Essay about Tesco’s Failure in America

Words: 1488
Pages: 6
Open Document
Tesco’s Failure in America
In times of fast progress, in terms of economic development and globalisation, many multinational companies are extending their business overseas. One of those many firms is Tesco. This report will elaborate more about how Tesco failed in America when it encountered cultural and economic differences.
Tesco is a British owned multinational grocery and general merchandise retailer that was found in 1919 by Jack Cohen in London. (Tesco PLC, 2013). Over the years Tesco has grown rapidly and now it operates in 14 countries around the world. (Tesco PLC, 2013). Tesco is now the third largest retailer in the world. (Tesco PLC, 2013). In 2007 Tesco entered the US market under the name of Fresh & Easy, opening …show more content…
Since Americans are patriotic towards their local sports teams. Cultural diversity offers a potential source of sustainable competitive advantage. Tesco should have created a multi-cultural research and development team which had British and Americans in the team. This would have helped the research team comprehend the information and understand the American way of life style easier. Equipped with local cultural sensitivity, knowledge, firms would have been able to develop more effective local advertising and marketing strategies. Tesco failed in America due to its own actions. If they had understood the culture of the local market thoroughly then Fresh & Easy might not have failed.
The economic condition of an economy can encourage and discourage investment and other economic activities. Tesco entered the US market in 2007, it had just started to establish itself when it was hit by the 2007-2008 financial crisis. Most of the Fresh & Easy supermarkets were opened near new housing developments. During the 2008 recession everything turned into a nightmare when the real estate market collapsed as well. Mortgage crisis ravaged many of the areas where Fresh & Easy shops were located. Therefore if there are no customers there are no sales. It was foreseen that Tesco would pull itself back together but even after 5 years it wasn’t able to make profit. This resulted in some unhappy shareholders. To make the situation even worse, Tesco had to
Show More

Related Documents: Essay about Tesco’s Failure in America

Tesco International Management Essay

INDEX: Page: Index 1 Introduction 2 Question 1: YIP’s drivers of globalisation framework 3-9 • Market 5 • Cost 6-7 • Government 8 • Competitive 9 Question 2: Thailand / Korea / Japan 10-16 • Entry Strategy 11 • Brand Management 12-14 • Politics/ Economy 15-16 Question 3: Fresh & Easy Neighbourhood Markets 17-23 • Macro Assessment 18-20 o Risk in foreign…

Words 9639 - Pages 39

Essay about analysing Tesco

types of businesses in Hampshire Firstly I will be analysing Tesco, a global grocer and general merchandise retailer. Tesco has a massive 5380 store across the globe; located in Europe, north and South America and scattered across Asia. It is by far a top contender in the businesses ranks. Tesco's belong to the tertiary sector as it does not make products but they provide a service. Even though it is a enormous company, its headquarters is based in Chesnutt, United Kingdom, and is run by chairmen…

Words 977 - Pages 4

Virgin Group Essay

Business Strategy Unit 7 EDEXEL Level 4 Tutor: Louise Penketh Manchester College 22/4/2010 By Guitola Tiny Contents Introduction 4 Introduction to Virgin Group 4 Strategy Formulation 5 Virgin Group Smart 6 Stakeholder Map 6 Virgin Group PESTLE 8 Political 9 Technological 9 Environmental 10 Virgin Group Porter’s 5-forces 11 Porter’s 5-forces analysis (Michael Porter (1947)) 11 The Treat of Entry 11 Governmental policies…

Words 7832 - Pages 32