TESCO's Global Expansion and Exit from South Korea: A Report

This report provides a comprehensive analysis of TESCO's business strategies in the South Korean market, examining the drivers of globalization and their impact on TESCO's expansion. It delves into TESCO's marketing strategies, including the marketing mix and the adoption of virtual stores and the Home Plus plan to maintain growth. The report also explores the reasons behind TESCO's eventual exit from the South Korean market, including issues with standardization, ineffective marketing, and challenges related to competition and scandals. The conclusion highlights the importance of effective marketing, adaptation to local environments, and customer-centric strategies in achieving and sustaining success in the global market, emphasizing the influence of political, economic, social, and technological factors on business operations. The report underscores the need for organizations to continuously improve their strategies to navigate the complexities of international markets.

Critical issues in Business
Management

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK 1 Analysing the drivers of globalisation for TESCO in relation to their expansion and exit
from South Korea.............................................................................................................................1
TASK 2 The way TESCO maintain its growth in South Korean market........................................3
TASK 3 Reasons for the TESCO leave the South Korea................................................................4
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................6

INTRODUCTION
In present scenario there are various factors in business environment that creates issues for
organisation. For example increase is competition and dynamic business situation are the
two major issues that are faced by firm. These issues are considered as integral problems.
It is very essential for organisation to identify such issuers and to plan as well formulate
effective strategies in order to deal these problems.
The study have focus on examining marketing strategy adopted by TESCO
PLC for promoting their product in international market, increasing market share and
fostering growth. It also has focus on drivers and impact of globalisation on retail industry
in UK. The reports purpose is to identify way by which TESCO is able to establish and
maintain good position in international market. It also emphasizes on reason that has
forced TESCO to leave South Korea market.
TASK 1 Analysing the drivers of globalisation for TESCO in relation to their
expansion and exit from South Korea.
Globalisation is defined as the process by which organisation develop global influence
or start operating on an international scale. The case emphasises on globalisation strategies of
TESCO and its success in South Korean market.
TESCO company is considered as Worlds leading organisation dealing in retail industry.
The organisation experience with globalisation was not successful at initial stage when it
enters into South Korean market. Later The company has planned to establish its retail
outlet and position their product according to the preference and demand of customers in
global market. TESCO enter South Korea market in year 1999 by the way of joint
venture .This partnership venture has assisted organisation in establishing their stores at
best locations. TESCO has established its retail stores at attractive location in order to
provide ease access to consumer in order to allow them to buy company products and
services. Joint venture has provided Tesco an opportunity to gain knowledge about market.
This has enabled business entity in fostering their growth and achieving success in
international market (Bauer, Eckhard, Ege and Knill, 2017. )
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The marketing strategy that was adopted by TESCO while expanding their business in
South Korea. Consists of 4 elements of marketing Mix.
Products- TESCo has planned to products and services according to the needs and demands of
consumer. It had intended to provide good quality goods at reasonable price to its clients.
It also delivers variety of products related with food, clothes and electrical goods.
Price- The organisation operates in such business environment which has stiff competition
within market place. Leadership cost pricing strategy was adopted by TESCO in order to
differentiate their product from that of competitors.
Place-The organisation has many stores located at located in many countries that provide
consumer ease of buying enterprise products and services. This has enabled firm to
increase its sales and profitability.
Promotion-The various measures had been adopted by Tesco for promoting their goods and
services in Global market. This activity has allowed business entity to generate brand
awareness and gain customer loyalty.
Standardisation strategy has been adopted by Tesco in order to expand their business in
south Korean market. According to this strategy the company has planned to provide same
quality. Prise, features goods and services in South Korean market as it used to serve
product in domestic market.
Although TESCO company is recognised as on of the leading company of UK. Yet the
TESCO business has to face various critical business while operating their operating in
South Korean Market (Wheelen and Hunger,2017.)
The major issues that was faced by organisation in South Korean market is problem related
to standardization of goods, services and internal operation. It is very important for
organisation to built adaption related to external environment factors that include political,
economic , technological and social has a significant impact on country Sustainability and
business operations.
