Tesco’s Global Expansion and Corporate Strategy

Introduction

Tesco plc is a multinational grocery store originated from British. Tesco general merchandise retailer headquartered located in United Kingdom. It’s the third-largest retailer in the world as we measured according by revenues its stand after Wal-Mart and Carrefour and is the second-largest if we calculated profits then, its stand after Wal-Mart. Tesco deals in approximately 14 countries across Asia, Europe and North America and is the grocery market leader in the UK and capture the 30% market share, Malaysia, the Republic of Ireland and Thailand.

The reason Tesco increase their growth rapidly is increasingly diversified geographically and into areas such as the retailing of books, clothing, electronics, furniture, petrol and software; financial services; telecoms and internet services; DVD rental; and music downloads. Tesco’s corporate strategy In behind every successful industry they have their own strategy. That strategy will be their core of the business and industry. Tesco also has its own strategy. Tesco is using its own brand product everywhere and selling with cheap rate.

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Another important part of their strategy is the use and innovation of new technologies. They are the first to introduce self billing and use camera to reduce theft. Reason’s Tesco choose India, Marketing Opportunities of Tesco in India Tesco has had a limited presence in India with a service centre in Bangalore. As part of their internationalization Tesco is planning to implement their full presence in India. Tesco is planning for opening a wholesale cash-and-carry business in the biggest commercial city of India, Mumbai.

Tesco will start its operation by joining with the Tata, one of the giant business groups in India. Factors Tesco has chosen India to start their new business Rising Income In India people with high income have a tendency to use new taste and prefer brand new items. So here Tesco have a wide opportunity because Tesco sell their own product with their label and is not available elsewhere in India. So as a new comer with branded products Tesco will have a good opening in market. So rising income is an important factor of their opportunities. Liberalization of Indian Economy

This is also an important opportunity of Tesco in India. They can invest large amount to attract the consumer mind by giving a variety of goods. Foreign direct investment is also a great factor that helps Tesco. Indian government is supporting FDI because it provides huge profit and development for the country. So Tesco can utilize this chance and can get a good opportunity in India (Accessed from report of Corporate Catalyst India). High population growth and suitable places Another opportunity which is in front of Tesco is the large population in India and the metro cities.

There are a lot supermarkets and retail outlets in India and are making huge profits. But the customer satisfaction guaranteed by them is low. Here Tesco have a good opportunity when they are using a core strategy to attract customers into their outlets. Cheap labor with high qualified personal India is a country with high population. So there is no much strain for Tesco to rent a labor. They will get skilled and educated labor because India has a wide labor pool range with cheap wages. Skilled workers are needed for retail industries.

So Tesco can choose the skilled workers through agency. This is also an opportunity for Tesco for operating in India. All in One This is the main opportunity of Tesco in India. By the term ‘All in One’ it means that people can shop everything they want from Tesco itself. There is no need for them to go to different shops for purchasing. People can save time by purchasing in Tesco. If Tesco can exploit this opportunity very well they will be the market leaders in India. (Anjana (2010); ‘Business India Retail Market Overview’) Developed technology and Infrastructure

India is a country with high technology and infrastructure. So Tesco can utilize easily all the technologies and infrastructure they require when they start their production in India. Technology is also the key variable that which has direct influence in the supply chain, operation and process of grocery and food retailers. Newer technologies like selecting products through mobiles can also attract customers as it can save their time. (Ben; ‘PEST analysis of Tesco in UK’) Difficulties and hurdles Tesco has faced when starting its business in India

The main problem TESCO has faced is the criticism by the Indian Population. If we consider most of the population in India is middle class and most are in the business of retailing in small levels so they have the fear that when such a multinational start its operation in India then there business will destroyed so they were against of it by this behavior of People the political opposition parties take this issue in headlines strikes are called by this all the planning of TESCO is changed according to the environment change so Tesco have to reschedule its planning.

