Texco Case Analysis

Case Analysis: Tesco
Background and History
Tesco Corporation is an international food and general merchandising retailer based in the United Kingdom. Tesco’s original formation began in 1919 by Jack Cohen peddling groceries in London’s East End.   World War I forced Cohen to look for alternate suppliers when food supplies were restricted and scarce, and as a result, he began to sell low priced groceries by buying damaged groceries and reselling them. Growth of Tesco took off as Cohen’s reputation as the low price leader began to spread across Great Britain. The Tesco name was officially formed in 1924 as a combination of the letters from TE Stockwell, a tea brand, and the first two letters of Cohen’s name. Growth was gradual through the 1950’s until Tesco began to acquire several small to mid-sized grocery chains, eventually owning over 800 stores by the end of the 1960’s. Change in ownership and successors brought about a new management and leadership strategy that changed Tesco’s original format of providing the lowest prices available. Tesco began their own labels for products with a range of low prices and high prices, generically named Value and Finest to represent their appeal to different market segments, affectively transcending across multiple markets and creating mass market appeal.
Although the grocery industry had grown at a phenomenal rate during the 1970’s and 1980’s, it had reached maturity during the 1990’s, with the market being effectively saturated by many competitors. Fortunately Tesco had branched out into many diverse industries by offering services such as banking, insurance, telecommunications, and financial services, to name a few.   They also branched out to offer retailing, DVD’s, music downloads, and software. Most of their industries are still saturated with many dominant companies holding fierce competition amongst the top market share holders. For the grocery industry, Tesco’s main competitors are Sainsbury and Wal-Mart.
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