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    16 views1 page

    TESCO WK 5 Case PDF

    Uploaded by

    shikha khaneja

    Copyright:

    © All Rights Reserved
    Download as PDF or read online from Scribd
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    of 1
    Major supermarket chains are a global phenomenon. In ‘Australia, Coles and Woolworths control around 80 pet cent of the matket and are among the 20 biggest retellers in the warld, having thrashed the competition for over @ eneary. However, they are dwarfed by Tesca Tesco PLC is the world’s third-largest retailer, fact that suggests its ability t0 compete successfully against companies both in the UK Gis home mare) and throughout the world. However, che’ firms recent competitive strugles, both Goinestcally and globally appear to highlight the fact that, as noted in Chapter 1, no company’s success at a point in dime guarantees its future success. ‘So what are some descriptots of the situation Tesco encountered? From’a financial perspective, the firin reported « decline in profits in 2012 for the first ime in apptoximately two decades. In 2013, Tesco closed its Fresh & Easy stores in the USA and also took a writedown of £804 million to reflect the then-current value of its UK properties, In all, Tesco wiote down the value ofits global operations by USS3S billion in 2013, (This global ‘writedovin accounts for the frmls troubled operations in countries such as Turkey, China aind India as well as the ‘losing of ts US operations) "Another isste is that revenue has bech declining in ‘Tesco home market, where the company still generates roughly two-thirds of its sales and profits, Part of the reason for the’ revenue decline is related to customer service, as suggested by the fact that the results from'a survey of UK consumers a few yeats ago ‘found that despite £1 billion of investment in the UK. in FY2012/13, customer perceptions of Tesco’ quality prices, promotions and overall value for money had all deteriorated quarter on quarter and year on yea? In light of these results, the firm tooka numberof actions, including adding more and betterttained staff members in its stores, sfurbishing those stores, and zevamping its product lines and the pices it charged for thet. Revamping product lines ard changing the prices charged for items are tactical actions. In. contrast, centering the US market with the Fresh & Easy concept ‘was a strategic action (strategic and tactical actions and responses ate defined Istr inthis chapres). On the surface, entering the large US market seems to be @ reasonable ‘course of action for a successful global retailer co tae. As isoften the cage, though, execution ofthat strategic action appears to be where problems were encountered. Fresh & Easy stores were sized to be handy neighbourhood stores such a those found is’ many European cities. This did rnot appeal to American’ consumers, a5 suggested by an analyst: My senses that what chey tried todo was make 8 European model. Europeans tend to make more frequent tips to grocery stores, maybe every day or every other day, where Americans are used to going for bigger tips less frequently’ Additionally products carried in stores located in different pats of the USA were not customised to any degree, meaning thatthe potentially unique needs of any local consumers who might choose to shop daily ‘were not being identified and satisfied. ‘Tesco has taken additional strategic actions as part of its curtene array of competitive behaviours. For exemple, itis taking postions in other companies for the purpose of being able to turn their stores into compelling retail destinations for customers. “vestments in the Harris 6 Hoole coffee chain, working with the Euphorium bakery brand in London and acquiring the Giraffe restaurant hain’ are examples of the competitive behaviour Tesco has

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