Entry & Expansion Strategy: Tesco in Japan
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Case Details:
Case Code : BSTR297
Case Length : 18 Pages
Period : 2000-2007
Pub Date : 2008
Teaching Note :Not Available
Organization : Tesco
Industry : Retail
Countries : Japan
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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.
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Excerpts Contd...
Expansion Strategies
In order to further strengthen its foothold and expand its
presence in the Japanese market, Tesco went on to acquire a few more retailers
which were not performing well in the market.
In April 2004, it acquired Fre'c
(Fresh and Cost), located in Chiba and Saitama. The company was not doing well
and had an outstanding debt of ¥ 10 billion. As part of the acquisition, ¥ 3
billion of Fre'c's debt was paid by C Two-Network...
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Localization Strategies
The look and feel of Tesco Express stores in Japan was very local and the stores
were designed keeping in mind the Japanese mentality. They were located in
central areas within the city as the Japanese did not like to travel long
distances for shopping...
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Outlook
The markets of Asia, especially Japan, had proved tough for foreign retailers.
This was mainly due to the inconsistant shopping habits of Japanese consumers
and the fierce competition. The failed attempts by firms such as Carrefour and
British drugstore Alliance Boots signified that the Japanese market was a tough
nut to crack. Even one of the biggest local retailers, Aeon, witnessed an 18
percent fall in its operating profit to ¥156.04 billion for the year ended
February 2008 in its supermarket business... |
Exhibits
Exhibit I: Tesco: Store Formats
Exhibit II: Turning Points in Japan's Retail Industry
Exhibit III
Exhibit IV: Timeline of the Alliance between Tesco and C Two-Network
Exhibit V: Japan's Top Ten Retail Stores
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