International Business Assignment- Tesco

Running head: INTERNATIONAL BUSINESS
INTERNATIONAL BUSINESS
Name of the Student
Name of the University
Author Note

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EXECUTIVE SUMMARY
Tesco is one of the multinational companies in Britain that deals in general merchandise and the
groceries in the multinational market. The retail company was founded in the year 1919 by Jack
Cohen and is presently headquartered in the Welwyn Garden City, Hertfordshire, England,
United Kingdom. The following report opens with a brief overview of the concerned company in
discussion, Tesco and the concerned country that has been chosen for the expansion purposes of
the retail magnet. The report also attempts a brief summary of the previous assignment and
proceeds to provide an analysis of the concerned country wherein the retailer had been planning
an extension, Australia. The report proceeds further to provide an analysis of the entry mode that
is recommended for the concerned company and attempts an analysis of the competitive market
that is present in Australia in the fields of retail. The report also takes into consideration the
various marketing and the research and development strategies that might be implemented by the
company and aims to provide the concerned reader with the recommendations regarding the
matters related to the production of the British retail magnet, Tesco. The report near the end with
the attempt of throwing some light on the issues that the concerned company might face in the
matters related to the international human resource management and the considerations that it
might implement in order to address the afore-mentioned issues.

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Table of Contents
Introduction..........................................................................................................................3
Brief overview.................................................................................................................4
Country analysis..............................................................................................................7
Entry analysis...................................................................................................................9
Competitive strategy......................................................................................................10
Marketing and R&D considerations..............................................................................10
Production recommendations........................................................................................11
International HRM issues and considerations...............................................................12
Conclusion.........................................................................................................................13
References..........................................................................................................................14

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Introduction
Tesco is one of the multinational companies in Britain that deals in general merchandise
and the groceries in the multinational market. The retail company was founded in the year 1919
by Jack Cohen and is presently headquartered in the Welwyn Garden City, Hertfordshire,
England, United Kingdom. The company is known to be one of the major retailers in the country
and the third largest in the whole world on the basis of the profits that the company earns and the
ninth largest retail company in terms of the revenue that the company earns for itself. Tesco is
known to be the owners of the various shops in twelve different countries spread over the
continents of Europe and Asia (Tescoplc.com, 2018). The retailer also owns the title of being the
market leader of the various groceries in the United Kingdom. The retail company has been
planning an expansion in the Australian market. The following report deals with the matters that
pertain to the strategic recommendations on the matters that pertain to the expansion of the
British retail magnet, Tesco. The following report opens with a brief overview of the concerned
company in discussion, Tesco and the concerned country that has been chosen for the expansion
purposes of the retail magnet. The report also attempts a brief summary of the previous
assignment and proceeds to provide an analysis of the concerned country wherein the retailer had
been planning an extension, Australia. The report proceeds further to provide an analysis of the
entry mode that is recommended for the concerned company and attempts an analysis of the
competitive market that is present in Australia in the fields of retail. The report also takes into
consideration the various marketing and the research and development strategies that might be
implemented by the company and aims to provide the concerned reader with the
recommendations regarding the matters related to the production of the British retail magnet,
Tesco. The report near the end with the attempt of throwing some light on the issues that the

4INTERNATIONAL BUSINESS
concerned company might face in the matters related to the international human resource
management and the considerations that it might implement in order to address the afore-
mentioned issues.
Brief overview
Headquartered in England, United Kingdom, Tesco PLC generally known as Tesco is one
of the retail magnets of the world that deals in the multinational merchandise and the grocery.
The company is known to be one of the leading companies in the grocery markets of Hungary,
Ireland, Thailand and United Kingdom and is the owner of the stores across twelve different
countries in the continents of Asia and Europe. The company was founded in the year 1919 by
Jack Cohen and had opened the first store in the market in the year 1931 and ever since has been
ruling the retail market in the country and has been maintaining a huge expansion in the country.
The company is known to belong to the United Kingdom and has displayed a huge amount of
diversification all over the world in the areas that deal with the books, clothing, electronic items,
furniture, the financial services, the internet services, the petrol and other fuels, various software
services, the telecom services, the toys and other such items. The company has displayed the
revenues of a whopping £55,917 million alongside an operating income of nearly £1280 million
and employs almost over 476000 employees as a part of the workforce of the organization
(Tescoplc.com, 2018).
The retail company of England, Tesco has been reported to have been planning of an
expansion in the overseas market. The company is advised to take into consideration the various
factors that deal with the cultural differences that exist within the territories of the host country
wherein the concerned retailer has been planning an expansion. The company should also take
into consideration the facts that deal with the legal and the other regulatory barriers that might

