Tesco plots to make even more dough

Identify the development directions available to Tesco. Assess the relative suitability of each of these options by ranking them . For each of the top four development directions in your ranking compare the relative merits of each development methods. Complete your evaluation of the options thats now appear most suitable by applying the criteria of acceptability and feasibility.

Group- 7 week - 7
By : Prasath, Nikhil, Pinkesh.
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Identify the development directions available to Tesco

PINKESH

Market Penetration

Four Important Development Directions

Product Development

Market Development

Diversification

PINKESH

Market Penetration

Four Important Development Directions

Product Development

Market Development

Diversification

Market Penetration

Current situation and future direction :

core competence and powerful resources for grocery industry. Different scheme such as club card and value range loyalty scheme. Stable profit due to economic of scale. Offering product with backward integrity in order to minimize the cost. Current strategy : Continues expansion; Nationally and internationally. purchase large volume of product. Increase the Purchasing power of existing customers. Strengths of company :

strong brand reputation.

Wide range of resources. Increasing number of customers. PINKESH

Market Penetration

Four Important Development Directions

Product Development

Market Development

Diversification

PINKESH

Product Development

Current situation and future direction : increasing demands for Non-food product Current strategies: Focusing on the development of non-food products . Introduction of new product in existing market. Benefits of these direction : High growth market share and revenue

PINKESH

Market Penetration

Four Important Development Directions

Product Development

Market

Development

Diversification

PINKESH

Market development Current situation and future direction:

Varieties of product. Target different market segment. Target different countries and culture.

Current strategy :

Target the other countries . format of shops.

On-line shopping channel.

Benefits of these direction :

Vast opportunities with other countries in terms of size and scales. Customer segmentation improves revenue and market share. Own label products for on- line shopping.

PINKESH

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Market Penetration

Four Important Development Directions

Product Development

Market Development

Diversification

PINKESH

Diversification

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Current situation : Longer opening time Non- food product current strategies: Emphasis in different sector like finance, telecommunication process.

PINKESH

each of the four development directions in your ranking compare the relative merits of each development methods (internal,acquisition or strategic alliance)

NIKHIL

Internal growth
Market Penetration. - Join and use the existing marketing strategies. - Market expansion by improving the line of products. Market development. - Market entry is considered as critical, based on the internal venture. Product development. - Innovation is necessary. - Products should be improved with the help of knowledge and skills inorder to meet the customers needs and demands. Diversification. - Diversification is difficult due to current knowledge and skills.
NIKHIL

Acquisition
Market Penetration. - Expanding the range of products. - Developing market share. Market Development. - Penetration to new market. - Development of new segments. Product Development. - Use the competency in order to develop new products and innovations. - Improving the position in the market. Diversification. - Focusing on the new market. - Application of horizontal integration in order to have an access immediate access to the new market.
NIKHIL

STRATEGIC ALLIANCE
Market Penetration - Expand the range of products - Develop market share Market development - Global expansion - Focusing on new segments Product development - Application of new technologies with improved knowledge and skills - Adding resources for innovation and developing market share Diversification - Substitution of vertical integration - Risk of seasonal and cyclic fluctuations in product demands - Focusing on the competition
NIKHIL

Complete your evaluation of the options that now appear most suitable by applying the criteria of acceptability and feasibility

PRASATH

Strategic direction of tesco

To increase the company core competency as a strong platform for grocery retailing To develop higher-margin non-food category products To develop new markets in order to create additional profit Additional services that are being offered by the company

PRASATH

Strategic direction (cont..)

Benefits
Higher margin

Reduce the operation cost

Helps in analyzing the customers for the future process of decision making

Risk
Experience High competition

PRASATH

Acceptability Evaluation

CEO customers

shareholders

Suppliers

PRASATH

Internal factors
Investment requirements & Working capital requirements

Employment implications -to improve the core competency of the company

Technical skills is important for expansion of market segment Acquisition and acquisition planning New products can help to cover new markets Communication can help to focus on market and product expansion as well as improvement of new services

PRASATH

External factors
The aspects about how the bankers respond to the strategies that the company proposes

Customer will help to strengthen the core competency of the business, together with the process of product and market expansion
Competitors will be affected regarding the issues of competitive advantage and expansion of line of products and target market Suppliers are important in the process of competitive advantage due to supply chain, product innovation and market expansion The government and other regulatory approval
PRASATH

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References :
Meldrum,M,McDonald,M.(2007)Marketing

in a nutshell: key concepts for nonspecialists ,Elsevier ltd. www.guardian.co.uk www.tesco.com www.foodanddrinkeurope.com

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Any questions ????

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