Tesco Strategy Analysis

Topics: Strategic management, Retailing, Tesco Pages: 10 (2840 words) Published: August 25, 2012
Executive Summary
Tesco is the leading retailer in UK. It manages over a thousand supermarkets, hypermarkets, and convenience stores in the United Kingdom, Ireland, Central Europe and Asia. This study explored the competition inside the retail industry in Malaysia. Now, that Tesco has opened 16 stores in Malaysia, the retail industry becomes very competitive. The study analyzed the profile, the company’s goals and objectives and the industry life cycle, which is very important in strategic and competitive study of an organization, especially in the retail and service industry. Since the retail industry undergoes very diverse change almost everyday, it is just right that Tesco’s strategy on change examined. In analyzing how Tesco, Malaysia is competitive, the study utilized the SWOT analysis and Porter’s five forces for the industry attractiveness. The study arrived to the conclusion that Tesco, Malaysia like its mother company in U.K. is very competitive, however, since there are some competitors in the industry, Tesco still needs the aid of Michael Porter’s five forces, generic studies and cost leadership in order to stay on the top in the retail industry  

            Tesco is the world leading retailer in United Kingdom and now is currently expanding outside Europe. Currently, they are entering the retail industry in Asia. In this study, the competitive advantage and strategic management of Tesco in Malaysia will be explored utilizing some concepts in strategic management such Porter’s frameworks and SWOT and industry analysis.  

An Overview of the Organization
The first Tesco Hypermarket was opened in 2002. This hypermarket is in Puchong, Malaysia. Tesco also opened two more stores in Malaysia with Sime Darby Network Corporation. Currently, Tesco, Malaysia profit is increasing and had profited more than $31 million. The suppliers of Tesco, Malaysia are mostly local suppliers, these suppliers understand the needs of the Malaysian consumers. Since the expansion is very fast in Malaysia, there will come a time that the supply chain of Tesco, Malaysia will be regional (2005)[TEO1]  Tesco, Malaysia manages 16 stores and provides work for 240,000 individuals worldwide. Over the precedent five years, the corporation has extended from its conventional Malaysian supermarket foundation into new nations, merchandise and services, as well as a chief non-food business, individual investment and internet shopping. The ever-increasing degree and internationalization of its sales and purchasing processes constructs a noteworthy involvement to its competence and productivity, as it make progress towards its long-standing goal of becoming a truly global retailer. In this apparently vast scope of Tesco in terms of human resource, it is important to have a strong leadership to apply an equally competent human resource scheme for its whole workforce (2005)  

            Tesco’s organizational structure serves to be aiming for the company’s missions and goals. Tesco has three committees, the Remuneration Committee, the Audit Committee and the Nominations Committee[TEO2] . Below is Tesco’s organizational chart of each stores.  

Mission, Vision, Objective and Industry Stage Life Cycle
                                                                                                                                The core objective of Tesco is to establish value for customers in order to gain their lifetime loyalty.  Tesco’s success depends on their valued customers. These customers shop and work with the company. Tesco’s principle is, if the customer likes what they offer, surely these people will come back and purchase again. The two core value of Tesco are: No-one tries harder for customers and Treat people as we like to be treated. (2005)  

            Tesco’s mission and vision shows that this company is really for quality service and values their customers (...
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