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`` In south Korean market the TESCO organisation has standardized itself in terms of
delivering products, designing of retail outlets, and internal business process. Lack of
effective differentiation and adaption strategy in context of advertising campaign of
enterprise in South Korean market has forced firm to quit their operation in particular
country. Culture was the other macro environmental factors that has affected TESCO
business. In south Korean market the marketing strategy of TESCO was not at successful
as the organisation was norm able to comply with the norms related to Business
environment of South Korea. TEScO was unable to adapt legal and social changes in
South Korea. Some significant problem that was being faced by organisation are decrease
in market share, reduction in profits and revenue, increase in cost of production and
increase in competition (Pitelis and Runde, 2017)
TASK 2 The way TESCO maintain its growth in South Korean market
The virtual stores was established by TESCO in Public places in order to provide ease to
customer. It has adopted advance technology for promoting their products and services in
market. Advertising campaign was being organised for generating brand awareness in the
country. TESCO has marked online presence that has provided consumer an opportunity to
shop online. Effective strategy was developed by organisation to understand the needs and
demands of consumer in market (Galati and Moessner, 2017) Technology has allowed
company to reach wide number of customer and enabled firm to represent its objective of
conducting or serving particular products and services. It has provided firm an opportunity
to enhance its brand image by delivering good quality of products and services at
reasonable price. Economic condition of the country has provided enterprise a chance to
expand their business and reduce cost of production. It has planned to provide customer
convince and value. TESCO intends to provide customers with goods that client want at
lower price. TESCO has planned to execute this plan through multiple channels that
includes Hypermarkets, grocery, convenience and online retail stores. At initial stage
When Tesco enter South Korea it has offered value proposition for local people and has
provided them variety of goods at low cost. By establishing its virtual stores, Tesco was
cable to execute its new localised value proposition plan. In adding to value proposition
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strategy, Its Home Plus plan has allowed firm to develop and enhance its brand image and
experience positive reinforcement.
Home plus plan has provided organisation an opportunity to attract more numbers of
consumer as they attract customer by delivering the value of high convenience that is
demanded by customer. TESco was able to maintain their position in south Korean by
providing satisfaction to consumer and gaining their loyalty by offering them good quality
product at reasonable price. In simple words' customer based marketing has allowed
organisation to maintain their position and sustain their business in international market
(Vedung, 2017)
TASK 3 Reasons for the TESCO leave the South Korea
TESCO provides the effective and good quality product to the customers in the market.
They also provide the product based on the consumer needs. In the industry, it innovate
their products and services based on the client needs it help to increase firm performance
and productivity in the world. TESCO is third retailer in a world. It provides good quality
products to the consumers. They set their business in the South Korea by applying
different and innovative strategies and approaches which help to increase the company
performance and also help to expand a business in the world. TESCO faces two basic
problems such as prosecution and ineff3ective strategies. They are not able to satisfy the
consumer needs in the South Korea (Collis and Hussey, 2013). TESCO executives in
South Korea potentially faces the prosecution over allegations that the retailer sold the
customer data.
The growing scandal in South Korea is another big issue for the company because it
provides different and innovative products to the clients in the market. By these problems
TESCO leave the South Korea and they are also not able to apply different and innovative
strategies in the existing products (Achtenhagen, Melin and Naldi, 2013). They are only
providing their existing products to the client they are not able to innovate the existing
item based on the customer needs. They should follow advanced marketing strategies
which help to increase their company performance and productivity in the world.
Ineffective marketing strategy is the main factor to leave the South Korea. TESCO need to
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follow advanced and enhanced technologies to promote their products in a market. By
applying these approaches of marketing they can easily get higher performance in the
world.
Further, the third reason to leave the South Korea is that ineffective marketing strategies.
Employees are not have good and efficient knowledge about to innovate their product and
how to sell in the market. In South Korea there are many companies that follows different
types of methods of the marketing to get higher performance in the world. further, scandal
is the big competitor of the TESCO in South Korea. They provide innovative products and
good quality products to the customers (Sarkis, 2012). These all are the reasons the
TRSCPO leaves the South Korea. They should follow different types of marketing
strategies and approaches such as customer based marketing strategy, expansion strategy
etc. These all are the strategies help to increase overall performance and product8ivuty in
the world. TESCO should provide appropriate training and development to the employees
so that they can easily innovate the produce and market it in the market. By using
advanced technologies and marketing approaches they can easily get higher performance
in the world (Haas, Snehota and Corsaro, 2012).
