Tesco's Experience in the Middle Kingdom
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Case Code : BSTR303
Case Length : 20 Pages
Period : 2002-2008
Pub Date : 2009
Teaching Note : Available
Organization : Tesco
Industry : Retail
Countries : China
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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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In 1919, Jack Cohen (Cohen), who served the Royal Air Force during World War I, founded a grocery store using the gratuity he received when he left the military service. Cohen started to sell tea from a supplier TE Stockwell in 1924.
The name Tesco was a combination of the initials of TE Stockwell, and the first two letters of Cohen. The first Tesco store was opened in 1929 in Edgware, London...
Tesco's Global Operations and Strategy
Tesco's international foray began with its entry into Ireland in 1979 through the acquisition of a 51 percent equity stake in 3 Guys stores owned by Albert Gubay . In 1986, Tesco divested itself of its stake in the stores when it found that customers were rejecting the British products sold there. Tesco's next international foray, its entry into France, proved to be as unsuccessful. In December 1992, Tesco entered France by acquiring an 85 percent equity holding in Catteau SA , which operated under the Cedico brand with 72 superstores, 7 hypermarkets, and 24 small stores...
Tesco Enters China
According to newspaper reports, Tesco had been harboring ambitions of entering China since the early 2000s. It had planned to venture into the country only with a local partner and was on the look out for a suitable partner from 2002...
Initially, Tesco decided not to sell its private-label brands in the
Hymall stores. According to Lucy Neville-Rolfe (Neville-Rolfe),
Director, Corporate Affairs, Tesco, "At first we will sell what is in
stores at present... then look to bring in our own brand."
In late 2006, Tesco launched its private label, Tesco Value in China.
The label was used on more than 500 products, including pre-packed
foods, convenience foods, noodles, biscuits, and tissue papers...