Tesco's Global Expansion Strategy

The assignment examines Tesco's planned global expansion into Romania. It delves into the PESTLE analysis of the Romanian market, highlighting factors like political, economic, social, technological, legal, and environmental influences. The report discusses various entry strategies available to Tesco, including exporting and joint ventures, evaluating their risks and benefits. Finally, it provides recommendations for Tesco's successful entry into the Romanian market.

GLOBAL
BUSINESS

Table of Contents
INTRODUCTION...........................................................................................................................1
GLOBAL BUSINESS.....................................................................................................................1
INDUSTRY ANALYSIS................................................................................................................1
COMPETITOR ANALYSIS...........................................................................................................2
TARGET COUNTRY ANALYSIS.................................................................................................2
MANAGERIAL CHALLENGES...................................................................................................3
OPERATIONAL CHALLENGE.....................................................................................................4
ENTRY STRATEGIES...................................................................................................................4
CONCLUSION & RECOMMENDATION....................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
The global corporation is the firm that operates global business across the world. It is
form of internation business that sells the products world widely (Burnett, 2017 ). With the help
of technological advancement the fast and international trade expansion, firms are incentivized to
sell products and service in foreign market. The present report is based on Tesco, it is global
leading brand and it deals in retail services and grocery products. The main target markets where
the large number of the public uses to live. Thus, Tesco will select the effective marketing
strategy to carry out the things systematically. In this, Tesco is taking initiatives to operates its
business activities in Romania.
GLOBAL BUSINESS
This refers to international trade in which global business conducting their business
activities. In the effective manner. International business may be conducting their activities
appropriately and there can be possibilities in order to maximize the profitability (Hill, 2017 ).
Thus, in order to get the proper understanding of the international transaction it is essential to get
engaged in legal requirements and trade regulation in which they are conducting their business
activities. Thus, trade and investment can be examined with the depth and conceptual
understanding of the trade and investment across the national boarders.
INDUSTRY ANALYSIS
The SWOT analysis will be helpful in terms to enhance competitive environment and to
conduct the better working it is essential to under go with strength, weakness, opportunities and
threats. Thus, it is defined in the following context as-
Strength-
 Tesco has won the number of the awards and it deals in quality and excellence customer
service.
 With the use of improved technical advancement and better operations it is possible to
have greater cost efficiencies and enhanced service experience (Liu, 2017.).
Weakness-
 The consumer refuse to purchase many of products related to the disposal income and
they do not need to adjust its inventory and selection with the high of inventory.
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 In this, competitive pressure led to create price wars and they have eroded some of the
retailer profit margin. This kind of the activities must be improved in order to being better
working in the enterprise.
Opportunities-
 In this, there are many opportunities in the private label market.
 The significant opportunity to grow online shopping will help to attract the wide number
of the customers in market.
 The maximum opportunities are with the strategic alliances with the other brands and
admired companies to offer more product so that customer attraction can be enhanced
(Polonsky and Jevons, 2009 ).
Threats-
 The economic recession and credit purchase will continue to threaten the market share
and its profitability.
 There are number of rivalries this is the biggest threat to the enterprise.
COMPETITOR ANALYSIS
Tesco is the larger grocery store in the UK and the main competitors as ASDA,
Sainsburry and Morrison and this all are crucial in order to bring long term profitability in the
enterprise. In addition to this, Tesco also uses to competes with the convenience stores and they
are continually gaining popularity in customer taste and shifting towards providing quality
products in the affordable rates.
TARGET COUNTRY ANALYSIS
The target market analysis will be helpful in terms to conduct the business operations in
the proper manner. Thus, it is defined following manner as are-
 Culture- The Romanian culture sets apart from the various countries but it is quite similar
to the European country. The number of the elements are here and that all defined the
beauty of the place (Rao-Nicholson and Khan, 2017).
 Administrative- This is the place that is situated in the south eastern Europe with the
boarder with the Bulgaria. Thus, the legal authorities has transformed most of the social
contributions from employees to employers. They works as to set the legal compliances
so that all things can be taken in the better manner.
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 Geographic- The geographic analysis the topic that helps to conduct the business
activities in the more proficient manner. Thus, the firm need to conduct its business
operation in the systematic mode. With help of knowing about the size, age, income of
