Tesco: from Domestic Operator to Multinational Giant (Case Study from Exploring Strategy 9/E) Essay

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Case Study – Tesco: From Domestic Operator to Multinational Giant.
1. Identify the reasons behind Tesco’s Internationalization Strategy.
Tesco sought to take advantage of undeserved and immature markets, particularly in Europe and followed by Asia. Central Europe in particular was the first phase of its expansion in the post-soviet era.
Tesco had achieved measurable success in the UK market which was highly regulated and competitive. Due to regulatory pressures, Tesco focused on its operations and capital investment within UK, which also led to opportunities in the international markets as they were a profitable business.
Tesco had extensively studied the Asian market in late 90s and due to the rapid liberalization of previous
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Unlike other market entries, Tesco was late in entering to Taiwan, especially since Carrefour had a strong 10 years of market presence. One of the biggest factors missing in Taiwan (in comparison to Thailand and S. Korea) was the absence of strong local partner. Starting from scratch along with steep learning curves of the complex Chinese land ownership were also major stumbling blocks for growth (as mentioned in case - complex Chinese land ownership system proved to be a difficult arena in which to transfer Tesco’s skills in market/site location analysis and property acquisition /development ). In all emerging markets, Tesco was able to gain access to strategic locations for its express stores, either via the existing partnership or even during its organic expansion, whereas in Taiwan, Carrefour had already occupied strategic locations.
4. Use the PESTEL framework to evaluate Tesco’s internationalization strategy.
Political – Political environment has played a crucial role in determining the expansion of Tesco in its home market and international market. Within UK it faces pressure from Department for Environment, Food and Rural Affairs, European Union and government from East Asia. As mentioned in the case, Tesco works closely with the local community to integrate them into its value chain. Tie—ups with the local partners also gave them a competitive advantage.
Economical – Tesco also has weathered economical crises effectively so far. During the