Tesco's Failure in America

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Tesco’s Failure in America In times of fast progress, in terms of economic development and globalisation, many multinational companies are extending their business overseas. One of those many firms is Tesco. This report will elaborate more about how Tesco failed in America when it encountered cultural and economic differences. Tesco is a British owned multinational grocery and general merchandise retailer that was found in 1919 by Jack Cohen in London. (Tesco PLC, 2013). Over the years Tesco has grown rapidly and now it operates in 14 countries around the world. (Tesco PLC, 2013). Tesco is now the third largest retailer in the world. (Tesco PLC, 2013). In 2007 Tesco entered the US market under the name of Fresh & Easy, opening…show more content…
The Americans were confused whether it was a convenience store or a discount store. (Sonne & Evans, 2012). This was not an American style. Tesco was overconfident that British and Americans speak the same language therefore it shouldn’t be too hard convincing the customers but Tesco didn’t realise that British and Americans have a totally different culture. (Tesco close American strores,2012, para 6). Any business experiencing environmental problems are likely to experience failure, for example Nokia struggled due to rise of smart phones. Tesco’s success in UK was due to its use of consumer data garnered from loyalty cards but that might not be enough for American market to be convinced. Isomorphism states that for a business to be successful it must be able respond to factors of the environment effectively that affects them. Tesco’s did chose a favourable environment to do business because during it research Tesco found that west coast was one of the healthy eating rout. (Geoghegan, 2011,para 25). Somewhere during their research Tesco did forget that America has the highest obesity rate in world at 30.6%. (Health statistics, 2013). Therefore they are the biggest buyers of fast foods in the world. Another important environmental factor Tesco should have used to manipulate the American customers was through heavy advertising. Fresh & Easy should have used sports celebrities to promote the supermarket as one of the

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