International Marketing Report: Tesco's Strategy, Issues, and Analysis

This report provides a comprehensive analysis of Tesco's international marketing strategies, focusing on the concepts of product standardisation and adaptation. It examines key trends impacting multinational corporations (MNCs), such as cultural differences, taxation policies, and economic factors like inflation and consumer purchasing power. The report critically evaluates Tesco's international strategy, highlighting its target market, product diversification, and the application of the Ansoff Matrix for strategic development. It identifies key decisions for strategic development, emphasizing the importance of market need, competitive analysis, and cost considerations. Furthermore, the report delves into Tesco's company background, activities, and competitive positioning within the retail industry, while also addressing the international issues the company faces, including adherence to foreign laws and regulations and global pricing strategies. The report concludes by emphasizing the importance of both product standardisation and adaptation for MNCs operating successfully in global markets, offering insights into Tesco's approach and challenges in international marketing.

International Marketing

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Concepts of Standardisation and Adaptation...............................................................................3
Key Trends That Affect the Operations of MNCs.......................................................................3
Critical Evaluation of MNC's International Strategy...................................................................4
Key decisions for strategic development.....................................................................................6
Company background..................................................................................................................6
Activities......................................................................................................................................6
Competitive positioning...............................................................................................................6
International Issues That Tesco Faces.........................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................1

INTRODUCTION
Both product standardisation and product adaptation are business strategies that help
business organisations to use their manufactured goods and services to satisfy the needs and
requirements of diverse markets. It is immensely important for large multi national corporations
(MNCs) to make use of both product adaptation and standardisation strategies on the basis of
their operational requirements, in order to effectively diversify into new global markets (Rao-
Nicholson and Khan, 2017). This report evaluates how MNCs, particularly Tesco addresses the
issue of standardising or adapting their pricing, product, communication and marketing
strategies. Tesco, founded in 1919, is a business organisation that operates within the retail
industry of UK and currently operates from its headquarters in Hertfordshire, England,
specialising in selling general merchandises and groceries to its customers.
MAIN BODY
Concepts of Standardisation and Adaptation
Product Adaptation is the business strategy commonly used by international business
organisations and MNCs, that relates to the business modifying its manufactured goods and
products with the intention to adapt the product to reach and satisfy the needs and requirements
of international or diversified markets. The international marketing operations of MNC have to
be adapted to the target market to which the goods and services are being marketed to. For
example, while targeting Islamic countries, Dove promotes using women wearing traditional
Islamic attire with scarf, while when promoting to western audience, Dove adapts its marketing
strategy and promotes using its products using women wearing western attire.
Whereas, product standardisation refers to the process through which an international
business organisation or MNC maintains the uniformity and quality of its manufactured and sold
goods and services to diverse or international markets. Standardisation is also an immensely
important strategy for business organisations when operating in international markets (Li, Liu
and Bustinza, 2019). For example all Apple's Iphone products are standardised and manufactured
to be the same using a standardised process so that irrespective of the market customer purchases
them from, they receive the same level of care and quality that Iphone provides.
Key Trends That Affect the Operations of MNCs
There are present several key trends that affect the operations of all international business
organisations and MNCs irrespective of the industry in which they operate. One of the most

significant external trend relates to the different cultural backgrounds and upbringing of
populations in different countries of the world. All business organisation are effectively required
to modify their manufactured goods and services in order for them to be able to effectively
satisfy the needs and preferences of individuals belonging to different cultural backgrounds.
Another major political trend that immensely impacts the operations of international business
organisations relates to the different taxation policies and legal regulations that MNCs are
required to adhere to while operating in different global markets. Economic trends such as
inflation, consumer purchasing power etc., of international markets also have huge impact on the
operations and functions of MNC.
Critical Evaluation of MNC's International Strategy
Tesco being a retail business organisation focuses its operation on its target market which
includes individuals and families belonging to the middle and upper economic classes of the
population. In this segment, Tesco targets customers belonging to all cultural backgrounds,
nationalities, religions, races, genders etc., in order to effectively satisfy their needs and
requirements and increase their operational customer base, market share, productivity and
profitability. The services and goods provided by Tesco to their customers wihtin the retail
markets are diverse, but Tesco primarily specialises in selling general merchandises and
groceries to their retail customers.
In order to effectively operate in global markets, Tesco can develop their international
strategy as follows:
Illu
stration 1: Ansoff Matrix

