Tesco's Global Expansion: Challenges, Strategies, and Analysis

This report delves into the challenges businesses face in global trade, using Tesco as a primary example. It examines key concepts such as globalization, the impact of cultural differences on international trade, and the significance of environmental trends. The report highlights specific challenges Tesco encounters, including tax and tariff fees, organizational communication issues, local competition, and unfamiliar cultural environments. It provides insights into how these factors affect Tesco's expansion strategies and overall business operations in diverse international markets. The analysis includes references to relevant literature and provides a comprehensive overview of the complexities inherent in global business environments.

Global business
Globalization
It refers to a process through which businesses expand their
operations in other countries. they trade at international level in
order to growth and develop. The main aim of companies is to
generate large revenues by attracting large number of people and
providing goods and services to fulfil their needs.
Concept of global trade
Global trade is also known as international trade in which goods
and services are transferred between two or more nations. This
helps in increasing world economy by creating demand and
supply. Trading globally enables consumer to use or consume
products or services that are not available in their country. By
trading globally every type of goods like cloths, food, groceries,
etc. and services like banking, tourism, hospitality, etc. are
exchanged. International trade is done in different currencies. It
depends between agreements done between nations. Export
means selling product in global market and import means
buying product from it. they both account for country’s balance
of payment.
Challenges faced by Tesco:-
In order to expand operations in different countries
businesses has to face many challenges. In similar way,
Tesco wants to expand in different countries. They will
also have to face challenges which are as follows :-
Tax and tariff fees – in many countries there is similar
system of export and import. But every country taxation
system is different. Tesco may have to follow a long
procedure of paying taxes. They might have to pay high
fees to government for trading. This may result in putting
extra burden on them and increasing expenses.
Organization communication Tesco is having stores in
almost every continent and many countries. thus, it may
be difficult for them to communicate there. For this they
might have to install high technological infrastructure in
country. also, they have to follow protocols and rules of
government.
Local competition – Tesco might face local competition
in many nations. There are many local retailers who
already exists in country. This may impact on their
expansion strategy. They might face stiff competition
from them. This may be a disadvantage for them. Thus,
they need to analyze market condition and competitors
existing.
Unfamiliar culture- this is most common challenge Tesco
can face. their may exist cultural differences between
people. Tesco might not know how to interact with people,
what is the culture of country, etc. it will restrict them to
enter in new market.
c) trends of business environment
business environment refers to external factors in
which they operate. They include legal,
environment, etc. any change in these impacts on
business to a great extent. Thus, it is important to
develop effective strategies so that impact can be
minimized. Expanding business in different
countries results in facing many challenges.
Environmental trends – this is major trend that can
impact Tesco. in present time countries and
government is highly focusing on protecting
environment. They have imposed strict rules and
regulations for business to trade. Also, in
international trade certain environmental policies
has to be followed. Tesco operate globally and
contribute in CSR. They also have to follow various
country rules in which it operates. For example –
Brazil is a country which is having diversified
natural resources. In recent times, there is high
deforestation of Amazon forest, soil erosion, etc.
this can impact business growth and development.
Als, it may restrict the to use resources.
b) impact of cultural differences as a challenge
there is a great impact on culture while doing international trade.
This is because there are certain differences that becomes challenge
for business to enter in new market. this effects on growth and
development. The differences are described below
Communication – this is the major difference that can impact in
trading globally. It is because different country has different regional
language. Communication is important as it helps business to convey
their message to people. So, this restricts business to develop strategy
to overcome challenge. Thus, it is important for Tesco to understand
importance of culture and language.
Work place etiquettes – this is another culture difference that
impact on organisational culture. It is because the norms, policies,
etc. that vary from country to country. Alongside this, etiquettes
include policies and procedure, working hours, etc. thus, tesco can
also be impacted due to these issues.
Organisational structure – it refers to structure of business that
shows how authority flows at work place. Each company have their
own structure according to country culture. Basically, developing
structure depends on social values, status, norms, etc. this gives
shapes to hierarchy in organisation. For example – in Japan social
norms reflects seniority. This approach is followed that shows
seniors must be respected.
Tesco has to face these cultural challenges while
expansion. It may lead to restrict them to enter in new market.
moreover, they have to change their structure and develop new
policies and implement at work place.
REFERENCES
Books and journals
Wirtz, J., Tuzovic, S. and Ehret, M., 2015. Global business
services: Increasing specialization and integration of the world
economy as drivers of economic growth. Journal of Service
Management. 26(4). pp.565-587.
Kasemsap, K., 2016. The role of social networking in global
business environments. In Social media and networking: Concepts,
methodologies, tools, and applications (pp. 1635-1653). IGI