Expansion in Foreign Markets Tesco

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Table of Contents

Overall aims and objectives
Literature review
Methodology
Data collection
Data analysis
Time scale and Plan
List of References

Overall aims and objectives

This research shall attempt to develop a clear comprehension of expansion in foreign markets by making use of the example of Tesco. The research shall specifically consider the obstructions and difficulties that an organization faces when it considers expansion.

This thorough understanding shall be developed by making use of analysis instruments such as the SWOT analysis to judge the companys internal and external standing as well as the use of Porters five forces to evaluate the standing of the company in a foreign industry as compared to the standing of the company in its native region.

The research shall also take into account the role and relevance of mergers and acquisitions as they come forth for an organization when it is considering expansion. Furthermore, marketing strategies, macroeconomic instabilities and the relevance of corporate social responsibility shall also be accounted for in the research. As a result of this analysis, the study will serve to form a clear comprehension of the intricacies of expansion. The final result shall serve as the establishment of a set of variables that should be considered by an organization when considering expansion. However, it is of the utmost importance to note that the frame of reference that the research shall make use of shall be one that shall be focused on multinational corporations and the findings therefore may not necessarily be applicable to organizations of a smaller size.

Special consideration shall be given to the areas of economies of scale, labour market trends, distribution difficulties and the presence of oligopolies in the market within which expansion is being considered. Competitors in the retail industry shall also be considered for their role in the dictation of market trends as well as their relevance when considered in light of the expansion. Also, it would be unfair to carry out a research concerning the intricacies of expansion and considering the role of the competitors without considering the role of the stakeholders as well. Similarly, the development of an expanded value chain shall also be covered in the research in order to acquire a thorough and practical understanding of the intricacies of expansion.

During the course of the research, the following questions shall be taken to be of primary relevance

Why and when should a company consider expansion?
What are the implications of an expansion on the mission, vision and goals of a company?
What benefits can Tesco derive from an expansion in the US?
How does an expansion such as Tescos into the US affect the US market?
How shall marketing and branding strategies have to be adapted in order to suit the US market?
What implications does the expansion have on the industry?
How does corporate social responsibility fit into an expansion such as that of Tescos into the US?

Even though the research shall give special consideration to the questions presented above, it is important to note that neither the analysis nor the scope of the dissertation shall be limited by them, particularly in the exploratory analysis of the research.

Literature review

It was in 1919 that Tesco first came into being when Jack Cohen began his business by attempting to selling surplus groceries. The area was of East London and Jack named his business, Tesco, which back then, was known for selling Tesco Tea. As the years went by, Tesco developed to sell far more products than Tesco Tea and eventually expanded not only its portfolio but also its regional distribution (Johnson, Scholes and Whittington 2005, p. 380). The expansion allowed Tesco to enter different industries. Through the decades, Tesco has not expanded to over two thousand stores functioning in over fifteen countries across the globe. The expansion was brought about as a result of a business strategy that was based on numerous joint ventures and acquisitions (Humby, Hunt and Phillips 2007, p. 231). In the United Kingdom alone, Tesco stores count over a hundred and fifty with revenues being well over three billion pounds.

The modern day Tesco has expanded eons beyond tea and now provides consumers with financial services, car insurance services and other services (Sandler 2009). The expansion being carried out by Tesco is one that is of a global nature. Tescos first ever stepping into the US was with the Fresh and Easy that was launched in 2007 (Finch and Teather 2006). As of now, Tesco has nearly one hundred and fifty stores in the US and has based itself in California in the region.

Tescos expansion is not one that comes out of the blue or as a result of a sudden change of management. Rather, it comes forth as a result of nearly two decades of market research into the American consumer market and the American consumer. Once can surmise from this fact that there are a number of possibilities that may exist in this regard. Either Tesco has judged the US market as one where increased competition leaves no room for errors and therefore has to be fully mastered before penetration; or the US market is one into which Tesco is too hesitant from entering on account of decreased interest (Peppers and Rogers 2004, p. 464). However, from the apparent condition of competition, chances are that the former holds true and the increased competition posed by strong players in the American supermarket industry serves to make penetration in the American market a highly tedious task.

