Presentation on :
Paras Chamoli I Archit Dhasmana I Nancy Agarwal I Dhruv Gupta
Brief Overview
Founded: U.K. in 1919, TESCO is one of the
world’s largest retailers, employing around
500,000 people across 12 countries
Started international operations in 1979 and
65% of total retail space now located in Tesco plant in Bengaluru
countries like India, Ireland, Malaysia, South
Korea, Thailand, Czech Republic, Hungary,
Poland, Slovakia, Turkey and China
Their expansion in U.S. wasn’t a wise decision
and they were forced to move out after
operating for only 6 years because their
subsidiary “ Fresh & Easy” failed to meet the
Fresh & Easy forced to shut its
results operation in 2013.
Initial International Expansion:
Ireland France Hungary
•Global acquired in 1995, only
• After 60 successful stores in UK, • In 1992, TESCO acquired Catteau remaining operational international
Tesco’s 1st international venture in supermarkets expansion. TESCO got access to 26
Ireland in 1979 • Faced competition from local stores
• Analysts questioned the timing of the competitors like Carrefour and left •Despite cultural differences
move and said that TESCO should French market in 1997 between UK & Hungary, TESCO able
have focused on its domestic to adapt to local tastes, claiming 85%
business, after 7 years they pulled of its products as locally sourced
out from IRISH market •Followed by 2 more accusations in
• In 1997, TESCO entered Irish market Czech Republic and Slovakia where
again and it was a success due to their they still maintain their operations
international experience
First Successes
• In 1992, Tesco acquired Catteau supermarkets in France, but faced extreme competition from local competitors like
Carrefour and left the French market in 1997
• In Hungary, Global was acquired in 1995, which is the only remaining operational international expansion. Tesco got
access to 26 stores
• In spite of the clear cultural differences between UK and Hungary, Tesco was able to adapt to local tastes, while claiming
85% of its products as locally sourced
• This was followed by 2 more accusations in Czech Republic and Slovakia where they still maintain their operations
Continued Expansion
• Tesco has turned its attention to the fast-growing but challenging East Asian market. Expanding into the region
for the first time, in Thailand in 1998, Tesco followed its proven buyback approach by purchasing a 75% stake
in the Lotus distribution chain
• The 4,444 food retailers in Thailand have traditionally focused more on small retailers, but Tesco has sought to
change that model with the introduction of hypermarkets. After the hypermarkets were established, they also
opened a series of small convenience stores around the country
• Tesco entered the Korean market in 1999, then deviated from its usual strategy of acquiring existing
distribution chains and instead created a joint venture with South Korean giant Samsung, in which Tesco holds
81%
• The local knowledge Tesco gains from all of its acquisitions is priceless. it helps them a lot instead of
marketing the Tesco brand. This strategy has proven to be so successful that Tesco will follow the same
strategy when entering the Turkish market, acquiring the Kipa chain and continuing to operate under the name
"Tesco Kipa"
Marketing Strategies
Tesco’s Product Strategy
Tesco has grown significantly since its founding and now offers a wide range of products in
categories such as food, electronics, health, books, clothing, home and decor, parties and gifts,
sports and fitness equipment, beauty, jewelry, baby products, etc. It is clear that Tesco meets the
diverse needs of consumers across all segments and is a retail giant. Tesco has its own brands for
these categories, which are Tesco Loves Baby, Tesco Lotus, Tesco kipa, F&F Clothing, Tesco
Value, and more
Tesco’s Pricing Strategy
Tesco has an efficient supply chain network that allows it to take advantage
of economies of scale and offer products at the lowest possible prices.
Tesco doesn't compromise quality with price. They regularly get feedback
from consumers and try to cut extraneous expenses to keep prices low.
