Describe the evolution of tesco business model

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Reference no: EM132126949

Please Read the below TESCO case and answer the following question :

1) Describe the evolution of Tesco business model. Your answer should be in relation to enhance, expand, explore and exit approaches.

Tesco Case

Founded in 1919 in London, Tesco is a British?based international grocery and general merchandising retail chain. With revenues of £60 billion (2009), it is the largest British retailer by both global sales and domestic market share, with profits exceeding £3 billion. With almost 500,000 Employees (2009) and over 4000 stores Tesco is currently the third largest global retailer. Originally specialising in food and drink, it has diversified into areas such as clothing, consumer electronics, financial services, telecoms; home, health and car insurance, Internet services, and software.

Tesco's UK stores are divided into six formats, differentiated by size and the range of products sold: Tesco Extra stores are larger, mainly out of town hypermarkets that stock nearly all of Tesco's product ranges; Tesco superstores are standard large supermarkets, stocking groceries and a much smaller range of non?food goods than Extra stores; Tesco Metro stores are sized between Tesco superstores and Tesco Express stores. They are mainly located in city centres and on the high streets of small towns; Tesco Express stores are neighbourhood convenience shops, stocking mainly food; One Stop stores are the only category which does not include the word Tesco in its name. These are the very smallest stores. In addition, Tesco has a banking arm called Tesco Personal Finance; operates as an ISP, mobile phone, home phone and VoIP businesses; sells petrol and diesel at their own petrol stations; and offers a loyalty card?scheme to customers. Customers can collect one Clubcard point for every £1 they spend in a Tesco store, Tesco Petrol or Tesco.com. Tesco has operated on the internet since 1994 and was the first retailer in the world to offer a robust home shopping service in 1996. Tesco.com was formally launched in 2000.

In common with most other large retailers, Tesco draws goods from suppliers into regional distribution centres, for preparation and onward delivery to stores. Tesco is extending this logistic practice to cover collection from suppliers (factory gate pricing) and the input to suppliers, in a drive to reduce costs and improve reliability. Radio?frequency identification (RFID) technology is taking an increasing role in the distribution process.

Tesco's international expansion strategy has responded to the need to be sensitive to local expectations in other countries by entering into joint ventures with local partners. Tesco operates in the following markets: China, Czech Republic, Hungary, India, Japan, Malaysia, Poland, Republic of Ireland, Slovakia, South Korea, Thailand, Turkey, UK, and USA.

The business is dependent on efficient IT systems. Any significant failure in the IT processes of their retail operations (e.g. barcode scanning or supply chain logistics) impacts ability to trade. Tesco recognise the essential role that IT plays across the Group in allowing efficient trade and achievement of commercial advantage through implementing IT innovations which improve the shopping trip for customers and make life easier for employees. The company has extensive controls in place to maintain the integrity and efficiency of IT infrastructure and share world class systems across International operations to ensure consistency of delivery.

Reference no: EM132126949

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