International Marketing: A Case Study of Tesco PLC's Global Strategy

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GLOBAL STRATEGIC MARKETING
PLAN
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Table of Contents
Introduction......................................................................................................................................3
Task 1. Provide a case background, including company size, competition and target market........4
Task 2. Include information on your chosen target countries with justification. (Analyze macro
environments (PESTEL) & competitors, customers and market (5 forces)....................................6
Task 3. Set your SMART global marketing objective for going international.............................10
Task 4. Decide upon and justify your global market entry strategy ( export, franchise, joint
venture etc). What are the implications ( risks and opportunity)? If your company would decide
upon a different strategy................................................................................................................12
Task 5. Global market strategies and tactics for this organization(Segmentation, targeting,
positioning and product, price, place, promotion strategies). What are the implications of your
choice (cost, resources, timing and choice)? 15
Conclusion.....................................................................................................................................19
References......................................................................................................................................20
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Introduction
The worldwide and comprehensive marketing activities were carried on to grow to the
proportions that virtually all marketing manager’s in today’s ambitious environment is involved
in, or is influenced by unbounded and global issues. This study pursues to address some leading
matters and skills prescribed when executing marketing programs in worldwide markets. The
main concern suffers by the retail business organizations is competition in the market and the
invariably changing the arena of the marketing. New dimensions of the company can be
according to the revision of the marketing platform. The TESCO PLC is one of the largest
wholesalers in the British which is doing a tremendous job in the wholesale business. This
organization concerned with supermarkets and general buying and selling in the retail market. In
both terms, the domestic market share and global sales, TESCO PLC is one of the best
companies in the UK. Jack Cohen started this company in the year 1919.
The TESCO PLC Company stands for the third position in the global retail business in terms of
revenue. In its initial phase it was started with specialized food and drink business, but later other
segments like electronics, home, health, financial services, telecom, apparel, dental implants and
car allowance are also included. The company also holds music,online networking & software-
related services. The TESCO PLC operates its stores in various nations with the best
performance as it is the largest food retailer in the UK. The motto of this company “Every little
helps” helping the organization in developing, motivating and advanced environment to aid the
customer in their shopping trading and commerce (Ziliani &Ieva, 2015). The main focus of
business operations is to maximize the assets, generate recurring income and secure value of
fundamental management imperatives. The present report includes the key factors of the
PESTEL which describes the macro environment which is targeted by TESCO PLC and the
policies used in the marketing mix. It also includes the SMART initiatives taken by the company
and the 4 P’s which describes the marketing mix strategic plan of the TESCO PLCCompany.
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Task 1. Provide a case background, including company size, competition and target
market.
In today's world, the global strategic marketing plan is necessary for development in business
growth. In the company of the United Kingdom i.e., TESCO PLC, which is the multinational
food retailer company which deals with the retail market. It is the 3rd largest retailer company in
the United Kingdom. As we are discussing the company size, there are 5, 00,000 employees
working atTESCO PLC in the world. Generally, in the UK, 3, 35,000 employees are working
and 6800 stores around the world. The TESCO PLC is not only driving the online market share
but driving online marketing itself.
The profit for last year is increased, i.e., £145 m. The online retail immensely declared a rise in
turnover of £1.64 bn in 2017. They pay the UK corporation tax bill £ 300 min 2016 to £450 in
2018. The estimate of growth has been increasing for the third year running and in 2017 gets
larger operating income is £1280 million and net income will be £54 million.
TESCO PLC Centre space is also immense by ALDI and WALMART. Those two tremendous is
their only bigger contender. TESCO PLC helps over 270 million active consumers with an
approximate 60-80 million in TESCO PLCPrime Service. As take a look at WALMART it will
help 157 Million active buyers. We trust their company capability to initiate and modify to
market trends is what keeps them as a leading group of companies. The UK has decided to leave
the EU will force new dares for TESCO PLC. Brexit will change immigration policy impacting
economic outlook consumer spending, Etc. It will impact the supply chain of the Tesco PLC.
