Tesco's US Market Entry: A Foreign Direct Investment Analysis

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RESEARCH PROPOSAL
TESCO entering an emerging market as the United States, using foreign direct investment and trying
to determined company s profitability and impact in the economy

Table of Contents
INTRODUCTION......................................................................................................................................................... 2
RESEARCH AIMS AND OBJECTIVES..............................................................................................................3
RESEARCH QUESTIONS..................................................................................................................................... 3
BACKGROUND OF COMPANY............................................................................................................................... 4
LITERATURE REVIEW............................................................................................................................................. 5
METHODOLOGY......................................................................................................................................................... 8
INTRODUCTION.................................................................................................................................................... 8
RESEARCH PHILOSOPHY.................................................................................................................................. 9
TYPE OF INVESTIGATION................................................................................................................................. 9
DATA COLLECTION METHOD......................................................................................................................... 9
SAMPLING METHOD.........................................................................................................................................10
ACCESSIBILITY ISSUES....................................................................................................................................10
DATA ANALYSIS................................................................................................................................................. 11
GANTT CHART.......................................................................................................................................................... 12
REFERENCES............................................................................................................................................................ 13
APPENDIX................................................................................................................................................................... 15

INTRODUCTION
Tesco Plc. is the leading food and grocery retailer in the UK that is providing quality
services and products to the customers. It is a 4th biggest retailer company in the world
after Wal-Mart, Carrefour, and Metro (Qu and Green, 2018). It is a public sector
organization which mainly aims to provide satisfactory services to the customers. This
report will be analyzing the challenges and issues which have been faced by Tesco at the
time of entering an emerging market like the US. The benefits and drawbacks of foreign
direct investment method will be discussed in the report which has been applied by Tesco
to attain success in the emerging market of the US. Apart from this, this research report will
be helpful in analyzing the profitability of the company and its influence on the economy.
There are different competitive advantages gained by the organization in the US market
which can be really beneficial for gaining profit and brand image. The opportunities will be
discussed in the report. A brief discussion about foreign direct investment will be
presented in the assignment. Secondary and primary research methods will be used in the
report to gain accurate outcomes (Jones and Wren, 2016).

RESEARCH AIMS AND OBJECTIVES
The main aim of this research is to know the challenges and opportunities which have been
faced by Tesco at the time of entering into the emerging market of US (Iamsiraroj and
Ulubaşoğlu, 2015). The company is using foreign direct investment at the time of entering
the business in the market of the US. The company wants to enhance its profit by
expanding its business in different areas. This report wants to know the different
circumstances that have been faced by Tesco to expand their business successfully.
Moreover, it has been observed that the expansion of a multinational company like Tesco
highly impact the economy of the nation. The negative and positive impact of the economic
conditions of the nation will be discussed in the report (Iamsiraroj and Ulubaşoğlu, 2015).
 To critically evaluate the challenges and opportunities that have been faced by a
multinational company (Tesco) at the time of expanding the business in the US
 To know the benefits and drawbacks of foreign direct investment method at the
time of entering an emerging market as the US
 To know the level of competition in the emerging market like the US.
 To determine the company's profitability and impact in the economy due to
entering in the new market place.
RESEARCH QUESTIONS
1. At what level the expansion of Tesco in Us will impact the economic conditions of
the nation?
2. Does the use of foreign direct investment method can be beneficial for Tesco for
entering into the emerging market of the US?
3. Do you think that the Tesco is earning more profit after entering into the market of
the US?
4. Do you think the use of technical tools and techniques will be helpful for Tesco to
enter into the market of US successfully?

BACKGROUND OF COMPANY
Tesco Plc. is a British multinational groceries and general merchandise retailer of UK. The
head office of the company is situated in Welwyn Garden City, Hertfordshire, England. The
organization was founded in 1919 by Jack Cohen (Huan and Huan, 2019). As per the data of
2018, the company is currently having around 6,500 stores in the UK, Ireland, Thailand,
Hungary, India, and other countries. There are approximately 4, 30,000 employees are
working in the company. Operating income and net income of the company is £1,620
million and £1,205 million respectively.
The company is having an effective brand image in the market and they also have the
loyalty of the customers. It is a 4th biggest retailer company in the world after Wal-Mart,
Carrefour, and Metro. It is a public sector organization which mainly aims to provide
satisfactory services to the customers. Tesco has expanded its business in different
countries and areas in order to earn more profit and brand image (Hedman and
Henningsson, 2015). The main mission of the company is to maintain its position in the
retail industry and enhance its profitability by using different techniques and innovation.
The company started to expand the range of products it sold during the 1960s and in the
current situation the company covers a huge area of the world.

