What are the keys to Tesco’s success in the competitive global retailing industry?
One of the leading retailers with over 2100 stores spread across US, Europe and South East Asia, Tesco deals in financial services, telecommunications, food items and grocery. Over years, Tesco has earned a good name for providing value for money to its customers. With its tagline- “Every little helps”, the company stands up to its commitment to foster good relations with not just customers but, vendors and distributors as well. The company’s assets are truly visible from its vision and mission. Some of the key reasons that contribute towards Tesco’s success include:
Having achieved the tag name of being one of the best supply chain in retail sector, Tesco stands as a powerful brand since 1919. It has earned a reputation for serving value to its customers and saving them as much money as possible. Tesco has also displayed good public relations and building a strong profile in the local market (Michael, E., 2007). The associations Tesco is linked with have come a long way in helping Tesco to explore new sectors and markets.
Tesco’s continuous efforts towards spreading its reach in the international market has always kept the company’s profits on a higher side. It’s efforts towards enhancing customer service has been highly appreciated and supported in UK specially, when Tesco strategized multiple formats to give customers an ease of shopping experience.
Another contributing factor is the wide range of products that Tesco offers. It has a list of its own labels too that help in strengthening profits for the group. The quality of customer service it provides is commendable and ensures extraordinary levels of customer satisfaction (Doggart, N., 2013).
Tesco’s innovative strategies to grab every new opportunity is another key factor that paved way for its success. Initially, the company started with selling only food items but as the environment of retail marketing changed, Tesco quickly adapted itself to new changes, eventually extending to selling electronic appliances, garments, financial services, internet services and a lot of other businesses too.
Which of the market-entry strategies identified in the chapter was Tesco using in the United States? Do you think this was the appropriate strategy?
Tesco entered the US market with a new concept – “Fresh & Easy”. However, efforts did not reap the desired results owing to mismanaged marketing strategies, a not-so-good customer service and limited cultural adaptation (Quo, L., 2013). Majorly, Fresh & Easy struggled to make profits. Tesco’s failure in its US venture can be attributed to its organic growth strategy which started with constructing their own new supermarkets in the US (Logan, J., 2009). Owing to the initial difficulty in entering into the retail market in a new country, the organic entry strategy proved to be a failure. Being super players in this industry in other countries, they should have opted for an acquisition strategy instead.
Currently, there are more than 100 Fresh & Easy stores being operated by Tesco in the United States. Although, Fresh & Easy turned out to be failure in the beginning, Tesco adjusted its strategies to appeal to the American market. It’s forceful price promotions and the approach to sell everything under $1 worked out in creating better opportunities later (Gilbert, J., 2014). However, Tesco’s US market still remains limited to mini neighborhood markets only.
References
Quo, L. (2013, September 11). Why the world’s third largest grocery conglomerate couldn’t make it in the US. Retrieved June 8, 2016, from http://qz.com/123247/why-the-worlds-third-largest-grocery-conglomerate-couldnt-make-it-in-the-us/
Logan, J. (2009, June). Tesco's employment practices in the USA (Rep.). Retrieved June 8, 2016, from http://laborcenter.berkeley.edu/pdf/2009/tesco09.pdf
Gilbert, J. (2014, July 4). Tesco’s Fresh & Easy Failure. Retrieved June 8, 2016, from http://www.theundergraduateexeter.com/2014/07/tescos-fresh-easy-failure/
Doggart, N. (2013, April 19). Why did Tesco fail in the US? Retrieved June 8, 2016, from http://opentoexport.com/article/why-did-tesco-fail-in-the-us/
Michael, E. (2007). International review of retail, Distribution and Consumer Research. [Review of the Book]. Determinant factors of failures in foreign markets, 12, 79-100.
