Strategic Marketing: Analysis of Tesco's Entry into New Zealand Market

Strategic
Marketing

Contents
INTRODUCTION...........................................................................................................................................3
MAIN BODY.................................................................................................................................................3
Scenario...................................................................................................................................................3
Macro-environment analysis...................................................................................................................3
Modes of entry into the market..............................................................................................................5
Market segmentation and targeting........................................................................................................7
Porter’s generic forces.............................................................................................................................8
CONCLUSION.............................................................................................................................................10
REFERENCES..............................................................................................................................................11

INTRODUCTION
Strategic marketing refers to a process through which an organization can differentiate
itself from its competition by focusing on its strengths and providing better value and services to
the customers (Agic and et.al., 2016). It can be used effectively and efficiently by the managers
of an organization for the purpose of gaining of the required competitive and strategic advantage
over the competitors. Using it, managers can focus on tactics to be adopted in order to maximize
the level of profits within an organization so that it can achieve sustainable growth in the future.
In this report, Tesco has been selected which is supermarket store providing grocery and other
related products to its customers and is based in United Kingdom. In this assignment, specific
analysis will be made on macro-environmental analysis, modes of entry in a particular market,
application of concept of market segmentation and use of porter’s generic strategies for the
purpose of gaining competitive advantage.
MAIN BODY
Scenario
Tesco is a company which provides grocery and general consumer-related products to its
customers. It is planning to shift its operations in New Zealand where it will provide its products
and will launch a new service in the country which is the drone-delivery service.
Macro-environment analysis
Macro-environment analysis refers to analysis of all the external factors which can
impact a company’s operations both in the short-run as well as the long-run (Brooksbank,
Subhan and Calderwood, 2018). In the context of Tesco, it can be done as follows-
PESTEL analysis-
It is management tool which is used in order to identify the impact which the factors of
external environment will have on the operations of a business enterprise. These factors are
explained as follows-
Political factors- These are government policy, political stability, tax policy etc. New
Zealand is a democratic country which generally has political stability and thus it would be good
if Tesco expands its business in the country.
 Positive impact- If the government of New Zealand reduces the tax rates then it will be
positive boost-up for Tesco’s business.
 Negative impact- If the government of New Zealand makes its policy stricter then it will
negatively impact Tesco’s business operations.

Economic factors- These are economic growth, exchange rates etc. New Zealand is a
developed country and its GDP growth rate is among the best in the world and thus is a
good option for Tesco to expand its business.
 Positive impact- Increasing GDP growth of New Zealand opens up excellent
opportunities for Tesco. It can easily maximize its level of profits in the country.
 Negative impact- Decrease in disposable income of customers in New Zealand can
negatively impact operations of Tesco in the country.
Social factors- These are population growth rate, age distribution and lifestyle attitudes
of the customers (Carrie and et.al., 2017). In New Zealand, people value these factors and
therefore they can put an impact on the operations of Tesco.
 Positive impact- Changing lifestyle attitudes of people in New Zealand opens up
excellent opportunities of growth for Tesco’s operations in the country.
 Negative impact- The cultural barriers can create problems for Tesco in New Zealand as
some of the people may be conservative towards its products.
Technological factors- These are technology incentives, level of innovation, R&D
activity etc. In New Zealand, technological innovation has reached at a higher stage and
thus it can put an impact on operations of Tesco.
 Positive impact- Increasing level of innovation in New Zealand gives Tesco an
opportunity to try out something new and raise its level of profits effectively.
 Negative impact- Lack of funds required for R&D activities can impact Tesco as it may
not be able research properly on advanced technology.
Environmental factors- These are weather, climate and environmental policies which
are framed within the country (Cegliński, 2016). In New Zealand, these factors have an
impact because the people there are very much conscious about the environment and like
to purchase those products which are eco-friendly.
 Positive impact- If Tesco adopts environment-friendly policies then it will be able to
capture a larger market share and thus this will have a positive impact on its level of
operations.
 Negative impact- If the government makes strict environmental policies which Tesco is
not able to follow then it can create a negative impact on its business operations as it may
result in reduction of its level of profits in the future.
Legal factors- These are discrimination laws, anti-trust laws and employment laws.
These factors impact the business operations in New Zealand as they have to be followed
by Tesco in order to do its business.
 Positive impact- In New Zealand, if the government makes its rules and regulations and
laws lenient then it will positively impact Tesco as it would be able to maximize its level
of profits easily without any problem.