Also, considering the fact that the action under question is an expansion in a foreign market, it is important to note that there is a considerable degree of complication caused by the trends that a company follows in its native market and those that is has to follow in an external market into which it expands. It would therefore be reasonable to surmise that there is no evidence that Tescos strategy in the UK shall prove to be just as successful if it is applied in the US. Acquiring market share can come across as a far more complicated task when put into play (Duff 2006). This is because of the fact that the American market has evolved to a point where the consumer is highly educated in terms of the choices available to the consumer and companies are giving an increased degree of attention to the retention of consumers which is serving as a higher entry barrier for new entrants.

The recent economic occurrences that have occurred on a global scale have made it all the more tedious for companies to enter into markets (Miller 2007). However, it has also made it all the more difficult for them to carry out consumer retention measures and this serves to reinstate the entry barriers to the same level at which they were before the economic recession hit (Clark 2009). Nonetheless, the recession has made it all the more difficult to carry out value chain development and expansion into an economy that has been hit severely as a result of the recession can make it excessively difficult to set up distribution networks and establish favourable relationships with the suppliers. Elements such as space rent, supplier coordination, distribution networking, franchising and the like have become more complicated now than they ever were before and companies find that increased attention towards these elements has left them with little time and resources to concentrate on the countering of cultural and regional differences (France 24 2009).

It is of the utmost importance to note, that in Tescos case in particular, the expansion into the US market is one that is very different for a company such as Tesco. Tesco became acclaimed for its expansion in the last two decades but was accustomed to expansion in developing countries in Asian and European regions (Finch and Teather 2006). However, the move to expand into the US is one that is of a comparatively different nature for Tesco since the American market is one that is well developed and where it is all the more difficult to carry out market penetration operations.

Another highly important aspect that merits highlighting is the fact that an expansion in time such as these cannot be carried out without expecting any retaliation from competitors in the area into which the expansion has occurred (Duncan 2008). The implementation of a defence strategy is inevitable by key competitors in the region into which a company such as Tesco has expanded and it is for the same reason that it is highly imperative for the expanding company to anticipate such actions. In essence, defence strategies come into play when a new entrant enters the market or when an already present competitor engages aggressive activities to capture market share through expansion in product lines, ranges or by simply expanding geographically. It is evident from this brief discussion that there are countless variables that come into play when a company chooses to expand. In essence, expansion on the part of one company may very well lead to implications on not only players in the immediate market but upon the very market in a larger sense as well.

Methodology

The establishment of a methodology for a research is perhaps the most crucial element of any research (Kumar 2008, p. 20). This is because of the fact that the research methodology has direct implications on the findings of the research (Ketchen and Bergh 2006, p. 374). The research methodology serves to highlight key elements in the research approach and serves to determine the scope and the vastness of the research (Kothari 2008, p. 1). It is therefore imperative to develop the research methodology well before the implementation of the actual research and any interaction with data that could influence the findings (Goddard and Melville 2004, p. 8).

The research methodology shall incorporate perhaps the most integral part of the research (Taylor, Sinha and Ghosal 2006, p. 1). Since it shall allow the research to establish a concrete and comprehensive directive during the course of the study, there is little doubt that the research methodology shall serve as the key determinant of the authenticity of the findings upon which the research shall come to a conclusion. It is for the same reason that the research methodology shall be elaborated upon in detail in the actual research. However, for the sake of establishing a clear comprehension of the research methodology, the following paragraphs shall present a preface to the fundamental elements that the research methodology shall constitute.

The research methodology shall be established only after due consideration has been given to the research approaches available; after which the one that comes across as most adequate for the research shall be followed without compromise during the course of the study. The research methodology shall not only include the selection of the sources of the data but shall also incorporate special consideration to the nature of the sources of information, the collection of the data and the analysis techniques that the findings shall be subjected to.

