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Swot analysis of Tesco plc
We all know Tesco as a food retailer, and we know that they are in constant competition with other retailers such as Sainsburys and Asda, yet we do not know much about what goes on beyond the shelves and the tills, the marketing plans and the day to day tactics that have to be devised to stay the number one food retailer in the United kingdom today.
I am going to analyse Broughton Parks Tesco and their possible competitors Swot Analysis
Firstly, four main goals, under which these particular four are Strengths:
1. Tesco is about a strong UK core business. Last year the industry saw some very marginal growth as a whole, however Tesco continued to grow beyond the market by offering better value for money and through getting cheaper.
2. To be as strong in non-food as in food. The market for non foods (such as clothes entertainment cleaning products) is worth seventy five billion pounds in the UK today. You can see through the growth of their dot.com business which now has over four hundred and fifty thousand users and is the largest grocery online retailer in the world, and through the success of tescos personal finance with over 1,5 million customers that they are making some real in roads into non foods.
3. International growth, Tesco have 30% of their stores outside the United Kingdom and plan to make it 45% by the end of next year, and will be approached through central Europe and trough Asia
4. To have the most loyal and committed staff.
Tesco as a company uses clear values to underpin what they do. Their core purpose is based on "Creating value for our customers to earn their life time loyalty?Tesco have invested one billion pounds
Tesco believe that one of they offer the best quality on a broad range of products and believe that they offer the best value. They have invested one billion pounds since 1996 on the campaign to reduce prices to customers and that continues to build as they go in to 2004. They offer outstanding customer service, every customer is offered help at the checkout. Location and convenience is another reason to choose Tesco, they have introduced a staggering 200 in the last two years that stay open 24 hours a day and they plan another 1540 new express stores, which are Tesco mini stores linked on to esso garages and forecourts.
Another key difference for Tescos is that they do not market to the average customer. Instead they use Customer Insight, to drive their actions, and to focus their starting point for all the different strategies. They have Club card segmentation data, which can give a real insight into Customer profiles and their shopping habits. Tesco use the Organics, Finest and Value brands to deliver to customer needs.
Their Customer Plan delivers the customer part of their strategy. It's an annual activity plan, and is an agenda for customers with these projects forming part of category plans. It is designed to drive trade, and to improve the shopping experience for customers.
The Operational Plan is an annual activity plan, including for example upgrading, replenishing systems and better ways to build stores for the future. Lets now look at our store portfolio in the U K.
This can be broken down into Hypermarkets, Superstores, and High street & Express stores.
Tesco hypermarkets, of which some in the UK are now up to 100,000 sq. f t. such as Peterborough, Watford , have been designed to a footprint which is being used world-wide across our business.
They have 277 superstores including Broughton Park, 81 compact superstores, 27 Express stores, 41 Metro stores, and 229 other stores (mainly high street stores, which Chester's Tesco is). They also have Tesco.com, which has no walls so they could sell houses, garden furniture and trips to the moon! Looking at the number of stores in each category you can see that we have got 659 stores in total.
Moving onto the Company Overview and Tesco figures, turnover is tremendously healthy, at nearly ?0 billion, including VAT, just in the UK, representing nearly 17% in market share.
During the 1990's when Tesco started their international expansion, you can see that initially in central Europe it had always been through acquisition. Tesco acquired Global (41 stores) in Hungary, (32 Stores) in Poland, Kmart (13 stores) in Czechoslovakia, and in Ireland we bought 110 stores in 1997. Tesco acquired Lotus in 1998 in Thailand and then 1999 went in to a joint venture with Samsung in Korea. In the meantime in 1995 we became the UK's first retailer and last year the Group turnover reached ?0 million, Tesco are also now looking at Japan and China to continue worldwide expansion.
They plan to have new space of nearly1.5 million sq. ft. in 2004 so the growth does not just stop there, Tesco's overseas strategy, focuses on adding value to the customers who are living and working in those Countries and developing the hypermarket concept world-wide.
Tescos world-class hypermarkets blue print is about having a common layout, common systems and common operations globally and then applying to that local people, and local marketing and services.
Tesco now has 37% of its space overseas and the total number of hypermarkets will be 130 by the end of 2002.Tesco will have 100 hypermarkets in four years, which will not only benefit shareholders but the global economy too.
Tesco now operates in four Countries in Eastern Europe and no other retailer is in all four of those Countries. It's been extremely important to work with the regional and the local staff there, as they have got so much knowledge about the local produce and products. Tesco now employ over 27000 people in central Europe alone. Southern Ireland now has 75 stores and was acquired in 1997.
The focus here has been on rebranding since the acquisition, with 3 new stores opened in 2002, and there will be a further 6 new stores opening there this year.
Tesco has now got worldwide sourcing in Hong Kong, India and Thailand, to assist in the development of the international business, 30% of tescos products are sourced internationally and continue to grow.
To conclude, Tescos international business is an incredibly important part of the Tesco business and Tesco future strategy.
Tesco will have 130 hypermarkets by 2001, with 45% of space overseas by 2002 and the International sales target was ? million