LITERATURE REVIEW
Foreign direct investment (FDI) is an investment that is made by an organization from one
country and locates its business in different countries. The main aim of this process is to
enhance capital investment. There are different strategies used by business organizations
in order to make accurate decisions. FDI involves different international movements of
trade and other operations which impact the profitability of the organization. It has been
observed that the foreign direct investment has positively impacted the growth of retail
industry in the US and UK market. Apart from this, the level of competition is increasing
day by day which can be a threat to the success of the organization. Analysis of competition
level can be helpful for the organization to understand the actual circumstances of the
market place by which they can earn the profit from there. Apart from this, the
organization needs to know the policies and rules which are followed by the business
companies in the market.
A. Impact of using foreign direct investment at the time of entering into the US
market
According to Geyskens (2018) foreign direct investment is a process in which a company
can control its ownership in business in one country by an entity based in another country.
This is helpful in controlling the ownership by which the company can earn profit from one
and other nations. This strategy can be really beneficial for the organization to expand its
business in other area and managing the business operations successfully. The retail
organization can adopt mergers and acquisitions for expanding its business in the US
market. FDI involves different international movements of trade and other operations
which impact the profitability of the organization. It has been observed that the foreign
direct investment has positively impacted the growth of retail industry in the US and UK
market. Using foreign direct investment can be really beneficial for enhancing the
profitability of the organization. The United States is a developed country which is having a
well-managed market place so that the foreign direct investment can be really beneficial
for managing the business operation accurately (Steenkamp, 2017).

B. The benefits and drawbacks for the Company's profitability at the time of
entering an emerging market
As per the review of Riboldazzi (2016) the company can gain different competitive
advantages at the time of entering into the new market place. The company needs to
maintain different strategies and plans for entering into the new market place. This will be
helpful in gaining the attraction of the customers. Entering into the new emerging market
can be a benefit or drawback for the organization. The level of competition is increasing
very rapidly and every multinational organization is trying to be in the top position. The
company can earn profit and brand image in the new emerging market place with the help
of making different strategies and plans (Hilton, 2018). The existing successful
organizations of the market can be a big threat to the success of the company. Adopting the
process of mergers and acquisitions can be really beneficial for the company to understand
the market easily and it will be supportive and comfortable in entering into the new market
place. Apart from this, the company needs to know about the policies and norms of the
country in which they are expanding their business. It will be really helpful in
understanding the market circumstances accurately. Entering into the new market will be
helpful in enhancing the brand image and profitability of the organization. It will also
beneficial in enhancing the growth of the business. It has been identified that the expansion
of multinational retailing company can be really helpful in improving the economic
conditions of the nation by which the local people will gain employment and career
development opportunities (Ziliani and Ieva, 2015).
C. Analyze the impact of the expansion of retail organization on the economic
conditions of US
Bolton and Shankar (2018) state that the expansion of retail business organization can
highly impact the economic conditions of a nation like the US. There can be some benefits
or drawbacks of expansion of retail organization on the economic conditions. The local
people will gain employment and career development opportunities that are helpful in
enhancing the strength of the nation. The retail industry is growing rapidly which can be
helpful in improving the current economic conditions of the nation. It has been observed

that there are many peoples are working in the retail business organizations which are
helpful in giving them employment opportunities and career development opportunities as
well (Ziliani and Ieva, 2015). The growth of the nation has been enhanced after the
globalization and international business concept. There are many business organizations
that are conducting their business in other countries in order to gain more profit and
enhancing their brand image internationally. The economic conditions of the countries
have been improved after this process. Globalization is one of the main reason behind the
organizations can conduct their business in other countries successfully (Reinartz and
Linzbach, 2018).
D. Analyze the competition level in the market before entering into it
According to Jorgenson et al (2016), the company needs to analyze the accurate conditions
of the market before entering into it. The level of competition is increasing day by day
which can be a threat to the success of the organization. Analysis of competition level can
be helpful for the organization to understand the actual circumstances of the market place
by which they can earn the profit from there. Apart from this, the organization needs to
know the policies and rules which are followed by the business companies in the market. It
will be helpful in performing the right actions at the right time (Guy Jr et al., 2017). The
company needs to provide proper training to their employees before entering into the new
market place so that they can manage the new situations effectively. Effective strategies
and plans need to be maintained by the organization by which they can gain competitive
advantages from the market. Before entering in the market the company needs to develop
some effective promotional strategies by which they can promote their services and
products to the customers and attract them towards their facilities easily. These practices
and actions need to be done by the organization before entering into the new market place
because it will be helpful in gaining success easily (Rim et al., 2016).

