Tesco is the world’s third largest retailer and has been on the top in the UK market with a market share of 25%. In the past few years it underwent horizontal expansion and diversified into new products and services like Tesco property and telecommunications as part of its long term strategy to reduce risk. It started online shopping, nonfood sector, clothing, home ware and electricals to add value to the business to fight competition. Thus achieving economies of scale and scope. Tesco also took good long term decisions to enter into foreign markets of Europe and South East Asia. It has a horizontally integrated structure. The macro environmental problems like unemployment and Rise in VAT and interest rates could reduce spending power of consumers. Also supermarkets are saturated and stagnated in the UK today, and Tesco being the market leader is facing the brunt by opposition from the local community for killing local trade. Trying to survive and maintain its market share in the UK is the wicked problem identified. An analysis has been done to identify the strengths of the company, and an attempt has been made to suggest future actions for reducing the pressure from the community and at the same time maintaining its market share in the oligopolistic environment through franchising.
1.0.Tesco Today in Numbers:
Tesco is the top four leading grocery retail store in UK and has the following numbers (guardian.co.uk) The company towards stands on the following figures (tesco.com) Employees: 472,000.
Number of stores (UK): 2,492,
Number of stores abroad (13 countries): 2,329
Market share: 30.7%
Revenue: £62.5 billion
It takes £1 in every £7 spent in UK (Ian, 2010)
Tesco went on a major international expansion bid by entering Malaysia (2002), Turkey and Japan (2003), China (2004), Fresh and easy in US (2007), Working on Franchise deal in India (2008) 1.1.History:
Tesco has a 110 year old history, with founder Jack Cohen selling...