(PDF) Impact of Globalization on the Growth of Economies
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Added on 2021-04-30
(PDF) Impact of Globalization on the Growth of Economies
Added on 2021-04-30
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IntroductionDue to rapid growth in the globalization, All companies are able to cross the national boarderfor doing business in the globally. The main aim of the industry is doing business in theinternational market. An international strategy helps identifying international market to beevaluated about how the resources are examined, objectives identified, understanding markettrends. International strategy helps to expand the business via applying best strategies. In thisreport, Tesco Plc has been taken which is one of the largest retail chain in the world or morespecially in the Europe. By applying international strategy, Tesco Plc. could expand theiroperations globally.There are 5 steps to preparing an international strategy:1.1. The first step is to analyses or examine the markets in general, to establish an international strategy. This research will helping to provide an overview of the country'sgeneral macroeconomic statistics data , trade balance, trading partners, income per capita, etc. or other beneficial information’s.2.Next step, the organization should determine the resources for its global expansion. It is evident that in all markets, not all products will fit. Resources with greater competitive advantages must be chosen for higher income as well.3.The third step in the international strategy is to set international and global targets, which are not taken counter-intuitively in the first level. The explanation of business or the target should be separated and inadequate for the business in question. So a prior analysis of the market is needed.4.Deciding the market entry and mode should be the next step. The company may select the routes such as the launching of a brand new product or new services related to other country religion or joint venture with another willing partner company that is already present in that industry.5.In this international strategy phase, the final step is to create a service offering that will include specifics such as pricing, goods and distributionImportance of international strategy:An international strategy will help to diversify and broaden a business when a company recruitsinternational employees or looks for new markets, new product of goods and services in abroad. Economic globalization is the mechanism in which companies widen their markets quickly to include foreign consumers. For operating a business outside country is vey crucial task the company operating a business, cannot using the same strategy to expand the business in another country, So the framing of an international strategy plays a very important role for a business pursuing international foothold. Businesses either become aggressive exporters and
start exporting products or open their business units in the market they want to win, dependingon the business strategy chosen. A business using an international strategy has three fundamental advantages. These advantages are: (1) greater consumer access, (2) economies of scale and additional learning opportunities, (3) advantages such as labour and resources for strategic and lower cost locations.Case of TESCO international strategy in USAIn the UK Tesco operates more than 2300 supermarkets, hypermarkets, convenience stores, where it has retail market in food, It operational business includes small municipal stores and other financial services.It holds a 35 percent stake in US supermarket chain Safeway's Grocery Works, the world leader in online grocery sales. It is the largest online grocery store and now has a TV channel and a "retail-based education organization" to grow its market.In November 2007, Tesco, a UK-based retailer company, entered the US market, opening a small-format shop called Fresh & Simple. The case outlines the entry strategy of Fresh & Simple,touching on market research, shop format, layout, venue, etc. In US so many issue are raised related to the shop, The case discussed about the Tesco decision on April 2007 to opening 61 New fresh &Easy stores had been opened, At the end of case with a short debate, with inflation and recession raising their heads, about the unfavorable macro situation in the US.UK based retail company Tesco had opened 60 floor in Fresh & Easy shops in the US at Manhattan beach, According to the survey, the store opening is a major success to registering about 2600 footfalls. Another one best sales product is Grill pack (It is high quality beef patties, chicken role) It was great to open, the neighborhood turned up in force to show its support. Tesco is entered in the US market in November 2007 opening a small shop Fresh & Easy. In November 2007, Tesco's had started pre-launch operations, such as performing market research, negotiating leases, buying land for a distribution centre in Moreno Valley, California, and building its US headquarters in El Segundo, California, have been published in US-based newspapers since the beginning of 2005, and it also confirmed in September 2005 that the Tesco had opening a team of 60 executives. Years Stores number 20071502011175Tesco's plans for global growth in the past have been:. In developed countries, to reach markets aggressively. Focusing on less-competitive markets
. Entering by acquisitions. To reach the U.S. market, Tesco used entirely different tactics.Tesco faced intense competition, such as national rivals, local and regional grocers, and discounters, by entering the U.S. market. So in April 2009, nearly $200 million in losses announced by Fresh and Easy departmental store which is one of the chain of Tesco Plc and in June 2009 June Fresh & Easy stores have been criticized for hiring only part-time staff and denying a union recognition request. In April 2011, losses have risen to approximately $220 million, In January 2012 the stores are temporarily closed because of losses.Why Tesco failed in USAThe company spent lot of money in the ground research, One of the biggest failures they have made is their choice of place. Furthermore, their plan is to open shops smaller than a typical supermarket and place them within walking distance of every residential or business location. Itwas majorly identify that Tesco strategic marketing problem are lack of knowledge, lack of customer relation, cultural issue arises, wrong knowledge of low quality products, foreign brands, economic recession, highly strong client and resource rivalry,Unpredictability of raw material prices in USA , existing or new market dealer create a huge competition these are the problem faced by Tesco. So that company wants to change American customers habits, changing habits is typical task in that time, these are the following changes consumers wants, the US customers want to purchasing in bulk to save money, or to involvement in online coupons and offer directly on website. Identification of strategic issue Tesco is focusing on the development of an alternative strategy, it must trying to build continueto create consumer trust, but this may take a longer period of time, or help to changing’s the habits when trust is formed among the consumers then the company makes a good progress and compete with other market rivals. In order to capture more buyers, marketing is considered an integral component, and this was not pursued by Tesco in the US market. The organization wants to a good knowledge about the value of Tesco products. While on other hands, the "Food Love Stories" campaign must be carried out by Tesco and this can be seen as an effective tactic to draw the market's attention, theses campaign helps the company time to time to concentrate on the best quality of food so it would be easier to reorganize the brand structure in short period of time. In addition, the price of the product from Tesco must also be economical because pricing is a significant benchmark in different supermarkets as well as competing with its rivals (James, 2015). The company's loyalty seminars is one of the largest assets in the US market to draw consumers and thereby expand accordingly.Issue involved in the strategy
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