Case study

Group 5

Introduction
Founded

in 1919 by Jack Cohen Low price = bad image? New corporate strategy formed Largest retailer in the UK, with around 30% market share

Strength and development in the domestic market

The

Largest food Retailer in the U.K Heading almost 30 %share of market More than 2000 stores ranging from the extra hyper market style to small Tesco express high street outlets. UKs more valuable brands in 2008 Tesco net worth 8.6bn Sainsburys net worth 4.6bn Marks & Spencer net worth 3.9bn

Components of the business strategy

Operation

of a multi-format approach Building Tesco as a brand Coordinated business planning system Simplification of in-store systems Customer loyalty Efficient and well organized supply cycle

International Expansion
Expansion

international operations has been started since 2000

entry new countries substantial increases in the network and of sales in several markets

change

of format in development subsequent

Knowledge transfer
Increased regional sourcing capability Extend data sharing with major multinational suppliers Transfer of the multi-format approach Transfer of retail branding Centralize supply chains Move every day low pricing policy to international markets Transferring retailing services to the international markets Types of knowledge transferred

Developments in. Poland

1995 Acquired 36 small stores taking 98% share of the company. 2001 10 hypermarkets 2002 Acquired Dohle. Taking 13 HIT hypermarkets, doubling their numbers. 2004 Developed a multi format approach Distribution centre was opened.

 South Korea

1999 (May) bought 51% of the Samsung Corporation. $250 million. (June) totaled 89% ownership 2001 2005 -35 hypermarkets 2003 new formula for a more manageable store size Opened the first Tesco express most ethical company

 China
2004 50/50 joint venture with Ting Cao (now own 90%) 2005 15 stores Opened a distribution centre

Very fast Development

Happy to buy

Conclusions
Targeting the developing economies Enter into foreign markets through acquisition of smaller well established developments A quick development of a brand within the new market Management processes Local adaption

Discussion
What are the key components of implementing a strategy in the UK? Tesco enter new and developing economies, how have they made these risky ventures successful? Tesco has developed and grown incredibly fast throughout the world, in countries such as Indonesia, Pakistan and Turkey. With the fast developments has come a lot of controversy surrounding the Tesco brand and company ethics, do you think this has any bearing on the lack of Tesco stores in Scandinavia?