Answer to Question #295104 in Marketing for shan

Question

 Tesco: International Strategic Business Units.                                                                                  

Source : https://tesco-business-strategy-brainscentral.com

 total words. 2500.

Question 1

Based on the article above, Tesco choose to pursue SBU structure across all its business areas for maximising the degree of competitiveness. Advise Tesco based on your opinion on the success of TESCO upon pursuing the selected sturucture as the main tool to overcome competitors.

CLO 1 : Discuss the core issues, key concepts, elements, components and processes of strategic management

Question 2

Advice TESCO on the changes or improvements which ought to be done as to the retailing related sector in order to overcome the pandemic situation as faced by the world now strategically beside their current practice in the industry.

 CLO 1 : Discuss the core issues, key concepts, elements, components and processes of strategic management

Answer 1

Question 1

The pandemic wreaked havoc on the planet, resulting in a slew of bizarre circumstances. The majority of enterprises began to see a variety of options for maintaining profit margins. According to the report, Tesco will experience massive growth in the next years as a result of its ability to successfully weather the 2008 economic crisis despite aggressive development plans. While the company's financial strength and client base appear to be solid for the time being, the supermarket's organizational culture, structure, decision-making processes, and leadership have all assisted the supermarket in managing people – both employees and consumers. Tesco's management of the aforementioned factors has unquestionably aided cost-effectiveness, organizational efficiency, and staff devotion. As a result of its strong organizational and people management practices, Tesco is poised for better times in the future.

Tesco has prospects in emerging market regional marketplaces. To disperse operational risks and gain from economies of scale, the company should explore diversifying into Asian markets such as India, Malaysia, and Thailand. Tesco.com, for example, is an online store that allows the company to increase sales, cut costs, and attract clients from all over the world. Tesco may be able to expand internationally through franchise partnerships. Trent, a company whose operations are limited to the Indian market, has franchise arrangements with the store. Tesco can also grow into the digital entertainment market by selling branded tablets and phones.

Question 2

Tesco's future competitiveness will be bolstered by diversification and product differentiation tactics. The company's varied retail strategy could help it draw more customers to its online and physical stores, as well as its digital entertainment business. Tesco will be able to handle the current challenges and uncertainties thanks to its diversification strategy. Flexibility allows businesses to restructure their plans to reduce the risk of failure. Tesco's decision to close its Fresh & Easy outlets in the United States in 2013 was prompted by market conditions. With a broad retail approach, the corporation can rely on high-performing segments to keep the business running even while other brands are struggling.

Tesco is likely to use regional diversification in addition to product diversification to minimize the dangers inherent in the UK market. Franchise agreements with small firms in growing regions in Southeast Asia and Latin America could be involved. Tesco will be able to enter these areas successfully if it uses a franchise entry model that emphasizes outstanding customer service, fair pricing, a wide assortment of products, and the utilization of local suppliers. Trent was recently hired by Tesco to oversee its franchise in India as part of its effort to diversify into the Indian market. Tesco is likely to approach other emerging markets in the same way. Tesco may also deploy a strategic business unit (SBU) to boost its product category competitiveness. A strategic business unit that covers a company's operations, financial aims, supplier chains, and geographic reach, among other things, can assist a company improve its market competitiveness. Tesco has four SBUs: "UK Core," "Tesco International," "Non-Food," and "Retailing Services."

The UK Core is responsible for the home market, while Tesco International is in charge of the company's international operations. The Non-Food division is in charge of selling non-food commodities including apparel and machinery, while the Retailing division is in charge of internet stores, banking, and insurance. To maintain flexibility and support worldwide operations, the store is likely to pursue the international SBU. The creation of effective supply chains inside the host country, regulatory compliance, extensive product offers, brand development, and CRM are all part of such a plan. With this strategy, the merchant will be able to adjust its products to the preferences of local customers. Tesco launched the Fresh & Easy brand in the United States in an attempt to appeal to the local market's tastes and culture. The company is increasingly exploring other markets in India and China to benefit from economies of scale.

The store will be able to diversify into non-traditional categories thanks to the SBU structure. Tesco, in example, may create branded goods, such as smartphones, that complement its core services. By cooperating with fashion designers, the company can employ vertical integration to boost its non-food division, which includes clothing lines. When entering new markets, Tesco will use a custom-tailored marketing plan. When the company expanded into California, it created a new brand, Fresh & Easy, that matches the local values and preferences. Fresh goods and organic food were in high demand in a neglected sector, therefore in-city stores provided them. As a result, the company will most likely offer custom-tailored items in order to fit into the local culture and build a presence in the business.