Management
Chosen Retailing companies to be evaluated: Tesco and Wal-Mart
Introduction
Why e decided to choose Wal-Mart and Tesco?
Market leaders in their respective home markets, Diversified range of products, Intense international expansion.
Wal-Mart: The Statistics at present:
Type of Company: Public
Employees: 2,100,000
Employee growth: 10.5%
First store opened in 1962 by Samuel Walton and his brother J.L. (Bud) Walton in Roger, Arkansas.
With more than 7,250 stores, including Wal-Mart Super centers(US) and ASDA (UK), make Wal-Mart the #1 retailer in the World.
In 1999, ASDA Group plc is acquired for $10.8 billion.
Tesco: The Statistics at present:
Type of Company: Public
Employees: 440,061
Employee growth: 74.3%
The first
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Tesco and Wal-Mart are equipped with these necessary structures, for example: Tesco superstores which are usually located out of town with plentiful free parking thus aiding car- borne shoppers seeking more choice. Same would be relevant for a Tesco express in the centre of London.
Accessibility is also important to the retailer so that staff and supplier access is of ease.
Location is important to both retailers through upkeep of reputations, being two of the largest most dominant retailers the right location can positively influence their reputation, for example either Tesco or Wal-Mart having a smaller store in a village would show they are providing a service and can relate to every potential consumer.
Tesco and Wal-Mart must be aware that some locations costs may outweigh the maximised profitability of a store for example, rent cost on Oxford Street.
Tesco and Wal-Mart must locate themselves where there they believe that there is appropriate disposable income and an appropriate community that would benefit from their service and create a cost effective store. Tesco opening a store in a small low income area where there is already a perceived lower priced supermarket for example- Lidl would not be appropriate. Macro location evaluation is essential to detect if there is potential buyers in a given area.
Visibility and association has strong links with location
In 1950, Sam Walton purchased a store and opened Walton’s 5 & 10 in Bentonville, Arkansas. This later became the home office of the now multi-billion dollar company. As business became more successful, Walton opened more stores and renamed the chain “Wal-mart.” Now, Walmart has stores all around the globe, with 5,229 stores in the US alone. It is considered the largest retail company in the world.
Due to the fact that they are in an oligopoly market, Tesco 's decisions would be mainly
It is crucial for a business to know where their customers come from in order to select the best location for the store. Choosing the best geographic area can help in the success of the business or the failure of the business. This is why Trader Joe’s has particular criteria when choosing new store locations. Trader Joe’s is aware who their target consumer is and utilizes the data they receive to place their locations in the areas that will benefit in the growth of the organization.
International competitiveness: Even when the TESCO is doing its business in its own country, other international competitors or international or doing the same business could affect its operation or marketing. For example the Wall-Mart, which is doing the similar business, could impact its sale. If the competition given by WALL Mart is tough then it would be difficult for TESCO to operate there
In 1950, former J.C. Penny employee, Sam Walton opened Walton’s Five and Dime in Bentonville, Arkansas. By 1965, in the same small town Walton would open the first Walmart store unknowing that his investment would become the world’s largest retailer. By keeping sales prices low Walton was able to get ahead of the competition and successfully opened an additional store within the same year. Walton’s success continued and by 1967 his chain of stores had grown to 24 locations, and was bringing in about $12.6 million dollars in sales annually.
The firm also has several branches across different states. This offers a deliberate effort regarding location since the strategy behind this is placing and concentrating the outlets in populations where middle-income households reside. This concept helps to cut implicit transaction price regarding distance and time.
The stores would cater to the need of locals and tourist. To not cannibalize existing
This also opens up access to people who may not be able to visit the stores due to poor mobility.
Tesco also have social factors that affect them, as the business have charity centre in helping the less privilege people and the more these people gets poor, the more they will have to stretch to help out which also spending money.
This would be a superior advantage as Tesco would be making the best use of its competitiveness. A disadvantage may be that the change will be hard to adjust; therefore Tesco will need experts to help them get started. Over all this procedure will cost a lot.
Wal-Mart is a general merchandise discount retailer, which was incorporated in 1962. Wal-Mart’s history is based on one man, Sam Walton, who changed the course of retailing forever. Sam Walton first entered retailing when he was a management trainee at J.C. Penny Co. in 1940 in Des Moines, Iowa. After serving in the Army in World War II, Walton acquired a Ben Franklin variety store franchise with his brother James Walton in Newport Arkansas, until they lost the lease to the store in 1950. By 1962, when the first Wal-Mart Discount City was opened in Rogers Arkansas, both Walton’s were operating fifteen stores under the “Walton 5 & 10” name, and were the largest Ben Franklin franchisee in the
Wal-Mart is a world-wide active American retail trade company and currently the largest retail company in the world. Beginning in 1962, Wal-Mart has made the transition from a small firm in Arkansas to the largest employer with 3, 800 store units in the United States with record revenues today. But nevertheless, since Wal-Mart launched its online branch, it had to suffer from substantial setbacks from competitors such as Amazon.com or Ebay.
In 1962, Sam Walton opened the first Wal-Mart in Bentonville, Arkansas. What began as a single
this would also solve the problem of congestion on the shop floor and secure the lifetime loyalty of customers, as customers will be shopping in a less congested environment.
The company has to decide between the two locations based on their virtues, availability and higher margin of profit.