Tesco's Strategies in the Indian Market

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Strategies in international market

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“Tesco in India”
The idea of a multinational company has been around for centuries but in the
twentieth-century multinational companies is becoming important enterprises for the nation.
Multinational companies have their origin in one country but it expanded their business
beyond the boundaries. Multinational companies normally function with headquarter which
is placed in one country (Prasad, and Prasad, 2018). There are many companies expand their
business beyond the nations to earn the profit in the market. To earns the high profit; Tesco
expands the business by entering into the Indian market. The company entered with the
various reasons and motives such as goodwill, high profit and many others. After the
liberalization, globalization and global products were getting more accustomed to the Indian
market. The multinational company takes the advantages by entering into the Indian market
as same Tesco also takes the advantage by entering the new market (Mukher, 2018).
Tesco is entered into India's retail market through a wholesale business with the
country largest company the "Tata group". It entered with a franchise agreement, in the arms
of the Tata group in the Indian market. Tesco entered with the Tata group company with the
joint venture approach. The company based in England, it provides the grocery product in
the market with the Tata to analyse the market or build the goodwill (Tesco PLC, 2018). In
this paper, the discussion will be made on the overview of Tesco with their strategies and
goals to enter the Indian market. The strategies of the company to enter the India market will
be discussed by analysing them. The company did not meet success in the Indian market; the
reason behind the business failure will also be discussed in the last section of the report.
It has been analysed that the Tesco has revealed plans to enter the market. The
company enters the Indian market by developing the relationship with the Tata Group. Tesco
helps the Tata group in expanding the business of Tata Group‘s hypermarket Chain Star
Bazar by investing the high capital in the company. The company announced the reason to
enter the Indian market by establishing the wholesale cash and carry business in the India
retail sector. Tesco deal with the Tata group to invest in dozen stores of north and south; due
to expanding the business in another cities and states the company earned the high revenue.
It is observed that the joint venture is beneficial for both the companies. The joint venture
makes the Tesco first foreign supermarket in India due to enter into the market with the high
branding company. The company invests $85 million in 12 existing Star Bazaar stores of

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selling the food and groceries like kitchen products, fashion items and home wares
(Papadopoulos, and Heslop, 2014).
India is a developing economy with nominal GDP and the third largest purchasing
power party. The long-term growth of the Indian economy is positive just because of its
young population, low dependency ratio, and investment rates into the global economy.
India is the world fast growing service sector with its annual growth rate. Since 1991, the
adoption of industrial policy and multinational companies has been recognised the rapid
growth of the Indian economy and it is beneficial for the multinational companies as well
due to enter into the new market. The rapid growth of the Indian economy is beneficial for
the Tesco Company to enter into the new market (Solberg, 2017).
The multinational companies have bought new technologies with the new product to
attract the consumer and create a wider choice for the consumer. Indian companies work
more efficiently and the consumers of the economy aware of the international markets. In
1991, the Indian government gave permission to the multinational companies to enter the
market and boost the economy. The multinational companies improve the lifestyle of Indian
consumers. The companies promote the food industry of the Indian market with the help of
strategies and objectives like Tesco entered the Indian market with food and grocery
products. Tesco entered as a joint venture company with the Tata group to supply the food
and grocery product in the supermarkets (Malhotra, 2014).
Indian consumers market has higher disposable income which has a positive impact
on the multinational companies. Increase consumer awareness affected the buyer behaviour
of the consumers. The credit facility of commercial banks has been increased at a rapid rate
which increases the consumer's demand. It is observed that Multinational companies have
the advantage to enter the Indian market (Dwivedi, and Kumar, 2017). Tesco is taking place
in India at the tremendous pace in the starting phase of entering into the new market. It
influences the lifestyle and buying behaviour of the consumer. Tesco focused on improving
the food and grocery product. Indian consumers attract the western trend and buy the Tesco
product. Indian consumers were spending their money on the various products which were
changed after the multinational companies. Tesco influence the customer to spend their
money on food and non-food. In India, the higher class people spend more amounts on their
income or luxury goods and trendy products. The middle-class people spend more on