This recently shipped in from abroad a large percentage of its products sold, so these changes
will straight influence on its COGS and capability to offer reasonable products to UK customers.
The TESCO PLCmarketing strategy combines a number of targeted online marketing
mediums,i.e., Associates program, sponsor search, social and online advertising, television
advertisement and other enterprises. The most effective way to target the market is to increase
the sales of TESCO. There are a number of ways by which sales can increase rapidly. It will
have to be competitive in market trends (Nicholls, 2012). The listing products are self-regulating
to increase sales. Try to invest in pro-merchant contributions. TESCOmedia sales are also the
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better options as in Google many ads were showing which is seen by customers is the best way
of increment in sales. Recently the TESCO PLC implies a new feature, i.e. ‘asks the owner'.
Increase consumer trading online by websites and create consciousness among the customers of
products and services. Boost up the repeat purchase of goods. Consider the fulfilment by TESCO
PLCi.e. FBA. It will help in supervising the order which was sold by other online sales channels.
Another way is to win the buy box. Improve your SEO which will help the product in the listing
of search products by customers. The feedback and reviews are the things by which we are able
to know how the consumer feels after purchasing the product online. If it is satisfied or not. To
bring the customers to the TESCO PLC stores, market outside ofTesco, which will help to
increase the sales? The most important thing is to follow the rules and regulations if you do not
follow the rules and regulations it will decrease sales.
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Task 2. Include information on your chosen target countries with justification. (Analyse
macro environments (PESTEL) & competitors, customers and market (5 forces).
The TESCO PLC is a multi-platform international food wholesaling company. Its headquarters is
in the UK & has supermarkets in 12 countries over the world. It is 2nd largest Merchandisers later
on WALMART in a status of earnings built and also upholds the caption for the 2nd largest
Merchandisers taken in account taxation. Specifically, recognized for merchandising edibles
materials & food products. The TESCO PLC also capitalizes economic affairs, mobile,
allowance, hardware maintenance and plenty more. To figure out exceptional we compare it
through PESTEL Analysis.
1. POLITICAL FACTORS: -This merchandising or retailer company handles worldwide,
overall political factors affects the production of TESCO. It incorporates tariff amount, acts of
regulation and also utilizes in the solidity of the nation.As a result of growing economic
uncertainty in the globe, many Merchandisers motivated by a government to produce
employment for the domestic population. The demand for the product is also rising and expand
its resources because of this company plays an important role in producing employment
opportunities (Puri, 2013).
2. ECONOMIC FACTORS: - It is the important factor of this company as generally
purchase prices, interest, profit and estimates. Accordingly, the organization should be conscious
of any changes in taxation schemes, it will give an impact on the convenience of finance. The
company is pacifically relying on the market of the UK where it has 30% shares in the market.
Although business reaches internationally (Amatole&Guido, 2012). TESCO has two
procedures,i.e., incorporation and changes pursued by the company for its success. TESCO has
moved its focus towards advertising its brand values in place of deluxe products because of
falling off income levels and household incomes.
3. SOCIAL FACTORS: - The buyers in the UK have displaced facing bulk shopping and
nonstop shopping, this is due to the array of social changes occurred in trends. Since TESCO
added on a number of food products make available for sale. The type of kinds of stuff and
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service request by customers is generally motivated by their assumptions and reactions are
leveraged by social practices. The consumers are generally aware of their health problems so
their thoughts towards food items were inconstant. By accumulating the demands of organic food
products, TESCO adopted these changes thoroughly.
4. TECHNOLOGICAL FACTORS: - The extension of new technologies accompany
various new opportunities for TESCO. The two well-defined ones comprise, firstly, the home
delivery is available in the online shopping introduction and growth. Secondly, for the comfort
and relaxation for customers, there is self-service checkout points have been provided which
decreases the labor values. Moreover, TESCO spends or important amount of energy,
adaptability projects to fulfil lifelong decrease its carbon footprints.