Further, one more reason is that they are not following the marketing techniques to attract
the customers in market. They should follow different types of technologies to promote
their products and services to the client to increase their fir performance and productivity
in the world. TESCO Company tie up with different companies in the South Korea to
expand a business in the world.
To attract a customer in a market they need to follow different types of approaches. Based
on the client need they should provide appropriate product to the clients. They should also
apply innovative strategy to increase firm performance in the worlds (Beske, Land and
Seuring, 2014). In retail market they need to provide appropriate and innovative products
and service to the customer which helps to get higher performance in a world. These all are
the reasons that TESCO leave South Korea. Company provides effective products to the
consumer to maintain brand image in the market. Firm should follow different types of
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marketing and innovative strategy which help to increase product8ivity in the world
(Massa and Tucci, 2013).
CONCLUSION
It has been concluded from the report that effective marketing and other strategies can
help firm in expanding and sustaining their business in global market. Ineffective strategy or
Plans can forces company to quit particular market. It has been concluded from study that the
major issues that was being faced by TESCO are increase in competition, decrease market share
and growth. Various globalisation drivers such as political, legal, social, technological, and
economic factors have great impact on business operation. Such macro Environmental factors
have both positive and negative influence on business activities. Favourable business
environment can assist organisation in expanding their business and fostering growth. It has been
identified from research that Value proposition strategy and Home Plus plan has enabled
enterprise to maintain their position in South Korean Market and provided them to expand their
business in other countries. Ineffective marketing strategy has forced organisation to withdraw
their products from South Korean market (Kew. and Stredwick.2017)
It has been suggested TESCo company is required to make improvement in various
strategies such as customer based marketing strategy, expansion strategy etc. It is recommended
to organisation that it should adopt innovation strategy as it would help company in
differentiating their product from that of its competitors and would allow firm to sustain their
business for long period.
REFERENCES
Books And Journals
Hudson. M. 2017. MANAGING WITHOUT PROFIT. DIRECTORY OF SOCIAL CHANG.
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Wheelen. T.L. and Hunger.J.D.2017. Strategic management and business policy. Pearson.
Pitelis. C. and Runde. J. 2017. Capabilities, resources, learning and innovation: a blueprint for a
post-classical economics and public policy. Cambridge Journal of Economics. 41(3).
pp.679-691.
Galati. G. and Moessner. R. 2017. What do we know about the effects of macroprudential
policy?.
Vedung. E. 2017. Public policy and program evaluation. Routledge.
Kew. J. and Stredwick.J. 2017. Business environment: managing in a strategic context. Kogan
Page Publishers.
Bauer. M.W. Eckhard S. Ege J. and Knill C. 2017. A public administration perspective on
international organizations. In International Bureaucracy (pp. 1-12). Palgrave Macmillan
Collis, J. and Hussey, R., 2013. Business research: A practical guide for undergraduate and
postgraduate students. Palgrave macmillan.
Achtenhagen, L., Melin, L. and Naldi, L., 2013. Dynamics of business models–strategizing,
critical capabilities and activities for sustained value creation. Long range
planning. 46(6). pp.427-442.
Sarkis, J., 2012. A boundaries and flows perspective of green supply chain management. Supply
Chain Management: An International Journal. 17(2). pp.202-216.
Beske, P., Land, A. and Seuring, S., 2014. Sustainable supply chain management practices and
dynamic capabilities in the food industry: A critical analysis of the
literature. International Journal of Production Economics. 152. pp.131-143.
Massa, L. and Tucci, C. L., 2013. Business model innovation. The Oxford handbook of
innovation management. 20. p.18.
Haas, A., Snehota, I. and Corsaro, D., 2012. Creating value in business relationships: The role of
sales. Industrial Marketing Management. 41(1). pp.94-105.
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