1. Why did Tesco’s initial international expansion strategy focus on developing nations?
They were looking for an area where there were few capable competitors but strong underlying growth trends.
2 .How does Tesco create value in its international operations?
First , the company devotes considerable attention to transferring its core capabilities in retailing to its new ventures, 2) the company hires local managers and support them with a few operational experts from the United Kingdom, 3) the company’s partnering strategy in Asia is a ...view middle of the document...
3. In Asia, Tesco has a long history of entering into joint venture agreements with local partners. What are the benefits of doing this for Tesco? What are the risks? How are those risks mitigated?
Tesco is able to share ideas and use ideas from the Asian companies. The risk is that the companies involved could pull out, steal Tesco ideas, or fail and leave Tesco with debt. The risk is mitigated by Tesco being involved only 50/50.
4. In March 2006, Tesco announced that it would enter the United States. This represents a departure from its historic strategy of focusing on developing nations. Why do you think Tesco made this decision? How is the U.S. market different from others Tesco has entered? What are the risks here? How do you think Tesco will do?
.Tesco observed how it competed with Wal-Mart in the United Kingdom and made an analysis that it would do just as well in the United States. The breakeven analysis would be achieved by the second year and the market in the United States has not seen a model like Tesco’s format. The United States is a different market because it is a developed country and has many competitors in all of its markets. The risk is that the United States competitors will beat out Tesco. I think Tesco will do very well.