Tesco Case Presentation

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TESCO CASE PRESENTATION

Monday, December 03, 2012

TESCO CASE PRESENTATION

THE SEQUENCE OF THE PRESENTATION

ANNE
TESCO BACKGROUND
QUESTION 1
QUESTION 2
JEAN-MARIE GAHAYA
QUESTION 3
QUESTION 4
OWEN DOWNEY
QUESTION 5
QUESTIONS & ANSWERS

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Monday, December 03, 2012

TESCO CASE PRESENTATION

TESCO BACKGROUND
Tesco Background:
Tesco is a public limited company founded by Jack Cohen in 1919. Since its initiation the company has gone through different development stages and Tesco is now UK's largest retailer and is now No. four retailer worldwide.

Tesco has business activities in three main regions in the world in Europe (Republic of Ireland, Hungary, Czech Republic, Slovakia, Turkey and Poland) Asia (China, Malaysia, South Korea, Thailand and India) and U.S. Tesco has over 4,500 stores around the world and has employed over 440,000 people around the world with revenue over £30 billion. Tesco’s major products are groceries, non-food products, financial services and telecoms.

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Monday, December 03, 2012

TESCO CASE PRESENTATION

KEY ELEMENTS STRUCTURE FOR
QUESTIONS
QUESTION 1
QUESTION 2
QUESTION 3
Key factors of Tesco success & failure in Asia







Business Strategies (Tesco Asia)
Market Leadership (Tesco Asia)
Market Entry (Tesco Asia)
Rivalry (Tesco Asia)
Innovative Exit Strategic (Tesco Failure in Asia-Taiwan – The asset swap market exit solution) Market Entry (Tesco US market entry)

QUESTI ON 4


Tesco Porter’s Diamond
1. Firm Strategy, Structure, and Rivalry
- Strategy
- Structure
- Rivalry
2. Factor Conditions
3. Demand conditions
4. Related and Supporting Industries

QUESTION 5

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Monday, December 03, 2012

TESCO CASE PRESENTATION

Question 3
Tesco key factor for success in Asia
Corporate Strategies
Store operations - automation
Centralized logistical & Distribution
Multi- format store
Speed to scale on market entry (5years)
Competitive low price & Sell more
Consumer insights localize assortments.
Groceries, Non-food products lines
Online home delivery service
Building the Brand
Innovation-re-innovating
Actively Supporting local communities

Market Leadership
Competence a strategy
Competitive pricing
Opening new stores
Different store formats
Flexibility

Driver factors
Push factors
Saturated domestic market
Pub policy restrictions
Pull factors
High financial gains

Facilitating Factors
Removal of barriers of entry

Tesco key factor for failure in Asia
Rivalry
Threat of entry
Dominance & Price-performance
Attractive

Innovative Exit Strategic

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Monday, December 03, 2012

TESCO CASE PRESENTATION

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Question 3
Innovative Exit Strategic
(Tesco Failure in Asia-Taiwan – The asset swap market exit solution) Tesco was never able to develop the market scale necessary to operate in Taiwan. In 2005 Tesco made a deal to swap the retail assets (stores) with its rival French retailer Carrefour in central Europe which allowed Tesco to withdraw from its lossmaking operations in Taiwan. Tesco swapped its six stores in Taiwan in return for Carrefour's eleven stores in the Czech Republic and four stores in Slovakia. Tesco also had to make an additional payment of €57m to Carrefour. The deal sounded reasonable as both companies were making losses in the respective areas.

Market Entry (Tesco US market entry)
Tesco expansion in EST Asia was mainly based on government’s liberalisation of previous restricted entry of retail FDI across EST Asia and subsequently a successful exit from Taiwan, gave Tesco scale confident to enter US market in 2006 under branded name as “Fresh & Easy”, the entry was after a considerable amount of research into the US Market.

Tesco entry into US is based on one of the three principles of market entry: Self-start entry this strategy allowed Tesco to develop organically rather than acquisition, where than Tesco could be loaded by problems of the company...
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