Beruflich Dokumente
Kultur Dokumente
OF BUSINESS
POLICY
RANA M SHOAIB
SHOAIBS_SPIRIT@YAHOO.COM
COMSATS INSTITUTE OF
INFORMATION
TECHNOLOGY ISLAMABAD
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TABLE OF CONTENTS
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FINAL PROJECT OF BUSINESS POLICY......................................................................1
...........................................................................................................................................1
RANA M SHOAIB..............................................................................................................1
shoaibs_spirit@yahoo.com...............................................................................................1
COMSATS INSTITUTE OF INFORMATION TECHNOLOGY ISLAMABAD.............1
Table of Contents.................................................................................................................2
INTRODUCTION...............................................................................................................4
HISTORY............................................................................................................................4
IMPLEMENTATION OF TRADE THEORIES:................................................................5
1: PORTER’S DIAMOND THEORY:............................................................................5
THEORIES NOT IMPLEMENTED...............................................................................7
1: NEW TRADE THEORY:............................................................................................7
ENVIRONMENTAL SCANNING.....................................................................................7
ECONOMIC ENVIRONMENT:.....................................................................................7
LEGAL ENVIRONMENT:.............................................................................................7
POLITICAL ENVIRONMENT:.....................................................................................8
CULTURAL ENVIRONMENT:.....................................................................................8
COMPETITIVE ENVIRONMENT:...............................................................................8
MODE OF BUSINESS........................................................................................................8
SELECTION OF LOCATION:...........................................................................................8
HUMAN RESORCE STAFFING POLICIES:....................................................................8
JOB EVALUATION & COMPENSATION.......................................................................9
MARKETING STRATEGIES.............................................................................................9
PULL STRATEGY:.........................................................................................................9
SEGMENTATION:.........................................................................................................9
MODES OF FIANANCING:..............................................................................................9
MILESTONES:....................................................................................................................9
Reference:..........................................................................................................................10
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INTRODUCTION
Tesco is basically a Public limited company. It was founded in 1919 in
East London by Jack Cohen. Its Headquarters is in Delamere Road, Cheshunt,
and Hertfordshire, England. The chairman of Tesco is David Reid and chief
executive is Sir Terry Leahy. Tesco’s major products are Groceries, Consumer
goods, financial services, telecoms. Its Revenue is £59.4 billion (Year ending
28/02/2009)) and Operating income £3,128 million (Year ending 28/02/2009)).
It has approx 440,000 till 2008 employees and it has almost 3,729 stores till
2008.
HISTORY
Tesco was founded by Jack Cohen, who sold groceries in the markets of
the London East End from 1919. The Tesco brand first appeared in 1924. After
Jack Cohen bought a large shipment of tea from T.E. Stockwell, he made new
labels by using the first three letters of the supplier's name and the first two
letters of his surname forming the word "TESCO". This information was
verified by the TESCO press relations on BBC Radio in the South on December
10th. In the late 1990s, the typeface of the logo was changed to the current one
shown on the top of the page with stripe reflections underneath the typefaces as
Tesco used them on their carrier bags.
The first Tesco store was opened in 1929 in Burnt Oak, Edgware,
London. The firm was floated on the London Stock Exchange in 1947. The first
Tesco self-service store opened in 1948 in St Albans and is still trading in 2005.
The first Tesco supermarket was opened in 1956 in a converted cinema in
Maldon, Essex.
It has been said that it began own-label canning at the former
Goldhanger Fruit Farms factory, sited a few miles from Maldon in the village of
Tolleshunt Major, despite Goldhanger being another nearby village. The factory
has since been sold. It is now a transport depot, with several other business units
on the site.
Tesco's first "superstore" was opened in 1968 in Crawley, West Sussex.
It began selling petrol in 1974 and its annual turnover reached one billion
pounds in 1979. Also In 1975 Tesco opened one of its first Hypermarket's in
Irlam. The first Hypermarket under the "Extra" name opened in 1997. It
introduced a loyalty card branded 'Clubcard' in 1995 and later an Internet
shopping service. During the 1990s it expanded into Central Europe, Ireland and
East Asia. In July 2001 it became involved in internet grocery retailing in the
USA when it obtained a 35% stake in GroceryWorks. In October 2003 it
launched a UK telecoms division, comprising of mobile and home phone
services, to complement its existing internet service provider business. In
August 2004, it also launched a broadband service.
