A business report for TESCO
SWOT is good method to analyze the running of company clearly, now, we will use the SWOT analysis to find out TESCO’S strength, weakness, opportunity and threat .We believe that the analysis will help US find the reason of TESCO’nightmare in America more completely.
Strength
Faced the challenge of conquering American market, TESCO have their own advantages:
1.They have Intensively researched for two years.
2.They were Fully reinforced and good competition (UK’s largest groc er and the second largest in the world).
3.They Entered US through the west coast, a region which did not have the dominance of Wal-Mart.
4. They have won the competition with Wal-Mart in
some markets.
5. Huge fund support TESCO’running from financial market.
6.They Opened an hour early in the morning
Weakness
There are a lot of reasons led Tesco to fail in America, and we point out these reasons as follow:
1.They have too much the "British Style" shops, for example they chose using pre-packed food, small packing and too much self-service, all of these was not American customer’s habit who prefer. In addition, they did not sale a lot of local food and American brand, so, TESCO was not popular in American market.
2.For choosing store locations, their store was not closer to warehouses and less warehouses linked together. So, they could not concentrate around hubs and form the network.
3. Bad business numbers (especially how to react to them) start with less shops -> make them work -> then open more shops (2012 was too late)
- -> budget management
- do research on why the competitors failed
4.The Brand (including positioning Tesco in the market) positioning as a convenience store "locality's neighbourhood market"
- more advertising (TV)
- new Brand name (something without obvious meaning)
Opportunity
Admittedly, TESCO actually have their opportunities to win, although, these opportunities were not too much.
1.At beginning they had chance to take on Wal-Mart in it own backyard, indeed, because they have very good reputation and strength to make them so competitive.
2.In the middle period, they tried to revive their sales and reposition their plan to increase their stores, but they faced too much external pressure, for example, the local economic situation.
Threats
To analyze this part, we divide it into two parts and point out this kind reason clearly.
1.The outside threat
Indeed, they faced the US economic crisis in 2007 and the economic downturn of 2009 in California, at the same time, failure in other place increased the pressure they ran in America.
2.The inside threat
Poor strategy, poor execution and too much confidence (Hyped research and planning) made they
running appear too many errors and go against American customer’s habit, so, they face the threat which make them worse and worse.
In addition, loosing too much profit let TESCO bear too much pressure from their shareholder and decreased the growth rate of their development in America.。