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,International business
In this essay I will be talking about the international trade of two businesses. For this I have chosen
Tesco and Thatcher’s as they are both international organisations that trade in contrasting
international markets. International business is fundamentally the trade between different countries
through importing and/or exporting. Tesco is a multinational organisation that imports goods to sell
in their stores across the world. As a retailer Tesco source products to sell from their stores to
consumers. Whereas Thatcher’s export goods to other countries and manufactures all of their cider
from their headquarters in England. Before looking into the international trade of Tesco and
Thatcher’s I will investigate into key areas of their organisation to better understand them, such as:
ownership, organisational structure, scope, size, liability, main aims, values and products/services.
Tesco
Tesco is a global/international company and is the second largest retailer in the world of groceries
and wide-ranging merchandise. Their grocery market share in Britain is very impressive at nearly
30%, with their biggest competitors (Sainsbury’s) at only 16% 1. Tesco’s core purpose is ‘To create
value for customers to earn their lifetime loyalty’ 2. This means that they strive for perfection so that
their customers will always shop with Tesco, as appose to competitors. The business was first
established in 1919 by Jack Cohen, who sold groceries from a small store in London. He earned a
profit of only £1 on sales of £4 by the end of his first day. It was 39 years until the first supermarket
was opened in Maldon, Essex in 1958. This shows how they grew the business and then went on to
creating their own- brand products e.g. Tesco Tea. This is also reflected in Tesco’s seven part
strategy, with number one being ‘To grow the UK core’ and number six being ‘To be a creator of
highly valued brands’3. Overall, the main purpose of Tesco is to provide a retail service that fulfils
the many needs of consumers. They do this by doing everything other supermarkets do but with
extras services, e.g. Tesco mobile and Tesco insurance. These extra services attracted potential
customers to their stores, which will result in a higher turnover.
Tesco offer a range of products with an original focus on groceries, which they offer in store and
online. Although Tesco originated as a store that exclusively sold groceries they now sell lots of
different services and products, such as: household equipment, toys, garden products, F&F clothing,
finance, insurance, mortgages, loans, savings accounts, electronics, etc.
Ownership
Tesco is a Plc which means that they are a public limited company. This means that they can freely
sell shares to the public on the stock exchange in order to raise capital. Tesco has a board of
directors, containing roughly 9 different people. However, because Tesco has sold so many shares
the ownership is with shareholders. Although shareholders own the company the day to day running
is down to Tesco’s chairman, Sir Robert Broadbent, who follows the shareholders overall wishes for
the direction of the company. Tesco’s main purpose is to make as much profit as possible and
remain the UK’s largest retailer.
Organisational structure
Looking at Tesco’s organisational structure will help to evaluate their lines of communication when
conducting international business. Tesco organisational structure is highly hierarchical; this reflects
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, the large size of the company. On average, Tesco as four layers of management just at store level,
which is very high for any company. The structure at store level for Tesco is not rigid and changes
depending on:
➢ Store location
➢ Size
➢ Other store-specific factors
This is show in the table below which is based on one large Tesco store structure.
Source: www.kidakitap.com
Having over four layers of management at a single store can give clear authority and structure for
employees. However, it can also be very demotivating for employees because it may produce
unnecessary bureaucracy, which could have a negative effect on communication between
management layers. This could be amended through reducing the layers of management or
increasing the flexibility of job roles. This should give greater flexibility and a faster flow of
information being communicated.
Size and scope
Tesco is an international organization which operates in many different countries around the world.
Some examples of the places Tesco operate in include:21
➢ UK
➢ France
➢ India
➢ Malaysia
➢ Lotus
➢ Czech Republic
➢ Hungary
➢ Japan
➢ Turkey
➢ Thailand
➢ Taiwan
➢ Ireland
➢ Poland
➢ Slovakia
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