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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Excerpts Contd...
Store and Merchandise Management
A typical Tesco store in China occupied two floors, with the ground floor stocking food and the first floor stationing other items like clothes, consumer durables, and bicycles. A store in Shanghai had a parking lot that could accommodate around 400 bicycles, one of the most preferred modes of transportation in China...
Localization Strategies
As in its other international ventures, in China too, Tesco aimed at combining some of the core strategies of its UK and international operations and adapting them to local conditions. It was of the view that to succeed in any country, it was important to understand the local culture, habits, and customs and to modify the products and services accordingly. Leahy was of the view that a single top-down model would not work in any country and local people were necessary to understand and function in the local markets. In China, more than half of Tesco's senior management personnel were Chinese...
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The Challenges
According to the RNCOS market research report 2005, China's retail market was valued at around US$ 756 billion, with organized retail accounting for only 20% of the market. In 2005, China was the seventh largest retail market in the world, and by 2010, it was expected to rise to the fifth position, ahead of France and Germany...
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Exhibits
Exhibit I: Tesco - Store Formats
Exhibit II: Top Ten Grocery Retailers in the World (2006)
Exhibit III: Tesco Values
Exhibit IV: The Tesco Way
Exhibit V: Retail Industry in China
Exhibit VI: Regulations in the Retail Industry in China: Pre and Post
2004
Exhibit VII A: Carrefour in China
Exhibit VII B: Wal-Mart in China |
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