Report on TESCO Market Expansion Strategies and Analysis

This report provides a comprehensive analysis of TESCO's market expansion strategies. It begins with an executive summary and introduction, outlining the methodologies used, primarily secondary data analysis. The main body delves into key findings, including existing brand values aligned with the target audience based on Kapferer’s Brand Identity Prism, a detailed description of TESCO's diverse target market, and an analysis of new markets using PESTLE analysis. The report further explores TESCO's application of Ansoff's Matrix for market penetration and development, including product diversification. A competitive analysis compares TESCO with Sainsbury and ASDA, highlighting their strengths, weaknesses, opportunities, and threats. The report concludes by emphasizing the need for TESCO to focus on international market expansion to overcome market penetration obstacles. References and appendices are also included to support the findings.

Brand Extension

EXECUTIVE SUMMARY
The report revolves around market extension policies for TESCO, including all the
methodologies and monitoring practices they will require to collect data and therefore establish
their policies and code of conduct in accordance with. The report will also focus on existing
brand values and developing the compatibility of values with their target customers along the
way. The report will also focus on description of TESCO's target market along with analysis of
new market including the trends of that market. Along with it report will also reflect on product
development and using it as a tool to subdue competition.

Table of Contents
EXECUTIVE SUMMARY.............................................................................................................2
INTRODUCTION...........................................................................................................................4
MAIN BODY...................................................................................................................................4
Methodology...............................................................................................................................4
Findings.......................................................................................................................................4
Competition.................................................................................................................................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................8
APPENDICES.................................................................................................................................9

INTRODUCTION
Market expansion strategies are important for any organisation as they provides a brand
opportunities for growth along with all the dynamics that they have to consider in order to enable
penetration in their target market. These policies lays an outline for course of action that should
be taken by an organisation keeping in mind all the dynamics that are to be taken into
consideration in order to subdue the threats that can arise in the market. TESCO is one of the
biggest supermarket chain in all the UK. They have well establishes equity and have earned
customer loyalty over the course of their operations. This report will revolve around the
methodologies that can be undertaken by TESCO to expand their operations further more.
MAIN BODY
Methodology
The methodologies taken into consideration in order to carry out this research is
collection of secondary data and using it to draw reliable conclusions about the operational
course of actions regarding market expansion of TESCO.
Findings
The key findings for market expansion the report will revolve around the following dynamics:
 Existing brand and Brand Values – In accordance to Kapferer’s Brand Identity Prism
TESCO establishes their values in compatibility of that of their target audience. TESCO's
services physique and personality is based keeping in mind the picture of their sender.
TESCO as an organisation is able to weave all six dynamics together in order to establish
a clear image of their values (Loredana 2017). TESCO's management keeps in mind the
culture of their target market and uses it as a tool to establish a relationship between the
organisation and their target customers.

 Description of the Target Market – The target market for TESCO PLC is an
accumulation of many dynamics. Their target customers involves the locals of their target
market. Along with them a very huge segment of their target customers are immigrants,
who need quality groceries at affordable prices. Their target customers also includes
working class people and old aged people as they have the availability of all the products
under one roof. Analysis of the New Market, Including Trends –
PESTLE analysis :
Political – This dynamic is stable in the market TESCO operates in (Adamyk 2019),
which provides the organisation countless opportunities for growth.
Environmental – UK government is very strict about their environmental policies which
TESCO have to follow in order to subdue the continuity threats arising due to this factor.
Social – Social status and values are taken into consideration by TESCO management
while establishing an outline for organisational code of conduct.
Technological – The technological advancements and growth opportunities in the market
TESCO operates in. The organisation uses their active monitoring techniques in order to acquire
the required technologies.
Legal – The legal conventions in which TESCO operates in accordance to are strict and
therefore the organisation have to make sure that they follows those outlines.
Economic – There is no deficiency in investors and funds in UK market, which gives
TESCO countless opportunities to attract funds and use them in accordance to their benefits.
Ansoff’s Grid:

Market penetration strategies of TESCO - The Clubcard policy of TESCO added more to
this, it helped it gaining customer brand loyalty and also find new market opportunities for
growth. There are many customers who prefer brand over products, TESCO identified these
customers and becomes the brand first.
Product development - TESCO started offering organic food products after seeing change
in consumer preferences (Thompson 2019). The company also take note of environment friendly
products and fulfilling social responsibility. It introduced biofuel other than petrol and diesel and
still making improvements. Further, the company is growing more in telecommunication and
electronics. This has helped TESCO to cater more Market segments.
Market development strategies of TESCO - Under its market developments strategies
TESCO has focused on product dimensions, new strategies, distribution channels, demand
factors and buyer's feasibility and accessibility. TESCO took over the Scottish supermarket, a
supermarket in Poland, in 2019 it announced 750 stores operational in Thailand, it has its stakes
in Associated British Foods, Quinn worth and Crazy prices.
Diversification - Diversification helps splitting business risks of loss in one category of
products into many category of products (Cleberg 2019). Over the time TESCO has diversified
into many products and services, like insurance, furniture, banking and finance, books,
telecommunication, electronics and many more. It introduced its own clothing brands like “F+F”
and “Cherokee”. The company has its own food brands, “Value” and “Finest”.
Competition
Sainsbury
Strengths
 Providing quality services at
affordable rates.
 Providing services to the customers at
their convenience
Weakness
 Inefficient time - management
practices.
 Poor management.
Opportunity
 Expansion of their services using
digital space.
 Affordable rates generating the
opportunities to acquire their target
customers.
Threats
 Inability to adapt in accordance to
legislative outlines poses a threat in
continuity of operations.
 Time consuming services poses a
threat of their customers going for
substitute sellers.
ASDA

Strengths
 Good management.
 Loyal customers.
Weakness
 Inability to initiate change
management.
 Time consuming decision making
process.
Opportunity
 Market expansion.
 Product development.
Threats
 Excessive competition.
 Recession in Global Markets.
Its strategies didn't worked out in some cases. TESCO bought “Giraffe” restaurants in
2013 but had to sell it in 2016 (Planning 2017). Also it bought 80% stakes in online video shop
Blinkbox Entertainment in 2011, but the business made heavy losses and was sold to “Talk-
Talk” in January 2015.
CONCLUSION
This report concludes that TESCO needs to focus on their operations in international
markets in order to expand their market as their inefficiency to do so is the biggest obstacle in
their market penetration techniques. TESCO's ignorance towards foreign competition inefficient
modifications in their products and services have turned their subsidies into liabilities.

REFERENCES
Loredana, E.M., 2017. The use of Ansoff matrix in the field of business. Annals-Economy Series.
2. pp.141-149.
Thompson, I., 2019. Ansoff Matrix. In The Procurement Models Handbook (pp. 45-47).
Routledge.
Cleberg, C., 2019. Strategic Success: The Ansoff Matrix vs. The Balanced Scorecard.
Adamyk, K., 2019. PESTLE Analysis on Tesco PLC.
Planning, A., 2017. Fuchsia Enterprises Trial Balance. Change. 2016. pp.2015-2016.

APPENDICES

1