METHODOLOGY
INTRODUCTION
This research report will be using the mix method approach in which the primary and
secondary research method will be applied by the researcher (Silva, F. and Cortez, 2016).
The primary research approach is helpful in gaining the accurate review and answers of
peoples by conducting a survey or making a questionnaire. The primary research can also
be conducted by taking personal interviews of the peoples to know their perceptions about
the research topic. The primary research will be used for this research in which a detailed
and relatable questionnaire will be created by the researcher to know the reviews of the
participants. The secondary research method is helpful in gaining depth knowledge about
the topic. For this research, the secondary data will be collected by the journals, books,
previous research papers, articles, and other reliable sources. The information which is
gained from the literature can be really beneficial for understanding the topic accurately
and gain a satisfactory outcome from the research (Walker, 2017).
Qualitative Research
Qualitative research is helpful in giving theoretical and depth knowledge about the topic
that is helpful in understanding the topic more wisely (Chong et al., 2017). This research
will be using the qualitative method which will be helpful in analyzing the impact of Tesco
on the economic conditions of the US. The different challenges and opportunities which
have been faced by the company will be evaluated with the help of qualitative research
method. Books, Journals, article, literature reviews and other blogs will be used by the
researcher to analyze the data accurately.
Quantitative Research
Quantitative research approach will be used for this research by the researcher which is
really helpful in gaining statistical and realistic data for the research. Qualitative research
approach can be conducted by using a survey, interview and preparing a questionnaire. A
sample size of 100 participants will be taken for this research in which the target audience

will be the employees of Tesco (Tripathi, 2018). The employees will be able to tell the
actual conditions of Tesco after entering into the market of the US.
RESEARCH PHILOSOPHY
Research philosophy is a belief about the way in which the data will be collected for the
research. How the data will be collected, measured, and used in the report will be decided
by the researcher before starting the research project is called a research philosophy. For
this research, the researcher adopted Positivism. It is helpful in gaining the data according
to the objectives of the research (Rovito et al., 2018). This involves a detailed discussion
about the issues and challenges which can be faced by Tesco at the time of entering into the
market of US. The Positivism approach can be really helpful in managing the complete
research project accurately.
TYPE OF INVESTIGATION
This research is using Descriptive research approach which is mainly used for knowing the
accurate elements of population and research method which has been used in the report.
This type of investigation is really helpful in managing the overall research process
accurately (Reinartz and Linzbach, 2018). The researcher can present evidence of research
in descriptive form with the help of this descriptive research investigation.
DATA COLLECTION METHOD
There are different data collection methods which can be used by the researcher to collect
accurate data for the research. This research report will be collecting the data by using a
questionnaire that will be provided to a focused group in which the researcher has targeted
to the employees of Tesco to gain actual information about the company at the time of
entering into the market of US (Iamsiraroj and Ulubaşoğlu, 2015). The employees will be
able to tell the benefits and drawbacks of foreign direct investment at the time of entering
into the emerging market of the US. A sample size of 100 participants will be taken for this
research in which the target audience will be the employees of Tesco. The questionnaire
will be completely related to the objectives of the research by which the researcher can
collect accurate information about the research topic. For collecting the data researcher
have chosen the questionnaire and survey method because it is the most effective method

to know the actual views of people (Hedman and Henningsson, 2015). It has been assured
by the researcher at the time of survey that the personal information of the participants
will remain confidential. Collecting the appropriate data is one of the most essential stages
of research by which the researcher can know the actual reviews and answers about the
topic which has been selected. While collecting the data age, gender, positions of employees
which they occupy will not be considered. They all will be treated similarly which is helpful
in resolving the risk of discrimination. The purpose of the research is to know the different
circumstances which have been faced by Tesco at the time of entering into the market of
the US and the employees will know this best so the method of the questionnaire will be
accurate to collect the reliable data for the research (Geyskens, 2018).
SAMPLING METHOD
A sampling method is a procedure for selecting sample members from a population. This
research will be adopting the random sampling method in which the participants will be
randomly selected by the researcher for conducting the survey (Ziliani and Ieva, 2015). It
will probably be biased in some way to collect accurate information about the research
topic. For this research, the researcher has selected the employees of Tesco and the sample
size is decided of 100 participants. The employees will be able to tell the actual conditions
of Tesco after entering into the market of the US. Sampling is one of the most essential
methods of the research in which the researcher choose the sample size which will be
helpful in conducting the survey properly (Rim et al., 2016).
ACCESSIBILITY ISSUES
There are different accessibility issues can be faced by the researcher in order to complete
the research (Tripathi, 2018). The people who are participating in the survey have their
different views and suggestions which impact the overall outcome of the research. In this
research, the researcher is targeting the employees of the company who can give a
different opinion regarding the different questions. In this situation, it will be tough for the
researcher to make a satisfactory and reliable conclusion. Apart from this, the researcher
assures that personal information will be safe and confidential. The researcher has the
responsibility to protect the personal data of the respondents. Apart from this, the research

faced the issues in collecting the data and selecting the accurate sample size and place for
the survey (Huan and Huan, 2019).
DATA ANALYSIS
The data analysis is a process of inspecting, cleansing, transforming, and modeling data as
per the objectives and goals of the research (Qu and Green, 2018). It is the most essential
methods of research in which the researcher analyze the collected data by using
appropriate methods and tools. For analyzing the collected data for this report the
researcher will be using the statistical approach in which the graphs and charts will be
presented to know the actual answers of the participants on the questions which are
presented in the questionnaire. The graphical presentation will be helpful in understanding
the answers and reviews of the participants more accurately. The data which has been
collected by the primary research and quantitative research approach will be analyzed by
the graphs and charts (Jones and Wren, 2016).