Tesco's Growth Strategies: Ansoff Matrix, BCG Matrix, SAFS Framework

This report provides a comprehensive analysis of Tesco's strategic direction, utilizing frameworks such as Ansoff Matrix, BCG Matrix, and SAFS framework. It evaluates Tesco's market penetration, product development, and diversification strategies, highlighting both successes and areas for improvement. The report examines Tesco's growth in various markets, including the UK, Asia, and Europe, and assesses the impact of factors such as the 2008 financial crisis and cultural differences. It also offers recommendations for Tesco, emphasizing the importance of job creation for fresh graduates and adapting strategies to different cultural contexts. The analysis concludes that Tesco's policies are largely effective, but continuous adaptation and innovation are crucial for sustained growth and competitiveness.

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Table of Content
Excutive Summery..........................................................................................................................2
Introduction....................................................................................................................................3
Analysis and Critical Evaluation.......................................................................................................3
Strategic Directions ( Ansoff Matrix)...............................................................................................4
BCG Matrix......................................................................................................................................5
SAFS framework...............................................................................................................................7
Conclusions and recommendations.................................................................................................7
References........................................................................................................................................9
Graph and Tables..............................................................................................................................5,6

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Executive summary
In every business there is always the relationship between customer and seller the
businessman having deep eye on the market will never let it go his customer he always introduces
new schemes and promotions which always attracts the customers with great interest Tesco is one
of the biggest retailer and multinational group which always follows on the policy of loyalty with its
customers . This report will provide an insight into the supermarket company ,you will find out
different strategic directions critical evaluations and recommendations for the Tesco in this
assignment we use Anosff ,BCG and SAFS framework to know the better current strategies of the
Tesco.

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Introduction
Tesco is one of the biggest retailer and multinational group who started their work from retailing
later on with the advancement of world they diverse their business in many fields like banking,
telecommunications, petrol. Nowadays they have market shares in UK stock Exchange with the
name of Tesco .After Cohen, Tesco follows on the philosophy of "Pile it high and sell it cheap"
Analysis and Critical evaluation
After a close internal , external and SWOT analysis of Tesco in the first assignment. We are further
researching on the current strategies directions of Tesco by using different frams .As following
analysis and critical evaluation is based on my previous assignment these points point out the
successful and loss factors within the company.
1) The company was spreading like wildfire by offering different schemes and promotions "every
penny count" the company have good customer relations that not let the brand name down there is
more development going on in product and development department where they are working on to
increase the efficiency of the product . The company gained success on the base of customer
loyalty
2) Now the UK is known as global cultural village you can find each and every type and race of
people here Tesco is fulfilling their demands but due to increase in population Tesco started
importing the goods from other European countries to fulfill the demand of the people .Tesco
started its product from their own forms and lands but due to the increase in population it looks
abroad for goods that are not available in UK .As a multinational company it develops many
supplier management programs to survey key suppliers and franchisee satisfaction .
3) Due to the financial crisis of 2008 , it directly affects the buying power of the customers whereas
after this crisis government increase the ratio of interest which cause to increase in the prices of
the goods the recent survey shows 45% of the customers are dissatisfied and 23.75% of
customers are highly dissatisfied with the prices whereas a small amount of the people are highly
satisfied 6.25%
4) Although the company is going in a good direction but there are some points to be noted that
they are preferring the experienced people for higher jobs but they must give a chance to the fresh
graduates because new generation having the vision and power to will to change the world

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Strategic Directions (Ansoff)
Market Penetration
There are some companies who know that people run after brand they sell brand before the
product. Tesco is a brand.
 Tesco entered the market with a self advertising website, Tesco property market,
 They promoted them self through the website and leafleting in their stores
 In 1995. Tesco crosses the Sainsbury and become the biggest retailer in the UK
 Their club card scheme was the biggest trump card in the markets from this card they gain
the loyalty of the customers and find a way to penetrate into the markets
New Products and Services
Product and Development is the heart of any industry 25% of things and services are dependent
on it Tesco provides their customers credit cards loans, Mortgages, Insurance, Saving schemes,
electronics and also working to increase the life of the food
They have already introduced the biofuel instead of diesel and petrol and still working to improve
its quality (www.wkipedia.com)
They are now working to expand in the mobile sector as earlier told you they got a big profit in
Asian Market so they are expanding and try to launch there telecommunications products and
electronics
Market Development
In 1994 Tesco caught the Scottish supermarket chain Williom Low
In 1997 Tesco purchased a group of food retail chain consisted of Stewarts,Quinnsworth and
crazy they have a business in Ireland and Northern Ireland(www.acadimia.com)
Tesco purchased C Two -Network in Japan in June 2003
In mid-2006 Tesco purchased Casinos Leader price supermarkets in Poland , which were
subsequently reconfigured as small Tesco stores
Tesco regularly continues to make small changes to diversify its businesses. For example, in the
2005-06 fiscal year, changes were made in Asian and European countries like
Japan,Poland,South Korea,

