Internationalisation and Tesco Into America
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Transcript of Internationalisation and Tesco Into America
STRATEGYBUS 322 By Thomas Cosser and Thomas Clark
Introduction Introduction
MethodsAdvantages Disadvantages Case Study Conclusion
What What
is Internationalisation?
are the advantages and disadvantages? in America
Tesco
Internationalization Introduction Methods Advantages Disadvantages Case Study
Company chooses to expanding into another country
StrategyPlans Advantages Disadvantages
Conclusion
Strategies Introduction Methods Advantages Disadvantages Case Study
Four
main different ones
International Multi-domestic
GlobalTransnational
Conclusion
(Hill 2011)
Strategy - considerations Introduction Methods Advantages
Entry method When Local laws Environment Networking and Research
Disadvantages
Case Study
Conclusion
Entry method Introduction Methods Advantages Disadvantages Case Study
Turnkey
Licence Franchising Joint
venture Wholly owned subsidiaries
Conclusion
(Hill 2011)
When? Introduction Methods
Risk
:
Advantages
Early learning, Late - saturated
Disadvantages Case Study
Conclusion
Local laws Introduction Methods Advantages Disadvantages Case Study
Import
laws Restrictions on ownership Deals with previous governments Types of products Product descriptions/advertising
Conclusion
(Freeman & Reid 2006)
Environment Introduction Methods Advantages Disadvantages Case Study
SWOT
analysis
Competition Local Local
needsvalues
Conclusion
(Asch & Bowman 1987)
Networking and Research Introduction Methods Advantages Disadvantages Case Study
Opportunities Mergers Internet
and partnerships
Conclusion
Introduction Methods Advantages Disadvantages Case Study
Advantages
Wider market Low cost production Secure suppliers Reduce reliance on one economy Value
Conclusion
Disadvantages Introduction Methods Advantages Disadvantages Case Study
Exposure
to risk
Communication Information
availability
Conclusion
Introduction Methods Advantages Disadvantages Case Study
Case Study Tescos What Is
In America
is their Strategy?
Conclusion
it Successful? are their future Plans?
What
Introduction Methods Advantages Disadvantages Case Study
Tescos The The
largest Retailer in the UK 3rd Largest retailer in the world
Became
International in 1995in 14 countriesRevenue for 2008500,000 400,000 300,000 200,000 100,000 0
ConclusionRevenue $ Millions
Operates
(Geoghegan 2011; Tesco PLC 2012a)
Introduction Methods Advantages Disadvantages Case Study
In America Is
known as Fresh and Easy its first store in 2007
Opened 164
Conclusion
stores in 3 States with 4134 employeesnever made a profit
Has
(Geoghegan 2011; Tesco PLC 2011)
Introduction Methods Advantages Disadvantages Case Study
Research Tescos Sent
spent 10 years Researching
people to live with families
Conclusion
(Geoghegan 2011)
Introduction Methods Advantages Disadvantages Case Study
Performance
Conclusion
(Geoghegan 2011)
Introduction Methods Advantages Disadvantages Case Study
Performance Losses
of 186million in the 20102011 financial year2008 16 2009 206 2010 349 2011 495
Conclusion
Year Revenue (million)
(Geoghegan 2011; Tesco PLC 2011)
Introduction Methods Advantages Disadvantages Case Study
Reasons Exchange Merger
rate Issues
of 2 Suppliers
Conclusion
Strategy Brand
Recognition
(Geoghegan 2011; Tesco PLC 2011)
Introduction Methods Advantages Disadvantages Case Study
Fresh and Easy
Conclusion
(Freash and Easy 2012)
Introduction Methods Advantages Disadvantages Case Study
Fresh and Easy Wholesome
food that does not cost your whole pay check
Simplicity Environmental
Conclusion
considerations
(Fresh and Easy 2012; Geoghegan 2011; Tesco PLC 2012b)
Introduction Methods
Greenfield Investments Solar High High
Advantages Disadvantages Case Study
powered stores Capital Costs
Conclusion
Risks
Introduction Methods Advantages Disadvantages Case Study
Issues
The convenience market is saturated Lack of Brand Recognition Not the same amount of customer data in the US Exchange Rates Issues with Unions
Conclusion
(Geoghegan 2011; Tesco PLC 2011; Fresh and Easy 2012; UFCW 2008)
Introduction Methods Advantages Disadvantages Case Study
Union United
Food and Commercial Workers international Union Differently in the UK to
Operating
in the US
Conclusion
Protests
outside stores
(UFCW 2008)
Introduction Methods Advantages Disadvantages Case Study
Future Expecting
to Break even by 20122013 Financial year
Will
have 300 stores by this timeof Friends of Fresh
Conclusion
Development
and Easy
(Tesco PLC 2011; Fresh and Easy 2012)
Introduction Methods Advantages Disadvantages Case Study
Conclusions Advantages Entry
and Disadvantages
Method
Conclusion
Tescos Wholly
is Multi domesticOwned Subsidiary
References
Asch & Bowman (1987): Strategic ManagementI.1st Edn London Deloitte (2009). Emerging from the downturn Global powers of 2010 [online] Available at: http://www.deloitte.com/assets/Dcom-Australia/Local%20Assets/Documents/newsresearch/Press%20releases/Global%20Powers%20of%20Retailing/Global_Powers_of_Retailing _2010_report.pdf (Accessed on 6th of February 2012) Freeman & Reid (2006): Foreign Market-Entry into Central and Eastern Europe. Journal of East-West Business Fresh and Easy. (2012). Who We Are [online]. Available at: http://www.freshandeasy.com/WhoWeAre.aspx (Accessed on 4th of February 2012) Geoghegan. T (2011). Why is Tesco Struggling in the US? [online]. Available at: http://www.bbc.co.uk/news/magazine-13190124 (Accessed on 3rd February 2012) Hill (2011): International Business, Competeing in the Glocal Marketplave. 8th Edn. NewYork Tesco PLC (2012b). United States [online] Available at: http://www.tescoplc.com/corporateresponsibility/our-approach/local-community-activity/#mapoverview (Acccessed on 3rd of February 2012) Tesco PLC (2012a) Our Strategy [online]. Available at: http://www.tescoplc.com/abouttesco/our-strategy/ (Accessed on 6th of February 2012) Tesco PLC (2011). Annual Report and Financial Statements 2011 [online] Available at: http://www.tescoplc.com/media/417/tesco_annual_report_2011_final.pdf (Accessed on 3rd of February 2012) UFCW. (2008). The Two Faces of Tesco [online]. Available at: http://www.ufcw.org/docUploads/The%20Two%20Faces%20of%20Tesco.pdf?CFID=13562326 &CFTOKEN=94288421 (Accessed on 7th of February 2012)
Any Questions?