Its founder, Jack Cohen, bought a small plot of land in North London with the idea of selling surplus groceries for a profit. In the s, supermarkets began to revolutionise the way people shopped, and Tesco initiated a massive expansionary strategy, opening stores throughout England. In the s, when competition in the industry was heating up, Tesco implemented several successful business strategies that effectively cemented its position at the top. What sort of marketing strategy did Tesco use?
Related Abstract This study explores the different theories of international entry strategies and then analyses the international strategy of Tesco Plc. Firms can enter the international markets through different strategies, including licensing technology abroad, direct investment acquisition, exporting, strategic alliance in foreign market and establishing joint ventures.
The findings of this study indicate that Tesco Plc uses international joint ventures, acquisitions and Greenfield investments to enter into foreign markets.
However, Greenfield investments have led to failures and as such it is recommendable that the company explores international joint ventures and acquisitions as part of its future entry strategies. Introduction International strategy is very important for all business organisations operating in the international market.
This is because the strategy plays an important role in determining the opportunities present in the international market and how to exploit them Hensmans et al. The supermarket chain has managed to expand its operations across Europe, Asia and North America with huge success.
This international expansion has affected all the facets of the company like business structure, financial status, corporate culture and organisational structure Ryans, This study looks at different international strategies, why they are important to Tesco Plc, related theories and their applications.
International Strategies The current business environment is very competitive and as such companies need to venture into the international markets in order to generate more profits Hitt et al However, choosing the right international strategy is never easy; whether it is licensing technology abroad, direct investment acquisition, exporting, strategic alliance in foreign market, or establishing joint ventures.
This study will focus on a few of these strategies that are of importance to Tesco Plc. These strategies are joint ventures, foreign acquisitions, and Greenfield investments. However the choice of the choice of international strategy is highly dependent on organisational resources, commitment and the extent of risk that it is willing to incur.
Joint ventures involve cooperation among different companies. These ventures are often disbanded once the project is completed.
Joint ventures can enable an organisation to market its products or establish its manufacturing plants in a foreign country with the assistance of the local foreign partners. These local partners equip the foreign organisations with the relevant knowledge on government regulations, workings, local markets and the available channels of distribution.
Joint ventures are ideal for Tesco Plc. In foreign acquisitions a foreign organisation acquires an interest in a local firm through foreign direct investment Hensmans et al In most cases foreign acquisitions occur only in proven markets after years of exporting or success experienced through existent joint ventures.
Once an organisation has obtained controlling interests, it attains full authority over policies regarding aspects like quality control, finance, production, marketing strategies and expansion programs.
Foreign acquisitions are ideal for Tesco Plc. The last strategy is Greenfield investment which is a type of foreign investment that entails investing in foreign markets by starting new subsidiaries and then fully owning them. This is a strategy that is suitable for Tesco Plc. Theories of International Strategies There are different theories that explain the reasons why an organisation opts to pursue a specific international strategy in a specific target market.
This is the reason why organisations pursue different foreign markets using different strategies depending on their unique characteristics Hitt et al These theories are monopolistic advantages, transaction cost, internalisation, strategic behaviour, internationalisation, bargaining and eclectic theories.
These theoretical perspectives at times hold divergent perceptions on the relative importance of the different factors that influence choice of entry into foreign markets.
The previous theories like that of Heckscher and Ohlin had restrictive assumptions on the immobility of the factors of production. Hymer argued that organisations could use their firm-specific advantages or monopolistic advantages that other organisations do not have to expand into foreign markets.
Therefore foreign direct investment was made possible by product and market imperfections. These market imperfections are structural and are as a result of control ownership advantages like proprietary technology, economies of scale, special access to inputs, product differentiation and gathered managerial expertise.
According to this theory, the direct investor is often a monopolist or an oligopilist in product markets. Therefore these organisations pursue market power and monopolistic advantages in the foreign markets leading to the increased growth of international trade.
This results to the growth of the firms as they increase their operations across the borders to take advantage of the existent opportunities. As the organisations increase their efficiency through internalisation of transactions, the vertical integration of operations across the world lead to efficiencies and economies that include long term contracts, opportunity to exploit tax differentials and better quality control.
Therefore firms move from exporting to foreign production as they continually gain international experience. This experience enables the firms to build their knowledge and developing deeper understanding of the foreign markets.
Therefore they weigh the costs of exchanging resources with the environment against the bureaucratic ones that arise from performing the same operations within the firm.2.
Functional areas in organisations. Functional area is a person, area or department which carries out a particular business function, for example, Administration, Customer Service, Distribution, Finance, Human Resources, ICT, Marketing, Sales, Production or Research and development.
In this assignment I am going to be looking at the roles of marketing in two contrasting organizations, Tesco’s and the Oxfam.
Tesco is a multinational food chain based in the UK and is the second largest retailer in the world after Wal Mart. OXFAM STRATEGIC PLAN, – 3 1. foreword Foreword 5 Oxfam has a vision: nine billion people will live equitably and free from the injustice of poverty, on a planet that has the natural resources to sustain them.
should underpin anti-poverty strategies in all countries. Investigating The Companies Of Tesco And Oxfam Business Essay. Print Reference this. Disclaimer: This work has been submitted by a student.
This is not an example of the work written by our professional academic writers. You can view samples of our professional work here.
evaluate Tesco practices and their marketing strategies to present that Tesco is a marketing oriented grocery retailers in.
The scope of this report includes listing and discussing about the methods on how grocery store such as Tesco targets their market’s consumers in Malaysia, positioning, environmental analysis of Tesco, marketing.
Materials such as direct marketing, one to one marketing and mass marketing are all strategies to enhance the effectiveness of a marketing plan. These marketing strategies can derive data the can be used in the development of a product or service, its distribution, customer relations and pricing.