Marketing Strategy Evaluation of Tesco: France Retail Expansion

This report provides a comprehensive evaluation of Tesco's marketing strategy, particularly in the context of its planned expansion into the French retail market. The report begins with an executive summary highlighting Tesco's international market position and its strategic decision to expand into France. It then delves into a detailed analysis of the company's background, market position, and the application of the SOSTAC model for marketing and business planning. The report includes a situation analysis using SWOT and PESTEL frameworks, as well as an application of Hofstede's model to understand the French market. Objectives are defined using the SMART framework, followed by an examination of Porter's generic strategies. The report then evaluates Tesco's current SOSTAC model, including an analysis of the Ansoff Matrix and the application of the 4Ps. The GLOCAL strategy is discussed, and the report concludes with a summary of findings and recommendations. The report highlights Tesco's approach to international marketing, emphasizing the importance of adapting to local market conditions and consumer preferences.

Running head: MARKETING STRATEGY EVALUATION OF TESCO
Marketing Strategy Evaluation of Tesco
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1MARKETING STRATEGY EVALUATION OF TESCO
Executive Summary
Tesco has the international retail market position of being the most admired company because of
its quality of gods and services offered along with its quality of marketing. Considering the
business expansion and profit growth objectives, Tesco has considered to expand its business in
the retail industry of France. The report revealed that the Ansoff Matrix indicates that Tesco
follows marketing penetration strategy in UK with offering wide range of food and non-food
products at low prices than its competitors in the industry. Conversely, the GLOCAL marketing
strategy of Tesco in expanding its business successfully in France is focussed on ensuring
significance that is effectively customized based on the demands and needs of the French market.

2MARKETING STRATEGY EVALUATION OF TESCO
Table of Contents
1. Company Background.................................................................................................................3
1.1. Company Profile and Market Share.....................................................................................3
1.2. Market Position of Tesco......................................................................................................3
2. Task 1: Introduction.....................................................................................................................4
2.1. International Marketing Mix.................................................................................................4
2.2. International Marketing........................................................................................................5
2.3. Country Selection for Business Expansion of Tesco............................................................6
3. SOSTAC Model...........................................................................................................................6
4. Situation Analysis........................................................................................................................7
4.1. Micro-environment Analysis: SWOT...................................................................................7
4.2. Macro-Environment Analysis: PESTEL..............................................................................8
4.3. Hofstedes Model Analysis of France....................................................................................9
5. Objectives..................................................................................................................................10
5.1. Mission Statement of Tesco................................................................................................10
5.2. Objectives for Successful Business Expansion of Tesco in France...................................10
6. Strategy......................................................................................................................................12
7. Tactics........................................................................................................................................14
7.1. Action.................................................................................................................................14
7.2. Control................................................................................................................................15

3MARKETING STRATEGY EVALUATION OF TESCO
8. Task 2: Evaluation of Current SOSTAC Model........................................................................16
8.1. Hofstedes Model Analysis of UK.......................................................................................16
8.2. Tesco UK Revenue.............................................................................................................17
8.3. Ansoff Matrix Implementation...........................................................................................18
8.4. 4Ps Application...................................................................................................................19
9. Task 3: Current Marketing Strategy Application Analysis.......................................................21
9.1. The GLOCAL Strategy.......................................................................................................21
9.2. Application of 4Ps Approach..............................................................................................22
10. Conclusion...............................................................................................................................23
References......................................................................................................................................25

4MARKETING STRATEGY EVALUATION OF TESCO
1. Company Background
1.1. Company Profile and Market Share
Tesco PLC is a renowned retail company based in UK that has business operations of
retailing and retail banking along with insurance services. The brands of the company encompass
Everyday Value, Finest, Chokablock and Technika. Tesco’s convenience store market shares are
observed to control around 34% of the grocery market (Chaffey 2015). However, recently the
only threat that is observed to be faced by Tesco in its increasing market share position is from
its competition authorities that is enforcing monopoly legislation. Tesco has the international
retail market position of being the most admired company because of its quality of gods and
services offered along with its unity of marketing. Its success in UK market is through shifting to
“higher margin” non-food merchandise and its core business is m maintaining low prices,
cultivating consumer loyalty along with offering distinct store concepts like insurance and
banking. In the recent years Tesco has more than 2646 stores all over the world with 490 gas
stations, 25 distribution centres, and 13 other stores along with its website (Tesco plc. 2019).
Moreover the company also has around 700 convenience stores all through the world like in
Wales, England and Scotland. In the current year, the retail organisation has 28% of its market
distribution in terms of sales in UK and in international markets.
1.2. Market Position of Tesco
The marketing strategy of Tesco to attain international business success has always been
focussed on promoting its brand message of “Every Little Helps” to strength is core traditional
competitive edge in the marketplace. The retail brand based in UK also focussed on developing a
marketing strategy to position its brand as a “high-volume and low-cost” retailer that offers

5MARKETING STRATEGY EVALUATION OF TESCO
exceptional value and finest retail product ranges at affordable prices. Through positioning itself
as the leading supermarket in UK, Tesco has attained around 55.9 billion revenue internationally
in the recent year (Chaffey 2016). The company has also expanded its business operation from
just being a food retailer to include products and services such as financial services mobile
telecommunication product services along with data analytics. Tesco has successfully expanded
globally holding a leading international market position through ensuring continuous offering of
competitive products with smarter prices, better service and improved quality. The objective of
the company is to expand its successful business in the prospective market where it has not yet
established its business operations, such as in France.
2. Task 1: Introduction
2.1. International Marketing Mix
International marketing mix is referred as the use of distinct marketing instruments in
order to attain prospective financial results by the organisations operating within the international
markets (Datta and Sanyal 2016). These instruments encompass product, price, place and
promotion. The international marketing mix strategies facilitate companies in adjusting its
marketing strategies for adapting to the business environment in other nations.

