This case study focuses on Tesco’s expansion plan and its entry strategy in the U.S. which places it directly against competitor and retail giant Wal-Mart.
Tesco in US Retail Market
UK’s largest retailer Tesco and one of the top supermarket operators in the world, plans to open a thousand-strong chain of discount stores in the US. Tesco plans to invest more than $250m (£120m) [$2.5 billion over the next five years] in its US business launch. This expansion plan and entry strategy places it directly against competitor retail giant Wal-Mart. Many UK retailers have found it difficult to survive or compete in the US retail market. The US retail market is most competitive in the world, a fact well-known to British retailers Sainsbury’s and Marks & Spencer which failed to attract US customers.
Case Study Contents
Introduction – Tesco in US Retail Market
Tesco – Company Background and Timeline
TESCO at a Glance
Localization Strategy – Tesco in South Korea
Tesco’s Business Strategy in the US – Healthy food, No waiting
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This case study covers the following issues:
Assess Tesco’s globalization strategies
Examine and analyze the entry and expansion strategies of Tesco in US
Study how Tesco localized its retail practices in US
Understand Tesco’s efforts to integrate its global best practices with local strategies in US
Case Study Keywords: Tesco, Globalization Strategy, Localization Strategy, International Business, International Expansion and Entry Strategies, Retail Store Formats, supermarkets
The world’s third-largest retailer: Tesco is the world’s third-biggest retailer by sales behind U.S. retail chain Wal-Mart Stores Inc. and French retail chain Carrefour SA.
Tesco has 4,331 stores worldwide. In 14 countries, Tesco employs 470,000 people. (Jan 2010 figures)
Top five supermarket groups in the U.K. – Tesco, Asda, Sainsbury, Morrisons and Co-op/Somerfield. These five groups have around 85% of grocery retail in the U.K. market.
Tesco’s market share in U.K. – Tesco has approx 30% market share of British grocery retail
By September 2009, Tesco had around 126 stores open in the U.S.
Tesco’s U.S. operations (Fresh & Easy) reported a GBP85 million trading loss in the first half of the year (six months to August 31, 2009).
A report on European Retail Forecast by RetailNet Group (RNG) indicates that, by 2014 the top 15 European retailers would capture 66% of retail sales growth (from 43% in 2009). The report covers more than 200 major retailers, 880 store banners (more than 2,12,000 stores) from more than 41 countries and includes major retailers Wal-Mart, Tesco, Aldi and Carrefour. These retailers account for over 47% of all retail sales across Europe.