Therefore, Tesco follows a cost leadership strategy
Tesco’s Place and Distribution Strategy
• Tesco has over 6,900 stores in over 15 countries including the UK, Ireland, Hungary, Slovakia, France, Japan,
and more. Tesco has a variety of stores offering different products and services. Namely Tesco Metro, Tesco
Express, Tesco Extra and Tesco Superstore
• Tesco Hypermarkets are large supermarkets that sell groceries and a variety of non-food items. Tesco Metro
are smaller shops located in towns and city centers. Tesco Express is an even smaller store that mainly sells
high-margin products
• Tesco Express products are more expensive than other Tesco stores. Tesco Extra are large stores offering a
wide range of items, including groceries and general merchandise, allowing customers to complete all of their
usual purchases under one roof
Tesco’s Online Services and E-Commerce Strategy
• Tesco has a sophisticated online strategy that enables seamless digital shopping. Tesco's e-commerce strategy reflects
the brand's commitment to value and convenience. Website visits are just as effective as in-person shopping. Tesco's
website, like their stores, is easy to navigate
• Tesco's online business has performed very well over the years. As a result, the company's online sales jumped 15% in
Ireland and South Korea. Tesco also saw double-digit growth in the UK grocery market. Since 2010, Tesco has
continuously improved its online business to provide customers with an engaging online shopping experience
• Tesco has also launched Click and Collect services that allow its customers to shop online and collect them at any
store operated by Tesco. Tesco Direct also has an online platform that allows customers to purchase electrical
products, clothing and general merchandise
• Tesco App is also a huge success and essential for customers when making purchases and paying in person. The app
launched a great feature in 2020 that created a lot of buzz. They introduced the ability for customers to shop in-store
by simply scanning products as they make a purchase, through the app. Once completed, customers can simply pay
through self-service or checkout kiosks. And make the payment through the method of their choice. It turned out to be
extremely convenient and fast because people didn't have to queue for their turn
Challenges in USA
Nov 2007 first of Tesco’s Fresh & Easy stores opened in Hemet, California
In the first five months Sixty stores opened
By the end of the first year 150 Fresh & Easy stores opened across California
April 2009: Fresh and Easy reported close to $200 million loss
June 2009: Fresh & Easy stores were criticized for employing
only part-time workers and rejecting a request to recognize a
union
April 2011: Losses climbed to around $220 million
Jan 2012: 12 Fresh & Easy stores temporarily closed across
California, Arizona and Nevada because of weak local
economies
December 2012: Philip Clarke the new Tesco CEO announced
a strategic review of Fresh& Easy “with all options under
consideration”
April 2013: Tesco confirmed at a cost of around $ 2bn it will
cut its exposure to the US business Philip Clarke
The changes for the consumer included:
• Paying for itself as US consumers are known to have high service values and are used to people around them
packing their purchases and, in some cases, carrying them in their cars , which leads to the often-quoted saying:
"Not so fresh and easy”
• Offer small packages as US consumers are used to buying in bulk to save money
• Delivering British-style prepackaged meals is an unfamiliar concept to American consumers, whose only
experience is that 1950s 'TV' dishes have had a bad reputation and are not widely accepted. Today's consumers
prefer and slimming meals. The unfortunate timing of Tesco's launch to coincide with the subprime mortgage
crisis means that these meals will never top the shopping list of struggling families
• Food packaging is in shrink wrap, which means customers can't smell the fruit they buy or buy, like an onion.
This is due to a misconception regarding consumer concerns about health and hygiene
• Ordering all of their offers and coupons online instead of in-store is in stark contrast to the existing preference
of price-sensitive consumers to have such things available in stores. store
SWOT Analysis
• Largest supermarket chain in UK • Increase geographical
• Strong brand name and financial power spread makes focus
• Third largest retailer after WALMART on specific markets
Carrefour difficult
• International presence in 13 countries • Lack of experience in
• Better usage of technology in marketing
phone and insurance
and distribution
markets
• More dependency on
Strength WEAKNESS
UK market
• High transport
Opportunities Threats
• Strategic alliance with other Tough competition
companies from giants Walmart
• Online arena for selling and and Carrefour
marketing of products and service 2. Fluctuation in taxes
• Opening of new stores may impact the Tesco
financials
3. Innovation by other
super markets