5. ENVIRONMENTAL FACTORS: - To address environmental problems, the pressure
must expand on companies and for the welfare of society, the number of operations is adopted.
The TESCO is apparently pledged to decrease its element footprints by 50% over 2020(Glanz,
et. al., 2012). By expanding general principles in customers, the TESCO is diminishing waste
products in their stores.
6. LEGAL FACTORS: - The government schemes and regulations are precisely affecting
the accomplishment of the TESCO. For example, the Food Retailing Commission (FRC) in
2004 recommended fair practice shall be induced which will restrict in many prevailing
proceedings just as unstable costs without taxing refund from Merchandisers. For promoting
these schemes, The TESCO sustains its consumers cost minimization on the purchased material,
in correspondence to the quantity consumed on their supermarket shops. The prices are lowered
in suggestions after several promotions.
PORTER’S FIVE FORCES
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Five forces of the porter of the structure are the mechanism of study rivalry or competitiveness of
the business environment and identify the approach potential effectiveness. The deformed
industry is the one in which these all the five forces affect the global profitability.For example, In
the airline industry, the profitability is not high due to the organization’s hidden arrangement of
huge fixed costs and lower variable costs sustain an excessive run in the cost of airways travel.
Airways lead to integrated on demand and turn down the utility of particular bearer along with
the industry itself because it is decided by the customer to buy the ticket or not.These five forces
comprise from smooth competition, i.e., The threat of substitute products, the risk of rivalry, the
threat of new entrants and the upright competition are the bargaining power of suppliers and the
bargaining power of buyers.
1. The Threat of New Entrants:- Your place can be influenced by the person's capability
to enter into the marketing world. It takes a small amount of money and struggles to arrive in the
market and give the competition energetically. The small protection of your fundamental
technologies can lead the rivalry to enter into your marketing world and let down your position.
If you have stronger boundaries in your way, the entrance of the rivalries is being blocked and
saved your marketing plans and take trustworthy advantages from it (DeSoto, et. al., 2013). The
economies of scale and product differentiation also affect the market. The cost disadvantages are
independent of size. There are new websites and apps launching at very low prices and easier to
resist the slab and bind the industries of the past. TESCO PLC conducts all the challenges
successfully and constructs the effective blockages to safeguard the competitive edges. They
build economies and invest their money on research and development.
2. Bargaining Power of Suppliers:- Every retail industry buys its raw materials from a
large number of suppliers. A supplier in effective places can lower the margins, whichTESCO
PLC can gain in the marketing world. In the consumer service sectors, there are many powerful
suppliers which use their neglecting power to gain higher cost form the retail industries. It causes
the global profitability of Retail with the number of suppliers, they build productive supply
chains (Nufer, 2013). If the cost of one raw Material goes higher than they shift towards the
other company by using different types of products with experimenting with material design.
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3. Bargaining Power of Customers:- Buyers demands are at higher levels. They only
want to buy those products whose costs are lesser with the best offers and discount available in
the market. This made the huge pressure on TESCO PLC to sell that product with these offers.
New products are available in the market to minimize the rejection of existing consumers in
TESCO PLC to its competitor. The dominant and smaller customer base is of this company
which has the highest bargaining power of customers and capability to explore the increasing
offers and discount also higher.
4. Threats to substitute products or services:- The company profitability suffers only
when the new services are demanded by consumers and meet a similar customer’s desire in
distinct ways. The switching cost can also be increased by the company for customers. The
TESCO PLC does not focus on the buying of customers, but they understand the desires of the
customers (Nufer, 2013). For example, The drop box and the Google drives, these both are
alternate of the storage hardware devices used for data storage.
5. Threats of Rivalry: If the rivalry industry in the marketing world is more powerful than
the prices are falling down and the profitability of the company decreases globally. TESCO PLC
has many rivalries in the retail industry, which has the greatest competition. This company
tackles this by constructing sustainable differentiation and construct a scale for better
competition in the collaborating market.
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Task 3. Set your SMART global marketing objective for going international.
