CASE STUDY – TESCO STORES ADAPTS AS IT GROWS

I. Time Context

 1919 to present
 1947: Year incorporated

II. Viewpoint

 Tesco PLC (Tesco) is a retail company. It is a British multinational groceries and

general merchandise retailer with headquarters in Welwyn Garden City,
Hertfordshire, England, United Kingdom. It is the third-largest retailer in the
world measured by gross revenues and ninth-largest retailer in the world
measured by revenues. Originally founded in 1919 by Jack Cohen, the group has
more recently diversified both geographically and into other retail areas, such as
books, clothing, electronics and toys, as well as financial service and telecoms
and internet service subsidiaries. It has shops in seven countries across Asia and
Europe, and is the market leader of groceries in the UK (where it has a market
share of around 28.4%), Ireland, Hungary and Thailand. The Company is
engaged in the business of Retailing and associated activities (Retail) and Retail
banking and insurance services. The Company's segments include UK & ROI,
which includes the United Kingdom and Republic of Ireland; International, which
includes Czech Republic, Hungary, Poland, Slovakia, Malaysia and Thailand, and
Tesco Bank, which includes retail banking and insurance services through Tesco
Bank in the United Kingdom. The Company's businesses include Tesco UK,
Tesco in India, Tesco Malaysia, Tesco Lotus, Tesco Czech Republic, Tesco
Hungary, Tesco Ireland, Tesco Poland, Tesco Slovakia, Tesco in China, Tesco
Bank and dunnhumby. The Company's brands include Finest, Everyday Value,
Chokablok and Technika. Finest and Everyday Value are the two food brands in
the United Kingdom. The Company offers a range of personal banking products,
principally mortgages, credit cards, personal loans and savings.
(https://markets.ft.com/data/equities/tearsheet/profile?s=TSCO:LSE)

III. Statement of the Problem

A. What legal forms did Tesco adopt at different stages of its development?
 Sole trader
 Partnership
 Private Limited Company
 Holding Company
 Public Limited Company – provided capital for future growth
B. What strategies were used by Tesco to bring about growth?
 Acted as middleman
 Organic growth - growth fueled by private equity capital and retained
earnings
 Growth through acquisitions
  Going global

IV. Objectives
 Listen to customers throughout the company, at every level.
 Offer goods and services as the customer valued, not what Tesco could do.

V. Areas of Consideration (SWOT Analysis)

A. Strengths
- 3rd largest retailer in the world in terms of revenues
- The retailer has a stable and decisive corporate governance.
- Commitment to corporate social responsibility
- Ability to adapt to changing business needs
- Able to grow organically and through acquisitions
B. Weaknesses
- Dependency on the UK and European markets
- Some of the retail formats in certain countries have not performed as well as
expected, suggesting that TESCO might not have done as much market
research as they should have done.
C. Opportunities
- Strategic alliances with other brands and admired companies to offer more
products or attract more consumers in certain target markets.
- Grow online shopping as well as offer its home delivery service to more areas
- Enter joint ventures in other countries
D. Threats
- Fierce competition from Wal-Mart and Carrefour
- Need more innovation
- Economic recessions and credit crunches will continue to threaten market share
and profitability in areas around the world

VI. Alternative Courses of Action

A. Tesco had to adapt its stores to meet the needs of its customers.
B. Offering non-food products

VII. Recommendations
A. Innovate, innovate! There is a need to focus more on innovation in order to grow
more as a business.
B. Merge or form a strategic alliance with another company is a great way to
improve their services and overcome some of their weaknesses, especially in
overseas markets.

VIII. Conclusion / Action Plan

 A. Success in the retail industry is still dependent upon how well Tesco can meet the
customer needs. Management should stay focused on further diversification of
products in Tesco's primary UK market rather than on international expansion.
B. Expanding current marketing campaigns such as the “price match promise” to
cover these growing competitors.

References:
https://markets.ft.com/data/equities/tearsheet/profile?s=TSCO:LSE

https://businessteacher.org.uk/case-studies/tesco.php
https://coriolisresearch.com/pdfs/coriolis_tesco_study_in_excellence.pdf