International Marketing Report: Tesco's Global Expansion Strategy

This report provides a comprehensive analysis of Tesco's international marketing strategy, focusing on its expansion into the Australian market. It begins with an overview of Tesco and the reasons for its international marketing research, emphasizing the importance of understanding market trends, competition, and consumer behavior. The report then delves into key decisions in strategy development, including market segmentation, product differentiation, and distribution channel selection. It examines how Tesco adapts its marketing mix to the specific needs of the Australian market, considering factors like customer preferences and competitive pressures. The report also highlights the challenges Tesco faces, such as inventory management and distribution, and the strategies it employs to overcome them. Finally, the report concludes by summarizing the main findings and emphasizing the significance of international marketing in achieving business success.

International Marketing

Table of Contents
Project 1...........................................................................................................................................1
Introduction..................................................................................................................................1
Overview of Tesco.......................................................................................................................1
Reasons for international marketing research..............................................................................2
Key decisions in the strategy development.................................................................................2
Conclusion...................................................................................................................................5
REFERENCES................................................................................................................................6
Appendix..........................................................................................................................................7

Project 1
Introduction
International marketing refers to an application of marketing principles that a company
uses to expand its business globally (Turner and et. al., 2019). It helps in developing strategies
for trading products and services, across territorial boundaries of a country. By designing
marketing mix i.e. product, place, promotion and other strategies, a firm can customize its
business according to varied needs and demand of people, who are residing across a nation. The
present report is going to evaluate this concept of international marketing, by targeting the firm –
Tesco that deals in retail business (Dahms, 2019). It is a British Multinational Organisation,
which headquartered in England, UK. It offers a range of products that classified as clothing,
furniture, electronics and more, in many countries. But now, it is going to sell new innovative
furniture products in Australian marketplace, where it is expected that demand of this item will
reach by 14 billion till 2022 (Australia Furniture Market is Expected to Reach AUD 14 Billion
by 2022: Ken Research, 2018). So, offering innovative furniture in this market will prove
beneficial for Tesco, in enhancing its profitability ratio (Mogaji and Yoon, 2019). For this
purpose, key trends that may affect the operations of respective firm in chosen market, will be
critically evaluated in present report.
Overview of Tesco
Today competition has risen more in world, due to open business market of international,
where companies are allowed to trade their commodities across nation. Tesco is one of the
multinational organisation of UK, that considers as third largest retail in terms of revenue, in
world (Thorpe and Roper, 2019). It has already expanded its business globally in more than 11
countries, with approximate 6,800 shops and give employment to over 450k employees. This
firm has built a wide range of operational strategies in order to satisfy varied need of customers,
by reducing cost and improving the delivery system. With increasing competition in international
market, retail industry has continually focused on developing operations’ capability, as well as
meeting changeable customers’ need for outperforming their competitors (Dahms, 2019).
Concerning on this fact, Tesco that also deals in retail business, has successfully responded risks
which includes competition and complexity by framing ambitious operation strategy. In context
with the business unit and functional strategy, Tesco also adheres towards consumer-centric
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therefore, always comes one step ahead from its major competitors (H&M, Sainsbury, M&S and
more). Analysing its competitive position, one of the most vital operational strategies that helps
Tesco to gain competitive advancement is provide benefit to customer, by selling products on
cheap rates. Regarding with the strong customer centric concept, respective company introduced
a club card to gain loyalty at low price policy (Bredahl, 2019). Thus, till establishment of
business, Tesco has competing on price, where main strategy is based on selling a wide range of
products on cheap rates as much as possible. Furthermore, recognising the lower cost price
against major competitors, respective firm also set up a global sourcing team all over the world,
in picking up non-food products (Horton, 2019). Thus, lower price refers to the key competitive
advantage that leads Tesco to achieve success from other retailers.
Reasons for international marketing research
As per views of Bredahl (2019), it has been evaluated that in order to achieve strong
competitive position in international market, Tesco now going to offer some more innovative
