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Presented by Eric Geffre Mitch Hughes Wenshu Wang Mengqiu Yan

Presented by Eric Geffre Mitch Hughes Wenshu Wang Mengqiu Yan. Agenda. Company Analysis-Mengqiu History-Mitch Competitor Analysis-Wenshu SWOT Analysis-Mengqiu Industry Analysis-Mitch Global operations-Eric Recommendations-Eric. Company Analysis.

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Presented by Eric Geffre Mitch Hughes Wenshu Wang Mengqiu Yan

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  1. Presented by Eric Geffre Mitch Hughes Wenshu Wang Mengqiu Yan

  2. Agenda • Company Analysis-Mengqiu • History-Mitch • Competitor Analysis-Wenshu • SWOT Analysis-Mengqiu • Industry Analysis-Mitch • Global operations-Eric • Recommendations-Eric

  3. Company Analysis • 2,800 branch stores across 14 countries and regions • Non-food products • Sports equipment, kitchen utensils, etc. • Own label products (ex. Cherokee) • E-commerce business (Tesco.com)

  4. Tesco cont., • 5 types of stores in the UK • Tesco Extra Stores • Tesco Stores • Tesco Express Stores • Tesco Metro Stores • One Stop Stores • Tesco is mainly in the form of joint ventures outside UK

  5. Tesco History • Founded in 1924 by Jack Cohen • Opened small store in Edgware, London • National food store chain in the 1970s • Took over 40 Hillards supermarkets in 1987 • Surpassed Sainsbury to become largest UK retailer in the 1990s • Now world’s 3rd largest grocery retailer and 59th on Fortunes global 500

  6. Competitor Analysis • Wal-Mart • Carrefour • Metro AG • Small local retailers

  7. Wal-Mart • In 1962, Sam Walton, in the USA. • Largest retailer in the world: 6,796 stores in 14 countries. • “Always Low Prices” • In 1999, ASDA ( the second, in the UK) • In 2007, bid for the Sainsbury( the third, in the UK) • Tesco’s Fresh & Easy in the USA

  8. Carrefour • In 1959, Marcel Fournier and Louis Defforey, France, “crossroads” • “High-Low Price”, hypermarket • NO.1 in China’s market Tesco Carrefour 6 stores in Taiwan & € 57.4 million 11 stores in Czech Republic & 4 stores in Slovakia

  9. Metro AG • In 1964, Otto Beisheim, Germany • Cash & Carry, commercial customers • Bad performance in China’s market • No.1 in Eastern Europe market

  10. Small Local Retailers • Daily grocery • Popular in Asia, especially in China • Example: Seven-Eleven

  11. A small shop in Korea A small shop in China Seven-Eleven in Japan

  12. Strengths • Strong brand image • “good, better, best” • Partnership strategy • As a partner with Le Gou in China • Customer service • “Every little helps” • Clubcard • Performance of Tesco.com • Largest online food market

  13. Weaknesses • High dependence on UK • 76% of total revenue from the UK market • Low returns

  14. Opportunities • Green Consumption • Low carbon economy • Renewable materials • Non-food market

  15. Threats • Intense Competition • Wal-Mart, Carrefour, and Metro (international market) • Asda, Sainsbury, and local retail stores (UK market) • Increasing labor wages in UK

  16. Industry Analysis • Food retail industry • Supermarkets • Hypermarkets • Food specialists • Discounters • Other

  17. Industry cont., • Increase in 2001 • Decrease in 2002 • Causes • Energy costs • Property taxes • Transportation prices

  18. Industry cont., • Food retail industry in Europe

  19. Industry cont., • Environmental management program • Tesco’s environmental program • Employees and community • Recycling and waste management centers • Reduce energy consumption • Bio-fuels

  20. Global Operations • Entered international market in 1994 • First international store in Hungary • Poland, Slovakia and Czech Republic followed • Entered Ireland in 1997 • Entered Asia for first time in’98 in Thailand • Followed by South Korea, Malaysia, Japan • China in 2004

  21. Global Operations cont., • Tailors stores to local cultures • Extensive use of local resources • Only 100 of 100,000 international employees are ex-patriots • Multi-format stores

  22. Global Operations cont., • Operates 87 stores in Hungary • Market leader • Largest foreign investor • Has 105 stores in Poland • 13 acquired from HIT • Also the market leader • Operates 72 stores between Slovakia and Czech Republic • Most stores are smaller formats

  23. Global Operations cont., • Tesco runs 91 stores in Ireland • Market leader • Has 8 stores in Turkey • Entered Thailand in 1998 • Purchased Lotus chain • Operates 219 stores • Very successful with multi-formats

  24. Global Operations cont., • Very successful in South Korea • Operates 62 stores, 12 were acquired from Aram-Mart • 111 stores are located in Japan • Purchased Tanekin business to help grow organic market • Entered China in 2004 • Now has 39 stores • Area of concentration for Tesco

  25. Global Operations cont., • Opened 238 stores internationally in 2006 • Helped grow international sales by 40.7% over 2005 sales

  26. Recommendations • Focus on brand • Don’t focus on price competition • Look to offer more unique products • Become more environmentally conscious • Continue to develop overseas market • Have greater percentage of sales come internationally • Focus heavily on Chinese market

  27. Conclusion • Tesco is continuing to establish brand around world • In a competitive industry with strong competitors • Continuing its global expansion • Will have to evolve to be successful

  28. Any questions?

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