MANAGEMENT FOCUS ON TESCO

Q1. why did Tesco initial international expansion strategy focus on

developing nations.
ANS: Tesco looked for a location with few competitors in the grocery retailer area but due
to high growth potential, large size of customers , Tesco initial expansion strategy focuses
on developing country.

Q2. How does Tesco create value in its international operations?

 company attention is to transfer its core capabilities in retailing to its new ventures,
 company hires local managers
 company’s partnering strategy in Asia is a great asset
 company focuses on markets with good growth potential

Q3. 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 r the risks? How are those risks mitigated?
Tesco can 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. joint venture help Tesco to grow
faster, increase productivity and generate greater profits.

Q4. . 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?
Ans: Tesco believes that each market is unique and requires a different approach. one of
the reason Tesco enters the united states markets is because they want to build a brand for
Tesco. So, they made the decision . The United States is a different market because it is a
developed country and has many competitors in all its markets. The risk is that the United
States competitors will beat out Tesco.

Submitted by MUQADDAS ZUBAIR 32