In May 2011, Tesco committed £1 billion capitalIn May 2011, Tesco committed £1 billion capital
and revenue investment to improve the shoppingand revenue investment to improve the shopping
trip for customers. It set out a seven part strategytrip for customers. It set out a seven part strategy
designed to achieve its goals of being highlydesigned to achieve its goals of being highly
valued by customers and enjoying strong long-valued by customers and enjoying strong long-
term growth.term growth.
As of its 2006-year end Tesco was the fourth largest
retailer in the world behind Wal-Mart, Carrefour and
Home Depot. Tesco moved ahead of Home Depot during
2007, following the sale of Home Depot's professional
supply division and a decline in the value of the US
dollar against the British pound. METRO was only just
behind and might move ahead again if the euro
strengthens against the pound, but METRO's sales
include many billions of wholesale turnover, and its
retail turnover is much less than Tesco's.
1) Despite the fact that Tesco has a 27% of market share,1) Despite the fact that Tesco has a 27% of market share,
competitors are always one step behind.competitors are always one step behind.
2) With having all of these huge grocer giants that have online2) With having all of these huge grocer giants that have online
delivery services as well as offline retail s stores, market wasdelivery services as well as offline retail s stores, market was
packed and there was an opportunity and need of expansion inpacked and there was an opportunity and need of expansion in
other areas.other areas.
3)Tesco thought that if there is any market share left, there is a3)Tesco thought that if there is any market share left, there is a
potential for growth and expansion.potential for growth and expansion.
4)Other challenge in online selling is how to succeed without having4)Other challenge in online selling is how to succeed without having
huge expenses. Previous attempts to succeed in online sellinghuge expenses. Previous attempts to succeed in online selling
market for goods like furniture failed because of the inconveniencemarket for goods like furniture failed because of the inconvenience
and cost of shipping and handling.and cost of shipping and handling.
Tesco is a large U.K grocery firm and retailer whose main competitors are ASDA,
Sainsbury’s and Morrison’s, which are often called the Big Four in the United Kingdom.
Waitrose is another large chain that trails the Big Four in footprint. In recent years,
German grocers Aldi and Lidl have also become strong competitors in the U.K. grocery
Tesco also 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 28.6% market share, followed by ASDA and Sainsbury's, which each have
just around 17% market share. Over the past two years, Aldi and Lidl have taken
market share from the large incumbents.
TESCO went to extra ordinary heights to understand its customers :-
1) Marketing was aimed at sensible , middle class families from its slogan
“Every Little Helps “ to its no frills website .
2)A loyaly card (Clubcard ) was introduced in 1995 , and data subsequently
fed into Customer Management Systems.
3)American preferences were studied by embedding staff with US families
prior to launching its USA operations in 2007
Tesco did not have to change its supply chain due to its new strategy, but more of
expand its capacity and workforce.
Because company already had online channel for food, it was not extremely difficult to
extend this line and offer non-food products.
Tesco defined customer needs and expanded the range of products offered online and
fulfilled those needs. This new expansion of product line improved existing supply
chain without making drastic changes.
Tesco's success has not come about by chance but is the
result of effective leadership and management. The setting
of a clear vision is central to Tesco’s success, supported by a
commitment to establishing and monitoring specific
objectives and devising strategies to ensure these are
achieved. All aspects of the business are regularly
monitored and, when necessary, plans are adapted to
ensure targets are ultimately met. At the heart of all Tesco
does is a commitment to being a responsible retailer.