Tesco conquers the world case study answers

Failure stories abound in the retail industry. They are horror stories studied at length by strategists. Every grocery retailer that has ventured abroad has been defeated as often as it has been victorious. R etail is a high-fixed-cost low-margin business. Its diminishing marginal returns make the barriers to entry in foreign markets all the more painful.

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It is arduous to grow organically because of real-estate costs and in some cases a lack of available sites. Furthermore, many countries have passed legislation to protect local retailers from outside competition. Dealing with the different legislation and regulatory environments comes with extra costs. One of the ways to overcome that particular barrier is to acquire local players. But few retailers are selling. Business-to-consumer industries must develop the closest of relationships with consumers.

Naturally it is more challenging to achieve that in a foreign culture.

Unlike manufacturers, mass-market retailers have to fight for every consumer in the area of each of their stores. Managing human resources locally is a challenge that many US companies for example find particularly strenuous in European countries. Lastly, understanding local consumer habits has proved more difficult for food retailers than for non-food retailers. So far the latter have had more success at expanding globally.

There is no global universal answer to the most cultural of all questions : What are we having for dinner? Last but not least, it is exceedingly hard to master different complex supply chains and develop relationships with local vendors. In food you are always at least partly dependent on local vendors. Unfortunately if you are not a dominant player, this dependency will be more painful. New entrants rarely have a better deal than local giants! So sometimes they end up selling what they can buy rather than buying what they can sell.

The same is true for real estate: new entrants rarely get the best location, or they must pay a premium.

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Tesco’s Stumble into the US Market

Traditional food retail faces such challenges on more levels than any other industry, as explained in this interesting Deloitte Research Global Retail Study. But when you look at the success stories in retail, you can see that each strategy on the global- glocal -local continuum has failed and succeeded many times. Organic growth, acquisition, franchising, etc. It consists of four different strategies: market penetration, product development, market development and diversification: see link here.

For example, Carrefour successfully leveraged its unique assets when it exported its model and brand to Poland. The first hypermarket it opened in Poland Lodz, looked a lot like a French hypermarket. Today, it has more than stores in Poland : hyper- and supermarkets, as well as an increasing number of urban convenience stores, like in France! But Carrefour failed in Germany and the US.

Brazil is now an essential driver of sales growth for the Carrefour Group. But with the same strategy it has just failed in Greece earlier this year. So there is no one-size-fits-all playbook for retailers. Different strategies have been successful.


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As is often the case with strategy, what matters most is the consistency and flawlessness of its execution. Finding the right synergies between the strengths you have on your domestic market and the particularities of the new market you set about to conquer takes time and effort. For a company that is popular at home, arrogance is the number one danger. When it comes to going global, successful retailers, whatever strategy they choose, must spend vast resources learning about local markets. Many European retailers — among them German hard-discount giants like Aldi and Lidl — have accumulated vast experience adjusting to different local cultures and languages.

This resulted in one customer receiving up to six personalised promotions. So the retailer went out to hunt for six million products that can be tailored to each individual. We then drill into the data and match it to the customer. Meanwhile, to address the issue of mail bounces, Tesco launched a targeted CRM approach.

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This allowed the retailer to know the customer purchase history and their emailing habits. For example, Tesco had a group of customers who registered with it but never shopped with the brand. It hence had to re-introduce itself to them. Another group of customers shopped only once but never came back — so a separate programme was designed just for them with incentives so that they could come back and shop.

The CRM email strategy resulted in about customers being re-activated. Audio technology brand Dolby has appointed a digital marketing agency to ramp up its social media activities The GoOffice bundle includes features such as a principle postpaid line, two supplementary postpaid lines, 1TB cloud storage on On.. Click here to cancel reply. When it comes to cultural and linguistic differences, few regions stand as far apart as China and the Western world — the US in particular. One is a communist state that prioritises cooperation and collectivism, the other a democracy that sees itself as a paragon of meritocracy.

While both may fall short of their ideals which country in this world can truly live up to its values across all parts of its society? When it comes to population size , China dwarfs the US, with 1. Linguistically, too, China and the West are very different. Mandarin, is a tonal, analytic language that uses a subject-verb-object word order and topic-prominent organisation. The English language, on the other hand, is a Germanic language that uses a Latin script, modal verbs and the palatalisation of consonants, though it does share the subject-verb-object order of Mandarin.

Despite the many cultural and linguistic differences, China and the West have a long trading history. The Portuguese were some of the first sailors to successfully establish trade with China, gaining territorial rights at Macao in and swiftly opening up trading posts at Ningpo, Foochow, and Amoy. It took Britain until to attempt to follow suit, but efforts were unsuccessful until when the East India Company reached Canton and opened trade negotiations.

We can only imagine the communication difficulties faced by those early traders. While the Silk Road has enabled goods to flow from East to West and vice versa for centuries, the widespread use of commercial ships heralded a new era for trade between the two regions. While pointing and gesturing may have sufficed for those early, pioneering traders, the need for translators quickly grew. Several types of translation are essential when it comes to successful cross-border trading. Marketing translation and transcreation help brands to communicate information about the benefits of their products to their international audiences.

Regulatory translation of product information ensures that legal requirements are complied with and that products are shipped alongside the correct information, in the right language. Financial translation supports the brokering of deals between manufacturers, suppliers and delivery companies. Broader requirements can also include the translation of business emails, letters and legal agreements between trading partners.

Purchasing Management in Retail business RT9 : Tesco lotus case study

Success is never guaranteed when a company seeks to export its brand to new audiences, particularly when potential customers have a very different cultural background. In this situation, high-quality marketing translation and transcreation can make all the difference. Marketing translation involves translating and localising copy. Transcreation goes a step further — it looks to deliver the same brand impact but in another region, this can involve changing product names, logos, straplines, imagery, copy and more.

It is, in essence, a more holistic creative approach to delivering marketing messages to new audiences. Despite the easy access to translation services that modern companies enjoy, overcoming linguistic and cultural barriers can still be difficult for Western companies that are looking to crack the East, just as they can be for Eastern companies looking to make it big in the West.

Thus there is still plenty to learn from companies that have successfully managed to do so on each side. Huawei made its name manufacturing cheap electronics — originally phone switches back in However, the firm now has its sights set firmly on the global smartphone market.