Doctor Name: Ahmad abu zied

Prepared By:
Omar Qudah, Farah Khasawneh, Duha Mousa

“Tesco PLC: Leveraging Global Knowledge”

Tesco Case Summary

1.1 Company Background

Tesco is the largest British retailer and is also the world’s third largest grocery retailer with
outlets across Europe, USA and Asia. The business began in 1919 with one man, Jack Cohen,
selling groceries from a stall in the East End of London; his first day’s profit was £1 and sales £4.
Jack bought surplus stocks of tea from a company called T.E. Stockwell. T.E. Stockwell and Cohen
combined their names to brand the tea Cohen originally sold – TESCO tea. In 1929, the first
Tesco store opened in north London.

Tesco has expanded since then by a combination of acquisition of new stores, retail services and
by adapting to the needs of consumers. Tesco’s primary aim is ‘to serve the customer’. Keeping
existing customers happy is important, as they are more likely to return. This is more cost
effective for the business than acquiring new ones.

In the UK Tesco now has over 2,200 stores ranging from the large Extra hypermarket style stores
to small Tesco Express high street outlets. Tesco’s original product range of grocery and general
merchandise has diversified to include banking, insurance services, electrical goods as well as
telephone equipment and airtime. This move towards ‘one stop shopping’ means customers can
meet all their purchasing needs from one place. Tesco has also expanded its customer base
through its Tesco.com website which attracts one million regular users.

Tesco announced record-breaking sales of more than £1bn a week and better than expected
annual profits of more than £3.4bn for the 53 weeks to 28 February 2010, despite the impact of
the global downturn.

- Tesco became market leader through improving operation such as distribution, marketing, land
acquisition and product innovation.

-Tesco gain high loyalty from the UK people through two languages that are (Treat people how
we like to be treated) and (Listen, support, and say thank you).

-Improving the language to be simple because of UK culture that have a lot of people from
foreign countries and increasing the number of stores to cover the urban and the capital.

- Tesco initiates a huge market campaign called Tesco Way and with Slogan of “Every Little
Help”.
1.2 International Experience

- Acquired S-market chain in Hungary.

- Found Local partner in Thailand (Tesco Lotus)

- Innovative partnership with Sam-Sung in South Korea.

- Use the strategy of ethnocentrically by replying home success and culture abroad.

The above strategy only worked with the less distinct culture but it was wrong with many places
such as:

1- France even it is in Europe and share the same culture but due to using the English language
in French this become as setback between channels.

2- Taiwan: Tesco focus in the britichness by displaying Union flags and beefeaters in front of the
store that lead to a disaster of 11 billion fail and to buy all the sites to the Carrefour competitor.

Tesco learned a strong lesson from the global expanding and realized the need of replacing the
imperialism strategy by the hard work and customer dedication strategy, Tesco started to hire
young people that work in stocking shelves and to move them to management after a period of
time since they will have a strong understanding about the customer behavior. Tesco used the
Practice of TWIST, which means that all the managers should work for a week in the stores to be
near the customer. In addition, this new strategy was very successful in Thailand, South Korea,
China, Malaysia and Japan.

Challenges faced Tesco in UK after focusing on global and losing the competitive advantage
there.

1- Identifying Global advantage of foreign subsidiaries.

2- Learning how to develop UK competitive advantage.

1.3 The Essence of Tesco Project

Two Strategies Applied:

1- Determine what was and wasn’t working

2- Compare the state with what evolved in Tesco Asian subsidiaries.

Actions:

1- Choose nine managers from ASIA subsidiaries.

2- Train the managers on the organization behavior, values and let them work for 3 months in
52 store across UK.

3- The managers found that the problem is in Tesco Uk that they does not take every
opportunity to make the customer experience as good as in Asia.

4- Start going face to face meetings.

Questions:

2-3 The United States and France are more culturally similar to the UK
than are Thailand and Malaysia, yet Tesco failed in the former two and
has been highly successful in the latter two. How might you explain the
difference?
Answer:

To be successful in any a country doesn’t mean you will succeed in another one with the same
approach

Tesco recognized that business approaches that were rewarding in the UK would only be
rewarding if they were given a local flavor. The organization learned that it was very important
to bring in local personnel. Also, in France, mature and fashionable customers did not like the
clothes styled in a typically British fashion, and also using the English language in France was one
of the reasons they fail. While in the United States, Tesco concentrated on precooked meals
(ready meals) that cost more as compared to ordering from a restaurant or cooking in home.
This was a pattern in Europe, but not in the U.S. and sadly they tried to introduce this concept
during the recession, when many people had time and little money.
2-4. what is the role of global teams in sharing best practices across a
firm’s global operations? What advice would you give to make the teams
more effective?

Answer:

When the employees came together, they enabled the business to achieve a deeper
understanding of products and services and how to make and deliver them, because of thier
diversified background, point of views, and experiences.

I want to advise a plan of cultural awareness and sensitivity training to make these teams more
competent, Because a lot of these teams come from diverse cultures, it may be hard for
individuals to communicate with each other.

2-5. Look at the Tesco PLC website (www.tescoplc.com). What exactly are
its businesses and what do you think this tells us about its international
strategy today?
Answer:

Originally a UK-based grocery retailer, tesco Core business is grocery retail and has other
business lines such as electronic, furniture, internet, financial services, and clothing.

This tells us that to succeed in the international market you should have multi different business
lines, and that that the core skills that you have learned in one place can be applied in others.
 2-6. How would Tesco’s business model translate into policies of
recruitment, training and development, and career management across
the Group?

Answer:

In order to boost the organization’s productivity, training and employee development programs
must be implemented because Staff development is commonly recognized as a strategic tool for
organization’s productivity, growth along with capability of maintaining the precious employees.
Also employee engagement helps to coordinate the employee's career objectives with the
strategic aims of the organization.

2-7. what cultural skill sets are needed for individuals from multiple
cultures to share best practices across the global group.
Answer:

1- Having very good communications

2- Learning foreign language.

3- Non-verbal skills in order to know other cultures.

4- Cross culture competence, this is the ability to understand people from different
cultures and to engage with them effectively.

2-8. what are some things an MNE can do to facilitate knowledge sharing
and global integration across its global businesses.

- managing organizational knowledge can create a cultural change and innovation by

encouraging the free flow of ideas
- Programs should be designed to help managers accept change and encourage new ideas
and this will often lead to innovation.