Summary
Summary unit 39: International Business
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- PEARSON (PEARSON)
unit 39: International Business - PASS
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Unit 39: International Business Tamanna BegumP1-Explain the international business environment in which a selected organisation operates.
Tesco PLC is a British multinational grocery and general merchandise retailer with headquarters
in Welwyn Garden City, Hertfordshire, England, United Kingdom. It’s a public limited company. It is
the third largest retailer in the world measured by profits and fifth-largest retailer in the
world measured by revenues.
Tesco has expanded its operations outside the UK to 11 other countries in the world. No other
British-based supermarket chain has operations overseas. Tesco is based in the UK and the majority
of its stores are in the UK, but over two thirds of its floor space is now outside the UK, and Tesco
regards its international operations as
its major focuses for expansion. After a
gradual expansion into Ireland and an
unsuccessful expansion into France in
the 1990s, Tesco began a rapid
expansion in the late 1990s into
emerging markets focusing on Eastern
Europe and Southeast Asia. These
areas have relatively undeveloped
grocery retail markets but ones that
are changing rapidly giving Tesco major
opportunities. Tesco pulled out of the
USA in 2013, but continues to see
growth elsewhere. Tesco's
international expansion strategy has responded to the need to be sensitive to local expectations in
other countries by entering into joint ventures with local partners, such as Samsung Group in South
Korea (Samsung-Tesco Home plus), and Charoen Pokphand in Thailand (Tesco Lotus), appointing a
very high proportion of local personnel to management positions. It also makes small acquisitions as
part of its strategy: for example, in its 2005/2006 financial year it made acquisitions in South Korea,
one in Poland and one in Japan.
The first Tesco store was opened in 1929 in Burnt Oak, Edgware, Middlesex. Originally a UK-focused
retailer specialising in food and drink, it has diversified both geographically and by product, into
areas such as clothing, electronics, financial services, telecoms, home, health, car and dental
insurance, retailing and renting DVDs, CDs, music downloads, Internet services and software.
Tesco competes with convenience stores, which are gaining popularity as consumer tastes shift
toward more trips for fewer items. The convenience store market is highly fragmented. As of August
2015, Tesco is the U.K. grocery market leader with 28.4% market share, followed by ASDA and
Sainsbury's, which each have just under 17% market share. Over the past two years, Aldi and Lidl
have taken market share from the large.
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