Special consideration shall be given to the potential limitations and constrictions that the research can encounter and the limitations posed by each of the selected data sources shall be identified in advance in the research in order to prevent letting them have an influence on the findings of the research. The research methodology will also provide a detailed understanding of the data collection and data analysis methods along with exploratory discussions on any techniques and tools that the research intends to bring into use during the course of the study. It is extremely important to highlight at this point that the research methodology shall also incorporate an analysis of former researches performed with regard to the research methodology adopted by this specific research in order to validate and justify the approach being adopted for the study.

Data collection

The data collection shall be carried out by incorporating a combination of primary and secondary sources. The primary and secondary sources shall be brought into use only after a clear and concrete threshold has been established to ascertain that the sources used qualify for their authenticity and legitimacy.

Data from primary and secondary sources shall be collected at differing stages during the research in order to ensure that a considerable degree of differentiation between the data can be maintained. This differentiation will be brought into use in later stages of the analysis of the data.

The data collected from the primary source shall be one that shall serve to provide a clear and insight into the current and most recent trends with respect to the research questions. Furthermore, the perspectives adopted during the course of the collection of information and the selection of the information shall be developed in line with the research questions considered. It is therefore safe to assume that the research questions shall have a considerable degree of influence on the gist of the research methodology adopted.

The data collected secondary source shall provide a descriptive context to the research and shall attempt to provide a comprehensive review of the variables of the study. The secondary data shall be fundamentally meant to provide the research with a ground work to build on and shall constitute exploratory discussions. The secondary research therefore, shall serve as a foundation upon which the data from the primary research shall build inferences. The secondary research shall also be brought into use to identify key variables and key elements pertaining to the subject of the research so that the findings of the primary research can be compared and contrasted with the body of knowledge that is already available on the subject.

During data collection, special consideration shall be given to the role of the limitations that can have potential implications on the data as it is being collected. For instance, the development of a faulty question that has multiple meanings may cause different respondents to respond to the very same question in differing frames of references, which would in turn jeopardize the research findings and the conclusions.

Data collection shall be performed with complete regard to ethical principles and in the event that any respondents are brought into use, the information acquired shall be used for the singular purpose of research. Furthermore, the data collection shall be carried out in a manner so that complications in the data are reduced to a bare minimum through cross examination and analysis for verification of the authenticity of the data acquired.

Data analysis

Once a concrete research methodology has been established and the data has been collected, perhaps the most pivotal element is the analysis of the data to derive findings and inferences from the data. A data set that is incorrectly analyzed may cause the findings to be far from legitimate and authentic and may eventually compromise the entire study and its validity. A data analysis generally includes a thorough examination of the data that is not only directed towards the determination of the validity of the data but is primarily aimed at deciphering the data for underlying patterns and relationships between the variables for which the data has been collected.

The data analysis shall be carried out in accordance and adherence to standardized methods of analysis. Depending on the research methodology adopted and the research approaches that the research incorporates, the analysis technique shall be established as one that is compatible with the research variables.

In order to ensure accuracy and reduce complexity, the data analysis shall be divided into two sections. The first section shall present the findings of the implementation of the strategy. The findings shall be presented and shall be discussed upon for their trends and contrasts. The discussions on the findings shall then be brought into use to develop inferences. These inferences shall then be compared to trends and relationships between the data that is already available on the subject. In this manner, the data analysis shall be carried out as a complete and systematic process.

During the course of the presentation of the findings, the data shall be fashioned into the form of a model so that it can be analyzed coherently. The development of this model shall incorporate the development of tables and figures that reflect upon cause and effect relationships between the variables for which the data has been acquired.

It would not be unjust to expect the analysis to make use of techniques meant to bring the data into a coordinated form. In fact, the development of the data into a systematic and sensible form shall be one of the most important parts of the data analysis. The data analysis shall also serve as the point from where the exploratory elements of the research come to a halt and following which the research begins to converge towards its conclusions through inferences and deductions.

The data analysis shall serve as a platform from which the research shall draw inferences. It is important to note that the analysis shall be limited to the presentation of the intricacies of the trends and relationships of the data. These trends and relationships in the data shall then be brought into use to develop inferences that shall constitute the conclusion of the study.

