Business Strategies for Entering Emerging Markets: A Tesco Case Study

This report examines the strategies employed by businesses, specifically focusing on Tesco, to enter emerging markets. It begins with an introduction outlining globalization and the challenges companies face when expanding internationally, followed by a rationale for the research and its aims and objectives. The literature review explores various market entry strategies such as licensing, partnering, and joint ventures, and their importance. It also identifies and analyzes the risks associated with entering emerging markets, including foreign exchange rate risk and lack of liquidity, and suggests ways to overcome these risks, such as improving transparency and diversifying investments. The research methodology section describes the deductive research approach and pragmatist research philosophy, along with data collection techniques. The report provides a comprehensive overview of Tesco's strategic approach to international expansion, offering valuable insights into market entry, risk management, and the dynamics of operating in emerging economies.

Research Project

Table of Contents
TITLE: “The different strategies employed by business to enter emerging markets.”...................3
CHAPTER 1: INTRODUCTION....................................................................................................3
Overview and Background of the research.................................................................................3
Rationale of the research.............................................................................................................3
CHAPTER 2: LITERATURE REVIEW.........................................................................................4
The different strategies of entering into new market..................................................................4
The importance of different entry modes used by company while entering emerging market...5
The risks of companies while entering into emerging market....................................................5
The ways to overcome the risks of companies while entering into emerging market................6
CHAPTER 3: RESEARCH METHODOLOGY.............................................................................6
REFERENCES................................................................................................................................8

TITLE: “The different strategies employed by business to enter emerging
markets.”
CHAPTER 1: INTRODUCTION
Overview and Background of the research
Globalization is the process through which different organizations develop themselves to
enter into the international market. Every organization needs to develop itself according to the
market. This development happens only when companies entered into the global market.
Globalization helps the industries to grow internationally. These companies have more chances
to enter in the emerging markets such as India, China, etc. Apart from that, there are many
challenges which these companies can face while entering to the global market. The challenges
could be social, economic, political, technological etc. This report is based on Tesco which is a
multinational company based in Welwyn garden city, Hertfordshire, England, UK. Tesco is
entering into the emerging markets of world so as to increase its business. In favour of it,
researcher has discussed about different strategies of business to enter into emerging market. In
order to perform the research different aims and objectives have been prepared by the researcher.
Apart from that, identification of strategies, importance of entry modes, identifying risks are
done in order to enter the company in emerging market. Different types of approaches and
methodologies used are also explained in this research.
Rationale of the research
The main purpose behind conducting this research is to enhance the knowledge on the
strategies of entering into the global market. This will help the companies in order to gain the
access with the help of this research. Apart from that, importance of different entry modes will
also help the companies while moving towards different countries. This information is not only
necessary fro the companies but also helpful for the researcher in order to increase its knowledge
about globalization. The skills of researcher are used in this research in order to develop different
activities. This will help it in developing its skills and knowledge to pursue research in future
also.
Research Aim
“To analyse different strategies employed by business to enter emerging markets.” A case
study on Tesco.

Research objectives
 To identify different strategies of entering into new market.
 To identify importance of different entry modes used by company while entering the
emerging markets.
 To examine risks of companies while entering into emerging market.
 To overcome the risks of companies while entering into emerging market.
Research questions
 What are the different strategies of entering into new market?
 What are the importance of different entry modes used by company while entering
emerging market?
 What are the risks of companies while entering into emerging market?
 How to overcome the risks of companies while entering into emerging market?
Gantt Chart
In order to complete a particular tasks, a graphical illustration of processes is known as
Gantt chart. This chart helps the researcher in order to identify the time limit of completing the
research. This allows the researcher to know about the information of tasks followed at a single
place. There are two axis used in order to show the process. Horizontal axis shows time span
which can be in hours, months, years etc. while vertical axis shows the activities in performing
research.