The other problem is that religious issue is also come into existence which is animal welfare. The other main reason is the Foreign Direct Investment Policy regarding Retailing in India which is:

• FDI up to 100% cash and carry wholesale
• FDI is not permitted in Multi Brand retailing in India The other factors which effect are the
• Unstable environment As Indian financial position or economy not remains the same all the time, other than that there is Political instability, by which rules and regulation change rapidly.
• A lot of political pressures

This creates in this sense that in India there are many casts and religion one party is in favor of one cast and vice versa. The party which is ruling has pressure on such stores and multinational companies to follow their customs and deals with there peoples.

• Culture diversity
• Difficulty to understand the Indian market
• High risk of failure
• Indirect access to market figures.

Etc Hurdles in live streaming NO TESCO’S HERE! Shops and schools were forced to close during demonstrations against a government decision to open India's retail market to foreign companies such as Tesco and Wal-Mart.

The partly successful national strike saw protesters burn effigies of Prime Minister Manmohan Sing and holding signs reading ‘Go Back Wal-Mart’ whilst disrupting train services, blocking the tracks. A key partner in India's ruling coalition has withdrawn support from the government and said its ministers would resign in protest over a plan to allow foreign retailers such as Tesco into the country. "Our ministers will go to Delhi to resign. We will not stay in UPA II," the head of the regional Trinamool Congress party, Mamata Banerjee, told reporters, referring to the ruling coalition led by the Indian National Congress party.

The withdrawal of Trinamool, which is staunchly opposed to a move to allow foreign supermarkets into the retail sector, leaves the government weakened and dependent on outside support to pass legislation, AFP reported. The reforms unveiled by Prime Minister Manmohan Singh last week include allowing in foreign retail giants such as Walmart and Tesco, as well foreign airlines, and included a 12% hike in the price of subsidised diesel. Opposition Role and Benefit The opposition parties protested against these measures with a nationwide strike.

More damaging for the government is the decision of the Trinamool Congress, headed by the chief minister of West Bengal, Mamata Banerjee to pull out of the government, with its ministers to resign. The popular anger against the rise in diesel prices is easy to understand – Indian prices of this essential fuel are already among the highest in the world. This increase will affect all other prices, raising farmers' costs and causing already high food prices to soar.

If the government is really concerned with controlling inflation, this is a foolish and unjust measure, bound to cause further inflation without delivering much in public savings. Against to it Indian Prime Minister Manmohan Singh has said the reforms would "help strengthen our growth process and generate employment in these difficult times". While opposition neither criticizes nor will food inflation is brought down by this measure – certainly not immediately, or even in the medium term.

Distribution margins in India are quite low precisely because the various levels are so highly competitive – and if they are to be improved, that is best done through public investment in cold storage and efficient transport, as well as by encouraging co-operatives. The employment impact is likely to be very negative. The retail trade in India employs about 40 million – mostly very small-scale traders who are largely self-employed, who would not be able to compete with large organized corporations.

It has been estimated that one Wal-Mart can displace up to 1,400 small stores, costing around 5,000 jobs. Since Indian growth has been mostly jobless already, this is obviously a huge concern. So the hue and cry about opening up retail trade in India is hardly surprising. What is more surprising is the government's insistence on pushing through this relatively minor "reform" barely a month after it had promised parliament it would do so only by consensus. The entire episode speaks of a tired regime that has run out of ideas.

The party, which has been extremely critical of the reform package, postponed a meeting it had called for Thursday evening to determine its next step. Top ministers downplayed any talk of a teetering government. 'We have enough friends today, we had enough friends yesterday ... So I don't see any reason why you should doubt our stability," Finance Minister Palaniappan Chidambaram told reporters. In Uttar Pradesh and Bihar, protesters blocked railroad tracks. Some held up placards reading 'Go back Tesco' a reference to the U. S. retail giant expected to enter the Indian market under the new regulations.

By use all of these issues the opposition parties want to take out the advantage and by demolish this government they want to create out their own government. Conclusion Although Tesco is doing well in all of the territories, But in India Tesco can be failed because India is too much emotionally involved with its cultural and economical perspective. Traders and retailers of India will not easily accept it which could become and unfavorable loss for Tesco. People are not adopt to change there but once Tesco start its operation fully as Tesco is signing contract with Tata slowly this impact will change the environment.

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