Eric Geffre

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Presented by Eric Geffre Mitch Hughes Wenshu
Wang Mengqiu Yan
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Agenda

• Company Analysis-Mengqiu
• History-Mitch
• Competitor Analysis-Wenshu
• SWOT Analysis-Mengqiu
• Industry Analysis-Mitch
• Global operations-Eric
• Recommendations-Eric

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Company Analysis

• 2,800 branch stores across 14 countries and
  regions
• Non-food products
• Sports equipment, kitchen utensils, etc.
• Own label products (ex. Cherokee)
• E-commerce business (Tesco.com)

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Tesco cont.,

• 5 types of stores in the UK
• Tesco Extra Stores
• Tesco Stores
• Tesco Express Stores
• Tesco Metro Stores
• One Stop Stores
• Tesco is mainly in the form of joint ventures
  outside UK

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Tesco History

• Founded in 1924 by Jack Cohen
• Opened small store in Edgware, London
• National food store chain in the 1970s
• Took over 40 Hillards supermarkets in 1987
• Surpassed Sainsbury to become largest UK retailer
  in the 1990s
• Now worlds 3rd largest grocery retailer and 59th
  on Fortunes global 500

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Competitor Analysis

• Wal-Mart
• Carrefour
• Metro AG
• Small local retailers

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Wal-Mart

• In 1962, Sam Walton, in the USA.
• Largest retailer in the world 6,796 stores in 14
  countries.
• Always Low Prices
• In 1999, ASDA ( the second, in the UK)
• In 2007, bid for the Sainsbury( the third, in the
  UK)
• Tescos Fresh Easy in the USA

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Carrefour

• In 1959, Marcel Fournier and Louis Defforey,
  France, crossroads
• High-Low Price, hypermarket
• NO.1 in Chinas market

Tesco
Carrefour
11 stores in Czech Republic 4 stores in
Slovakia
6 stores in Taiwan 57.4 million
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Metro AG

• In 1964, Otto Beisheim, Germany
• Cash Carry, commercial customers
• Bad performance in Chinas market
• No.1 in Eastern Europe market

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Small Local Retailers

• Daily grocery
• Popular in Asia, especially in China
• Example Seven-Eleven

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A small shop in Korea
A small shop in China
Seven-Eleven in Japan
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Strengths

• Strong brand image
• good, better, best
• Partnership strategy
• As a partner with Le Gou in China
• Customer service
• Every little helps
• Clubcard
• Performance of Tesco.com
• Largest online food market

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Weaknesses

• High dependence on UK
• 76 of total revenue from the UK market
• Low returns

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Opportunities

• Green Consumption
• Low carbon economy
• Renewable materials
• Non-food market

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Threats

• Intense Competition
• Wal-Mart, Carrefour, and Metro (international
  market)
• Asda, Sainsbury, and local retail stores (UK
  market)
• Increasing labor wages in UK

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Industry Analysis

• Food retail industry
• Supermarkets
• Hypermarkets
• Food specialists
• Discounters
• Other

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Industry cont.,

• Increase in 2001
• Decrease in 2002
• Causes
• Energy costs
• Property taxes
• Transportation prices

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Industry cont.,

• Food retail industry in Europe

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Industry cont.,

• Environmental management program
• Tescos environmental program
• Employees and community
• Recycling and waste management centers
• Reduce energy consumption
• Bio-fuels

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Global Operations

• Entered international market in 1994
• First international store in Hungary
• Poland, Slovakia and Czech Republic followed
• Entered Ireland in 1997
• Entered Asia for first time in98 in Thailand
• Followed by South Korea, Malaysia, Japan
• China in 2004

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Global Operations cont.,

• Tailors stores to local cultures
• Extensive use of local resources
• Only 100 of 100,000 international employees are
  ex-patriots
• Multi-format stores

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Global Operations cont.,

• Operates 87 stores in Hungary
• Market leader
• Largest foreign investor
• Has 105 stores in Poland
• 13 acquired from HIT
• Also the market leader
• Operates 72 stores between Slovakia and Czech
  Republic
• Most stores are smaller formats

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Global Operations cont.,

• Tesco runs 91 stores in Ireland
• Market leader
• Has 8 stores in Turkey
• Entered Thailand in 1998
• Purchased Lotus chain
• Operates 219 stores
• Very successful with multi-formats

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Global Operations cont.,

• Very successful in South Korea
• Operates 62 stores, 12 were acquired from
  Aram-Mart
• 111 stores are located in Japan
• Purchased Tanekin business to help grow organic
  market
• Entered China in 2004
• Now has 39 stores
• Area of concentration for Tesco

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Global Operations cont.,

• Opened 238 stores internationally in 2006
• Helped grow international sales by 40.7 over
  2005 sales

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Recommendations

• Focus on brand
• Dont focus on price competition
• Look to offer more unique products
• Become more environmentally conscious
• Continue to develop overseas market
• Have greater percentage of sales come
  internationally
• Focus heavily on Chinese market

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Conclusion

• Tesco is continuing to establish brand around
  world
• In a competitive industry with strong competitors
• Continuing its global expansion
• Will have to evolve to be successful

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Any questions?