La stratégie de mondialisation de Tesco

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enter the USA market. Which was its value proposition? What were the opportunities and the threats in this market? How did Tesco try to address them? (5 points)

In February 2006, Tesco show his intention to implement 1.25 billion in 5 years to enter the western USA; at this time, the value proposition of Tesco is to be a chain of convenience focused neighborhood stores called Fresh and Easy Neighborhood Markets. Because of the regulation in the UK, Tesco has expended its knowledge skills about small formats stores. It focuses on small format stores operations, the company believes in the competitive potential of dense network focused on neighborhood stores providing an innovative retail offer.

The use of dense network of 10 000 square feet of high visibility corner location used by Drug retailers such as Walgreens will help to structure a chain of small formats food stores; Tesco used it to its advantage.

It was very risky, USA market is considered as “a graveyard of overambitious expansion by UK retailers”, and there was a deep skepticism about the entry in this market.

There were opportunities to develop a chain focused on offering high quality but affordable fresh and chilled prepared meal products served by a short lead time responsive distribution system, supplying higher levels of own label product products than US retailers

Then the biggest threat in the market was the concurrency such as Wal-Mart (the biggest retailer in USA) Aldi on the East coast and Trader’s Joe in the West with small retail stores. And finally, Tesco opened its first store in 2007 designed to be as fresh as Whole Foods, with the value of Wal-Mart, the convenience of Walgreens and a product range of Trader Joe’s. Despite of all the risk, the initial strategy of Tesco is a success thanks to a few points:

- The company attempts to engage with an online consumer culture to make his new brand known by the public

- Establishment of brand visibility and maximizing development opportunities by developing stores of low income and ethnically segregated communities.

- An integrated food production and distribution supported by follower-suppliers with the help of UK suppliers

-A muted competitive response, one year after the opening of the first store, no response from Wal-Mart were made (one attempt in Phoenix but not important enough), thanks to that, Tesco was able to continue developing its store network density

- The ability of Tesco to success in his gamble despite all the bad expectations from analysts.

Now Tesco is in possession of more than 100 stores in the USA but we can’t say if the strategy will be a success in the future.

B. Critical general question: Does the majority of the world’s population benefit from globalization? Give two arguments in favour and two arguments against this position. (6 points)

One one hand, the world’s population benefit from the globalization because of the development and the diversification of very big companies in poorer country which allow an economic growth in those countries with better employment and salary. What is more, globalization provide an access to usual consumption products which are only available for middle or higher class (Computer, mobile phone, TV…); Globalization is a good help to countries for developing their wealth by promoting exportations, what is more the economy of different countries are linked together (China and United States). So there are big benefits for the population thanks to the globalization.

One the other hand, big company that are outsourcing their operations in other countries to benefit from low salary are abandoning millions of workers (not very qualified) and those workers are in pain to find a job again. What is more, these companies don’t hesitate to use country with no labor law in order to have a hand cheap labor (they can use children to make their product like in China) which is not right on an ethical point.

Globalization made the world a big village with the same brands, stores, products. There is only one way of consumption. The process fastened the uniformity of urban society.

Finally, there is a high consumption of natural resources, pollution is growing, and the changes in the stock market can upset the whole world.

In order to conclude, we can say that globalization is profitable for the economy but some limits have to be settled to prevent abusing positions for big companies, corporations…