Can Tesco expand and succeed in North America?

Type :

Case study

Pages :

30 pages

Format :

.doc

Published date :

05/17/2009

Category :

Business & market

Sub category :

Business strategy

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Summary :

Executive summary
Introduction to retail market
Tesco's international expansion
1. Entry methods
2. Business formats
3. International success
North American retail market
1. USA
2. Canada
3. Mexico
Tesco's differentiation from Wal Mart
Conclusion and recommendations
References
Appendix

Abstract

In the first part of this report we evaluated tesco's international expansion to date, taking their main global competitors into consideration. Results showed that tesco has one main strategy that they use to approach international markets. Although, the company uses a different entry method and business format for each new market. The main global competitor tesco faces is Wal-mart, Ahold, Carrefour and growing Lidl. tesco success is visible through their market leadership in Eastern Europe.

In the second part, we identified the most important barriers in the USA, Canada and Mexico that are quite similar and consist of competition in price, due to Wal Mart's monopoly. This factor also makes it control the whole north American retail market. Thus, it imposes on its competitors prices that are difficult to compete with, which make establishment more difficult (the lower costs of production and logistics have to be reached before entering the market if a firm wants to be able to compete). Otherwise, multilateral trade agreements like NAFTA changed a lot the three markets, making them turn on one another, and, consequently, making it more difficult for foreign companies to enter the market.

Finally, we highlighted how tesco can distinguish itself from the world leader Wal Mart in the region of north america. The north American market showed us there is a big influence of cultural diversity on the eating habits of American consumers. Therefore supermarkets such as Wal-Mart, have adopted their own way of selling their products to meet consumer needs. In order to compete with Wal-Mart, tesco needs to consider convenience stores instead of hypermarkets and also a pricing strategy to win the trust and confidence of new consumers.