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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"I'm not surprised that Tesco have gone into the Japanese market because they've gone about it in a very different way. They took the sensible approach of studying the market and going with other stores without using their name, so it's not a rash decision to open the Express stores. They've looked at case histories like Carrefour and learned from them."¹

- Ian De Stains, Executive Director, British Chamber of Commerce², Japan, in 2007.

"We are not looking to succeed here as a foreign supermarket. In Japan, we aim to succeed as a Japanese supermarket."³

- Shizuko Ota, Spokeswoman, Tesco Japan, in 2007.

Introduction

In March 2008, UK-based retailer, Tesco Plc. (Tesco), relocated Michael Fleming⁴, Business Development Director, to Japan as the Chief Executive of its Japanese venture.

Analysts were of the view that the move indicated Tesco's plans of aggressive expansion in the market.

"Tesco really struggled to get the right people in place. They were forced to extend their feasibility study there, but now it seems that they are really committing to the business as it was looking to expand more aggressively in the world's second-biggest economy,"⁵ said an analyst.

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1] Justin Mc Curry, "Tesco Hopes for Express Success in Tricky Market,"www.guardian.co.uk, September 28, 2007.
2] The British Chamber of Commerce in Japan was established in 1948 to strengthen business ties between Britain and Japan and to support new business entrants from UK in the Japanese market and vice versa.
3] "Tesco Tries to Break into Japanese Retail Market,"www.iht.com, April 18, 2007.
4] Michael Fleming had a very strong record in Tesco as he was successful in the firm's operations in Asia.
5] Elizabeth Rigby, "Tesco Looks for Japan Expansion,"www.us.ft.com, March 14, 2008.

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