Tesco is one of the world's most eminent chains of stores in the international food retail services that started as small scale domestic retailer and with its sustainable growth strategy, emerged as an international corporate giant.
Tesco's operations adhered on the lines of sustainable strategic management that marketed itself with a strong sense of community service and socially responsible business practices. Tesco, instead of aggressive investments, penetrated international markets by partnering with local regional partners. It strategically chose Asian and primarily South Asian markets as its first choice for expansion as these markets were relative not as mature as western markets. With convenience and quality of western food retail store and a market knowledge of strong local partners, Tesco immediately emerged as strong players in South Asian markets.
Tesco however twisted its strategy to enter in a much mature and aggressive U.S. market where Walmart was already a string market player. Tesco however went on with the risk, and started on a much smaller scale. The store grew over a period of time to pose tough competition for Walmart. Tesco however still needs to remove inconsistencies pertaining to its human resource and certain marketing strategy for long-term sustainability.
This paper aims at evaluating the future strategic direction based on the Ansoff Market Development strategy.
Evaluation and Justification of Selected Strategy
A business model is an important and integral part of the business a strategy of any firm whether big or small. The way a business model is developed determines and indicates the values, ethics and principles on the lines of which the business at large will be operating. It also indicates how the business is going to function and covers various internal and external dimensions of a business and the organization as a whole. The global competitive industry is getting highly competitive over a period of time with many international food retail chains primarily of European and American origins expanding on transnational levels. Within itself, Tesco has seen a lot of Product Development over a period of time with adding on newer products on its shelves thus expanding the product range it offers to its existing customers. Considering the aggressive expansions taken up by the competing retail chain stores, it is highly recommended that Tesco now moves onwards to the market development strategy. This has to be done by expanding into newer markets that offer lucrative growth opportunities for Tesco.
Tesco, Morrison and Sainsbury are all competing business in the food retail industry. While all of three have diversified their retailing business in their own way's food and grocery remains the primary focus of their services. All three of them are renowned as one of the strongest retail stores in the world. All three of these stores are based in United Kingdom and operate in similar fashion to Amazon and Tesco, their counterparts in the United States of America. All the three competing retail organizations are operating as PLCs and aim for sustainable growths as their long-term business strategy.
Tesco's business model, like the other two rivals is focused on achieving sustainable growth. Most of the business strategy is outlined and dominated by the firm's extensive indulgence in Corporate Social Responsibility. Tesco believes in attaining sustainable growth satisfying its customer and providing them value for their money in a socially responsible manner (Child 2002).
Morrisons and Sainsbury also aim for sustainable growth and are particular about corporate social responsibility; however they do the same in a different manner. They market themselves to their customers much more aggressively and according to the 'interest and psychology' of the relevant target market segments. Both Sainsbury and Tesco have an online retail service available as well. On the other hand, though Morrison's maintain an online website, it does offer little online shopping services (Epstein, 2004).
As stated earlier, Tesco's business model, though aims at sustainability and growth, but it is too much centred on corporate social responsibility. Corporate social responsibility in the contemporary corporate world is seen as an immensely important part of business strategy. It involves organizations taking responsibility of 'giving something to the society' in return of what they earn from them. Many organizations today use corporate social responsibility as a potential marketing tool, also referred to as cause related marketing. Although highly important, and also pursued by the competing firms, extreme dependence and centred focus on corporate social responsibility
Tesco's business model states Tesco's aim to 'be strong in everything' that the company sells. It however does not elaborate that in terms of what dynamics does the company aims to become strong. In order to be sustainable it is important that the company aims at strength in terms of quality of service which would automatically lead to financial strength...
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