faced By TESCO

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TABLE OF CONENT

Company Overview1

Opportunities for TESCO2

Challenges for Tesco4

Increased customers awareness of environment4

Maintenance of quality5

E-buzz5

Demographic factors6

Impact of Globalization6

Challenges and Opportunities Faced By TESCO

Company Overview

The company, Tesco Plc, is one of the global companies operating in the markets of general merchandise and grocery. It has its headquarters in Cheshnut, United Kingdom. Considering its revenue generation, Tesco plc is the third-largest global retailer which is followed by Wal-Mart and Carrfour, while concerning the profitability, the company is the second-largest. Tesco operates in more than 14 countries all across the world, and has gained the position of a market leader in the grocery market of UK, Thailand, Ireland and Malaysia (Murphy, 1173-1200).

As far as its history is concerned, Tesco plc was founded in the year 1919 by Jack Cohen, and its first store was initially opened in Middlesex. The first brand of Tesco that was introduced by Cohen was the tea that was bought from an entire shipment from T.E. Stockwell, and later, he used the initials of this name and merged them with the surname that he owns. Thus, by origin Tesco Plc is grocery retailer which is focused on and based in United Kingdom. The company has adopted extreme diversification in all the aspects whether geographically or demographically (Humphrey, 121-141). Even the nature of the company's business is diversified since it operates in the areas such as petrol, books, clothing, software, internet, financial services, music downloads, DVD rentals and others. Above all, the company is also on the list of London Stock Exchange and has its shares owned by the public (UoP, 2013).

Tesco plc is the largest global grocery store based in UK. This is the second largest retailer in the world when measured in terms of benefits and third when measured in terms of income. In the UK (UoP, 2013), Tesco has a market share of 30%. The company has employed more than 326,000 employees around the world where 237,000 of them in Europe where it has its largest private employer (Flavián, Haberberg & Polo, pp.125).

Tesco is a food and grocery retailer. The company has been building a sustainable business model over the years through diversification into new geographies and value oriented retailing (UoP, 2013). International diversification helps Tesco to reduce its business risk as well as facilitate incremental sales through operations in growth markets (TESCO, 2007, p.n.d). On the other hand, value oriented retailing builds on customer loyalty and helps to sustain revenue growth even in a difficult economic scenario (UoP, 2013). However, with the competition intensifying in the UK market, customer retention could become a primary concern for the company and can also lead to loss of market share.

Opportunities for TESCO

Strong growth in Chinese, Indian and Thailand markets provides long term growth prospects (UoP, 2013). Tesco's business in Asian countries will benefit from the strong growth potential of these markets. According to industry estimates, the GDP of developing Asia is expected to grow by ...