Diversification: On the basis of the Ansoff matrix, Tesco can diversify their goods and services
as part of their international strategy. Doing this will allow for them to attract new customers in
global markets whose needs and requirements are currently unmet (Venaik and Midgley, 2019).
Contrastingly, this strategy also requires Tesco to invest into research and development of
diverse products, which is a difficult process.
Innovation: Tesco can also use innovation as the focus of their international strategy in order to
effectively operate in global markets. Innovation would add additional value to existing goods
and Tesco products, allowing for Tesco to effectively satisfy the needs and requirements of their
customers by providing them with highly valuable products. Contrastingly, innovation is a
complex process and requires creativity and inherent understanding of the future market and
consumer trends by Tesco.

Key decisions for strategic development
 The company needs to make sure the market in which the product is to be introduced is in
need of it or not.
 It is important to identify is their any similar product already existing in the market which
will help in taking better decisions.
 It also crucial for the organization for ensuring that all the requirements have been met
along the standardized quality because any inconsistency in it will stand the product out.
 Tesco needs to make sure whether the standardized product is beneficial for the
customers or not (Schlegelmilch, 2016). Does it adding any value to which is very
important for developing and implementing strategies.
 Tesco should undergo intensive research in order top reduce the cost of adaptation if it is
targeted at the right segment.
Company background
Tesco is a multinational retail store which is headquartered in UK. Founded in 1919 and
now has classified its business into varied segments such as clothing, electronics, furnitures,
financial services, software, internet services etc. It is one of the big four retail giants in UK.
Activities
Tesco has a very wide operation in UK. It has number of stores of different formats like
Tesco Extra, Tesco superstore, Tesco Express, one stop and so on. These are developed for
meeting the various needs of the customers.
Competitive positioning
Tesco has positioned itself at best position by offering differentiated products at the low
prices and has created a positive impression on the minds of the customers through heavy
discounts and offers.
International Issues That Tesco Faces
There are several challenges that Tesco faces on account of their international operations,
most important of which are as follows:
Foreign Laws and Regulations: A major international issue to plague the operations of Tesco
relates to them having to adhere to numerous foreign laws and regulations, many of which might
be applicable worldwide, but many of which may also be singularly applied in only one country

(Lee and Griffith, 2019). As Tesco has no choice but to adhere to the numerous foreign laws and
regulations in order to operate legally, this is a major international challenge.
Global Pricing Strategies: Another significant international challenge relates to cost calculations
and global pricing strategies. Tesco is required to keep their global pricing strategies at
competitive levels, even when the costs of raw materials, operational and labour costs differ
quite significantly from one country to other, making this a major international issue.
CONCLUSION
Based on the findings of the report, it can effectively be concluded that the effective use
of both product standardisation and adaptation strategies is of immense importance towards the
sustained successful operations of MNCs in global markets, irrespective of the industry in which
they choose to operate in. This report defines the concepts of standardisation and adaptation and
analyses the key external trends that affect the operations and functions of international
businesses and MNCs. Then the report critically evaluates product, service and market focus for
MNC's international strategy development using relevant frameworks. Finally, the report
analyses the key decisions in MNC's strategy development towards standardising their product or
adapting it to satisfy the local market requirements.

REFERENCES
Books and Journals
Lee, H.S. and Griffith, D.A., 2019. The balancing of country-based interaction orientation and
marketing strategy implementation adaptation/standardization for profit growth in
multinational corporations. Journal of International Marketing. 27(2). pp.22-37.
Li, R., Liu, Y. and Bustinza, O.F., 2019. FDI, service intensity, and international marketing
agility. International Marketing Review.
Rao-Nicholson, R. and Khan, Z., 2017. Standardization versus adaptation of global marketing
strategies in emerging market cross-border acquisitions. International Marketing
Review.
Schlegelmilch, B. B., 2016. Creating Global Product and Service Offerings. In Global Marketing
Strategy (pp. 83-103). Springer, Cham.
Venaik, S. and Midgley, D.F., 2019. Archetypes of marketing mix standardization-adaptation in
MNC subsidiaries. European Journal of Marketing.
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