Tesco Case

3956 Words16 Pages
Wrigley, Neil; Lowe, Michelle and Cudworth, Katherine

The Internationalisation of Tesco - new frontiers, new problems

Wrigley, Neil; Lowe, Michelle and Cudworth, Katherine, (2014) "The Internationalisation of Tesco - new frontiers, new problems", Johnson, Gerry; Whittington, Richard; Scholes, Kevan; Angwin, Duncan and Regner, Patrick, Exploring Strategy: Text and cases, 657-661, Longman Scientific & Technical © Staff and students of the University of Worcester are reminded that copyright subsists in this extract and the work from which it was taken. This Digital Copy has been made under the terms of a CLA licence which allows you to: * access and download a copy; * print out a copy; Please note that this material is for use ONLY by
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Licensed for use for the course: "BUSM3004 - Global Business Strategy". Digitisation authorised by Judith Keene

ISN: 1292002549

The internationalisation of Tesco – new frontiers and new problems
Neil Wrigley, Michelle Lowe and Katherine Cudworth

Tesco’s international expansion until 2010 had seemed like a complete success despite the odd hiccough. This case re-examines Tesco’s internationalisation in the context of harsher economic conditions, using a comparison of its operations in South Korea and the USA to draw out important strategic dimensions of the retail internationalisation process. It also explores the organisational consequences of that process for the firm, particularly when it is perceived to threaten the home market performance of the retailer.

In May 2013, Tesco, the UK’s largest retailer and private sector employer of labour, announced annual sales for 2012–13 of £72 billion (~ $109bn ~ CSSbn),1 barely changed from the previous year. Profits were £3.4bn, down from £3.8 billion the year before. For Philip Clarke, Tesco’s CEO since 2011, this was his second set of disappointing annual results. Sales across Europe were flat, and the company had had to decide at the end of 2012 to exit Tesco’s business in the United States. The main source of encouragement seemed to be Tesco’s growing Asian business. Philip Clarke declared: ‘Building an international business, even when the global headwinds work
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