About The Operations Of Tesco In India And Its Continued Growth (Research Paper Sample)

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Tesco in India
Tesco TLC is a multinational that has its headquarters in the Hertfordshire in the United Kingdom. The company has grown to become the second largest in retailing after the Wal-Mart that is based in the US based on their revenues. Further, the company is known for its ability to hold over 35% of the total market share in the UK. Tesco is operational in many countries in different continents. The company has many diversified products that are of superior quality and good brand image. The firm has grown globally regarding the presence because it has over six thousand three hundred stores around the globe. The company has been growing fast because of the effective strategies that it has been applying as well as the competitive advantage that the company has compared to other.
The competitive advantages are the major attributes that a firm uses to increase its efficiency, performances, and the capabilities that they do have in the company. The competitive advantage of a firm is achieved if the abilities that are required for the success of the company are present and much superior to the competitors that are in the market. The common ways that firm are known to acquire the competitive advantage is through the diversification of the products that are superior as well as the leadership in the costs that are applied to different products. Further, the competitive advantage will also be achieved only when the competitive position of the Tesco is higher the other firms that are in the market as well as the ability to acquire a large market share for the products being sold (Hitt 135).
The company has gotten the chance of getting into the Indian market that has a lot of untapped potentials and especially for the Foreign Direct Investments (FDI). India is known to be the country with the highest number of the retail industry in the world. Studies have shown that it is expected to have grown to be worth $ 1.3 trillion by the year 2020. The policies that are applied in India have allowed up to fifty-one percent of the Foreign Direct Investment in certain sectors in the economy. The Indian government allowed the Multi-Brand Retail to be part of the fifty-one percent FDI that was allowed to operate. The Tesco PLC has been the first grocery & multi-brand company to become operational in the Indian market. Previously, there are other retailer companies that have already gotten their part in the Indian market before the entry of the Tesco PLC. The population of India by that time was estimated to be 1.2 billion people when the Tesco PLC was getting into the Indian market. Additionally, the economy is projected to grow in its disposable income by forty-six percent by the end of the year 2016. The current projection has revealed that there will be an increase in the GDP of the India. Tesco PLC has gotten an advantage in venturing into the Indian market through the formation of the Joint Venture with the Trent Hypermarkets. The formation of the joint venture has opened up an opportunity for the firm to create the barrier of entry and the other firms that are concerned with the imitation of the products being offered in the market. The formation of the partnership was also a strategy that the firm used to reduce the competition and increase the market shared in the region. The Trent Hypermarket is known to hold many outlets in India and has a large market share. Therefore, the combination of both firms is the competitive idea that is aimed at reducing the competition as well as increasing the competitive power of the joint ventures. The partnership that was formed between the two ventures also offered a room for the complementary products sold by both companies to be traded. The move by the Tesco has provided the impetus for other players to gain access to the market that has been projected to grow by eight hundred and sixty-five billion dollars by the year 2023.
The strategy by the Tesco PL was aimed at capitalizing on the customers relationships that already existed in the market. This move was to give the form a competitive advantage over the other entrants that stood as single entities. Additionally, the competitive advantage that was formed after the formation of the venture was sustainable. The existing customer relationship meant that these are strategies applied by the Tesco to gain access to markets which are competitive and the one where the company is not popular. Tesco PLC is an excellent company that has always taken some decisions that are tough to expand to the emerging market. The company has had a stable income since its grocery retailing, and the infrastructures that are available have been capable of giving the company a sustainable growth especially in the emerging markets (Hitt 135).
Tesco PLC is expected to tune fine its global business model that has been tested and tried to suit in the Indian retail market. The retail industry is competitive, and there is in many instances the presence of the threat from the substitute products that have gained an easy access in the market. The threat that is obtained from the substitute products that are dealing with the foods is low while in the non-food products they are usually in the medium. The smaller enterprises can also be a threat to the existence of the company. Therefore, the Tesco PLC has to make sure that that they have competed using the approaches that reduce the cost of the products that are being purchased. Tesco is also expected to use the premium prices will make sure that the company has continued to grow in regards to the profitability.
The Tesco has ensured that it has also focused on the strengthening the foundation of the core market that will be used in getting into the market. The foundation that will be to the advantage of the company will be through the diversification of the products that will be offered. Additionally, the training of the staff and the opening of new stores will be another strategy that will come handy with the Tesco PLC getting into the Indian market. A strong leadership position in the world and the market will make sure that the firm has continued to maintain a better position in the market. The multi-channel world requires that the companies streamline all the operations that are taking place at the market where the companies are operating. The company also has to make sure that they have adopted the use of the “bricks and clicks” in the market. The bricks strategy is aimed at building new stores across India that will facilitate the sale of the products in the region. The brick will change the expectation of the customers and also build confidence in the institutions since they are sure that they can gain access to the products from the available store and the other that the Joint Ventures will continue establishing. On the other hand, the ‘clicks’ shows that the JV will have online presence whereby the shoppers will be capable of performing their shopping online. The joint venture will design a website that the shopper will be able to get access to the products online and then be delivered to them within the shortest time possible. Most companies and especially the multinationals that are in the retailing industries have adopted the intensive use of both the ‘clicks and bricks’ that will increase the customer satisfaction. These platforms make a company dominate the industry. The internet is a platform that has continued to grow over the years. Further, most of the phones that are being designed are internet enabled thus making it possible for the consumers to buy the products from the comfort of their homes. The Tesco is also expected strategize on the best method that will be used in the capital expenditure. The capital expenditure that will be applied in the three consecutive financial years will be used to determine the international growth the company will have received in the three subsequent years it will be operation in India.
Loyalty program is known to facilitate the growth and the expansion of many retail facilities. Therefore, the business model to be used should take into account the issue of making sure that the loyalty programs that will be offered for the products will be best suited for the clients in the region. These programs will cater for offers and even shopping vouchers that will be offered for the customers.
The venture is also likely to succeed based on the formats that will be applied by the firm. Supermarkets, Hypermarkets, department stores, and the convenience stores will be some of the formats that will be used by Tesco to make sure that they have generated more profits. The love will also make sure that the firm has continued to cushion itself from the risks that may occur in the course of the market. The Tesco will also continue to increase the customer retention. Customer retention is one of the factors or strategies that are used by these big firms to promote business.
There are various approaches that the company can undertake so as to avoid the failure that has previously occurred in the US market. First, the company is expected to focus on the timing of the entry in the market. The timing will greatly determine how well the company will progress. The time when the company was bein...