In addition to opening its own stores, Tesco has expanded by taking over
other chains, including:
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Victor Value, England, 1968 (sold again in 1986)
William Low, Scotland, 1994
Quinnsworth, Stewarts and Crazy Prices stores, Republic of Ireland and
Northern Ireland from Associated British Foods, 1997
13 HIT hypermarkets in Poland, 2002
T & S Stores, owner of the UK convenience store chains One Stop and
Day & Nite, 2002
C Two-Network in Japan, 2003
A majority stake in Turkish supermarket chain Kipa in 2003.
Lotus in Thailand
Hilliard’s, North of England 1984
21 remaining Safeway/BP stores in late 2005, when supermarket chain
Morrisons dissolved its Safeway/BP partnership (entered into when acquiring
Safeway).
FACTOR ENDOWMENTS:
DEMAND CONDITIONS:
The major factor in porter’s diamond theory is the demand factor with
respect to production scale. The production scale depends on the demand for the
products or brands like in London 70% Tesco’s own brand is highly appreciated
and demanded by the people due to its low cost besides having the “Finest”
quality in food items (like bread, cakes, etc) and non food items (like in Tesco
Ireland CD’s are of 14.95 euro compared with HMV Ireland or Golden Discs
(competitors) selling the same for just over 20 euro.
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RELATED AND SUPPORTING INDUSTIES:
STRATEGY:
Tesco's growth over the last two or three decades has involved a
transformation of its strategy and image. Its initial success was based on the
"Pile it high, sell it cheap" approach of the founder Jack Cohen. was overtaken
by Tesco in 1995. Key reasons for this success include:
1: An "inclusive offer". 2: Customer focus
STRUCTURE:
RIVALRY:
Asda, Sainsbury’s and Safeway are the domestic rivals which compete
with Tesco and this had allowed Tesco to become better international
competitors as it runs internationally as well.
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The only absolute advantage which Tesco has that it has a variety of
goods available under one roof for the convenience of its customers.
Safeway are the domestic rivals which compete with Tesco and this had allowed
Tesco to become better international competitors as it runs internationally as
well.
These two theories are also not implemented due to the following reasons:
Does not produce natural products which need climate, location, factors
of production etc.
ENVIRONMENTAL SCANNING
ECONOMIC ENVIRONMENT:
As the per-capita income of Pakistani national is high so that they can
easily afford the products offered by the TESCO, and thus it helps to increase in
the employment rate. The GDP rate is 5.8% in Pakistan. Those people, who
receive monthly salaries, will prefer to buy variety of goods under one roof in
reasonable price.
LEGAL ENVIRONMENT:
As Pakistan is an Islamic country, so it allows TESCO for sales except
for alcoholic products which are legally banned.
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POLITICAL ENVIRONMENT:
Political environment is favorable for tesco in Pakistan because it will
help to generate government revenue (i.e. Tax) and also the government
intervention will play the major role in progress of TESCO.
CULTURAL ENVIRONMENT:
Day by day it is becoming the culture of Pakistani nationals to get their
work done in minimum time so the TESCO will provide the variety of different
products (from food, grocery and clothing to consumer electronics to health and
beauty to media products) under one roof.
COMPETITIVE ENVIRONMENT:
As there is only one competitor for TESCO in Pakistan i.e. METRO
having small market share so TESCO has an edge to capture more market share
as compared to METRO because TESCO will target all the customers having
different income levels.
MODE OF BUSINESS
TESCO will use Greenfield Investment as a mode of International
Business to enter in Pakistan.
SELECTION OF LOCATION:
Tesco will start its business initially in Islamabad (F-6 Super Market) then
in the following cities of Pakistan.
Lahore
Faisalabad
Karachi
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JOB EVALUATION & COMPENSATION
The job evaluation will be done semi-annually on the basis of goal
achievement and employees productivity.
MARKETING STRATEGIES
PULL STRATEGY:
SEGMENTATION:
On the basis of social class, values, and lifestyle choices, the Social-
Cultural Segmentation is also applicable on TESCO.
MODES OF FIANANCING:
The following modes of financing will be used in order to establish business
in Pakistan.
Equity Financing
Debt Financing
70% of financing will be done by Equity Financing and the rest 30% percent
will be done by Debt Financing.
MILESTONES:
To expand business all over Pakistan
To capture the most market share by being the cost effective service
provider and by being the low cost leadership.
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REFERENCE:
International Business by Charles W. L Hill
www.tesco.com
http://en.wikipedia.org/wiki/Tesco
International Business: Environments and Operations
(9th Edition) by John D. Daniels & Lee H. Radebaugh
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