TESCO ANALYSIS

Tesco Analysis

[Name of the Institute]Tesco Analysis

Introduction- Company Overview

Tesco is considered to be one of the leading and biggest food retailers in the world. Its yearly revenue exceeds 55 billion dollars as per the 2012 Tesco's report. Established in 1919, it has evolved into a multi-million dollar retail industry and is the market leader within the UK food retail segment (Abeysinghe, 2010, Pp. 20).

Tesco employs more than 480,000 people worldwide as is considered to be one of the most strategically sound organizations of the modern era. The company possesses more than 4,500 stores globally and is situated in fourteen different countries. Tesco primarily has its operations in countries like USA, UK and Australia. Recently it has shifted its focus on China and European countries as well. Its head office is located in Hertfordshire, UK. Tesco provides numerous online retailing services through its website which is www.tesco.com. Besides that, Tesco also provides Internet based connections and advanced financial services through its domain named “Tesco Personal Finance” (TPF).

In 2008, Tesco's market capitalization was over 34.84 billion dollars and its annual turnover reached 75 billion Pounds, which placed the group at the forefront in UK and fourth in the world behind Wal-Mart and Carrefour. Currently the group is the fourth largest retailer after Metro (Datamonitor, 2010, Pp. 63). The activities of Tesco are divided into three main areas which are:

Local Distribution

International Distribution

Other Services

This paper will analyze the Tesco's financial and strategic position through SWOT, Porter Five Forces, PESTLE and Value Chain Analysis.

Companies

1986

1998

1999

2000

2005

2010

2012

Tesco

12.0

22.9

23.4

24.2

22.8

29.8

30.0

Sainsbury

12.3

19.8

19.1

18.6

15.8

16.2

16.9

Asda

7.2

14.1

14.8

16.2

12.4

17.0

17.1

Safeway

3.5

10.2

10.0

10.1

9.3

10.0

12.4

Evolution of market share in Britain (in percentage)

Global Expansion

Tesco is trying to expand globally by focusing on the diverse needs of the customers. For this purpose, Tesco has employed local staff in majority of their store so that effective and valued communication can take place. This strategy of Tesco is apparent mostly in Asia and Europe. Tesco is also putting emphasis on producing a wide range of local formats like Express stores so that the local communities can be served better. According to experts the overall position and standing of Tesco concerning the overseas business was highly successful in 2009, especially against the recessions, political instability and challenging diversity of the local communities of the developing and developed world.

Non-food

Tesco started off selling with food items only but with the passage of time non-food items were also introduced. This increases the overall sales and market revenue of the company and Tesco started to develop different strategies concerning the sales of non-food items. Tesco followed the differentiation strategy and Started selling non-food items like clothes, electrical appliances and daily home used products. Likewise Tesco's online non-food business, Tesco Direct, has achieved phenomenal success over the last few years and has increased its overall sales to approximately 50 percent in 2009-10. Tesco has also started selling online clothes which are trendy and affordable for the customers.

Retailing Services

Tesco has started developing retailing strategy for the last few decades and has been very successful in it. It brings value and ease to customers ...