Also in this report Tesco have given their 4 point strategy: To gain the market share from their UK competitors. (Tesco have achieved this) Develop their international business through new formats and local consolidations. (This means to spread to other countries and continents – they have recently opened stores throughout Europe and Asia. Tesco have developed a “winning formula” for international growth with a 79% increase on profit on last year)
Increase non-food sales and launch the new clothing line, Cherokee. (they have increased non-food sales to 7bn a year) Grow profits significantly in retailing services. (Tesco have now created a major new force in financial services.) What this basically means is that, firstly, Tesco want to keep their position as the leading supermarket chain in the UK. We can see that they have the largest UK market share from this chart:
They also want to globalise, as they have begun doing by opening a number of stores in a number or European and Asian countries. There are around 230 stores across Europe, in the Republic of Ireland, Hungary, Czech Republic, Slovakia and Poland. In Asia there are fewer stores, only 79, in Thailand, South Korea, Taiwan and Malaysia. The majority of the stores outside of the UK are hypermarkets, with very few supermarkets. This is because hypermarkets are far more popular outside of the UK partially because they sell such a huge range of goods.
In Poland last year, Tesco took over a chain called the HIT stores. This added 30 more hypermarkets to their chain, last year they were earning neutrals and by this year they should be earning profits from those stores. Neutrals are when you are equal, earning no profit but losing nothing. Tesco encourage customer loyalty – to make sure customers come back they try and make their shopping experience as enjoyable as possible. This involves high quality goods at low prices, a wide range of products and good customer service, to ensure that the shop is fast and efficient. Happy staff work better and are more helpful to customers, and to see how well Tesco treat their staff I asked 20 people who work for Tesco what they thought. To compare, I also asked 20 people from Waitrose, and these are my results:
From my studies, I have found that Tesco are much kinder to their workers, and through their workers, their customers. This method of business has definitely paid off for them and they have even made a joint venture with the Bank of Scotland, to offer a broad range of financial services including a Tesco Visa card, loans and insurance. In August 2003, Personal Finance had over 4 million customer accounts and a huge profit of ï¿½56m. Tesco were the first supermarket to launch a financial service in 1997, and were able to capitalise on a market niche. They were also the first to introduce the Club-card, and Tesco now have a huge advantage over their competitors. They are the most successful supermarket in the country and won’t be going anywhere soon.