6MARKETING STRATEGY EVALUATION OF TESCO
Figure 1: International Marketing Mix
(Source: Felgate and Fearne 2015)
2.2. International Marketing
International marketing process is defined as a process of implementation of marketing
principles in order to address different needs and wants of the target consumers all over the
world. More specifically, the international marketing strategy of any organisation is focussed on
undertaking marketing activities in more than one country. The marketing managers implement
international marketing strategy in ensuring growth of their profit and shares (Florea and Duica
2017).

7MARKETING STRATEGY EVALUATION OF TESCO
2.3. Country Selection for Business Expansion of Tesco
Considering the business expansion and profit growth objectives, Tesco has considered to
expand its business in the retail industry of France. France is considered to be prospective
business market for the retail company as the nation has observed tremendous growth prospects
in the store and the web based retailing. Development can be observed by Tesco in establishing
business on France through implementing its innovative business activities such as web retailing
along with store and non-store retailing (Ibrahim, Alkhawlani and Al-shaghdari 2017).
3. SOSTAC Model
The figure below indicates the SOSTAC Model that was developed by PR Smith, which
is a renowned and widely implemented model in supporting the marketing and business planning
of companies. This model includes developing a marketing or international business expansion
plan based on analysis of its six aspects including situation, objectives, strategy, tactics, action
and control. These major planning activities are required as a part of process of developing an
integrated or multi-channel marketing panning for a business. Implementation off SOSTAC
model can encourage a logical order in developing an effective marketing plan along with
critically evaluating companies business processes (Jeanpert and Paché 2016).

8MARKETING STRATEGY EVALUATION OF TESCO
Figure 2: SOSTAC Model
(Source: Jenkins and Williamson 2015)
4. Situation Analysis
Situation analysis can be defined as prices through which the companies employ methods
to analyse their internal and external business environment in realising their consumers,
capabilities and business environment in ensuring competitive edge (Lin and Peng 2018).
4.1. Micro-environment Analysis: SWOT
Strengths
 Attained recognition for retail
excellence and consumer service
 Most profitable supermarket with
Weaknesses
 Tesco subsidiaries are not operating in
some nations that is adversely impacted

9MARKETING STRATEGY EVALUATION OF TESCO
significant cash reserves
 Different store formats for addressing
local and cultural needs through
personalised service experience
(Martínez-Ruiz et al. 2016)
from credit crisis
 Competitive rivalry has resulted in
price wars affecting the company’s
profit margin
 High dependence on UK market for
sales with less expansion
Opportunities
 Strategic collaboration with other
brands for increased product offerings
 Attaining target consumer markets
internationally
 Developing private level market
 Tapping into emerging markets through
offering western goods
Threats
 Economic recessions and time crunches
affecting market share of Tesco
 Increasing raw material cost affecting
profitability
 Labour threats in form of high wages
and benefits (Meyer and WILKINS
2015)
4.2. Macro-Environment Analysis: PESTEL
Political French government has set regulations on
using eco-friendly bags to be used by
supermarkets and the ones not using them for
packing might have to pay fines (Peeroo, Samy
and Jones 2016).
Economic French retail market is affected because of

10MARKETING STRATEGY EVALUATION OF TESCO
recession and the unemployment rate is
increasing in the nation that is affecting
purchasing power of consumer market
Social French consumers focus on purchase retail
products focussed on supermarkets quality
assurance and value added consumer services.
Household consumption in France has increase
by 7% for retail products (Piercy 2016).
Technological French retail industry is investing more on
employing digital technology in increasing
efficiency of retail operations.
Environmental French retail industry is encouraging the
supermarkets to reduce their carbon footprints
by 50% through minimising wastes in their
stores by ensuring consumers social conscience
(Ramanathan, Subramanian and Parrott 2017).
Legal French government regulations have
introduced ban in several practices of
supermarkets such as price changes without
notice and demanding supplier payments.
4.3. Hofstedes Model Analysis of France
France has high score in power distance that indicates companies in the nation have
normally one or two hierarchical levels in comparison to UK. France is an individualist society

11MARKETING STRATEGY EVALUATION OF TESCO
as they are self-motivated to be best in their business. The country follows feminine cultures
where the top managers earn an average with great focus of maintain life quality. Uncertainty
avoidance score of France is high indicating the culture of the nation to be structured and
planned (Roberts and Fiebig 2018). They have high acceptance for innovative and complex
technologies. Long term orientation score in France is high indicating culture of pragmatic
orientation showing adaptability to changed conditions and traditions. Indulgence attained
medium score in France signifying the society are less relaxed and enjoys life to a limited extent.
Figure 3: Hofstede’s Analysis of France
(Source: Shamim, Ghazali and Albinsson 2016)
5. Objectives
5.1. Mission Statement of Tesco
The mission statement of Tesco is “To make what matters better, together” that has major
focus on attaining success in the retail industry. This mission is developed by the company based
on its strategic aim to improve consumer loyalty through improving their shopping experience
(Shamim and Albinsson 2016).