CHAPTER 2: LITERATURE REVIEW
The different strategies of entering into new market
According to Enloe, (2016), the different strategies for entering into new market for
Tesco is defined as below:
Licensing
It is one of the easiest method to enter the emerging market for Tesco. In this method the
company gives the license to other company which have a large market presence. This allows the
other company to sell the product of Tesco and thus the easiest way of entering into market.
Partnering

It is the method in which two companies partners with each other in order to perform
their business. This partnership is done on the basis of ratio and the profit is also calculated on
that ratio. In case of Tesco, this method allows it enter in the market where the culture is totally
different from the existing market of company. The loss and profit are divided according to the
ratio, therefore the impact of business failure does not affect much.
Joint Venture
It is a concept of 1+1=3. In this method two companies are joined together to form a new
company. In case of Tesco, the company can enter the new market using this method. The brand
value of both companies creates positive environment among the customers thus business can be
increased. The best example of joint venture is Sony/Ericsson.
The importance of different entry modes used by company while entering emerging market
According to Papastergiadis, (2018) there are many entry modes which can help Tesco
while entering to he market. These modes gives choice for the company so that they can choose
the best option for them. The importance of entry modes is discussed below:
Growing internationally
In order to grow in the international market, different entry modes help the companies.
When Tesco is entering itself with joint venture, it allows itself in growing the emerging market.
The company gets to know about different strategies of different companies. This will not only
increase experience but also increase the brand image. Tesco can not only grow itself in the
emerging market but also the customer base increases. Apart from that, the profitability of
company will surely increase the survival of company in international market.
Intellectual property gains
This is one of the important significance of entry modes while entering into new market.
If Tesco is entering with the help of joint venture, the investment of capital will be low. Since
there are two companies which are entering into the market, therefore the capital investment also
divided accordingly. This low investment allows the company to invest any different section of
that country. Therefore increasing the customer base and profitability also.
The risks of companies while entering into emerging market
According to Arthur Pinkasovitch, (2018) there are many risks which a company can face
while entering into new market. Those risks are stated as below:
Foreign exchange rate risk

The rate of foreign exchange impacts the revenue collection of company. Every country's
stock and bonds are generally released in their local currency. Therefore the investors has to
convert this currency in their own. Apart from that, the value of currency is also a major factor of
risks to the new company. If the value of currency depreciated, the company will face serious
loss in that market.
Lack of liquidity
Emerging markets are less liquefied while comparing to the developed economies. The
flow of cash was not so good that will help the company in growing faster in terms of
profitability. The price uncertainty is one of the major factor in less liquidity in market.
Therefore, less liquidity is one of the highest risk to the entering companies in market.
The ways to overcome the risks of companies while entering into emerging market.
According to Michael ferguson, (2011), there are many options through the risks of
entering into new market can be overcome. The steps are discussed below:
Improving transparency
In case of entering into new market, the company should instigate all the current and
future situations of the country in which it is going to invest. The situations can be overcome
with the help of identifying the risks with the help of PESTEL model. This model will help the
company in identifying the risks in the areas such as political, environmental, social,
technological, economical and legal. All these aspects will minimize the occurrence of risks
within the company.
Diversifying investment
This is another method through which the risks can be overcome. According to this
method, the investment of Tesco should be diversified in different sectors so that risk of loss will
also be diverted. This will minimized the risk of gaining loss in the emerging market.
CHAPTER 3: RESEARCH METHODOLOGY
Research Approach
There are mostly two types of research approaches used by the researcher such as
deductive approach and inductive approach. In this research the researcher has used deductive
approach because it best fits with pragmatist research philosophy. This approach help in forming

the ideas to achieve the objective of research. This is done with the help of primary data
collection and a questionnaire.
Research philosophy
The research philosophy used in this research is pragmatist research philosophy. The
alternative to this research philosophy is interpretivist research philosophy. The pragmatist
research philosophy is considered to be the new as compared to the interpretivist. Apart from
that, this research philosophy is helpful in identifying the solutions of the issues using different
theories and frameworks.
Data collection techniques
There are two types of research techniques through which data is collected such as
primary data collection and secondary data collection. The primary data is collected with the
help of structures questionnaire while secondary data is the universal data which is collected
through books, journals and magazines. The researcher has used both the primary and secondary
data collection techniques in this research.

REFERENCES
Books and Journals
Risks while entering into market. (2018). [Online]. Available
through:<https://www.investopedia.com/articles/basics/11/risks-investing-in-emerging-
markets.asp>.
Overcoming risk of companies while entering into emerging market. (2011). [Online]. Available
through:<https://www.journalofaccountancy.com/news/2011/jul/20114177.html>.
Enloe, C., 2016. Globalization and militarism: Feminists make the link. Rowman & Littlefield.
Hirst, P., Thompson, G. and Bromley, S., 2015. Globalization in question. John Wiley & Sons.
Milanovic, B., 2016. Global inequality: A new approach for the age of globalization. Harvard
University Press.
Papastergiadis, N., 2018. The turbulence of migration: Globalization, deterritorialization and
hybridity. John Wiley & Sons.