STRATEGY

BUS 322 By Thomas Cosser and Thomas Clark

Introduction
Introduction

Methods
Advantages Disadvantages Case Study Conclusion

What What

is Internationalisation?

are the advantages and disadvantages? in America

Tesco

Internationalization
Introduction Methods Advantages Disadvantages Case Study

Company chooses to expanding into another country

Strategy
Plans Advantages Disadvantages

Conclusion

Strategies
Introduction Methods Advantages Disadvantages Case Study

Four

main different ones

International Multi-domestic

Global
Transnational

Conclusion

(Hill 2011)

Strategy - considerations
Introduction Methods Advantages

Entry method When Local laws Environment Networking and Research

Disadvantages

Case Study

Conclusion

Entry method
Introduction Methods Advantages Disadvantages Case Study

Turnkey

Licence
Franchising Joint

venture Wholly owned subsidiaries

Conclusion

(Hill 2011)

When?
Introduction Methods

Risk

Advantages

Early learning, Late - saturated

Disadvantages Case Study

Conclusion

Local laws
Introduction Methods Advantages Disadvantages Case Study

Import

laws Restrictions on ownership Deals with previous governments Types of products Product descriptions/advertising

Conclusion

(Freeman & Reid 2006)

Environment
Introduction Methods Advantages Disadvantages Case Study

SWOT

analysis

Competition Local Local

needs
values

Conclusion

(Asch & Bowman 1987)

Networking and Research

Introduction Methods Advantages Disadvantages Case Study

Opportunities Mergers Internet

and partnerships

Conclusion

Introduction Methods Advantages Disadvantages Case Study

Advantages

Wider market Low cost production Secure suppliers Reduce reliance on one economy Value

Conclusion

Disadvantages
Introduction Methods Advantages Disadvantages Case Study

Exposure

to risk

Communication Information

availability

Conclusion

Introduction Methods Advantages Disadvantages Case Study

Case Study
Tescos What Is

In America

is their Strategy?

Conclusion

it Successful? are their future Plans?

What

Introduction Methods Advantages Disadvantages Case Study

Tescos
The The

largest Retailer in the UK 3rd Largest retailer in the world

Became

International in 1995
in 14 countries
Revenue for 2008
500,000 400,000 300,000 200,000 100,000 0

Conclusion
Revenue $ Millions

Operates

(Geoghegan 2011; Tesco PLC 2012a)

Introduction Methods Advantages Disadvantages Case Study

In America
Is

known as Fresh and Easy its first store in 2007

Opened 164

Conclusion

stores in 3 States with 4134 employees

never made a profit

Has

(Geoghegan 2011; Tesco PLC 2011)

Introduction Methods Advantages Disadvantages Case Study

Research
Tescos
Sent

spent 10 years Researching

people to live with families

Conclusion

(Geoghegan 2011)

Introduction Methods Advantages Disadvantages Case Study

Performance

Conclusion

(Geoghegan 2011)

Introduction Methods Advantages Disadvantages Case Study

Performance
Losses

of 186million in the 20102011 financial year

2008 16 2009 206 2010 349 2011 495

Conclusion

Year Revenue (million)

(Geoghegan 2011; Tesco PLC 2011)

Introduction Methods Advantages Disadvantages Case Study

Reasons
Exchange Merger

rate Issues

of 2 Suppliers

Conclusion

Strategy Brand

Recognition

(Geoghegan 2011; Tesco PLC 2011)

Introduction Methods Advantages Disadvantages Case Study

Fresh and Easy

Conclusion

(Freash and Easy 2012)

Introduction Methods Advantages Disadvantages Case Study

Fresh and Easy

Wholesome

food that does not cost your whole pay check

Simplicity Environmental

Conclusion

considerations

(Fresh and Easy 2012; Geoghegan 2011; Tesco PLC 2012b)

Introduction Methods

Greenfield Investments
Solar High High

Advantages Disadvantages Case Study

powered stores Capital Costs

Conclusion

Risks

Introduction Methods Advantages Disadvantages Case Study

Issues

The convenience market is saturated Lack of Brand Recognition Not the same amount of customer data in the US Exchange Rates Issues with Unions

Conclusion

(Geoghegan 2011; Tesco PLC 2011; Fresh and Easy 2012; UFCW 2008)

Introduction Methods Advantages Disadvantages Case Study

Union
United

Food and Commercial Workers international Union Differently in the UK to

Operating

in the US

Conclusion

Protests

outside stores

(UFCW 2008)

Introduction Methods Advantages Disadvantages Case Study

Future
Expecting

to Break even by 20122013 Financial year

Will

have 300 stores by this time

of Friends of Fresh

Conclusion

Development

and Easy

(Tesco PLC 2011; Fresh and Easy 2012)

Introduction Methods Advantages Disadvantages Case Study

Conclusions
Advantages Entry

and Disadvantages

Method

Conclusion

Tescos Wholly

is Multi domestic
Owned Subsidiary

References

Asch & Bowman (1987): Strategic ManagementI.1st Edn London Deloitte (2009). Emerging from the downturn Global powers of 2010 [online] Available at: http://www.deloitte.com/assets/Dcom-Australia/Local%20Assets/Documents/newsresearch/Press%20releases/Global%20Powers%20of%20Retailing/Global_Powers_of_Retailing _2010_report.pdf (Accessed on 6th of February 2012) Freeman & Reid (2006): Foreign Market-Entry into Central and Eastern Europe. Journal of East-West Business Fresh and Easy. (2012). Who We Are [online]. Available at: http://www.freshandeasy.com/WhoWeAre.aspx (Accessed on 4th of February 2012) Geoghegan. T (2011). Why is Tesco Struggling in the US? [online]. Available at: http://www.bbc.co.uk/news/magazine-13190124 (Accessed on 3rd February 2012) Hill (2011): International Business, Competeing in the Glocal Marketplave. 8th Edn. NewYork Tesco PLC (2012b). United States [online] Available at: http://www.tescoplc.com/corporateresponsibility/our-approach/local-community-activity/#mapoverview (Acccessed on 3rd of February 2012) Tesco PLC (2012a) Our Strategy [online]. Available at: http://www.tescoplc.com/abouttesco/our-strategy/ (Accessed on 6th of February 2012) Tesco PLC (2011). Annual Report and Financial Statements 2011 [online] Available at: http://www.tescoplc.com/media/417/tesco_annual_report_2011_final.pdf (Accessed on 3rd of February 2012) UFCW. (2008). The Two Faces of Tesco [online]. Available at: http://www.ufcw.org/docUploads/The%20Two%20Faces%20of%20Tesco.pdf?CFID=13562326 &CFTOKEN=94288421 (Accessed on 7th of February 2012)

Any Questions?