Time scale and Plan

The research shall incorporate five fundamental chapters. The first chapter shall serve as the introductory chapter and shall provide an insight in to the fundamental context of the research. The chapter shall also serve to identify the research questions and shall establish the scope of the research while serving to highlight the aims and objectives of the research. The second chapter shall constitute the literature review of the research. This section can be considered to be an expansively expanded version of the brief literature analysis presented above. The literature review shall constitute and exploratory analysis of the subject in question and shall form the groundwork for further research. The third chapter shall constitute a detailed explanation of the research methodology along with a discussion of the sources to be used and a justification of the selection of the sources. Furthermore, the research methodology shall also highlight key potential limitations and the ethical considerations that the research shall be taken into regard. Further on, the research methodology shall be implemented and the key findings shall be presented and analyzed in the fourth chapter following an elaboration of the conclusion in the fifth chapter. All key peripherals shall be presented in the appendices following the bibliography.

The submission of the dissertation shall follow the following schedule:

Chapter 1 Introduction	4-Jan
Chapter 2 Literature Review		15-Jan
Chapter 3 Research Methodology			22-Jan
Chapter 4 Findings				25-Jan
Chapter 5 Conclusions and Recommendations					30-Jan

List of References

Clark, A. (2009) Starbucks shuts 300 more stores.

Duff, M. (2006) Tesco to make U.S. debut on West Coast. Web.

Duncan, H. (2008) Tesco under fire over US expansion. Web.

Finch, J. and Teather, D. (2006) Tesco takes plunge into tough US market.

France 24. (2009) Recession hits the US harder than expected. Web.

Goddard, W. and Melville, S. (2004) Research Methodology: An Introduction. South Africa: Juta and Company Ltd.

Humby, C., Hunt, T. and Phillips, T. (2007) Scoring points: how Tesco continues to win customer loyalty. Philadelphia: Kogan Page Publishers.

Johnson, G., Scholes, K. and Whittington, R. (2005) Exploring Corporate Strategy. New Delhi: Pearson Education India.

Ketchen, D. J. and Bergh, D. D. (2006) Research Methodology in Strategy and Management, Volume 3. Oxford: Emerald Group Publishing.

Kothari, C. R. (2008) Research Methodology: Methods and Techniques. New Delhi: New Age International.

Kumar, R. (2008) Research Methodology. New Delhi: APH Publishing Corporation.

Miller, R. (2007) Recession Hits U.S. Profits; Economy Might Be Next. Web.

Peppers, D. and Rogers, M. (2004) Managing customer relationships: a strategic framework. New York: John Wiley and Sons

Sandler, K. (2009) 2nd UPDATE: Tesco Expansion Helps Sales Grow. Web.

Taylor, B., Sinha, G. and Ghosal, T. (2006) Research Methodology: A Guide for Researchers in Management and Social Sciences. Delhi: PHI Learning Pvt. Ltd.

Abrams, R. and Kleiner, E. (2003) The successful business plans: secrets and strategies. Palo Alto: The Planning Shop.

Basu, R. (2004) Implementing quality: a practical guide to tools and techniques: enabling the power of operational excellence. Surrey: Cengage Learning EMEA.

Campbell, D., Stonehouse, G. and Houston, B. (2002) Business strategy: an introduction. Oxford: Butterworth-Heinemann.

Hitt, M. A., Ireland, R. D. and Hoskisson, R. E. (2008) Strategic management: competitiveness and globalization: concepts and cases. Ohio: Cengage Learning.

Kotler, P. and Armstrong, G. (1991) Principles of marketing. New Delhi: Pearson Education India.

Lewis, J. P. (2004) Project Planning, Scheduling and Control. New York: Tata McGraw-Hill.

Rabb, T. K. (1999) Enterprise and empire: merchant and gentry investment in the expansion of England, 1575-1630. New York: Taylor and Francis, 1999.

Richardson, F. L. and Walker, C. R. (1977) Human relations in an expanding company. Cleveland: Ayer Publishing.

Spiers, J. W. (2001) How small business trades worldwide: your guide to starting or expanding a small business international trade company now. London: John Spiers Company.

Stapleton, J. and Thomas, M. J. (1998) How to prepare a marketing plan: a guide to reaching the consumer market. Vermont: Gower Publishing, Ltd.

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