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Business Strategy: Tesco Add in library

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Discuss business strategy by Tesco?



Tesco is the largest food retailer in UK and it operates around 2318 stores in the globe. It also is called as a wholly owned subsidiary for providing online services and offers online and offline personal financial services. Tesco approaches to work with people that help the company to remain competitive. Tesco has a deep strategy for growth and development. It allows the business to span and expand in multiple countries. It practices to encompass the best business practices and enables to decrease the price with quick access. The strategy of global markets benefits the company immensely and it is now the first major retail in UK. (Newby, 1993)

The company inspired high number of customers to sign up with Tesco club cards that can increase the sales. The company satisfies wide range of customers with the presence of tech supports. Finally Tesco has an opportunity to be successful and to remain effectiveness in the world. The business strategies play a major role in long term growth of the company and Tesco should understand the opportunities of new markets in terms of business structure, corporate culture and organizational culture. The assignment will analyze the issues and strategies with respect to growth and success of the business. This can help to lead to success and development. (Smithers, 2009)


Business strategies

The company carry huge market share in UK and faces huge challenge to deal with the competitive situations. It faces issues with management of growth rate that decreases every year and the issues are associated with business diversifications, high prices of raw materials with respect to increase on the prices, poor decision of finances, high investment in club cards etc.  

Diversification strategies in the business are very poor and this is the reason, Tesco is decreasing its market share. It deals in multiple businesses and apart from going global, there is a need of other issues that could create problems in business circumstances. Tesco is not able to meet the requirements with respect to the competitors such as Wal-Mart, etc. (Johnson,, 2009)


The other diversification with the nightmare decisions for investment made in the tech field. It provides the diversified products with respect to the decrease of profits and increases market shares with 23% from the low cost approach and right quality. Huge diversification has made the company to decrease the market shares and increase the profitability. Most of the business failure was the reason of low service offerings and high price ranges. Another major cause was associated with poor planning and decision making without long term success. (Bromley & Thomas, 1993)

Increase in the price has also generated huge challenges for the company. Tesco was focusing on cost leadership strategy and the company has been cost focused with middle income and high income people by new introduction of brands in the market. With the increase of price, the level of income has decreased the growth of the company and it also implemented discounts and offers to increase the confidence of the customers. It has formulated few changes to attract the customers toward the company and to deal with the pricing strategy successfully. Thus, there are problems with current market situations of the business. Tesco is not able to meet the new products needs such as forex, derivatives, swaps etc. Investment in banking was the appropriate decision making strategy in the year 2000. (Bowby, 2001)

Company introduced more diversified products that decreased the profitability of the company and also it introduced selling televisions, mobile phones, tablets and music system etc. The UK market has been particular about low cost and right kind of quality that has been offered by customers in different stores with diversified products. Thus, the decision made by the company to meet with the poor conditions rather than focusing on the discounts and offers that could create business failures. (, 2010)

Tesco also has launched the new strategy sell its products through which the company has introduced high volume of sales and lose its growth. The major problems were associated with term planning and decision making that decreases the market share. Thus, it has also expanded its business in both the business. Therefore, to resolve the issues, the company came up with new strategies like insurance on the electronic products that will develop the best outcome for the company. Company is also facing tuff competition with respect to prices and it increasingly is looking for cost leadership in the market. (Harris,, 1993) 


To recommend, the financial products such as mutual funds and derivatives will help the business to deal with the business. With the variety of products associated with mutual fund, it can offer the customers with low tax rates and bring confidence.

With the help of e-logistics and e-procurement, it could decrease the cost of raw materials that will increase the company for long term. E-procurement will help the company to decrease the price of operations which deals in future. Thus, technology will decrease the price of the product and manage the position in the UK market. (Desvaux, 2009)

With the local fresh products, Tesco will deal with the income group and achieve the strategies of cost leadership in the country. Local farm products will offer the company to develop the strategies of confidence with respect to the customers. Local farm products offer to decrease the costs in terms of increase of the sales in the long term. (Financial times, 2009)

With the introduction of electronic products such as mobile, free insurance tools and techniques, it will increase the sales of the company. The best techniques are the insurance package that attracts the customer with respect to the support of the customers.  

Thus, Tesco can increase the opportunities with the increase of market penetration strategies. It can offer high quality food and continue to deal with the rewards through economic downturns. To tackle with the challenges, the company can focus on competitive advantage to deal with the ideas and stocks properly. It needs to possess strong foundation in domestic market.

Tesco can follow the huge growth and innovation in the country and can bring into competition successfully.   



1. Johnson, K. Scholes, R. Whittington (2009). Fundamentals of Strategy. Essex: Prentice Hall. Couldn't get

Defra, Analysis (2006, May), Economic Note on UK Grocery Retailing. Defra, Food and Drink Economics branch. Can'T be retrieved from and

Bowlby, R. (2001).Carried Away: The Invention of Modern Shopping. New York: Columbia University Press. Retrieved February 20, 2010, from Questia database:

Bromley, R. D. & Thomas, C. J. (Eds.). (1993).Retail Change: Contemporary Issues. London: UCL Press. Retrieved February 19, 2010, from Questia database:

De ChÂtel, F., & Hunt, R. (2003), Retailisation: The Here, There and Everywhere of Retail. London: Europa (2010), Emerging from the downturn. Global Powers of Retailing 2010, Retrieved on February 18, 2010 from:

Desvaux, (2009, May 29), How to keep European customers buying, Business Week. Retrieved on February 20, 2009 from

Financial, (2009, October 6). Retrieved on February 20, 2010

Ghost Towns; MPs Fear the Unchecked Expansion of Supermarkets Such as Tesco Will Destroy 40 per Cent of Britain's Small Stores by 2015, Creating Cloned High Streets. (2006), The Daily Mail, London, England, p. 22

Harris, F. W., & O'Brien, L. G. (1993). Chapter Twelve The Greening of Shopping. In Retail Change: Contemporary Issues, Bromley, R. D. & Thomas, C. J. (Eds.) (pp. 229-246). London: UCL Press. Retrieved February 19, 2010, from Questia database:

Harvey, M, (2000), Innovation and competition in UK supermarkets, Supply Chain Management, 5, 1.P 15 to 21

Newby, P. (1993). Chapter Eleven Shopping as Leisure. InRetail Change: Contemporary Issues, Bromley, R. D. & Thomas, C. J. (Eds.) (pp. 208-228). London: UCL Press. Retrieved February 19, 2010, from Questia database:

Nicholson-Lord, D. (2004), The Food Revolution That Lost Its Soul: As Organic Produce Booms, Supermarkets and Big Processing Companies Have Moved in. Does It Matter That the Pioneers Are Pulling Out? New Statesman, 133, 24+

Smithers, R., (August 17, 2009). Tesco becomes UK's first retailer to display carbon footprint on milk. Retrieved on February 20, 2010 from


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