Tesco International Management Essay

Words: 9639
Pages: 39

INDEX: Page:
Index 1
Introduction 2
Question 1: YIP’s drivers of globalisation framework 3-9 • Market 5 • Cost 6-7 • Government 8 • Competitive 9
Question 2: Thailand / Korea / Japan 10-16 • Entry Strategy 11 • Brand Management 12-14 • Politics/ Economy 15-16
Question 3: Fresh & Easy Neighbourhood Markets 17-23 • Macro Assessment 18-20 o Risk in foreign markets 18-19 o Economic Recession 19 o Infrastructure 19 o Socio-cultural 20 • Micro Assessment 21-23
Question 4: Tesco US – Porters Diamond 24-27 • Factor
…show more content…
With only 130 underperforming stores opened in 2009 the U.S strategy does not seem to have yielded the results expected of a 1.25 billion investment
The heavy investment cost was due to a Tesco decision to build its own processing plants adjacent to the Tesco distribution centre where shelf ready prepared meats, poultry fruit and veg would be prepared. (3. Lowe & Wrigley 2010)
This huge investment before determining the cost comparison of local supply vis a vis consumer behaviour in suburban retailing has come at a large price. The model of Tesco express did not translate to southern California where lower footfall but higher volume/trolley spend were different to high footfall lower basket spend as seen in UK Tesco express. This also comes at a cost as customer and investor dissatisfaction with minimal staffing and self-checkout does not appeal in the suburban market space in the U.S.
In its nearly five years of operations, Fresh & Easy has a troubled track record including: Repeated shifts in strategy and revised benchmarks, leaving investors unable in o to predict future performance;
Total investment and losses of £1.94 billion from Fresh & Easy operations
Inadequate disclosure of the costs associated with the US operations, further frustrating investors who seek to understand this risky venture. (4. CTW Investment Group, The Altitude Consultancy 107-111 Fleet Street London)

Tesco has historically been strategically nimble in reacting to