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Using suitable analytical tools, critically evaluate the current situation facing Tesco as they contemplate their entry in to the US food retail sector. Your discussion should draw attention also to any issues considered relevant for Tesco vis--vis the

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Introduction

Case Study Three: "America's shoppers get selective" Questions - Using suitable analytical tools, critically evaluate the current situation facing Tesco as they contemplate their entry in to the US food retail sector. Your discussion should draw attention also to any issues considered relevant for Tesco vis-�-vis the marketing mix. - Your group are to act as the Marketing specialist engaged by Tesco. Therefore, using a suitable framework, recommend a course of action that would allow the firm to enter the US west coast next year whilst maintaining the integrity of its 'Grab and go' concept, also highlight any ethical issues relevant to your action plan. The macro environment These consist of broad environmental issues that may influence a business. This includes for main topics of political/legal, economic, social/cultural and technology. This is known as a PEST analysis. These are all uncontrollable factors, therefore it is important that any organisation acknowledges this. - The political and legal influences which may affect Tesco are EU laws. This would prevent them dominating a market and restricting them for expansion. However as the company is trying to break into the US market this will not apply. There are some issues to be considered such as tax laws. If taxes are higher in the US, then their price strategy would have to change and if a higher price is charged then they can afford, this will affect sales. ...read more.

Middle

In order for Tesco to consider entering the US food retail sector it has to consider a lot of things such as competitors and customer loyalty. Each of these questions may have a positive and negative aspect to it which we will be considered below. Firstly we will take a look at the strengths of Tesco's as we already know Tesco's is a very well established business in the UK it is ranked number 1 supermarket. However this doesn't necessarily mean that it will be a success in the US as customers may want to stick with their local supermarket. So Tesco's may have to cut down prices or use a USP to attract its customers to shop in Tesco's. Secondly it has its own website. This will help it gain more customers as people can shop from the comfort of their own home and Tesco's can deliver it for them. This will encourage customers into shopping at Tesco's as local supermarkets do not have these advantages and people sometimes may not have time to go for a large amount of shopping so it is convenient for them. Tesco's final strength is that it has a strong brand image people already know that Tesco's sells good quality products. So customers will want to shop at Tesco's knowing that it has good quality products and services. Market Segmentation This is a strategy that involves dividing a larger market into subsets which cause consumers to have the same or similar products. ...read more.

Conclusion

The benefits outweigh the negative points. Expansion in the UK is not possible as there are laws to stop them having a higher market share. It has worked wonderfully in China and twelve other countries where Tesco has opened and we don't see why not in America. The key to Tesco's success is knowing what their consumers want and simply producing it with quality and low prices. As suppliers have already moved to Tesco they are gambling it is going to pay off. Approximately 2,500 jobs will be created in the first year and this will be beneficial to residents. Tesco has also said that it will look after its staff and pay a higher wage then Wal-mart. If it does open in the US maintaining its grab and go concept may be difficult. Reasons are because consumer needs and demands may change and Tesco have to adjust to this. If this does happen then their USP will no longer be this. Currently this concept has a direct appeal to the US as their primary concern is convenience. Tesco has the direct power to compete with restaurants if the grab and go concept does well. The market share will look to increase drastically. Breaking into a new market also has many negative sides. If the correct research is not done then Tesco could be in trouble. Tesco need to forecast sales realistically and focus on their primary objectives. The competitors can easily drive out any new firm breaking into the market and tesco need to be prepared for this and have contingency plans. ...read more.

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