¶ … Tesco's Marketing Environment and Performance
Today, there are a number of retail grocery and general merchandise corporations competing at the global level, including Walmart, Carrefour and Tesco. Although Walmart remains the largest retailer in the world today, Tesco in particular is fast acquiring its market share in several regions, especially China. Moreover, the company's innovation in providing efficient products and services to its customers has provided it with a distinct competitive advantage in its core United Kingdom domestic market, where it remains the largest grocery retailer in the country today. In fact, one of the main themes to quickly emerge from the research that follows is just how important Tesco is to its customers, with most simply taking the company's presence for granted. To determine how Tesco achieved this impressive level of performance, this study examines the company's proven track record of superior performance in a highly competitive industry to identify best practices as well as recent and current trends. To this end, the study provides a review of the relevant literature to identify the company's competitive position, its financial performance, and its current brand strength and potential weaknesses. In addition, a summary of the company's micro and macro marketing environments including marketing intermediaries, customers and suppliers is followed by an application of a SWOT and PESTLE analysis to Tesco's current situation. Finally, a summary of the research and important findings concerning Tesco's marketing practices and likely future trends are provided in the conclusion.
Review and Analysis
The Marketing Environment: Micro and Macro Environment
Today, the retail chain Tesco PLC (hereinafter alternatively "the company") is the largest retail chain in the United Kingdom with about 16% of the market share (Kita & Mazikova 2012). Not only is the company the leading retailer in the UK at present, it is also one of the top retailers in the world by annual sales, trailing only U.S.-based Walmart and France-based Carrefour (Kita & Mazikova 2012). The company's first store was established in 1929 in North London (Ritson 2004), the company launched its first superstore in Crawley, West Sussex in 1968 and its first petrol station in 1974 and by 1995, Tesco was the largest food retailer in the United Kingdom (Benady 2009). The company currently features four main store formats (a) Extra, (b) Superstore, (c) Express and (d) Metro (Ritson 2004). According to Ritson (2004, p. 18), "Throughout the 80s and early-90s, Sainsbury's had been the dominant supermarket chain. Tesco overtook it as the UK's biggest food retailer in 1995. The same year saw the introduction of Tesco's Clubcard, the UK's first customer loyalty card."
The company's business profile notes that Tesco and its subsidiaries currently operate more than 6,200 stores in 13 countries besides the UK including Asia, Europe, and North America; however, approximately 50% of the company's operations are located in the UK (Kita & Mazikova 2012). The company's founder, Sir Jack Cohen, established Tesco creed of "pile it high, sell it cheap," but the company's leadership has changed the business model from a discount format to a multi-format brick-and-mortar and online retailer (Kita & Mazikova 2012). The company's banners include: Tesco Extra superstores; Tesco Express, Tesco Metro, and One Stop convenience stores; Homeplus hypermarket, small express, as well as online stores in South Korea, and Dobbies gardening stores in the UK, Scotland, and northern Ireland (Tesco Business Summary 2013).
Established in 1919 by Jack Cohen from a market stall in London's East End (Tesco History 2013), Tesco is headquartered in Cheshunt, the United Kingdom today (Tesco Business Summary 2013). The company's stated vision is comprised of five elements that define what type of company Tesco wants to be:
Wanted and needed around the world
A growing business, full of opportunities
Modern, innovative and full of ideas
Winners locally whilst applying our skills globally
Inspiring, earning trust and loyalty from customers, our colleagues and communities (Tesco History 2013, p. 1).
The company's stated seven-part business strategy for growth is as follows:
To grow the UK core
To be an outstanding international retailer in stores and online
To be as strong in everything we sell as we are in food
To grow retail services in all our markets
To put our responsibilities to the communities we serve at the heart of what we do
To be a creator of highly valued brands
To build our team so that we create more value (Tesco History 2013, p. 2).
A comparison of Tesco's stock performance for the period 1990 to date compared to its major potential global competitor, Walmart, is provided in Figure 1 below.
Figure 1. Comparison of Tesco and Walmart Stock Performance: 1990 to Date
Source: http://finance.yahoo.com/q/bc?s=TSCO.L&t=my&l=on&z=l&q=l&c=
Key:
Tesco
TSCOL
Walmart
Tesco PLC Case Study Tesco is the third largest retailer globally behind Wal-Mart and Carrefour, and as of March 2011, operates 4,811 stores across 14 countries including Asia, many European countries, UK and the U.S. Tesco is also the leading food, sundry and grocery retailer in the UK and has established itself as the leading provider of ancillary services through the retail channel to Western Europe (Hackney, Grant, Birtwistle, 2006). Tesco
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
The leadership is also defined in terms of its capacity to influence employees in achievement of organizational goals. The leader member theory efficiently defines the role of leaders and mechanism through which they influence employee's behaviors. The leaders are capable of forming a high quality exchange of social components based on the trust and likings with some employees result into a high performance. Similarly on the contrary the leaders also
difficulties with marketing varies from organization to organization and the first matter to learn when dealing with the marketing of any organization is to understand the nature of functioning of the organization and then decide on the methods of marketing that will be applicable. Present position Let us hear from Sainsbury's as to what they are: "We're a leading UK food retailer with interests in financial services. J Sainsbury plc consists
organizational change by using Tesco plc as our organization of choice. The concept of change is explored from definition to effects that it has on an organization. Change resistance and the resulting conflict are also discussed. Finally, a recommendation of how to effect change is provided., Organization culture, a term that which refers to a collection of policies, values, beliefs as well as attitudes (Mullins,2010) is a very critical element
Again, Mc Donald's has managed to deal with competitive threats posed by both these market players due to the fact that the prices that Burger King, Starbucks and Costa Coffee charge are much higher than that charged by Mc Donald's. The primary reason behind higher prices of Costa Coffee and Starbucks is the fact that their target market is much stronger and niche as compared to that of Mc
Our semester plans gives you unlimited, unrestricted access to our entire library of resources —writing tools, guides, example essays, tutorials, class notes, and more.
Get Started Now