Tesco's Experience in the Middle Kingdom


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Case Details:

Case Code : BSTR303
Case Length : 20 Pages
Period : 2002-2008
Pub Date : 2009
Teaching Note : Available
Organization : Tesco
Industry : Retail
Countries : China

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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.

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"China is a great place for customers and has a lot of competition. We hope our share is as good as that of our competitors."1

- Ken Towle, CEO, Tesco China, in 2007

"Tesco's entry is particularly ominous for Wal-Mart. Even though the company is not as big as Wal-Mart or Carrefour, it's proven it can successfully expand internationally, particularly in Eastern Europe, and in Korea where Wal-Mart's struggled."2

- Frank Badillo, Director, Global Research Program, Retail Forward Inc.,3 in 2006

Introduction

In March 2008, Tesco Plc. (Tesco), Britain's largest retailer, opened a convenience store at Shanghai, its first in China. Till then, Tesco had been operating only through hypermarkets in the country. By opening the convenience store - Tesco Express - Tesco tried to attract customers who still preferred the traditional wet markets4 for buying fresh food. According to Ian Longden, head, Tesco Express China, "We think we can create a new type of neighbourhood store in China by taking the guarantee of quality and consistency that a big western brand can bring and combining that with convenience and value for money."5

Tesco's Experience in the Middle Kingdom - Next Page>>

1] Liu Baijia, "Tesco Buying Big in China,"China Daily, February 08, 2007.
2] "Wal-Mart Hits a Wall in China,"www.nacsonline.com, January 16, 2006.
3] Retail Forward Inc. is a Columbus, Ohio-based firm that focuses on management consultancy, market research, and executive development.
4] In China, wet markets can be found all across the country. These markets sell fresh fish and seafood, chicken, fresh vegetables and fruits, generally in the open.
5] John Arlidge, "Tesco Express Rolls into China,"business.timesonline.co.uk, April 13, 2008.

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