Tesco's Experience in the Middle Kingdom


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Please note:

This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

Case Details:

Price:
Case Code : BSTR303 For delivery in electronic format: Rs. 300;
For delivery through courier (within India): Rs. 300 + Rs. 25 for Shipping & Handling Charges

Themes

International Business | Globalization Business
Case Length : 20 Pages
Period : 2002-2008
Pub Date : 2009
Teaching Note : Available
Organization : Tesco
Industry : Retail
Countries : China

Abstract:

The 2000s witnessed the entry of several international retailers into emerging markets. The reason for this could be as much attributed to saturated markets and cut-throat competition in developed countries as to the untapped opportunities in emerging markets. Tesco, the UK-based retailer, operated in several emerging markets in Europe and Asia. The case focuses on the entry and expansion strategies of Tesco in the Chinese market. Tesco made several international forays in the 1990s and 2000s. Tesco developed an international strategy that involved having consistent processes and policies while making localization efforts that took into account cultural differences and local preferences.

The Chinese retail sector offered huge opportunities for international retailers with the average annual growth in the last 20 years being around 15 percent. Tesco entered China in 2004, after several successful Asian ventures including Thailand, South Korea, and Japan. The Chinese market was a very different market in terms of tastes and preferences from the other markets that Tesco operated in. Therefore, it decided to enter the country through a joint venture so that it could learn about the market through its partner, which had operated in the market for several years. Also, by the time Tesco entered China, other multinational retailers like Wal-Mart and Carrefour were already well established in the market.

The case discusses how Tesco faced the challenges in an emerging market like China by adopting strategies to suit that market. Some of the strategies like entry and expansion strategies, store management, and localization strategies are dealt with in detail. The case ends with a discussion on the challenges that Tesco faces in the country.

Issues:


» Study and analyze the entry of Tesco in an emerging market such as China.

» Examine Tesco's expansion into China.

» Examine how Tesco implemented the localization strategies in China.

» Study how Tesco achieved a balance in implementing its global retailing best practices and localizing to suit the needs of Chinese customers.

» Examine the challenges faced by Tesco in China.

» Gain insights into the growth and development of the retail industry in China.

Contents:

  Page No.
Introduction 1
Background Note 2
Tesco's Global Operations and Strategy 3
Tesco Enters China 5
Expansion Strategies 7
Store and Merchandise Management 8
Localization Strategies 9
The Challenges 10
Exhibits 12

Keywords:

Globalization, entry, expansion, localization, promotion, pricing, Beverage market, coffee, China, Starbucks, Starbucks experience

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