TESCO PLC has the objective to attain an appreciable marketing share. This company comprises
of the adequate objective that concentrates on the SMART pattern,i.e., Specific,
Measurable,Achievable, Realistic, Timely. These are the objectives which are implemented by
a company to supervise its marketing plans. These are used in helping the individuals and the
team and encourage them to reach the goal. Although you set the marketing plan you are assured
that they are SMART.
1. Specific: Every company sets the goal for the company on revenues and brands for the
specific marketing plan. They have to take all the decision carefully about what you are going to
acquire the marketing world. For Example, A TESCO PLC company may fix the revenue
marketing goals to boost up the market shares, where brand marketing goals are also
implemented which is an important part to set (Lee, et. al., 2014). These are like increasing
higher quality email list, and blogging more rapidly once you have set up these goals, you are
reaching with these goals towards measurable.
2. Measurable:- It is the part which objectives are to quantify. An objective beyond a
measurable result is just like playing as a game, but not maintaining a score.
For example, The TESCO PLC company is going to be confident that 40% of the sales are
increasing per month to reach the objective of increasing sales up to 240% in 6 months.
The key indicators are the main part of the measurable in integrated marketing. This may raise
conversation, natural social shares, page depth, revenue, form submission, and bounce rates.
3. Achievable: If the company is taking definite and measurable little steps on the way to
reach the goal. The company is achievable when it has specific skills and tools which are
necessary to reach the goals.
For example, the TESCO PLC company agreed that the sales of the company increasing with 4%
in the next 6 months will be achievable and reasonable for a company.
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4. Realistic: These are the goals which are based on the realities and current economic
conditions of the marketing business climate for every company. The right peoples, enough
amount of money, best machinery are needed to achieve the objective (Ionita, 2012).
For example, The company TESCO PLC has the difficulty when it wants to increase the sales,
but there are newly launched competitors are in line with a recession appearing on the boundary.
5. Timely: In this objective, if the deadlines are not described, you are not reaching for the
goal easily, struggle towards reaching for the goal will drift, if an expiration of time does not
exist.
For example, Tesco PLC company has the objective to increase the rates of the product by 40 %
so it has to build a deadline to reach the goal.
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Task 4. Decide upon and justify your global market entry strategy ( export, franchise, joint
venture etc.). What are the implications ( risks and opportunity)? If your company would
decide upon a different strategy.
Market entry planning is an organized transportation and dispatch method of good or services to
a new bull's eye market. In foreign markets, there are companies in entering in different ways.
There are number factors that determine your exclusive strategies, comprising tariff rates, the
degree of adaptation, transportation and working costs. The expectation about the increase in
sales is confirmed,but costs also increased by these factors. It will neutralize by the increase in
sales. This is the method to set up and supervise the bond in a foreign country. There are some
strategies for global market entry such as Exporting, Licensing, Franchising, Joint venture,
Buying a company, Turnkey projects.
1. EXPORTING: Exporting means dispatching goods and services manufactured in one
country to sell them in another country (Park &Park, 2016). It is a low-risk strategy that
businesses find fabricating for different reasons. The liability may be not to acquire as much
specified marketing information as compared to fabricating in a market company. There are
many companies which are the threat and have clearly defined strategies along with price,
distribution, promotion and research elements.
2. LICENSING: Licensing is a comparatively experienced adjustment where the company
gives its products using rights to the other company. Licenses issued can be in production and
marketing. For the purchase of a license, the purchaser must have broad market share in the
market in which it will be entering. It is done with small costs and involvement. The only costs
in signing an agreement and stepping the fulfilment. The right to use can be its brand name,
patents, sales knowledge, etc.
3. FRANCHISING: In franchising, the franchiser is a trader which allows which allows an
authority to use the trader’s trademark and delivers the trader's goods. Franchising is using
another firm outstanding business model (Balducci, et. al., 2015). The authority that is using a
trademark can pay a fee in return to the franchiser. A franchise is a substitute for constructing
chain stores to deliver goods that withdraw the expenses and liability of a chain.
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