Submitted to:

Sir Shahzaib Khan

Submitted by:
Abdullah Zahid (7500)
Moomal Siddiki (11428)
Munazza Khalid Saeed (6793)
Subhan Ali Khan (7535)
Syed Umair Kazimi (7698)
Syed Zeeshan Haider (7542)

BUSINESS
DESCRIPTION:
Tesco is one of the largest food retailers in world. Operating 2,318 stores in 13 countries.

Tescos primary market is UK and it

also provides online services through
tesco.com.

Tesco sells more than 40,000 food

products along with the clothing and
non-food products.

The company is the Britains largest petrol independent retailers and also provides Tesco
personal finance.

TESCO CLUB CARD:

Introduced in 1995.
With at least 150 points in card
customer receives vouchers and
discounts offers and tokens.
Tesco club card boost allows
customer to get 50% discount.
Tesco club card fuel save allows
members to get 20p off on every
litre of fuel.

EXPANSION
OF TESCO
IN CHINA

Why expand in
China?

Fastest developing
country.
Massive
population.
A huge market
size.

SUCCESS FACTORS IN
CHINA:
Quality
product to gain trust of
Chinese people.
Chinese buy fresh products from
nearby store.
Family-like environment in stores.
Low-priced products.
High competition for retailers in
market.

PHASE OF RISE

RISE OF
TESCO:
The first
move
140m
50-50%
shares
Hymall
Strong
Routes Of
Retail Stores
China

BEGINNING
AND
EXPANSION:
2005
Terry Leahy
Chief
Executive
15 New
Outlets
Joint Venture
HYMALL.

2006:

Great feedback
Customers.
JAN - Opened 39
outlets.
By time/First store
with its own Brand
Name.
DEC After the growth
decided to increase
Shares.
From 50 to 90%
Paying 180m to

Hymall.

200
7:

Opened first
store in Beijing
under the Brand
name.
Operating 46
store by then.
Looking forward

2009
:

Wanted to Invest 550m

more in China.
Already operating 66 stores
in China.
After getting the growth
and Feedback they were
willing to open a range of
23 new shopping malls in
Qingdao.

REASON
OF RAPID
RISE:
Passive to active approach to
enter in Chinese market.
Gain trust of Chinese
customer.
Cheap price setting.
Convenient location of stores.
Tesco sold sheeps feet, live
toads, and turtles.

PHASE OF DECLINE

CEO Sir Terry

Leahy left
Tesco.
Increase of
5.5% in annual
sales.
Estimated
target sales
was not
achieved.

Not able to
achieved even
a breakeven in
the last
quarter
(second-half of
the year).
Tesco decided
to minimize the
target of
launching new
stores in china.

dim-sum
bonds were
issued in
hongkong
Great downfall
was observed.
Great pressure
to close 4
hypermarkets
in august 2014.

REASON OF DECLINE:

1. Scandals:
Dangerous
pesticides present
in fruits and
vegetables which
were sold in TESCO
china stores.

2. Problems of
top
management:

3. Local taste:
Chinese market has lot of
differences in
consumption habits.

Tesco starting to
follow the
expansion in china
in British way.
5. Rise in prices:
4. Tesco club card:
The response of Chinese
customers was not up to
the mark related to club
card in Tesco.

PHASE OF RE-RISE:
Tesco established in 2013
that the solo brand which
they have will be merged
with the local retailer of
china.
The merger will be
combining more than 100
outlets which Tesco have
with resource of Chinese
enterprise which already
have more than 3000
stores
This merger the venture
ratio between the two
companies is 20 to 80, 20%

RECOMMENDATIONS

Despite the fact that

Tesco attempted to be
locally responsive but
they lacked the know
how about the buying and
consumption pattern of
Chinese people.
Advertising and
promotional strategies
could be the key factor in
their case if they want to
sustain and prosper in
Chinese market.

The strategy of quick

expansion led Tesco lost
its control on the
business, rather they
should focus on gradual
growth, the way they did
in the initial stages of
their business.

THANKS!

Any questions?