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exist within the territorial boundaries of the country wherein the company has been planning of
an expansion (Meyer & Peng, 2016). The company should also take into consideration the
complete analysis of the macro elements that exist within the concerned country in order to avoid
the complications that might be faced by the company on actualization of the plans to expand in
the market.
The country wherein the concerned retail magnet has been planning an expansion is the
sixth largest country of the world, Australia. The country has been known to hold the residence
of a population of over 2.47 crore people (Abs.gov.au., 2018). The concerned country is
observed to be a globally competitive market in terms of the economy of the country resulting
from the reformation measures that were adopted by the country back in the 1980s
(Data.worldbank.org., 2018). The competitiveness of the country might also be considered to be
resulting due to the location in the areas of the world economy that have demonstrated a huge
amount of growth in the recent years.
The economic analysis of the country in discussion, Australia, has revealed that the
country has depicted a modest growth of about 1.6%. The economic analysis of the country has
further revealed the fact that the concerned retailer in discussion might find the Australian
market to be a truly desirous one due to the fact that the population of the country is observed to
have been searching for the various alternatives in order to meet their purchasing needs of the
various grocery and the other useful materials for the daily uses (Trademinister.gov.au., 2018).
The economic analysis further put forth the fact that the unemployment rate of the country has
been on the rise along with the Consumer Price Index within the country. The analysis further
reveals that the concerned company in discussion, Tesco might find the taxation regime
maintained within the country to be favorable for the entry within the concerned market. The

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company that has been entering the market might attempt a saving of the funds by making timely
taxation payments and thereby taking advantage of the various concessions on the payments of
the taxes (Forsgren, & Johanson, 2014). The economic analysis also reveals that the companies
operating within the Australian economy might choose the payment frequency of the taxes that is
best suited to the concerned business. The analysis also throws light on the fact that concerns the
trade interest of the United Kingdom and the Australian markets. The analysis reveals that the
various companies operating in the Australian market has been portraying their interest in the
mergers or the joint ventures with the various companies of the United Kingdom in order to deal
with the matters that pertain to the unemployment and the acceleration of the overall economic
growth in the country.
The political analysis of the Australian market reveals that the laws implemented within
the country are well-compliant to the activities of the various business organizations that have
been operating within the concerned country. The Australian market holds the 15th position in the
list of the 190 countries in terms of the ease that the concerned business organizations might
experience in the matters that pertain to the various business operations of the organization as
well as ranks 5th in terms of the comparison with the various other economies that might boast of
having a higher population (Asx.com.au., 2018). The legal processes that are practiced within the
country and the effective e measures of governance that are undertaken by the concerned
government provides the concerned multinational companies operating within the country with
and safe and secure business environment within the country. The political analysis puts forth the
fact that the business organizations operating within the Australian market might have to face a
lower risk due to the healthy regulatory systems that are followed by the Australian government.
The government of the concerned country has also helped to put forth a competition law that

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might assist in arresting the various anti-competitive behaviors that are depicted by the numerous
business organizations that are operative within the concerned territorial boundaries
(Austrade.gov.au., 2018). The Australian commercial contract law might help to shield Tesco
from all the uncertainties that the concerned companies that have been entering the Australian
market might face within the territorial boundaries of Australia.
The company in discussion, Tesco might face the minimum barriers in the matters of the
languages that are spoken within the country since the majority of the Australian population
speaks the English language. This might refer to the barriers that the concerned company might
experience in the matters pertaining to the introduction of the company, negotiations and the
maintenance of the presence of the concerned company within the Australian territories as
compared to the other similar markets (Apetrei, Kureshi & Horodnic, 2015). Tesco is advised to
look into the matters that deal with the work environment that is maintained by the various
business organizations that have been operating within the Australian territories. The Australian
work environment promotes the equality among the male and the female employees of the
concern.
The services that are offered by the various financial organization tend to put forth the
conditions that might help in boosting the overall economy of the country. The market
capitalization of Australian Securities Exchange is a whopping1.9 trillion AUD thereby helping
it to achieve the position of one of the most successful exchange groups of the world.
Country analysis
The analysis of the environment that exists within the country of Australia through the
Hofstede’s model reveals the major factors that are effective within the territories of the country
thereby affecting the activities that are undertaken by the various business organizations that

