Tesco Case Study

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Retail multinational learning: a case study of Tesco
The Authors
Mark Palmer, Aston Business School, Aston University, Birmingham, UK Acknowledgements

I would like to thank Dr Barry Quinn at the University of Ulster for his thorough critiques of my ideas on an early draft of this work. This paper has developed out of doctoral work supported by Sainsbury's. I am also grateful for the assistance of British Stores & Shops Association and, in particular, The George Spencer Trust under individual Research Awards. Abstract

Purpose – This article examines the internationalisation of Tesco and extracts the salient lessons learned from this process.

Design/methodology/approach – This research draws on a dataset of 62 in-depth interviews with key executives, sell- and buy-side analysts and corporate advisers at the leading investment banks in the City of London to detail the experiences of Tesco's European expansion.

Findings – The case study of Tesco illuminates a number of different dimensions of the company's international experience. It offers some new insights into learning in international distribution environments such as the idea that learning is facilitated by uncertainty or “shocks” in the international retail marketplace; the size of the domestic market may inhibit change and so disable international learning; and learning is not necessarily facilitated by step-by-step incremental approaches to expansion.

Research limitations/implications – The paper explores learning from a rather broad perspective, although it is hoped that these parameters can be used to raise a new set of more detailed priorities for future research on international retail learning. It is also recognised that the data gathered for this case study focus on Tesco's European operations.

Practical implications – This paper raises a number of interesting issues such as whether the extremities of the business may be a more appropriate place for management to experiment and test new retail innovations, and the extent to which retailers take self-reflection seriously.

Originality/value – The paper applies a new theoretical learning perspective to capture the variety of experiences during the internationalisation process, thus addressing a major gap in our understanding of the whole internationalisation process. Article Type:

Case study

Learning; International business; Retailers; Multinational companies. Journal:

International Journal of Retail & Distribution Management




Copyright ©

Emerald Group Publishing Limited


International retailers frequently emphasise the cognitive aspects of the retail internationalisation process. Examples of this abound but include Tesco's utilisation of embedded research teams within Japanese families to monitor consumption behaviour prior to their acquisition of the Japanese C Two chain in 2003. Within the international retail literature, however, there has been limited detailed empirical or conceptual research on international retail learning (Clarke and Rimmer, 1997). Thus, although learning has played an important role in shaping the way retail companies behave in practice, comparatively few studies actually address international retail learning. An absence of detailed empirical or conceptual research on international retail learning is therefore a major gap in our understanding of the whole internationalisation process. It is contended that important insights and valuable lessons have been learned by retailers from their own successful international forays as well as the visible success of other companies in the international marketplace. Not all international retail operations have been successful however, and the difficult and highly contested process of scaling back of retailing operations to remedy mistakes may also result in an equally valuable learning process for international...
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