Changing Business Environment Tesco

Questions: 1.Why do you think Tesco international expansion has ,up to now been more succesful in irland,central Europe and Asia than western Europe and the United states? 2.On what factors is tesco's future success in international market likely to depend? 3.What changes in the business environments are likely to be on the horizone for tesco in the near future? Answers: 1. Success of Tescos International expansion Tesco has witnessed success in the in the international expansion of its business in Central Europe, Ireland and Asia rather than in United States and Western Europe. In the 1990s, Tesco has initially stated to expand its venture abroad in the countries of Central Europe Slovakia, Hungary, Poland and Czech Republic. However, it is seen that the Western Europe and US operations are running losses than the Asian and Central European operations (Dimitrova, Rosenbloom Andras, 2014). The whimsical shopping attitudes of the consumers of United States and the highly competitive nature of the retail market in United States are the reason of loss of the Tescos profitability in the US market. On the contrary, it can be said that the Asian market and Central European market are highly responsive. Tescos business operations at those areas are responsible for earning huge profitability of the company. International expansion of Tesco has adopted policies of mergers and acquisitions (Shannon, 201 4). However, it can be said that most of the revenue of the company is collected from the UK market compared to its business operations in other countries. Before expanding its branches in United States, Tesco has started to penetrate into United States through extending its internet business. After conducting a thorough research, Tesco has opened stores in United States in 2007 and incurred huge loss due to competitiveness of the retail market from Walmart mainly. In the Asian countries, the economy of these developing countries of Japan, Singapore, China, India, South Korea, Thailand, etc, are growing leading to increased shopping ability of the consumers (Zhao, 2014). 2. Factors of Tescos success in international market The success of multinational supermarkets in developed countries depends on the nature of the consumers of the particular country. There is a difference between the shopping patterns of developed countries like United States and Western Europe when compared to that of developing countries like Asian countries. It is seen that not only supermarkets like Tesco, Sainsburys, etc. expand in the Asian countries, but also they are expanding in saturated and matured markets also (Burt, Johansson Dawson, 2016). The process of expansion of Tesco in the international markets requires innovative strategy that will attract the consumers to the companys products. The case study forecasts that Tesco has a clear response to the competitiveness in the market. Apart from that, the trends of the market are required to be considered while making an expansion in the matured markets of United States and Western Europe (Eckman et al., 2015). The factors of success of Tesco in the international market depe nds on its quality of products and services as well as the cost leadership strategy both in the perspective of supply chain and to the customers are the reasons of increase of profitability in the company in international outlets. Apart from supermarkets, Tesco has also opened convenience stores in the different locations of the target country where opening of supermarkets are not possible. It is also considered as a factor of success of Tesco, PLC in the international expansion. The growth strategy of the company concentrates on the organic growth via increasing its number of stores in various international locations (Wood Reynolds, 2014). 3. Changes in the business environment for Tesco in near future In the near future, Tesco will face a change in the business environment of global retail market as well as in the supermarkets of the world. The competitive nature of the market will include development of technology in the departmental stores of the company that will use modern loyalty programs in order to attract more customers (Wood, Coe Wrigley, 2016). Apart from that, the development of new product using latest technologies will be the changing factors that Tesco will use for the development of business in the international market. The international competition between various supermarkets will be different in terms of the nature of the market. The case study portrays different types of market of Western Europe and Asian markets (Yoder, Visich Rustambekov, 2016). The spending nature of the customers is responsible for the building of new strategies by Tesco. The retail grocery market of UK is responsible for maximum revenue generation of Tesco. However, the case study portray s that the opportunity for future growth in the Asian market and few Central European countries are more as the saturation in the market are not yet reached in those countries till now. Hence, the possibilities of business growth are more in the Asian countries (Martnez-Ruiz et al., 2016). References Burt, S., Johansson, U., Dawson, J. (2016). International retailing as embedded business models.Journal of Economic Geography,16(3), 715-747. Dimitrova, B. V., Rosenbloom, B., Andras, T. L. (2014). Does the degree of retailer international involvement affect retailer performance?.The International Review of Retail, Distribution and Consumer Research,24(3), 243-277. Eckman, M., Sakarya, S., Hyllegard, K., Borja, M. A. G., Descals, A. M. (2015). 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