the people the Tesco can able to set up its business operation in the Romania.
 Economic- The growth of the Romania is increasing day by day and due to this, there is
more chances in order to enhancement in the job gains ( Rugman and Verbeke, 2017 ).
The country has high rate of the disposal income and there are number of the ways to
gain huge amount of the profitability in market. This is the system that is helpful in terms
to enrich the growth.
Potential market analysis-
The market potential analysis of the Romania is need to be considered before setting up
the operations in Romania market. Thus, main aim is to determine the entry size of the market at
the time of taking the entry. With help of it upper limits of the market can be analysed. In
addition to this, it can be said that market potential can be measured with the help of sales and
volume of sales in the enterprise. On the other hand, it can be said that market penetration and
market share uses to showing the performance in the existing markets and the expected
performance must be as per the prioritize the resources deployment. Thus, Romania is the
marketing which excellent potential, strategical locations and favourable business climate will be
helpful in order to enrich the growth of the enterprise.
MANAGERIAL CHALLENGES
The challenges are needed to be handled and it is has been defined in the manner as
financial risk and strategic risk. Thus, its defined in the following context as are-
Financial risk- This is also the one of the major concern for the each enterprise in market. This
is inherent in the business enterprise and risk management is essential in aspects if running
successful business (Entry Strategies in Global Markets, 2018.). In order to take the entry into
the Romania market there is needed to conduct with various risk as are-
 Market risk
 Credit risk
 Liquidity risk
 Operation risk
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Strategic risk- The strategical risk is the kind of the risk that can be occur due to the issue of
unsuccessful business plan. In this Tesco need to take various initiatives in terms to operate teir
business function in the Romania by undergoing with adopting the strategical analysis so that all
things can be undertaken in better manner. Thus, it is process that works as to identifying,
quantifying and mitigating the risk so that better things can be undertaken.
OPERATIONAL CHALLENGE
 Political- The current legislation of the market, European legislation, regulatory bodies
can impact the overall working in the enterprise. To operates business activities in the
global market
 there is need to include the number of the factors as tax rate, impending legislation,
political instability can affects the working of the enterprise.
 Economy- In this, the Romanian economy situation, trends, taxation issues specific to
product and services can affects the working of the enterprise in the huge context. This
kind of changes can affects the working of the enterprise in the greater manner.
 Social- The taste and preferences of the Romanian people must be identified. The level of
consumer behaviours and attitudes should be analysed so that overall things can be
conducted in better and efficient mode.
 Technological factor- The Tesco need to have the use of wide variety of technical
advancement so it can leads to perform business function in the appropriate mode. With
help of using of technologies the all equipments must be analysed so that things can be
undertaken in better mode.
ENTRY STRATEGIES
The most common kind of marketing strategies as are-
 Exporting- This means sending the goods that are produced to sell them in any another
country. It is low risk strategy that firms finds more attractive for the several reasons.
Thus, risk, cost an resources are the things with help of which exporting can be
undertaken in better manner.
 Joint venture- The term join venture is the partnership between the domestic and foreign
firm. In this the both partner invest money, share ownership, share control and venture.
Thus, Tesco can take initiatives with the method as real estate and regulatory
compliances.
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CONCLUSION & RECOMMENDATION
Based on the above report it can be concluded that global business means to bring
expansion in the business activities by start up the operations in any other area. The present
report is based on business activities of Tesco and this entity is planning to starts its operation in
Romania.
Recommendation
On the basis of above, there are some recommendation and it is need to be defined in the
following manner as are-
1. Tesco must take initiatives in order to provide the better quality of products so that they
can expand their business activities in Romania.
2. The enterprise should take steps in order to cope up with the financial and financial and
strategical risk.
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REFERENCES
Books and Journals
Burnett, R., 2017. Global strategies and local markets: explaining Swedish music export success.
In Global Repertoires. Routledge.
Hill, T., 2017. Manufacturing strategy: the strategic management of the manufacturing function.
Macmillan International Higher Education.
Liu, Y., 2017. Born global firms’ growth and collaborative entry mode: The role of transnational
entrepreneurs. International Marketing Review. 34(1). pp.46-67.
Polonsky, M. and Jevons, C., 2009. Global branding and strategic CSR: an overview of three
types of complexity. International Marketing Review. 26(3). pp.327-347.
Rao-Nicholson, R. and Khan, Z., 2017. Standardization versus adaptation of global marketing
strategies in emerging market cross-border acquisitions. International Marketing Review.
34(1). pp.138-158.
Rugman, A. and Verbeke, A., 2017. Global corporate strategy and trade policy. Routledge.
ONLINE
Entry Strategies in Global Markets. 2018. [Online] Available
through:<https://courses.lumenlearning.com/clinton-marketing/chapter/reading-entry-
strategies-in-global-markets/>.
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