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have been active within the territories of the country (Venaik & Brewer, 2013). The wok culture
within the organizations that have been active within the Australian territories demonstrate the
fact that the hierarchy within the organizations are established for the convenience of the
concerned employees. The communication within the various members of the workforce is
observed to be informal in nature as well as participative and direct in nature. The employees of
the concerned business organization are known to consult the concerned managers and other
superior members of the organization (Chhokar, Brodbeck & House, 2013). The members of the
Australian workforce are observed to display the properties of self-reliance within the concerned
area of work as well as provide the concerned management with the various initiatives that might
help the concerned organization to achieve an overall improvement in the concerned market. The
hiring and the employment of the concerned potential employees of the Australian organizations
is dependent upon the achievements of the concerned employees in the field of employment that
has been under discussion. The promotion and the appraisal of the concerned employees majorly
depends on the successes and the achievements that are depicted by the concerned employees.
The Australian work culture demonstrates that the resolution of the conflicts is to be brought
about on an individual level and the major target of the employees is to win against the
competition that they might face due to the other companies that have been active in the
concerned market (Matraeva, Konov & Erokhin, 2016). The Australian working culture thrives
within a society that has been observed to assure a multicultural workplace to the various
members of the workforce within the organizations that have been active within the concerned
country. The Australians are known to display a huge respect for the traditions that are followed
by the various groups of people who have been living within the country. The company in
discussion, Tesco, might face a huge benefit in the matters that pertain to the traditional beliefs

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and habits that are followed by the concerned members of the workforce of the company. the
Australian workforce also depicts a hugely indulgent attitude towards the various members of the
workforce that have been serving the various organizations that are active within the country.
The work culture of the country is very receptive towards the matters that pertain to the
socialization within the country as well as the various other members of the workforce of the
organizations that are based in the foreign locations (Matraeva, Konov & Erokhin, 2016). The
British retail magnet in discussion, Tesco, might thus find Australia to be a greatly suitable area
for their expansion due to the various cultural aspects that are desirable for the entry into the
concerned international market.
Entry analysis
The concerned company in discussion, Tesco, might consider a number of ways in which
the concerned company might mark an entry into the retail market of Australia. However, from
the previous analysis on the company and the concerned international market, it is recommended
that the concerned company would earn better revenue and depict an impressive overall growth
on adopting the joint venture mode of entry within the country (Hu, Chand & Evans, 2013). The
concerned company in discussion might be advised to form an alliance with one of the biggest
retailers in the Australian market, the Woolworths Ltd (Wiewiora et al., 2013). This might help
the company to gain popularity within the country in a faster pace and thus help in the
establishment of a business that might lead to the overall growth of the concerned retail magnet
by depicting a high rise in the amount of revenue that is earned by the concerned retailer
(Killing, 2013). A joint venture is a business condition that arises when two or more parties work
in unison for a certain tenure of time in order to help one of the concerned parties to gain entry
into a certain market or in order to help the concerned parties to outdo the other competitors in

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the concerned market thereby helping the involved parties to gain a marked competitive
advantage within the concerned market (Sun & Lee, 2013). The joint ventures between the
involved parties might exist for a limited period of time and are often observed to have been
bound by a certain set of rules and regulations that are penned down in a contract that has to be
signed by all the parties that are involved in the concerned joint venture (Meschi & Wassmer,
2013). The joint venture that the concerned British retail magnet, Tesco is advised to undertake
might help the retailer in setting the secure foot in the chosen international market that has been
chosen for the expansion.
Competitive strategy
The competitive strategy that might be advised to be chosen by the concerned company is
that of joint venture. The company in discussion, Tesco, is advised to take up the joint venture
with one of the leading retailers that exist within the territories of Australia. The joint venture
strategy that is being subscribed to the concerned authority might help Tesco to form a better
understanding of the concerned international market wherein the concerned company has been
planning an entry (Beamish, 2013). The joint venture is also known to be advantageous due to
the fact that the financial resources that are invested in the venture are shared by the concerned
parties who have been involved in the concerned venture (Brouthers, 2013). The joint venture
might also help the concerned companies to share the resources that are needed in order to carry
out the various activities that might be needed in the establishment of the concerned entrant
within the given international market (Yan & Luo, 2016). The other major advantage of the joint
venture strategy lies in the fact that this strategy of entry into he new international market might
allow the retailer to build long-lasting relationships with the various suppliers who have been
associated with Australian retail company, Woolworths (Brouthers, 2013). These might help the

