You are to prepare a two-page (single-spaced) paper based on the case assigned.

Question

You are to prepare a two-page (single-spaced) paper based on the case assigned. The case is listed below.

Case Note Format

Your case analysis should be in the format of a two page (not counting the reference section) single-spaced Executive Summary. The report should follow the following format in sentence/paragraph form using APA format to cite sources. You are required to cite the textbook and at least one outside source from an academic peer-reviewed article.

1. Introduction of Firm

2. Overview of Firm Competitive Advantage

3. Problem(s) Statement

4. Alternative Solutions - Solutions/Opportunities

5. Option 1 Analysis

6. Pros

7. Cons

8. Option 2, Analysis

9. Pros

10. Cons

11. Add More Option Analysis as needed.

12. Decision and Support

13. Action Plan

14. References in APA format

Book Pitt, M., & Koufopoulos, D. N. (2012). Essentials of Strategic Management. London: Sage. ISBN: 9781849201872

CASE STUDY: Tesco plc

Tesco is a British international grocery and household goods retailer. Jack Cohen founded Tesco in 1919 and opened its first north London shop in 1929. Tesco ex- panded rapidly after the 1939–45 war with Cohen’s famous dictum ‘pile it high and sell it cheap.’ By the 1960s it was one of the largest supermarket chains, operating 800 stores around Britain, pioneering much larger retail spaces selling grocery and allied goods.

Throughout the 1970s, 1980s and 1990s it continued to grow by develop- ing ever-larger, out-of-town stores, acquiring smaller chains and by extending its range of Tesco own-label goods. Over time it has emphasised value (quality at competitive prices), rather than simply low prices.

In 1997 (Sir) Terry Leahy became Chief Executive, leading a new phase of aggressive expansion. An alliance with the oil company Exxon Mobil allowed it to operate grocery stores on hundreds of petrol forecourts. It created multiple UK store formats based on size, location and range of goods sold. It entered the retail markets of the United States, Europe and Asia through acquisitions and joint ventures. It has extended its range of consumer goods and diversified into new services (such as banking, an internet portal, mobile phones, insurance, and on- line shopping). Tesco has become the UK’s largest retailer (with the most popular customer loyalty card scheme) and the third biggest retailer worldwide after US Wal-Mart and French Carrefour. Its key statistics over the last 5 years show that the pace of growth has not slowed.

Tesco is evidently very competent at what it does. The puzzle for its many competitors, themselves competent retailers, is how it has outperformed them so substantially. Amongst the answers to this question are probably the following:

• The singular, dedicated leadership of Sir Terry and his senior management team.

• The clarity of Tesco’s vision of growth via diversification and overseas expansion

• The application of appropriate resources and know-how to maintain growth in existing areas, to innovate, and to enhance the prospect of success in each new area. • Exploiting the capabilities of successful alliance partners, to distribute goods efficiently to its stores, diversify, and develop overseas.

• Developing expertise progressively in every activity by innovating and absorb- ing best practice observed elsewhere.

• Rewarding individual performance and promoting capable people.

Explanation / Answer

Overview:

Tesco Plc started in 1919 by Jack Cohen, in 1921 he used his demob money to surplus food from the army and sell it from a barrow in Hackney. He launched his own tea brand in 1924 and used first three letters of his supplier's name with his first two letters to make Tesco Plc. In 1929 he opened his first retail outlet in North London. He soon acquired the name of “Slasher Jack.” Today he is the biggest retailer in the UK with 330,000 employees and 3146 stores. His pre-tax profits are in billions, its policies and plan make national, international headlines and the company is always quoted for its efficient and consistent retail strategy. Its world third largest retail chain with a presence in 12 countries and over 27 million people have a Tesco club card in the UK.

Competitive advantage:

It has many advantages over its competitors but the main are as follows:

Problem Statement: The challenge for the organization to keep growing at the same pace and maintain its international positioning as being third largest retail store after The US Wal-Mart and the French Carrefour.

Option 1: They should create a bigger distribution base and create independent profit centers in each area of operation or product lines. The local benefits of cultural adaptation will increase and maintain existing pattern of growth and sales.

Pros: The benefits will be as follows:

Cons: The negatives of the making independent profit centers and redistributing the distribution centers would be as follows:

Option 2: Need to have a leadership plan as today entire organization is centered around Sir Terry and his strategy.

Pros:

Cons:

Decision and Support:

The above can be done by the support of the management and the stakeholders. The leadership has to get leaders trained to take over the helm of affairs under the able guidance of Sir Terry. The need is to create independent thinking with a cohesive strategy.

Action Plan:

A systematic plan should be put in place as follows:

Reference:

Tesco: How one supermarket came to dominate

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