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    Tesco is a large British grocery retailer that has expanded internationally. It entered new markets by acquiring existing grocery chains starting in 1995 in Hungary. By 2017, Tesco operated in 13 countries, generating $21 billion in annual sales outside the UK. Tesco's international expansion strategy involved entering emerging markets in Eastern Europe and Asia with few competitors, then pursuing a combination of acquisitions and partnerships to establish operations in countries like Poland, Czech Republic, Slovakia, Thailand, South Korea, Taiwan, Malaysia, Japan, and China. Tesco's success internationally was attributed to applying its competencies in marketing, logistics, and private label products globally.

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    Tesco is a large British grocery retailer that has expanded internationally. It entered new markets by acquiring existing grocery chains starting in 1995 in Hungary. By 2017, Tesco operated in 13 countries, generating $21 billion in annual sales outside the UK. Tesco's international expansion strategy involved entering emerging markets in Eastern Europe and Asia with few competitors, then pursuing a combination of acquisitions and partnerships to establish operations in countries like Poland, Czech Republic, Slovakia, Thailand, South Korea, Taiwan, Malaysia, Japan, and China. Tesco's success internationally was attributed to applying its competencies in marketing, logistics, and private label products globally.

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    Tesco is a large British grocery retailer that has expanded internationally. It entered new markets by acquiring existing grocery chains starting in 1995 in Hungary. By 2017, Tesco operated in 13 countries, generating $21 billion in annual sales outside the UK. Tesco's international expansion strategy involved entering emerging markets in Eastern Europe and Asia with few competitors, then pursuing a combination of acquisitions and partnerships to establish operations in countries like Poland, Czech Republic, Slovakia, Thailand, South Korea, Taiwan, Malaysia, Japan, and China. Tesco's success internationally was attributed to applying its competencies in marketing, logistics, and private label products globally.

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    Download as docx, pdf, or txt
    39 views2 pages

    Attachment 1

    Uploaded by

    Davyie
    Tesco is a large British grocery retailer that has expanded internationally. It entered new markets by acquiring existing grocery chains starting in 1995 in Hungary. By 2017, Tesco operated in 13 countries, generating $21 billion in annual sales outside the UK. Tesco's international expansion strategy involved entering emerging markets in Eastern Europe and Asia with few competitors, then pursuing a combination of acquisitions and partnerships to establish operations in countries like Poland, Czech Republic, Slovakia, Thailand, South Korea, Taiwan, Malaysia, Japan, and China. Tesco's success internationally was attributed to applying its competencies in marketing, logistics, and private label products globally.

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    of 2

    Assignment 2

    )Individual(

    Course: MGMT 401 Global Business Total Marks: 5

    Date Published: November. 5, 2021 Deadline: Friday Nov. 12, 2021

    Submission: Online (Blackboard)

    Read the following case carefully and answer the questions that follow:

    Tesco’s International Growth Strategy

    Tesco, founded in 1919 by Jack Cohen, is a British multinational grocery and merchandise
    retailer. It is the largest grocery retailer in the United Kingdom, with a 28 percent share of the
    local market, and the second-largest retailer in the world after Walmart measured by
    revenue. In 2017, Tesco had sales of more than .62 billion ($70 billion U.S. dollars), more than
    480,000 employees, and 6,553 stores in 13 countries.
    In its home market of the United Kingdom (with a headquarters in Chestnut, Hertfordshire,
    England), the company’s strengths are reputed to come from strong competencies in
    marketing and store site selection, logistics and inventory management, and its own label
    product offerings. By the early 1990s, these competencies had already given the company a
    leading position in the United Kingdom. Tesco was generating strong free cash flows, and
    senior managers had to decide how to use that cash. One strategy they settled on was
    overseas expansion.
    As managers looked at international markets, they soon concluded the best opportunities
    were not in established markets, such as those in North America and western Europe, where
    strong local competitors already existed, but in the emerging markets of eastern Europe and
    Asia, where there were few capable competitors but strong underlying growth trends. Tesco’s
    first international foray was into Hungary in 1995, when it acquired an initial 51 percent stake
    in Global, a 43-store, state-owned grocery chain. By 2017, Tesco was the market leader in
    Hungary, with more than 200 stores and additional openings planned, accounting for 1
    percent of the whole economy of Hungary!
    A year after the Hungary expansion, Tesco acquired 31 stores in Poland from Stavia. The
    following year, in 1996, Tesco added 13 stores that the company purchased from Kmart in the
    Czech Republic and Slovakia; and the following year it entered the Republic of Ireland. Tesco
    now has more than 450 stores in Poland, some 80 stores in the Czech Republic, more than
    120 stores in Slovakia, and more than 100 stores in Ireland.
    Tesco’s Asian expansion began in 1998 in Thailand when it purchased 75 percent of Lotus, a
    local food retailer with 13 stores. Building on that base, Tesco had more than 380 stores in
    Thailand by 2017. In 1999, the company entered South Korea when it partnered with
    Samsung to develop a chain of hypermarkets. This was followed by entry into Taiwan in 2000,
    Malaysia in 2002, Japan in 2003, and China in 2004. The move into China came after three
    years of careful research and discussions with potential partners. Like many other Western
    companies, Tesco was attracted to the Chinese market by its large size and rapid growth. In
    the end, Tesco settled on a 50–50 joint venture with Hymall, a hypermarket chain that is
    controlled by Ting Hsin, a Taiwanese group, which had been operating in China for six years.
    In 2014, Tesco combined its 131 stores in China in a joint venture with the state-run China
    Resources Enterprise (CRE) and its nearly 3,000 stores. Tesco owns 20 percent of the joint
    venture.
    As a result of these moves, by 2017 Tesco generated sales of about $21 billion outside the
    United Kingdom (its UK annual revenues were roughly $41 billion). The addition of
    international stores has helped make Tesco the second largest company in the global grocery
    market behind only Walmart (Tesco is also behind Carrefour of France if profits are used). Of
    the three, however, Tesco may be the most successful internationally. By 2017, all its foreign
    ventures were making money.

    Questions:

    Q 1: Explain the factors that enable Tesco to create value and generate profit in its
    international operations? (refer to chapter 13 in answering this question). (2 marks)

    Q2: Based on what you studied in chapters 15, classify the global expansion strategies used
    by Tesco in each country (Hungary, China, Thailand, etc.). (2 marks)

    Q 3: Do you expect that the success of Tesco will continue if it enters in Middle East
    countries like Saudi Arabia? Justify your answer. (1 mark)

    Instructions:

    a. Write the answers in your own words. It’s an online submission through Trunitin that
    detects the plagiarism automatically and generate a report. A plagiarized work will get a zero
    grade.

    b. Write in detail and explain your answer clearly.

    c. System will not allow late submissions. Therefore, you must submit before the deadline.

    d. Writing Guidelines: Paper size: A4, Line Spacing:1.15, Margins: 1” (inch) or 3 cm all sides,
    Font: Times New Roman, Font Size: 12 for text and 14 for heading; and overall good
    presentation

    e. The assignment should have a nice front page containing all the required information such
    as; Course name, title of the assignment, name, ID, and section number of the student.

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