ENTREPRENEURSHIP OF PAKISTAN

Mehwish perveen(5401)

Case Study PresentationTOPICIntroduction Tescopoly in the UKInternationalizing TescoTescos American AdventureThe Fresh & Easy ConceptThe Underlying Relationship NetworkThe Early Fresh & Easy ResultsDilemmas For Tescos Fresh & QueasyINTRODUCTIONUKs dominant retailer, taking around 30% of the national grocery market.Worlds third largest retailer after Wal-Mart and Carrefour. Overtaken Argos/Homebase to become the largest non-food items retailer.In 2008 show 53 billion Sales and 2.75 billion Profits.Up to the mid 2000s companys growth and business performance is outstanding. After a decade, Tesco is nearly twice the size of Asda & Sainsbury. In 2007 Slow down in sales, 1 billion wiped off Tescos market value. Shares fell 15% in the first quarter of 2008.Investors were become unhappy when Senior executives were leaving Tesco and join its rivals.

TESCOPOLY IN THE UK

Become an unpopular company. In 2008 at the Retail Week (Industry Oscars) Leader of the Year Sir Terry Leahy (CEO). Consumers Favorite Retailer. Anti-Tesco protests for Tesco Express local stores emergence in suburban areas. Some 2000 small independent food shops close every year because of super market competition.In 2008, Guardian newspaper published articles against Tesco in paying taxes.

INTERNATIONALIZING TESCO

In 1990s started efforts for internationalization. It has a portfolio of around 12 different markets, employing 450,000 people with generating international business of 7.6 billion sales and 370 million profit.About 80% of group capital spent on overseas expansion. In 2008 UK accounted for 76% of Tesco sales and 78% of profits. It has 150 stores in Japan out of 50 are Tesco Express outlets. Operates around 50 hypermarkets in China. In 2008 Tesco acquired South Korean discount chain for 1 billion, adding 36 stores. Importance for international success underlines the entry of Tesco in USA with its Fresh and Easy retail concept.TESCOS AMERICAN ADVENTURE

USA is a competitive market place. Tesco committed 1.25 billion over 5 years to its new Fresh & Easy convenience store format 11.5 million bonus if ventures pay off. Their goal is to open 200 stores by the end of 2008-2009 and it could be 1000 stores by 2012. Initial stores were open in California with plan for more in Arizona, Nevada and possibly in Mexico. Its next biggest overseas market is Thailand, where it took 9 years to open 220 stores. FRESH & EASY CONCEPT

Based on a small-store format. Emphasizing low price for high quality and healthy food. Developing Market Understanding50 Executives lived the American Dream for two weeks.Fresh & Easys Market PositioningBetween the discount and cut-price supermarkets.Fresh & Easy Value Proposition Low cost fresh food.American store for American customersFresh & Easy kitchenThe Underlying Relationship NetworkConsumer RelationshipCompetitor RelationshipSupplier RelationshipRelationship With Employees And Trade UnionsThe Early Fresh & Easy ResultsTim Mason used the break in store openings to tweak the Fresh & Easy model:Prices extra-low prices Promotions discount coupons Products new fresh food lines were added Shopping trolleys bigger trolleys Store design more colors to make stores warmerDilemmas For Tescos Fresh & QueasyThe positioning is between the discount supermarket and upmarketNo record of working with trades unions and local communities.Matching the format of California and Arizona, to Oklahoma, Wisconsin and New York.How much will it hurt us if it fails? The real damge would be the impact of of failure on the rest of business. Incoming CEO would find that the Tesco business model was broken.