Alisha Hussain
Unit 5
Why trade internationally?
Introduction
I have been asked to create a report on why trade internationally. In order for me to
do this, I will need to collect in depth information about two businesses that trade
internationally. The businesses that I have chosen to speak about are Tesco and
Vodafone. Both of these businesses operate in contrasting international markets.
Tesco
Tesco PLC is a global grocery chain that participates in international trade. With
4000 outlets across 5 countries, the corporation employs over 300k people in the UK
and 4.6 thousand worldwide. In 2023, Tesco gained £65.76 billion revenue but this
includes VAT. Tesco was founded by Jack Cohen in 1919 and the business started
off stall in London. The first actual store was opened in 1929. But by the 1950s, it
had grown to almost 800 stores. Tesco began offering online shopping in 1995, and
the service is still active and profitable for the company. Tesco operates in
developed countries such as Czech Republic, France, Hungary and multiple more.
Also they have a goal to deliver to emerging markets from Eastern Europe to Asia.
Since 2001, Tesco has effectively taken over small firms that they felt were worthy in
order to grow its operations throughout the United Kingdom. Also it fits in the tertiary
and secondary sector. They are in the tertiary sector because they provide a service
for their customers. The reason why they are in the secondary sector as well is
because they produce their own goods. Tesco makes and sells their own products.
In this manner, Tesco can save all of their money by not having to purchase anything
from outside sources. Especially affordable in this approach are dairy and meat
goods.Tesco offers Tesco Extra, Tesco superstores, Tesco Metro, Tesco Express,
Tesco Homeplus, and One Stop as its six different retail types. It currently has its
own mobile phone network and provides home and vehicle insurance as well. Tesco
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Unit 5
is the leading market share supermarket within the UK. The supermarket industry is
very comparative as Tesco has many competitors. Sainsuburys also has a large
market share. Other competitors are Asda and Lidl.
Vodafone
Vodafone was established as the first national network in 1985 within the UK.
Vodafone Group International was founded in 1993 with the purpose of obtaining
licences and managing overseas assets. Since then, the company has grown
significantly. Currently, Vodafone is present in 27 countries across 5 continents. In
2023, Vodafone received on average 45.71 billion euros. Vodafone has 18 plus
million customers within the UK but 625 million plus globally. They have one of the
leading technology communication market share with over 94 million connections.
On the first of January 1985 Vodafone launched in the UK as a network. They had
reached over 5 million customers by the year 1999. Their goal is to provide people
with new services and connectivity that will enable them to live sustainably. We can
safely conclude that the company's primary goal in going global was to expand by
taking up more market share and offering its services in new areas.
Organisational structure for Tesco and Vodafone
From the diagram above, it demonstrates what Tescos and Vodafone’s hierarchical
structure would look like. Employees with identical job tasks might share resources
assigned to them by management, allowing for more efficient operation of business
operations and cost savings. People at higher positions in the organisation will be
separated from those in lower ones as a result of the structure's grouping of them,
which means they won't interact as frequently and produce less fresh ideas. Each
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Unit 5
employee in this organisation is given a role and is organised in agreement with that
position, for example, the salesman in the sales department. Each group is
responsible for the group below them. They must give out clear instructions so that
the business is able to run smoothly. If they give out any wrong information it can
affect the business depending on what the cause is. If Tesco or Vodafone didn't have
a customer service section, many of its customers would stop shopping there
because problems and concerns would go unaddressed. Although this might be
regarded as one department at Tesco and Vodafone, it is actually much larger than
that because different teams are in charge of handling different problems. For
instance, one team might be in charge of assisting with technology-related problems,
while another might be in charge of describing customer products. For instance,
Tesco's and Vodafone’s customer service team's primary goal is to provide their
clients with excellent and positive services while resolving any issues or responding
to any concerns.
Reasons for conducting businesses internationally
Operating internationally, has many benefits to Tesco and Vodafone. Some reasons
are: growth, additional revenue stream, access to new markets, diversification,
increased market share, increased market leadership and also gain a competitive
advantage. Tesco and Vodafone may be able to expand by providing goods and
services in regions outside of the UK, which would raise sales figures. It will enable
each of these organisations to accomplish their revenue-generating objective more
quickly. Expanding the availability of its stores internationally contributed to the
franchise's growth, increased brand recognition, and increased consumer base.
Tesco will focus on its new "Finest" stores, which will only offer its premium private
label products and portray competitors upscale stores, as a result of the
development. The majority of Tesco's finest stores are probably found in busy,
central London neighbourhoods where dinner deliveries are a top concern. Tesco's
other plan, meanwhile, will focus on promoting tiny boxes rather than cash and
carriers and will be aimed at Thailand, where it is expected that there will be ample
space for an extra 750 stores.
Vodafone operates in around 200 countries, whereas Tesco operates in 13
countries, targeting a diverse variety of clients even in the world's most populous
countries, such as China, which has a population of 1.4 billion people. Vodafone and
Tesco are able to satisfy their stakeholders while making significant profits and
keeping up their impressive performance from their income sources by operating in
all of these nations. Reaching out to international markets is an excellent strategy to
boost sales of goods and services. A business that can access new markets will be
able to spot mistakes within the market and gain a competitive advantage over rivals,
enabling it to overtake the market.
