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Leave us your feedback <#feedback>. × inShare <javascript:void(0);>0 * Embed Doc * Copy Link * Readcast * Collections * CommentsGo Back Download 1FAKULTI OF BUSINESS AND MANAGEMENTSEMESTER 3 / TAHUNBBP4103 PENGURUSAN STRATEGIK NO. MATRIKULASI : 710624025377001 NO. KAD PENGNEALAN : 710624025377 NO. TELEFON : 0194146812 EMEL : [email protected] PUSAT PEMBELAJARAN : PPW KEDAH 2 NO CONTENT PAGES 1.0 INTRODUCTION 232.0 TOWS Matrix of TESCO 453.0 SWOT ANALYSIS 5134.0 CRITICAL SUCCESS FACTORS 14185.0 CONCLUSION 18196.0 REFERENCES 1921 3 1.0 INTRODUCTION Jack Cohen founded Tesco in 1919 when he began to sell surplus groceries from a stall at WellStreet Market, Hackney, in the East End of London (ironically, the market is now much smaller than in those days; a large Tesco Metro store now sits on the site.)The Tesco brand first appearedin 1924. The name came about after Jack Cohen bought a shipment of tea from T.E. Stockwell .He made new labels using the first three letters of the supplier's name (TES), and the first twoletters of his surname (CO), forming the word TESCO The first Tesco store was opened in 1929in Burnt Oak,Edgware, Middlesex. Tesco was floated on the London Stock Exchange in 1947as Tesco Stores (Holdings) Limited . The first selfservice store opened in St Albans in 1956(which remained operational until 2010, with a period as a Tesco Metro), and the firstsupermarket in Maldon in 1956.During the 1950s and the 1960s Tesco grew organically, and also through acquisitions, until itowned more than 800 stores. The company purchased 70 Wi ll iams on s stores (1957), 200 Harr owSto r e s outlets (1959), 212 Ir w i n s stores (1960, beating Express Primier Supermarkets to thedeal), 97 Char le s P hi ll ips stores (1964) and the Victor Value chain (1968) (sold to Bejam in1986).Originally specialising in food and drink, it has diversified into areas such as clothing,electronics, financial services,telecoms, home, health, car, dental and pet insurance, retailing andrenting DVDs, CDs,music downloads,internet services and software..The food and drink retail sector represents the largest industry in the UK, providing employment 4 for over three million people in primary production, manufacturing and retailing. In 2003 retailaccounted for 9% of gross domestic product (Datamonitor, 2003). In recent years UK supermarkets have come under increased scrutiny over their treatment of suppliers, particularlyof ownlabel products, yet the development of strategic supply networks has been an integral partof most supermarket strategies for the past decade.The report below provides an insight into the supermarket company, Tesco, with emphasis on itsexternal environment analysis and company's analysis of resources, competence and culture.Two future strategic options are suggested in regards to the resources based strategies.Tesco is one of the largest food retailers in the world, operating around 2,318 stores andemploying over 326,000 people. It provides online services through its subsidiary, Tesco.com.The UK is the company's largest market, where it operates under four banners of Extra,Superstore, Metro and Express. The company sells almost 40,000 food products, includingclothing and other nonfood lines. The company's ownlabel products (50 percent of sales) are atthree levels, value, normal and finest. As well as convenience produce, many stores have gasstations, becoming one of Britain's largest independent petrol retailers. Other retailing servicesoffered include Tesco Personal Finance. 5 2.0. TOWS Matrix of TESCO Strengths WeaknessOpportunities y Increasing market share y Tesco's general growth and ROI showno sign of abating. y Insurance. y Tesco online. y Brand value. y UK market leadership reinforced. y N onfood retail. y Health and beauty. y Further international growth. y Top Grocer and largest retailer at UK Brand value,good HR logistic,different marketformat.All this can help to increase the marketshare at N on food segment,and higher marginnew markets. y Perceived high brand value can help atexpansion. y Reliance upon the UK market. y Debt reduction. y Signs point to serialacquisitions. y Dependency at UK market is the weakness thatshould be over come toexpand and exploit other geography. y Moving to higher margin markets can minimizethe weakness associated withless captured N on foodmarket. 6 Threats y Different market formats,Brandvalue,customer centric approach,and new product and services can minimize the major threat of descrease in market share either due toentry of Wall mart,acquisition by Asda,WmMorrison Bid. y UK structural changecould spark a price war. y WalMart/Asdachallenge. y Internationalexpansion. y Focusing on the N onFood segment along with theexpansion to differentgeography can minimize thethreat and weakness. 3.0 SWOT ANALYSIS3.1 Strengthsa. Increasing market share. Tesco holds a 13% share of the UK retail market. Its multiformat capability means that it willcontinue to grow share in food, while increasing space contribution from hypermarkets willallow it to drive a higher share in nonfood. b. Tesco's general growth and ROI show no sign of abating. 7 In the UK, Tesco's late 2002 investment into Westmidlands based convenience store groupT&S was billed as the most aggressive move into the neighborhood market by a bignameretailer so far. The deal has turned Tesco into the country's second biggest convenience storechain after the Cooperative Group, and the company also plans to open up 59 new stores in theUK this year. Tesco has grown its nonfood division to the extent that its revenues now total 23%of total group earnings. Tesco's international business segment is growing steadily, and is predicted to contribute nearly a quarter of group profits over the next five years. If geographicalspread continues to grow, this will ensure Tesco's continued regional strength. c. Insurance. In fiscal 2003 Tesco Personal Finance reached the milestone of one million motor insurance policies, making it the fastest growing motor insurance provider ever. Thegroup's instant travel insurance allows Clubcard holders to buy their holiday insuranceconveniently at the checkout. Pet insurance now has over 330,000 cats and dogs covered, whilethe life insurance policy followed on from the success of last year, when it was voted The MostCompetitive Life Insurance Provider in the MoneyFacts Awards 2003. d. Tesco online. Tesco.com is the world's biggest online supermarket and this year the group had sales of over £577 million, an increase of 29% on last year. Tesco online now operates in over 270 storesaround the country, covering 96% of the UK. With over a million households nationwide havingused the company's online services, the company has a strong platform to further develop thisrevenue stream. 8 e. Brand value. Profits for Tesco's operations in Europe, Asia and Ireland increased by 78% during the last fiscalyear. The company has a strong brand image, and is associated with good quality, trustworthygoods that represent excellent value. Tesco's innovative ways of improving the customer shopping experience, as well as its efforts to branch out into finance and insurance have alsocapitalized on this. f. UK market leadership reinforced. Since acquiring number one ranking in 1996, Tesco has developed a successful multiformatstrategy that has accelerated its advantage. Its UK sales are now 71% larger than Sainsbury's.Also the Competition Commission's report makes it very difficult for a competitor to challengeits scale and has effectively