In today’s world most of the companies depend on its global strategies as it plays a crucial role to succeed in the throat-cutting competition between the companies.
This report of international strategic management explains how Tesco introduce, devise and implement its international strategy to strive against the other companies in this rapidly changing market conditions.
In this report we are also going to illustrate the significance of international strategy for the survival of the organisation and to what extent Tesco became successful on a global scale by using various analytical tools and globalisation drivers. And what challenges has Tesco faced during its expansion overseas.
Tesco is the biggest online supermarket in the world and also one of the leading supermarkets in UK. Tesco was founded in 1924 by Jack Cohen who opened the first store in burnt oak, London. Tesco is also one of the biggest supermarket chains in the world.
In the recent years Tesco became successful because of its expansion overseas. Tesco has excellent management which is the main reason behind its success. A statement given by the former chief executive of Safeway Plc 2 –
“Tesco will just sail away. It will become unreachable, and the competition commission has prepared that. The only thing that could bring Tesco down is its management, and they do not make mistakes.”
But as every coin has two faces the same thing is with Tesco as Tesco also has some bitter experiences overseas like in France and Taiwan.
In this report we are going to discuss about the success factors, global strategies implemented and the challenges faced by Tesco in its expansion overseas.
Tesco is expanding at a higher rate, the founder of Tesco TES Cohen has started his business from a small street shop and now it is one of the ten biggest supermarkets chain in the world which operates within 13 countries and also planning to open its stores in 5 other countries, having more than 3260 stores and36400 employees worldwide and provides approximately 40,000 products where its own brand accounts for 50% of the total sales. Except Tesco none of the UK’s supermarkets chain has its stores overseas. Tesco has opened his first store in US in 2007 and is trying to expand in many other countries such as India, Russia etc
Although Tesco is not successful in all the countries in which it is operating. In many countries Tesco find it difficult to survive which results in the closer of its stores in those countries like in France and Taiwan Tesco is not that much successful and decide to withdraw from these countries. But Tesco doesn’t stop here as Tesco knows that during its internationalization development they are going to learn from their mistakes, which is the major reason behind their success. It can be clearly seen as Tesco enter Thailand in 1997 and now Tesco is the market leader over there having more than 55 hypermarket and 100 express stores. A remarkable growth of 15% was recorded by Tesco Ireland in the year 2010.
Global strategies and operations:
Global strategy plays an important role in order to gain competitive advantage to the organisation. Every organisation has its own strategy and it is also possible that in a single organisation firms may have different global strategies. It depends on the market conditions and the environment of the country in which you are entering or performing. Tesco has an experience of more than 10 years in overseas expansion and became successful in most of the countries except the few ones. Due to its brand image Tesco has a benefit that it can compete on price war likewise it has done in Ireland due the reduction in prices the yearly sales has risen upto 15%, but having a brand image also...