Tesco The Resources Is In The Marketing Case Study

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Tesco Case Study
Question One
Tesco had no viable reasons for entering into the United States market in 2007, considering the fact by then, there were several supermarkets offering grocery products and services, and the country was said to be over-stored. The existence of the high number of supermarkets resulted in a fierce competition, which led to these retailers making minute profits ranging from 2% to 3% (Quelch 100). Its business in Eastern Europe countries was thriving, and instead of expanding into the US, they could have increased the number of stores in these countries to continue exploiting the ever-growing market. However, to Tesco’s point of view, lack of sufficient national grocery retailers presented an opportunity for business in the US. By the time the company expanded its business in the United States, only Walmart had the ability to sell its grocery nationwide. Walmart accounted for only 25% of all grocery sold countrywide, whereas supermarkets such as Kroger Supervalu and Safe each contributed to less than 15% of nationwide grocery sales (Quelch 100). One of the advantages of Tesco entering into this country is the fact it could exploit the underutilized grocery market to increase its international revenue. The United States grocery market in 2005 stood at $600 billion, but the retailers such as Walmart had no capacity to exploit it fully (Quelch 100). In analyzing the US market before venturing into, Tesco management noticed a gap created by the supermarkets and convenience stores in the neighborhoods, which was not the case in Europe. Also, the research reviewed the growing interest of the healthy feeding relating to food choices among the consumers, which created a trend on increasing demand for ready-to-eat meals as well as fresh foods (Quelch 100). Since Tesco was already offering these services, it had the edge over other companies in the United States. Some of the disadvantages of the US entry include trying to establish a business where other British companies had been proven unsuccessful. Establishment of a new business requires massive investment, and it was not worth risking such amount of money in a country where British companies did not succeed previously. For instance, Sainsbury miserably failed in the US, a situation that created financial problems for the parent company (Quelch 100). Other notable examples that were unsuccessful in the US include Marks & Spencer.
Question Two
It is true that Tesco offered products tailored to meet the health needs of American people at affordable prices. The company sold fresh commodities such as vegetables and fruits that appeared more appealing to customers. It also sold ready to eat food at relatively low prices. In the early stages of the business, it was estimated that the company would sell goods worth $200,000 per week (Quelch 102). Two of the areas where Tesco was doing great is its pricing strategy because they opted to offer high-quality products at affordable prices, which attracted more customers. They also put health concerns into consideration and were devoted to preserving their products to ensure that they were in good condition, thus not compromising the health ...