The International Development of Tesco Plc During the Period 1995-2012

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The International Development of Tesco PLC during the Period 1995-2012 This essay will focus on the period of international development between 1995 and 2012 for Tesco PLC, the retail company that has expanded gradually to become the world’s third largest retailer behind Wal-Mart and Carrefour by revenue (Tesco PLC). This period has seen Tesco’s sales rise to £67.6 billion in 2011 with 5,380 stores worldwide and a trading profit of £3.7 billion (Tesco PLC Annual Report and Financial Statements, 2011). ‘In 1997, our international businesses generated 1.8% of the Group’s profits. Today they represent 25% and we’re now either number one or number two in eight of our 13 markets outside the UK.’ (Tesco PLC, 2012) Tesco have always had,…show more content…
Tesco were motivated to expand into unexploited markets in Asia for profit reasons and are currently considering a move into Vietnam due to it’s, ‘economic growth and large population.’ (Thompson, 2011) Internationalisation advantages purely relates to the fact that should it be advantageous to internationalise once all things are considered, it should be done. Thus, Sternquist’s (1997) adaptation of Dunning’s (1981) elective paradigm theory only captures the motives behind internationalisation and whether it is the right idea to expand globally; it does not focus on the strategy firms undertake to enter foreign markets and how they behave once there. Tesco is motivated to continually expand internationally by its desire to be a growth company and the fact that their success in the UK market means they must internationalise to continue to grow. It is this underlying drive incorporating the whole company that allows them to expand gradually as all employees know that being a growth company is number one on Tesco’s list of priorities (Tesco PLC Strategy, 2012). The pull factors are motivations for exactly where Tesco are going to expand next rather than the main causes of their international growth. According to the literature, the, ‘central managerial issue that the international firm, the multinational corporation (MNC), must resolve is the tension between central control and local autonomy.’

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