Summary of the case study

• This case study tittle, “Fail! Tesco Strikes Out in the United States” is all about Tesco
entering into the U.S market
• Presents the former CEO’s vision in expanding the business to U.S
• The first stores in U.S. is named as Tesco Fresh and Easy
• Tesco had their own distribution network there.
• Tesco in U.S never met the market expectation, and thus Tesco incurred terrible loss
in United States
• Fresh and Easy was highly dependant of private labels such as Nature Way Foods
and 2 Sisters Food Group, based from U.K.
• Tesco’s around the world such as South Korea and JapanSouth Korea and Japan,
and its productivity.
Key Issues in Tesco United States of America

• Lack of research regarding consumers in US

• Over-ambitious goals by former CEO
• Entered market during economic downturn
Question 2: II) Which of the market-entry strategies
identified in the chapter was Tesco using in the united
states?
• Organic growth strategy
• Company used its own resources to
open a store on green-field site or to
acquire one or more existing retail
facilities from another company.
• Tesco raised eyebrows with an
ambitious plan to establish its own
distribution network.
• Tesco brought two suppliers across
the Atlantic: Natures Way Foods,
which specializes in salads, and 2
Sisters Food Group, a leading UK
poultry purveyor.
Question 2: II) Do you think this was
the appropriate strategy?
• Organic growth strategy is not an
appropriate strategy to enter the
market for Tesco
• US market was markedly different
from the various other markets
that Tesco had targeted in its spate
of increasing its international
presence
• Big players had already made
inroads into areas less explored
and didn’t leave any scope for
another player to start operations
Question 2: II) Do you think this was
the appropriate strategy?
• Buying practices of US customers were
markedly inclined towards brands and they did
not really care about proprietary products of
the retail companies
• Strategic alliances and partnerships with
existing retail companies in USA
• This would have given Tesco a necessary
exposure to the market conditions prevalent
at the time of entry and therefore give it time
and resources and all the local help required
to devise a suitable strategy for USA.
• Local expertise is a must in a mature market
because the new player must now eat into the
share of the existing players as there is not
much scope for the overall growth of the
market