By analyzing PEST model partly which contains four main factor as Economic; Political and Legal; Culture, Social and Ethics and some others (technology or environment), this paper has clearly presented penetration strategy Tesco PLC, a multinational retailer in grocery and merchandise towards Vietnam market. The paper conducted the report through collecting secondary data from General Statistics Office of Vietnam, Work Bank Data Source, CIA and some other trusted data source to indicate in detail whether Vietnamese market is a possible one for Tesco. The result point out that Vietnam could be a possible market for the core strategy of Tesco PLC.
Retail section has becoming one of the most potential businesses in the booming industry recently. Along with an active market, a level of competitiveness among retailers is also considered as a core factor influences each typical business strategy with the aim at obtaining big goal of profit. Numerous big retailer Groups in the world, now is trying to expand their business towards prospective market but not only domestic one such as Wal-mart or Metroto be able to perform, develop and compete through having effective plan and well performing. This report would like to examine Tesco PLC, the biggest retailer from the United Kingdom as a representative case for the effective expansion strategy implementation basing on analysing some key factors of host country’s market in a macro level. The chosen country is Vietnam, a brand new and potential Asian market which has quite high level of demanding in term of commodities so far.
2. MAIN BODY
2.1. Tesco PLC – Overview
Tesco, a multiple retailer, was established in 1919 by Jack Cohen with a head office at Cheshunt, the United Kingdom. The corporation has reached the third position in the world in grocery industry (by revenue) after Wal-Mart and Carrefour, and the second position in the world (by profit) after Wal-Mart. Currently, Tesco is performing business around 14 countries in Asia, Europe and North of America as well as a leader at the UK’s market (30% market share), Malaysia, Republic of Ireland and Thailand. Starting with a small off-license in East End of London, now there are three main type of Tesco store which are Extra, Metro and Express with a huge range of product and service such as Non-food product (electronic equipments, household products and cosmetics) and Retailing Service (such as telecoms services and online shopping) (Tesco, Annual Report 2014). Additionally, Tesco PLC also provides other type of services such as Tesco Bank or Tesco Fuel. Furthermore, about characteristics of Tesco group, Strength, Weakness, Opportunities, Threats are indicated through the figure below
Tesco now is mainly based on the UK, Europe and Asia (Tesco, annual Report 2014)
Accordingly, regarding revenue and trading profit, Asia is a second market for the Corporation just after only the home market – the UK. Additionally, as the statement of Tesco’s Chairman “The future is a retail world where retailers will need to operate across multiple channels while meeting wholly different customer expectations for service levels, choice, convenience and overall experience” (Tesco, Annual Report 2014), selecting a new market to continuously enhance the business performance based on current foundation could be the next move of Tesco. Within this scenario, emerging economy could be a great target for multinational Group who would like to spread out current scope of business as Tesco. Thus, this paper would like to introduce Vietnam as the representative market for the British Giant. At the latter part below, main indicators such as legal frame or ethic and culture shall be examined in detail to seek if Vietnam could be a possible decision.
2.2. Vietnam Market – Overview
It can be said that Vietnam is a full potential market in term of merchandise and grocery.
Figure 1 Vietnam retail sales...
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