Tesco- Case Study

1. Presentation By
Alok Ranjan

2. Introduction
• Tesco PLC is a British multinational grocery and general merchandise
retailer headquartered in Welwyn Garden City, Hertfordshire, England,
United Kingdom.
• It is the third largest retailer in the world measured by profitsand second-
largest retailer measured by revenues.
• It has stores in 14 countries across Asia and Europe and is the grocery
market leader in the UK.
• Originally a UK grocery retailer, Tesco has diversified geographically since
the early 1990s and into areas such as the retailing of books, clothing,
electronics, furniture, toys, petrol and software; financial
services; telecoms and internet services.
• Initially the company’s driving force was the idea “Pile it high and sell it
cheap”.

3. Issues Faced Initially
• Tesco suffered from the reputation of “Pile it
high and sell it cheap”.
• Stores were damaged and in need of repair.
• Sainsbury was the market leader.
• Supply chain was integrated and expensive to
maintain.

5. Complete Transformation
 New campaign “Every little help”.
 Supply chain management was re-aligned.
 Distribution centres were re-laid.
 20 ads in the market.

6. The TESCO Brand Guarantee
Ad from 1990s

7. All these Organizational, Informational
and Process transformations made
Tesco the market leaders by 1995 leaving
behind Sainsbury

9. Tesco Clubcard
• In 1995 Tesco introduced the clubcard in
UK.
• It allowed Tesco to really understand its
customers.
• It introduced a whole new way to
encourage customer loyalty.
• Acted as data gathering tool and build
unique “DNA profile” of every customer.

10. Expansion
• Tesco movedbeyondsupermarket to “big box” retailing
of nonfoodproducts.
• In 2003, the average profit marginwas 9 percent for
nonfoodproducts versus 5 percent for food.
• Nonfooditems earnedthem 20 percent of their revenue.
• And it also providedadditional convenience to
customers who wantedto shop under one roof.

11. • Tesco continued to diversify its product and
service offerings in order to reach more
customers: its own ISP service in 1990s; Tesco
Broadband; TescoMobile and Tesco Home
phone; Tesco Bank etc.

13.  Opening of new stores
 Going online for selling the products and services
 Enter the new high-growth markets in Asia
 Entering the other high potential streams of Products & services

14. Major Competitors
• Wal-mart
• Sainsbury
• Carrefour

15. Customer Database
Tesco can use its customer database
effectively to overcome its rivals. It has so
far been successful in appealing to everyone
with its Tesco-branded price-ranges:
“Finest”, “Mid-range” and “Value”. It can
continue with the same policy while
establishing at the new markets. Tesco
should also continue its loyalty clubcard
program because it’s a unique way to
increase customer loyalty.

16. Mission statement of TESCO
Creating value for customers, to earn their
lifetime loyalty.

17. VISION STATEMENT
• Our vision is for Tesco to be most
highly valued by the customers we
serve, the communities in which
we operate, our loyal and
committed staff and our
shareholders; to be a growth
company; a modern and
innovative company and winning
locally, applying our skills globally.

19. • Tesco can take its customer loyalty program
to the next level by concentrating more
toward marketing research and linking
consumers behavior towards different
services. By researching more about their
customers behavior and satisfaction, we
they can create abetter profile to
understand the needs and trends.

20. Summary
• From “Pile it high and sell it cheap”, Tesco
developed a campaign “Every little helps” to
build consumer relations.
• Launched Clubcard loyalty program
• Diversified geographically into areas like
books, telecom, petrol, insurance, mobiles
and internet providers.
• Today largest British retailer and second-
largest in the world after Wal-Mart