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Now focusing more on Asian markets recent new of BBC" Tesco got 12.5% profit in Asian market which shows the
Diversification of its growth" (www.bbc.com)
Diversification
In recent years Tesco diversified its business greatly extended its business from food to non food
items .Originally Tesco stared its business from food Tesco began to diversity in areas such as a
discount on clothes, dvd sales and rent,Customer financial service,Internet service,consumer
dental plan
In these new product segments Tesco heavily built its skills in private labels, It introduced brand
"Cherokee" and F+F brand of clothing
Tesco used its food brand "Finest" and "Value" to non food brands also like electronic stores ,
Finest health and beauty
BCG Matrix
Before starting the BCG Matrix we have a look the business growth of the Tesco in different part of
the World this the annual 2012/2013 report
Countries Revenue Revenue
Growth
Trading
Profit
Trading Profit
Growth
Marketing
position
Loyalty
scheme
members
UK £ 43.6bn +1.8% £ 2272m 8.3% 1st 16m
ASIA £ 11.5bn +6.0% £661m 10.3% 1st or 2nd 20m
Europe £9.3 bn 5.5% £329m 37.8% 1st or 2nd 7m
(www.tesco.com)
Star :
Star indicates that high market shares and high growth .Tesco started its business as a retailer
then further it divers to other fields like telecommunication sector ,Petrol , Banking The UK Market
is star for Tsco Petrol is a main business unit of Tesco" Tesco sales were 12.3% where as if we see
the second quarter the profit rises to 11.8% with the addition of petrol sales" (www.bbc.com)

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(www.lse.co.uk)
In this chart you can see from 1st July Tesco started gaining profit again and up till 16 September
2013 they are still in growing if you compare it with others like Vodafone and Barclays bank you
can find big difference of them
Barclays share chart Vodafone share chart
(/www.lse.co.uk)
Question Mark
The question mark shows high growth and low market shares this comes to Asian markets where
the new trend is going on people use to buy things from Tesco but there share prices are still low
because of the competitors and they find difficulty in telecommunication although their main
business is retailing but the unit which finds hard to give them profit in the Asian market is the
Telecommunication sector because Samsung , Warid, Jazz, Telenor are there and are providing
better services more than 10 years
Cash crow
In cash cow low growth high share prices this thing fits to European markets where the Tesco
have competitors but due to brand name Tesco the share prices of Tesco are still high you can
see
Dogs
Low growth low market shares this area comes to the banking sector of the Tesco in USA where
they were kicked off after 20 years recent news of BBC " Tesco lost its annual profit almost first

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time in 20 years. The company's statutory pre-tax profits fell 51% to £1.96bn, but post-tax profits
including the cost of the US exit were just £120m, down 95.7%"(www.BBC.com,17April,2013)
Critical evaluation of strategies
Suitability
Tesco becomes 3rd largest retailer in the Europe and now it diverse in to different continents it
diverse according to the markets as I earlier told you they are growing in Asian market but it will
take time to be no 1 in Asia because of culture,Religion and strategies for different regions and
Tesco is also working on these factors culture and Religion for example Tesco India and Pakistan
in Indian culture they mostly do not like to eat meat because of religion restrictions so they will use
another strategy Indian market but in case of Pakistan they have to put Halal meat if they have to
sell in market because majorty of Pakistani people are muslims and they always eat halal meat
Acceptability
The main thing according to market point of view is that provide the goods according to the
demand of the people in this report It is earlier discussed that Tesco is importing the goods from
Europe because to fulfill the demand of the UK this is the good strategy of them because they
know with the increase in population in UK It will not able to provide the goods from its forms and
lands if there is less or low quality of goods in store this will also affect on their name and brand.
Feasibility
Feasibility point of view Tesco is good you can see more them 500 stores are in the UK to cover
the market need it include metros , restaurant, electronics they started their business from the UK
then Europe then USA then Asia but in every continent they work according to the demand and
feasibility of the area they are not in Africa because of supply and profit is not acceptable for them
Sustainability
Marketing plans always play an important role in every business more the genuine promotions
more able creat sustainability between the relation of customer and seller
Different schemes and promotions give flow to Tesco group
Conclusion
We discussed different strategies of Tesco in this report and 85% I am agree with there
polices and strategies but the main thing which I which I feel Tesco have to creat job opportunities
for fresh graduates I discussed this in 4th point of very first evaluation as they are in UK ,Europe,
USA, but now they are entered the market of Asia here they will find different culture and literacy
ratio higher than other countries according to my point of view what I saw in UK people started
work at the age of 16 and left there education I think so the same thing is in rest of Europe here
they promote the uneducated people to managers level due to experince and neglect the educated

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person due to inexperinced but in Asia the litracey rate is high and here they will find people
having education with experience so they will gain good profit then other continents.

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References
http://www.ivoryresearch.com/samples/economics-essay-example-strategic-management-of-
tesco-supermarket-pestle-analysis-porter-5-forces-analysis-critical-success-factors-swot-analysis-
value-chain-analysis-tesco-strategic-options-core-comp/
Datamonitor Report (2003) Food retail industry profile: United Kingdom, January;
Datamonitor Report (2003) SWOT Analysis Tesco PLC, July;
Datamonitor Report (2003) Company Profile: Tesco PLC Analysis, October
MarketWatch (2004) Company Spotlight: Tesco, Datamonitor, September;
http://dotcom.tesco-careers.com/user/custom/downloads/peoplesectionofcsr.pdf
http://www.bbc.co.uk/news/business-11474282(18/08/2013)
http://en.wikipedia.org/wiki/Tesco
http://www.academia.edu/1610879/TESCO_Strategic_Management
http://www.tescoplc.com/index.asp?pageid=540&AR13nav#/
http://www.bbc.co.uk/news/business-22179255(17 April 2013 Last updated at 10:25)
http://www.lse.co.uk/SharePrice.asp?shareprice=TSCO
http://www.lse.co.uk/SharePrice.asp?shareprice=VOD&share=vodafone_grp
http://www.lse.co.uk/SharePrice.asp?shareprice=BARC&share=barclays
http://news.bbc.co.uk/1/hi/business/4040743.stm