Essay about Tesco Strategy Report

7388 Words Jun 13th, 2006 30 Pages
A07-01-0011
Copyright © 2001 Thunderbird, The American Graduate School of International Management. All rights reserved.
This case was prepared by Professor Kannan Ramaswamy, with research assistance by Mr. Gennady Dikalov, MIM
2000, for the purpose of classroom discussion only, and not to indicate either effective or ineffective management.
Tesco, PLC: "From Mouse to House" in Online Grocery Retailing
We have got a two-year lead over our competitors on the Internet and we intend to exploit that.
We are the largest grocery internet retailer in the world.
Mr. Terry Leahy, CEO, Tesco, PLC. April 2000.
It was a bright sunny morning in May 2000 as Mr. Tim Mason, e-commerce Director for Tesco, was driving through the lush English
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market? As he pulled into the parking lot, Mr. Mason realized that critical times lay ahead. He was only hoping that Mr. Leahy was right about the two-year advantage.
Tesco: The Company
In 1919 Sir Jack Cohen founded Tesco as a small organization that sold groceries to London's East End markets. It wasn't until 1929 that Tesco opened its first store in Burnt Oak, Edgware. Until then, all of its activities were primarily focused on selling to the retail trade. The company grew over the years and in 1947 was listed on the Stock Exchange as Tesco Stores (Holdings) attracting a share price of 75p
(pence). As of early 2000 the company operated 225 superstores, 220 supermarkets, 48 neighborhood stores, 42 Metro stores, and 21 Express stores in the U.K. It also had operations in Ireland, the Czech
Republic, Poland, Hungary, Slovakia, and Thailand.
While Tesco's strategy had taken various forms over the years, it had maintained an unflagging focus on delivering the best value possible to its customers. Taking a leaf from the successful grocery supermarkets that evolved in the United States in the 1930s, Mr. Cohen instituted a set of core principles that had served the company well. Tesco introduced a variety of innovative practices that have increased efficiency and reduced operating cost over the years. In January 2000, A.C. Nielsen, a market research company, rated Tesco

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