Tesco Case Study

1020 words - 5 pages

Marilynn Black
Tesco Case
Ashford University
BUS620: Managerial Marketing (NAC1244A)
Dr. Susan Sasiadek
11/05/12

Tesco is one of the world’s leading retailers with over 2100 supermarkets, in Europe, US and South East Asia. The group has interests in grocery, non-food items, financial services and telecommunications. It is committed to reducing prices for customers and offering the best value. It seeks to help customers spend less. In 2007, sales were £42,633.4 (mill) and it experienced sales growth of 21.9%. Tesco has over 400,000 employees (Tesco plc, 2010).
Tesco Company has attributed an increase in performance and productivity to the use of this model (Tesco plc, ...view middle of the document...

Terry Leahy, CEO of Tesco plc states “there are many opportunities for business like Tesco as long as you stay close to customer and adapt to the changing circumstance” (ICSC Research Review, 2008).
Aggressive overseas expansion has helped to keep profits high. The organization has expanded into Eastern Europe, emerging nations such as China and South Korea and even the US, through mid market supermarkets known as, “fresh and easy”. Its strategy of being close to the customer has been assisted in the UK specifically, when Tesco developed different formats for shopping (convenience, metro, express, superstores). It has been the best retailer for format delivery and obtaining some of the best retail positions (Datamonitor, 2010).
F & E is getting an overdue makeover as it looks to expand its US presence and hit the 300-store mark (the break even point for their US venture) by spring 2013. It gained a first mover advantage when it launched Tesco.com, which is one of the biggest and most Tesco’s F & E was originally presented as a “top up” or “fill in” retailer that could satisfy consumer demand for trips where fresh foods like vegetables, fruit, and dairy items were needed during the week, but did not require a full shopping experience. This concept did not prove formidable for Tesco they found it hard to connect with US shoppers to form any level of loyalty. After its initial blunder and multiple years of huge financial losses, Tesco executives were not ready to give up as the US was too attractive of a market to do so. They altered their strategy starting with the appointment of a new CEO – Tim Mason. They halted new store openings and began listening to US consumers (Kaplan R. and Norton D, 2008). In January 2010, Tesco announced that it would be closing 12 stores due to poor performance. Tesco had gained key insights into what kind of store F & E was to become. They increased the number of...

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