Strategy Report of Tesco Case Study Essay Example | Topics and Well Written Essays - 3500 words

Strategy Report of Tesco Case Study - Essay Example Although Tesco concentrated on the core growth of the company during the 50s and 60s, apart from organic growth, they also grew through acquisitions. They increased their market share at low cost as they concentrated in opening stores in and around London. The organic growth represents the long-term strategy of the company and also its core strength and vitality. The number of stores grew and they acquired cost leadership but cost leadership comes with disadvantages (Porter, 1979). Very low cost may take loyal customers away and it may also start losing revenues, which is what happened to Tesco. It then changed its strategy to increase its market share – price reduction and centralized buying. Thereafter Tesco concentrated on growth based on four factors. While UK was their core market, they also expanded internationally. Apart from market development, they also focused on product development as they became as strong in non-food products as in food. Besides, they also introduced new retailing services. So their strategy was both market and product development. This is how they penetrated into the market and increased their market share. In their overseas expansion, they adopted a localized approach where they took into account the local culture, local suppliers and ways of working. They also recognized that each individual was different and hence adopted the multi-format strategy. They focused on a few markets which helped them gain competitive advantage and then find the direction for growth and development. During the 1990s Tesco concentrated on national market development through product innovation. They attracted and retained customers through different innovative strategies. To retain loyal customers they introduced loyalty cards; to attract a new segment they started online shopping and thereby created differentiation in their service offerings. It was the same market but with the help of technology they could