products, related to furniture. For this purpose, it mainly targets the Australian market, where
there is a large demand of furniture items, on different price rates. To offer this product, it is
essential for this company to conduct a proper international market research (Mogaji and Yoon,
2019). The reason behind this is trends of new marketplace, that may arise global challenges for
Tesco in running its major operations in retailing. It includes inventory management, where in
retail industry, excessive supply of new product generates waste and less inventory impacts on
availability of same, that leads to loss customer retention. For this purpose, actually demand of
customers at international place, will lead Tesco to overcome from this threat. Prime distribution
is another main challenge that respective firm might face, where inefficiency in delivery service
may affect satisfaction level of customers (Turner and et. al., 2019). Thus, innovation in supply
chain system and localise its format as per new market, yet creates another key challenge for
Tesco. Along with this, presence of both domestic and multinational organisations at same place,
will also create difficulties in front of Tesco, in offering its new product at Australia.
Key decisions in the strategy development
From theoretical perspectives of Thorpe and Roper (2019), it has been determined that to
run business operations and launch new product successfully at Australia market, it is essential to
take proper strategies for Tesco (Mogaji and Yoon, 2019). This would help not only in coping up
global challenges but also, develop business strategically. For example – Identifying demand of
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new customers of Australia, will help Tesco in developing quality of product and setting up
prices competitively. For international research, carrying out market segmentation will help in
segmenting demand of customers as per need (Thorpe and Roper, 2019). On the basis of end
users, furniture demand is classified as Residential, Commercial and Hospitality; while major
cities such as Canberra, Sydney, Perth, Brisbane, Melbourne, Adelaide and more, by type of
sector either as organized or unorganized; distribution channel helps in classifying demand of
furniture as per Homewares, Departmental, Home Furnishing or Improvement etc. Thus,
segmenting market as per above manner, lead Tesco in managing its inventories accordingly
(Dahms, 2019). It has been revealed through research that number of households
within Australia is estimated to be raised from over 8k thousand in 2017 to 9k thousand till 2022
(Australia Furniture Market is Expected to Reach AUD 14 Billion by 2022: Ken Research,
2018). This has represented the economy growth or GDP at a CAGR of 1.8%, which shows
effective demand for furniture items in residential sector mostly. So, targeting this group will
lead to Tesco in generating more profitability.
To overcome from threat of intense competition at Australian marketplace, product
differentiation considers as best strategy for Tesco (Bredahl, 2019). For this purpose, it will
concern more on adding more new features in furniture such as offering – The Umberto Folding
Library, Tyrone Stoddart’s Boxed, Resource Furniture Stealth Kitchen and more.
Figure 1The Umberto Folding Library
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Figure 2 Tyrone Stoddart’s Boxed
Figure 3 Resource Furniture Stealth Kitchen
Offering these innovative furniture items, at Australian marketplace on lowest price, will
help Tesco in successfully expanded its business market, over here (Horton, 2019). This would
also lead to create competitive position in new place and attract targeted customers (residential)
towards its business. Along with this, as per shown in Appendix, focusing on selection of
distribution channel, will help Tesco in improving its delivery process. It has been evaluated
from the market survey (shown in Appendix) that to buy furniture, mostly people prefer physical
stores rather than online platform. So, Tesco also needs to improve its marketing mix strategies,
so that decisions for promotion of new furniture items in Australia can be taken.
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Conclusion
It has been concluded from this report that to run business competitively and launch new
product successfully, international marketing concept help a firm in achievement of same. It
helps organisations in developing effective strategies to set up their business at new marketplace
and meet global challenge as well.
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REFERENCES
Books and Journals
Horton, D., 2019. Potatoes: Production, marketing, and programs for developing countries.
CRC Press.
Thorpe, A.S. and Roper, S., 2019. The ethics of gamification in a marketing context. Journal of
business ethics. 155(2). pp.597-609.
Dahms, S., 2019. The influence of competences and institutions on the international market
orientation in foreign-owned subsidiaries. European Journal of International
Management. 13(3). pp.354-380.
Bredahl, M. E., 2019. Competitiveness in international food markets. CRC Press.
Mogaji, E. and Yoon, H., 2019. Thematic analysis of marketing messages in UK universities’
prospectuses. International Journal of Educational Management.
Turner, J. R. and et. al., 2019. Marketing for the project: project marketing by the
contractor. International Journal of Managing Projects in Business. 12(1). pp.211-227.
Online
Australia Furniture Market is Expected to Reach AUD 14 Billion by 2022: Ken Research. 2018.
[Online] Available Through: <https://www.prnewswire.com/news-releases/australia-
furniture-market-is-expected-to-reach-aud-14-billion-by-2022-ken-research-
685249081.html>.
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Appendix
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