Tesco's Exit from the United States

            
 
Case Studies | Cases in Business, Management, Cases | Case Study

ICMR HOME | Case Studies Collection

To download Tesco's Exit from the United States case study (Case Code: BSTR437) click on the button below, and select the case from the list of available cases:

Business Ethics Case Studies | Case Study in Management, Operations, Strategies, Business Ethics, Case Studies

OR


Buy With PayPal

Amount to be paid:



Prefer to pay in another currency ?
Select Currency for Payment



Exchange Rates: Click Here
Delivery Details: Click Here

Business Strategy Case Studies
Case Studies Collection
Business Strategy Short Case Studies
View Detailed Pricing Info
How To Order This Case
Business Case Studies
Area Specific Case Studies
Industry Wise Case Studies
Company Wise Case Studies

Custom Search



Please note:

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.



Chat with us

Strategic Management Formulation, Implementation, & Control, 12e

Please leave your feedback

Leave Your Feedback

ICMR India ICMR India ICMR India ICMR India RSS Feed

Case Details:

Price:

Case Code : BSTR437 For delivery in electronic format: Rs.500;
For delivery through courier (within India): Rs. 500 + Rs. 25 for Shipping & Handling Charges

Themes

Business Strategy/ Business Environment
Case Length : 26 Pages
Period : 2007-2013
Pub Date : 2013
Teaching Note : Not Available
Organization : Tesco Plc.
Industry : Retail
Countries : UK/USA

Abstract:

The case discusses the entry of the UK-based retailer Tesco plc (Tesco) into the US and its subsequent exit. Tesco entered the US in 2007. Prior to that, it spent over three years doing research about the retail sector in the US and the format that would suit the US market. It started operating through small format grocery stores under the brand name 'Fresh & Easy'. The stores occupied an area of 10,000 sq.ft and were positioned as a smaller and more convenient alternative to the US supermarket. They sold fresh food, pre-wrapped produce, dry grocery items, and ready-to-eat meals. Most of the stores were located in neighborhoods known as 'food deserts' where not many grocery retailers were present.

Business Strategy | Case Study in Management, Operations, Strategies, Business Strategy, Case Studies

Though Tesco spent considerable time trying to understand the market and plan its strategy, it failed to live up to customers' expectations. American customers were not comfortable with some of the practices like automated checkout counters, overemphasis on private label products, small assortments of products, etc. Besides, they were not happy with packaged ready-to-eat food. They also felt that the stores were dull. Within a few months of Tesco entering the country, the US economy found itself in the grip of recession, a fall-out of the subprime crisis. With growing unemployment, people started to spend less and preferred to shop at hard discounters. Though the prices at Fresh & Easy were lower than those at several other retailers, it found that it had yet to establish a value proposition among the consumers.

Tesco revamped the stores and increased the number of product lines in the stores. But the US operations did not break even and continued running at a loss. At the same time, Tesco started to face a tough time in its home country, the UK. Investors said that Tesco had concentrated on the US and other international markets at the cost of its core UK business. Tesco then decided not to invest further in the US operations. In April 2013, it announced that it would make an exit from the US.

Analysts' reactions to Tesco's exit were mixed. While some of them suggested that Tesco could have waited for some more time as the US economy had come out of recession and was on the growth path and smaller stores were making their presence felt in the market, others felt that Tesco had taken the right decision.

Issues:

Understand the challenges retailers can face while entering into highly developed retail markets.
Study and analyze Tesco's pre-entry and entry strategies in the US.
Understand the US subprime crisis and its impact on the retail industry.

Contents:

  Page No.
Fresh & Not Easy 1
Background Note 2
Tesco's Global Expansion 3
Tesco in the US 6
Fresh & Easy Stores 9
Plans Go Off-Track 11
Revamp Proves Futile 12
And Losses Mount 13
What Went Wrong? 14
Conclusion 17
Exhibits 19

Keywords:

Tesco, UK, USA, retail, recession, globalization, international operations, Fresh & Easy, convenience stores, fresh food, pre-wrapped produce, hard discounters, competition

Fresh & Not Easy - Next Page>>


Custom Search





Case Studies in Business Strategy Volume VI

Case Studies in Business Strategy
e-Book on Business Strategy

Case Study Volumes Collection

Business Strategy
Workbooks Collection
 

Case Studies Links:- Case Studies, Short Case Studies, Simplified Case Studies.

Other Case Studies:- Multimedia Case Studies, Cases in Other Languages.

Business Reports Link:- Business Reports.

Books:- Textbooks, Work Books, Case Study Volumes.