Expanding Tesco's Operations in the Australian Market: A Market Analysis

Running head: INTERNATIONAL BUSINESS
Tesco
International Business
11/26/2018

INTERNATIONAL BUSINESS 1
Executive Summary
The aim of the report is to enhance the knowledge regarding expanding the business in the
international market with the aim to increase the market share and profit. A vibrant
environment of international trade aids all the parties involved. Nations with high levels of
international trade possess a superior standard of living, steadier growth, and stronger
economies. International business exports its services and goods across the world. This
supports in gaining valuable foreign exchange. Exports lift up the country’s economic
development and reduce poverty. The strongest economies of the world are severely involved
in international trade and possess superior living standards, as per the Operation for
Economic Co-operation and Development. Exports support in opening new markets for the
business to maximize its sales. Economies fall and rise and a business that has an attractive
export market is proved to be in a superior position. In order to explain the importance of
international trade, this report has discussed different aspects involved in entering the
international market such as environmental analysis, market attractiveness, etc. To discuss all
these aspects Tesco Company has been selected for market expansion in Australia. The
political and social factors of the Australian market are in favor of Tesco to expand its
operations in the country but due to the economic decline, it can face some problems.
Moreover, the country has different competitors such as Woolworths, Coles, and ALDI who
will give strong competition and will raise barriers to the company. However, a report has
recommended Joint Venture and Green Field Investment market entry strategy for Tesco to
create its presence in the market and deal strongly with the competitors.

INTERNATIONAL BUSINESS 2
Table of Contents
Executive Summary...................................................................................................................1
Introduction................................................................................................................................3
Vision of Tesco......................................................................................................................3
Mission of Tesco....................................................................................................................3
Values of Tesco......................................................................................................................3
Strategies of Tesco.................................................................................................................4
Product Strategy.................................................................................................................4
Price Strategy.....................................................................................................................4
Place Strategy.....................................................................................................................4
Promotion Strategy.............................................................................................................4
Market Attractiveness (Australia)..........................................................................................4
Political..............................................................................................................................4
Economic............................................................................................................................5
Cost of Living....................................................................................................................5
Social..................................................................................................................................5
Technological.....................................................................................................................6
Legal...................................................................................................................................6
Environmental....................................................................................................................6
Potential Market Size.............................................................................................................7
Market Analysis.....................................................................................................................7
Market Entry Strategy............................................................................................................8
Joint Venture......................................................................................................................8
Greenfield Investments......................................................................................................9
Conclusion................................................................................................................................10
References................................................................................................................................12

INTERNATIONAL BUSINESS 3
Introduction
Tesco is a multinational general and groceries merchandise retailer with headquarter in the
United Kingdom. It is said to be the world’s third-largest retailer in terms of gross revenue
and the world’s ninth-largest retailer in terms of revenue (Reuters, 2018). The company has
shops in seven different nations all over Europe and Asia and is the leader of the grocery
market in the United Kingdom, Thailand, and Ireland. Jack Cohen founded Tesco in 1919 as
a group of market stalls. Tesco hires around 450,000 employees in all the 11 markets.
Formerly, Tesco has expanded its business globally since the early 1990s, with operations in
the world’s 11nations (CTP the Ministry of Defence partnering with right management,
2018). In 2013, Tesco was pulled out from the USA, but today it is growing in other
countries. Presently, the company is planning to expand its operations in the Australian
market by adopting different growth strategies and thorough market analysis.
Vision of Tesco
The vision of Tesco is to create and maintain the leading position in the market and create
value for the consumers in order to gain their lifetime loyalty (Tesco, 2018).
Mission of Tesco
The mission of Tesco is being the champion for consumers, supporting them in enjoying a
superior quality of life and a simple way of living (Tesco Plc., 2018).
Values of Tesco
The success of Tesco is dependent on the values it follows in the market. The values of the
company are to understand the demand of the customers to satisfy them with superior
products. Besides this, it is focused on the sustainable development of society through
different offerings and activities.