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company to retain the consumer base that in case there is a condition of a diversification from the
concerned joint venture that the company might be using in order to gain entry into the
Australian retail market scenario (Owens, Palmer & Zueva-Owens, 2013).
Marketing and R&D considerations
The concerned retail company in discussion might be advised to determine the target
consumer base that it aims to serve while entering the Australian retail market. The concerned
company might take insights from the concerned Australian retail magnet, Woolworths, the
retailer that is considered for the purpose of entry into the given market. The concerned retailer
needs to set the various marketing strategies and the consideration of the research and
development in the field of the marketing strategies that it needs to implement in order to attract
the clientele that the concerned company has targeted within the country or the region (Kotabe &
Helsen, 2014). The concerned company in discussion, the British retail magnet, Tesco is more
likely to target the clientele that is similar to the clientele that it served back in the United States.
This is due to the fact that the similar clientele is generally observed to demonstrate the
similarities in the behaviors that pertain to the purchasing selections (Nguyen, 2013). The
concerned company might enter the concerned retail market by dealing with the various
industrial products during the initial days during its entry in to the given Australian market (Lund
& Marinova, 2014; Gollnhofer & Turkina, 2015). The company might need o modify the
products according to the cultural differences that might exist within the home country and the
international market wherein the concerned company might have entered in order to bring about
an expansion in the concerned market (Castaldo, Grosso & Premazzi, 2013). The products of the
company might also vary due to the varying policies and legalities that might be effective in the
concerned targeted international market (Balasescu, 2014). The concerned retail magnet in

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discussion, might during the initial days tend to abide by the various distribution channels that
are followed by the concerned Australian retailer, Woolworths with whom the retail magnet has
been planning a joint venture in order to enter the Australian market.
Production recommendations
The concerned retailer in discussion, the British retail magnet, Tesco might be advised to
bring about certain changes and improvisations in the various products that it has been extending
to the concerned consumers of the company. The company might be advised to deliver the
products to the concerned clientele by bringing about a change in the packaging of the concerned
products abiding by the cultural norms that are followed within the targeted country. The
concerned company might also be advised to conduct a survey in order to develop an
understanding of the products that might be appreciated by the concerned clientele. The
concerned company might also use the results of this survey in order to introduce the popular
products of the UK market within the Australian market thereby leading to the capture of a
greater section of the Australian clientele of the company thereby leading to the increase in the
revenue that is earned by the concerned company in discussion, Tesco. The company might also
aim to introduce the itself within the chosen international market by introducing the products that
were exclusively available in the United Kingdom. This might help the concerned company to
gain the popularity within the concerned market thereby strengthening the client base within the
target market as well as proving itself to be a worthy competitor of the various retail magnets
that have been active within the Australian territories.
International HRM issues and considerations
The company might face certain issues in the matters that pertain to the international
human resource management due to the differences in the cultures that exist within the countries

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of the United Kingdom and Australia. The major areas that need to be taken into consideration
by the concerned company have been discussed in the previous section of the concerned report
that dealt with the Hofstede analysis of the target international market of Tesco, Australia. The
concerned company might also need to deal with the employment of the expatriate managers
who are employed by the company in order to oversee the various activities that are performed
within the branches of the concerned company in the various international markets wherein the
company has been planning an expansion (Story et al., 2014). The expatriates might also help the
concerned company to recruit, train as well as develop the various potential employees of the
concerned business organization in the concerned international market wherein the company has
planned an expansion. The major issues that might arise due to the cultural differences is based
on the facts that deal with the equality of the genders within the workplace (Rees & Smith,
2017). The company might find this to be a challenge since the culture of the work environment
in the United Kingdom does not bear a resemblance with the work culture that is prevalent
within the multitude of business organizations that have been operative within the territories of
Australia (Festing et al., 2013). In order to avoid these conditions, the concerned company might
be advised to undertake the surveys that are related to the work culture that is prevalent within
the country (Wilson, 2014). The company might launch a survey on the various job portals that
are accessed by the job seekers of the country.
Conclusion
In lieu of the above discussion it might be said that the concerned company might find a
greater prospect of expansion within the country of Australia. The entry of the British retail
magnet, Tesco, within the Australian market might lead to the introduction of the scope of
employment within the country of Australia. It might be safely concluded from the above

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discussion that the entry of the British retailer, Tesco through the joint venture strategy might
also help in the increment in the client base of the concerned company that has been selected for
the alliance, Woolworths. Thus, the above discussion might assist the safe conclusion that the
Australian market is the most suitable international market for the expansion of the British retail
magnet, Tesco PLC.

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